AMENDING, OR
DECLINING TO RENEW ITS POLICY.
AT BANK'S REQUEST, BORROWER SHALL DELIVER
CERTIFIED COPIES OF POLICIES AND EVIDENCE OF ALL PREMIUM PAYMENTS.
PROCEEDS
PAYABLE UNDER ANY POLICY SHALL, AT BANK'S OPTION, BE PAYABLE TO BANK ON ACCOUNT
OF THE OBLIGATIONS.
NOTWITHSTANDING THE FOREGOING, (A) SO LONG AS NO EVENT OF
DEFAULT HAS OCCURRED AND IS CONTINUING, BORROWER SHALL HAVE THE OPTION OF
APPLYING THE PROCEEDS OF ANY CASUALTY POLICY UP TO FIFTY THOUSAND DOLLARS
($50,000) WITH RESPECT TO ANY LOSS, BUT NOT EXCEEDING ONE HUNDRED THOUSAND
DOLLARS ($100,000) IN THE AGGREGATE FOR ALL LOSSES UNDER ALL CASUALTY POLICIES
IN ANY ONE YEAR, TOWARD THE REPLACEMENT OR REPAIR OF DESTROYED OR DAMAGED
PROPERTY; PROVIDED THAT ANY SUCH REPLACED OR REPAIRED PROPERTY (I) SHALL BE OF
EQUAL OR LIKE VALUE AS THE REPLACED OR REPAIRED COLLATERAL AND (II) SHALL BE
DEEMED COLLATERAL IN WHICH BANK HAS BEEN GRANTED A FIRST PRIORITY SECURITY
INTEREST, AND (B) AFTER THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT, ALL PROCEEDS PAYABLE UNDER SUCH CASUALTY POLICY SHALL, AT THE OPTION OF
BANK, BE PAYABLE TO BANK ON ACCOUNT OF THE OBLIGATIONS.
IF BORROWER FAILS TO
OBTAIN INSURANCE AS REQUIRED UNDER THIS SECTION 6.7 OR TO PAY ANY AMOUNT OR
FURNISH ANY REQUIRED PROOF OF PAYMENT TO THIRD PERSONS AND BANK, BANK MAY MAKE
ALL OR PART OF SUCH PAYMENT OR OBTAIN SUCH INSURANCE POLICIES REQUIRED IN THIS
SECTION 6.7, AND TAKE ANY ACTION UNDER THE POLICIES BANK DEEMS PRUDENT.
6.8
OPERATING ACCOUNTS.
(A)
BORROWER SHALL AT ALL TIMES MAINTAIN ITS, AND ITS
SUBSIDIARIES', PRIMARY DOMESTIC AND INTERNATIONAL BANKING RELATIONSHIP
(INCLUDING FOREIGN EXCHANGE ACTIVITY) WITH BANK. BORROWER SHALL AT ALL TIMES
MAINTAIN ON DEPOSIT WITH BANK NOT LESS THAN 85% OF THE AGGREGATE DOLLAR VALUE OF
BORROWER'S AND SUCH SUBSIDIARIES' DOMESTIC AND INTERNATIONAL COLLATERAL ACCOUNTS
AT ALL FINANCIAL INSTITUTIONS.
(B)
AS TO ANY COLLATERAL ACCOUNTS MAINTAINED
WITH AN INSTITUTION OTHER THAN BANK, BORROWER SHALL CAUSE SUCH INSTITUTION TO
ENTER INTO A CONTROL AGREEMENT IN FORM ACCEPTABLE TO BANK IN ITS GOOD FAITH
BUSINESS JUDGMENT IN ORDER TO PERFECT BANK'S FIRST-PRIORITY SECURITY INTEREST IN
SUCH COLLATERAL ACCOUNTS (TO THE EXTENT THAT BANK DETERMINES IN ITS GOOD FAITH
BUSINESS JUDGMENT THAT A CONTROL AGREEMENT IS NECESSARY TO PERFECT AND PROTECT
SUCH SECURITY INTEREST), AND EACH SUCH CONTROL AGREEMENT MAY NOT BE TERMINATED
WITHOUT THE PRIOR WRITTEN CONSENT OF BANK. THE PROVISIONS OF THE PREVIOUS
SENTENCE SHALL NOT APPLY TO (I)
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; AND
(II) BORROWER'S (OR ITS SUBSIDIARY'S) COLLATERAL ACCOUNTS LOCATED IN CHINA AND
RELATING TO BORROWER'S (OR ITS SUBSIDIARY'S) OPERATIONS IN SUZHOU, CHINA.
6.9
FINANCIAL COVENANTS.
Maintain at all times, to be tested as of the last day of each month (unless
otherwise noted), on a consolidated basis with respect to Borrower and its
Subsidiaries:
(a)
Adjusted Quick Ratio.
An Adjusted Quick
Ratio of at least