FINANCIAL STATEMENTS, REPORTS, CERTIFICATES.
(A)
DELIVER TO BANK:
(I) AS SOON AS AVAILABLE,
BUT NO LATER THAN FIVE (5) DAYS AFTER FILING WITH THE SECURITIES EXCHANGE
COMMISSION, BORROWER'S 10K AND 10Q REPORTS; (II) A COMPLIANCE CERTIFICATE
TOGETHER WITH DELIVERY OF THE 10K AND 10Q REPORTS; (III) A PROMPT REPORT OF ANY
LEGAL ACTIONS PENDING OR THREATENED AGAINST BORROWER OR ANY SUBSIDIARY THAT
COULD RESULT IN DAMAGES OR COSTS TO BORROWER OR ANY SUBSIDIARY OF $50,000.00 OR
MORE; AND (IV) BUDGETS, SALES PROJECTIONS, OPERATING PLANS OR OTHER FINANCIAL
INFORMATION BANK REASONABLY REQUESTS.
Borrower's 10K and 10Q reports required to be delivered pursuant to
Section 6.2(a)(i) shall be deemed to have been delivered on the date on which
Borrower posts such report or provides a link thereto on Borrower's or another
website on the Internet; provided, that Borrower shall provide paper copies to
Bank of the Compliance Certificates required by Section 6.2(a)(ii).
(B)
WITHIN THIRTY (30) DAYS AFTER THE LAST DAY
OF EACH MONTH, DELIVER TO BANK A DULY COMPLETED BORROWING BASE CERTIFICATE
SIGNED BY A RESPONSIBLE OFFICER, WITH (I) AGED LISTINGS OF ACCOUNTS RECEIVABLE
AND ACCOUNTS PAYABLE (BY INVOICE DATE) AND (II) A SCHEDULE OF DEFERRED REVENUE
BY CUSTOMER.
6
(C)
WITHIN THIRTY (30) DAYS AFTER THE LAST DAY
OF EACH MONTH, DELIVER TO BANK ITS MONTHLY FINANCIAL STATEMENTS TOGETHER WITH A
DULY COMPLETED COMPLIANCE CERTIFICATE SIGNED BY A RESPONSIBLE OFFICER SETTING
FORTH CALCULATIONS SHOWING COMPLIANCE WITH THE FINANCIAL COVENANTS SET FORTH IN
THIS AGREEMENT.
(D)
ALLOW BANK TO AUDIT BORROWER'S COLLATERAL AT
BORROWER'S EXPENSE.
SUCH AUDITS SHALL BE CONDUCTED NO MORE OFTEN THAN ONCE
EVERY TWELVE (12) MONTHS UNLESS A DEFAULT OR AN EVENT OF DEFAULT HAS OCCURRED
AND IS CONTINUING.
6.3
INVENTORY; RETURNS.
KEEP ALL INVENTORY IN
GOOD AND MARKETABLE CONDITION, FREE FROM MATERIAL DEFECTS.
RETURNS AND
ALLOWANCES BETWEEN BORROWER AND ITS ACCOUNT DEBTORS SHALL FOLLOW BORROWER'S
CUSTOMARY PRACTICES AS THEY EXIST AT THE EFFECTIVE DATE.
BORROWER MUST PROMPTLY
NOTIFY BANK OF ALL RETURNS, RECOVERIES, DISPUTES AND CLAIMS THAT INVOLVE MORE
THAN FIFTY THOUSAND DOLLARS ($50,000.00).
6.4
TAXES; PENSIONS.
MAKE, AND CAUSE EACH OF ITS
SUBSIDIARIES TO MAKE, TIMELY PAYMENT OF ALL FOREIGN, FEDERAL, STATE, AND LOCAL
TAXES OR ASSESSMENTS (OTHER THAN TAXES AND ASSESSMENTS WHICH BORROWER IS
CONTESTING PURSUANT TO THE TERMS OF SECTION 5.9 HEREOF) AND SHALL DELIVER TO
BANK, ON DEMAND, APPROPRIATE CERTIFICATES ATTESTING TO SUCH PAYMENTS, AND PAY
ALL AMOUNTS NECESSARY TO FUND ALL PRESENT PENSION, PROFIT SHARING AND DEFERRED
COMPENSATION PLANS IN ACCORDANCE WITH THEIR TERMS.
6.5
INSURANCE.
KEEP ITS BUSINESS AND THE
COLLATERAL INSURED FOR RISKS AND IN AMOUNTS STANDARD FOR COMPANIES IN BORROWER'S
INDUSTRY AND LOCATION AND AS BANK MAY REASONABLY REQUEST.
INSURANCE POLICIES
SHALL BE IN A FORM, WITH COMPANIES, AND IN AMOUNTS THAT ARE SATISFACTORY TO
BANK.
ALL PROPERTY POLICIES SHALL HAVE A LENDER'S LOSS PAYABLE ENDORSEMENT
SHOWING BANK AS THE SOLE LENDER LOSS PAYEE AND WAIVE SUBROGATION AGAINST BANK,
AND ALL LIABILITY POLICIES SHALL SHOW, OR HAVE ENDORSEMENTS SHOWING, BANK AS AN
ADDITIONAL INSURED.
ALL POLICIES (OR THE