(5) DAYS PRIOR WRITTEN NOTICE BEFORE
ESTABLISHING ANY COLLATERAL ACCOUNT AT OR WITH ANY BANK OR FINANCIAL INSTITUTION
OTHER THAN BANK OR ITS AFFILIATES. IN ADDITION, FOR EACH COLLATERAL ACCOUNT THAT
BORROWER AT ANY TIME MAINTAINS, BORROWER SHALL CAUSE THE APPLICABLE BANK OR
FINANCIAL INSTITUTION (OTHER THAN BANK) AT OR WITH WHICH ANY COLLATERAL ACCOUNT
IS MAINTAINED TO EXECUTE AND DELIVER A CONTROL AGREEMENT OR OTHER APPROPRIATE
INSTRUMENT WITH RESPECT TO SUCH COLLATERAL ACCOUNT TO PERFECT BANK'S LIEN IN
SUCH COLLATERAL ACCOUNT IN ACCORDANCE WITH THE TERMS HEREUNDER. THE PROVISIONS
OF THE PREVIOUS SENTENCE SHALL NOT APPLY TO DEPOSIT ACCOUNTS EXCLUSIVELY USED
FOR PAYROLL, PAYROLL TAXES AND OTHER EMPLOYEE WAGE AND BENEFIT PAYMENTS TO OR
FOR THE BENEFIT OF BORROWER'S EMPLOYEES AND IDENTIFIED TO BANK BY BORROWER AS
SUCH.
6.7
FINANCIAL COVENANTS.
Borrower shall maintain at all times, to be tested as of the last day of each
quarter:
(a)
Adjusted Quick Ratio. A ratio of Quick
Assets to Quick Liabilities of at least: (i) 0.95 to 1.0 for the quarters ending
March 31, 2008, June 30, 2008 and September 30, 2008; and (ii) 1.0 to 1.0 for
the quarters ending December 31, 2008 and March 31, 2009.
(b)
Minimum EBITDA-Cap Ex. Borrower's EBITDA
minus its capital expenditures, ("EBITDA-Cap Ex") for the two (2) quarter period
ending with each quarter, shall be in an amount equal to: (i) losses not greater
than (A) Seven Million Dollars ($7,000,000.00) for the quarter ending March 31,
2008; (B) Ten Million Dollars ($10,000,000.00) for the quarter ending June 30,
2008; and (C) Three Million Dollars ($3,000,000.00) for the quarter ending
September 30, 2008; (ii) Two Million Dollars ($2,000,000.00) for the quarter
ending December 31, 2008; and (iii) losses not greater than Two Million Five
Hundred Thousand Dollars ($2,500,000.00) for the quarter ending March 31, 2009.
6.8
LITIGATION COOPERATION. FROM THE DATE HEREOF
AND CONTINUING THROUGH THE TERMINATION OF THIS AGREEMENT, MAKE AVAILABLE TO
BANK, WITHOUT EXPENSE TO BANK, BORROWER AND ITS OFFICERS, EMPLOYEES AND AGENTS
AND BORROWER'S BOOKS AND RECORDS, TO THE EXTENT THAT BANK MAY DEEM THEM
REASONABLY NECESSARY TO PROSECUTE OR DEFEND ANY THIRD-PARTY SUIT OR PROCEEDING
INSTITUTED BY OR AGAINST BANK WITH RESPECT TO ANY COLLATERAL OR RELATING TO
BORROWER.
9
6.9
FURTHER ASSURANCES. BORROWER SHALL EXECUTE ANY
FURTHER INSTRUMENTS AND TAKE FURTHER ACTION AS BANK REASONABLY REQUESTS TO
PERFECT OR CONTINUE BANK'S LIEN IN THE COLLATERAL OR TO EFFECT THE PURPOSES OF
THIS AGREEMENT.
7
NEGATIVE COVENANTS
Borrower shall not do any of the following without Bank's prior written consent,
which shall not be unreasonably withheld or delayed:
7.1
DISPOSITIONS. CONVEY, SELL, LEASE, TRANSFER OR
OTHERWISE DISPOSE OF (COLLECTIVELY, "TRANSFER"), OR PERMIT ANY OF ITS
SUBSIDIARIES TO TRANSFER, ALL OR ANY PART OF ITS BUSINESS OR PROPERTY, EXCEPT
FOR TRANSFERS (A) OF INVENTORY IN THE ORDINARY COURSE OF BUSINESS; (B) OF
WORN-OUT OR OBSOLETE EQUIPMENT; (C) EQUIPMENT AND INTELLECTUAL PROPERTY NO
LONGER NECESSARY OR USEFUL IN THE CONDUCT OF BORROWER'S BUSINESS, UP TO A
MAXIMUM AGGREGATE AMOUNT OF ONE