LENDER MAY IN ITS
DISCRETION REQUIRE.
Section 6.2
Financial Covenants.
Notwithstanding anything to the contrary contained herein, the parties agree
that effective as of June 30, 2009, the following financial covenants shall be
applicable:
(A)
MAXIMUM NET LOSS. THE BORROWER SHALL NOT
INCUR A NET LOSS, DETERMINED ON A CONSOLIDATED BASIS AS AT THE END OF EACH
FISCAL PERIOD SET FORTH BELOW, IN EXCESS OF THE AMOUNT SET FORTH OPPOSITE SUCH
FISCAL PERIOD:
Measurement Date
Maximum Net Loss
June 30, 2009
<$5,800,000>
July 31, 2009
<$6,100,000>
August 31, 2009
<$6,300,000>
September 30, 2009
<$6,600,000>
October 31, 2009
<$6,500,000>
November 30, 2009
<$6,400,000>
December 31, 2009
<$6,400,000>
January 31, 2010
<$500,000>
February 29, 2010
<$500,000>
(B)
CAPITAL EXPENDITURES. BORROWER WILL NOT
INCUR OR CONTRACT TO INCUR CAPITAL EXPENDITURES OF MORE THAN $1,200,000 FOR THE
FISCAL YEAR ENDING DECEMBER 31, 2009; AND $150,000 IN THE AGGREGATE AS AT THE
END OF EACH FISCAL QUARTER THEREAFTER WITHOUT THE LENDER'S WRITTEN APPROVAL FOR
CAPITAL ITEMS, INCLUDING WITHOUT LIMITATION FOR NEW BUILDING AND BUILDING
EXPANSION PROJECTS, NEW BUSINESS ACQUISITION AND OR MAJOR UNPLANNED EQUIPMENT
PROJECTS; PROVIDED, HOWEVER, THAT BORROWER MAY INCUR NO MORE THAN
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$600,000 (OF THE $1,200,000 AGGREGATE LIMIT) FOR THE ROOF REPLACEMENT PROJECT AT
THE BLUE EARTH, MINNESOTA FACILITY DURING THE FISCAL YEAR ENDING DECEMBER 31,
2009, IN ACCORDANCE WITH THE PROVISIONS OF THAT CERTAIN LETTER OF CREDIT AND
REIMBURSEMENT AGREEMENT DATED JUNE 28, 2006 (AS AMENDED THE "REIMBURSEMENT
AGREEMENT").
Section 6.3
Permitted Liens; Financing
Statements.
(A)
THE BORROWER WILL NOT, AND SHALL CAUSE EACH
OF ITS SUBSIDIARIES NOT TO, CREATE, INCUR OR SUFFER TO EXIST ANY LIEN UPON OR OF
ANY OF ITS ASSETS, NOW OWNED OR HEREAFTER ACQUIRED, TO SECURE ANY INDEBTEDNESS;
EXCLUDING, HOWEVER, FROM THE OPERATION OF THE FOREGOING, THE FOLLOWING
(COLLECTIVELY, "PERMITTED LIENS"):
(I)
IN THE CASE OF ANY OF THE BORROWER'S PROPERTY WHICH IS NOT
COLLATERAL, COVENANTS, RESTRICTIONS, RIGHTS, EASEMENTS AND MINOR IRREGULARITIES
IN TITLE WHICH DO NOT MATERIALLY INTERFERE WITH THE BORROWER'S BUSINESS OR
OPERATIONS AS PRESENTLY CONDUCTED;
(II)
LIENS IN EXISTENCE ON THE DATE HEREOF AND LISTED IN SCHEDULE 6.3
HERETO, SECURING INDEBTEDNESS FOR BORROWED MONEY PERMITTED UNDER SECTION 6.4;
(III)
THE SECURITY INTEREST AND LIENS CREATED BY THE SECURITY
DOCUMENTS; AND
(IV)
PURCHASE MONEY LIENS RELATING TO THE ACQUISITION OF MACHINERY AND
EQUIPMENT OF THE BORROWER NOT EXCEEDING THE LESSER OF COST OR FAIR MARKET VALUE
THEREOF AND SO LONG AS NO DEFAULT PERIOD IS THEN IN EXISTENCE AND NONE WOULD
EXIST IMMEDIATELY AFTER SUCH ACQUISITION.
(B)
THE BORROWER WILL NOT AMEND ANY FINANCING STATEMENTS IN FAVOR OF
THE LENDER EXCEPT AS PERMITTED BY LAW.
Section 6.4
Indebtedness. The Borrower will
not, and shall cause each of its Subsidiaries not to, incur, create, assume or
permit to exist any indebtedness or liability on account of deposits or advances
or any indebtedness for borrowed money or letters of credit issued on the
Borrower's behalf, or any other indebtedness or liability evidenced by notes,
bonds, debentures or similar obligations, except:
(A)
INDEBTEDNESS ARISING HEREUNDER;
(B)