MATERIAL INFRINGEMENT OF
ITS OWNED INTELLECTUAL PROPERTY RIGHTS BY OTHERS, (B) CLAIMS THAT THE BORROWER
IS INFRINGING ANOTHER PERSON'S INTELLECTUAL PROPERTY RIGHTS AND (C) ANY
THREATENED
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CANCELLATION, TERMINATION OR MATERIAL LIMITATION OF INTELLECTUAL PROPERTY RIGHTS
MATERIAL TO THE BORROWER'S BUSINESS OR OPERATIONS.
(III)
PROMPTLY UPON RECEIPT, THE BORROWER WILL
GIVE THE LENDER COPIES OF ALL REGISTRATIONS AND FILINGS WITH RESPECT TO OWNED
INTELLECTUAL PROPERTY RIGHTS.
(L)
VIOLATIONS OF LAW.
PROMPTLY UPON
KNOWLEDGE THEREOF, THE BORROWER WILL DELIVER TO THE LENDER NOTICE OF THE
BORROWER'S VIOLATION OF ANY LAW, RULE OR REGULATION, THE NON-COMPLIANCE WITH
WHICH WOULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON THE
BORROWER.
(M)
PREMISES.
WITHIN 10 DAYS OF THE LENDER'S
REQUEST, THE BORROWER SHALL PROVIDE TO THE LENDER A LIST OF THE ADDRESSES OF THE
PREMISES.
(N)
OTHER REPORTS.
FROM TIME TO TIME, WITH
REASONABLE PROMPTNESS, THE BORROWER WILL DELIVER TO THE LENDER ANY AND ALL
MATERIAL, REPORTS, RECORDS OR INFORMATION AS THE LENDER MAY REASONABLY REQUEST.
Section 6.2
Financial Covenants.
(A)
ASSET COVERAGE RATIO.
TOTAL FUNDED
INDEBTEDNESS, DETERMINED AS AT THE END OF EACH FISCAL QUARTER, SHALL NOT EXCEED
50% OF CONSOLIDATED ACCOUNTS (OTHER THAN ACCOUNTS OWED BY FOREIGN ACCOUNT
DEBTORS AND ACCOUNTS PLEDGED BY DIGITERRA, INC. TO IBM GLOBAL CREDIT
CORPORATION).
(B)
LEVERAGE COVERAGE RATIO.
THE RATIO OF TOTAL
FUNDED INDEBTEDNESS DIVIDED BY EBITDA, DETERMINED AS AT THE END OF EACH FISCAL
QUARTER FOR THE PRECEDING TWELVE MONTH PERIOD, SHALL NOT EXCEED 1.25 TO 1.00.
(C)
FIXED CHARGE COVERAGE RATIO.
THE RATIO OF
EBITDAR DIVIDED BY THE SUM OF CAPITAL EXPENDITURES, INTEREST EXPENSE AND LEASE
EXPENSE, DETERMINED AS AT THE END OF EACH FISCAL QUARTER FOR THE PRECEDING
TWELVE MONTH PERIOD, SHALL BE NO LESS THAN 1.75 TO 1.00.
(D)
LIABILITIES TO TANGIBLE NET WORTH RATIO.
THE RATIO OF THE BORROWER'S LIABILITIES DIVIDED BY ITS TANGIBLE NET WORTH,
DETERMINED AS AT THE END OF EACH FISCAL QUARTER, SHALL NOT EXCEED 2.0 TO 1.0.
Section 6.3
Permitted Liens; Financing
Statements.
(A)
THE BORROWER WILL NOT 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, COVENANTS, RESTRICTIONS, RIGHTS, EASEMENTS AND MINOR IRREGULARITIES IN
TITLE WHICH DO NOT MATERIALLY INTERFERE WITH THE BORROWER'S BUSINESS OR
OPERATIONS AS PRESENTLY CONDUCTED OR ITS OWNERSHIP OF SUCH PROPERTY;
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(II)
STATUTORY LIENS OF MECHANICS, MATERIALMEN
OR SUPPLIERS INCURRED IN THE ORDINARY COURSE OF THE BORROWER'S BUSINESS
CONSISTENT WITH PAST PRACTICES AND SECURING AMOUNTS NOT YET DUE OR DECLARED TO
BE DUE BY THE CLAIMANT THEREUNDER;
(III)
MATERIAL LIENS IN EXISTENCE ON THE DATE
HEREOF AND LISTED IN SCHEDULE 6.3 HERETO, SECURING INDEBTEDNESS PERMITTED UNDER
SECTION 6.4;
(IV)
THE SECURITY INTEREST AND LIENS CREATED BY THE
SECURITY DOCUMENTS;
(V)
PURCHASE MONEY LIENS RELATING TO THE
ACQUISITION OF MACHINERY AND EQUIPMENT OF THE BORROWER NOT EXCEEDING THE LESSER
OF