SHALL FROM TIME TO TIME REASONABLY REQUEST,
BUDGETS, SALES PROJECTIONS, AND OPERATING PLANS USED IN THE PREPARATION OF THE
ANNUAL FINANCIAL PROJECTIONS REQUIRED BY CLAUSE "IV" ABOVE, AND OTHER FINANCIAL
INFORMATION NORMALLY PREPARED BY PARENT INCLUDING, WITHOUT LIMITATION,
CONSOLIDATING FINANCIAL STATEMENTS.
(B)
WITHIN THIRTY (30) DAYS AFTER THE LAST DAY
OF EACH FISCAL QUARTER, DELIVER TO BANK (I) AGED LISTINGS OF ACCOUNTS RECEIVABLE
AND ACCOUNTS PAYABLE (BY INVOICE DATE), (II) PERPETUAL INVENTORY REPORTS FOR THE
INVENTORY VALUED ON A FIRST-IN, FIRST-OUT BASIS AT THE LOWER OF COST OR MARKET
(IN ACCORDANCE WITH GAAP), OR SUCH OTHER INVENTORY REPORTS AS ARE REQUESTED BY
BANK IN ITS GOOD FAITH BUSINESS JUDGMENT AND ARE REASONABLY AVAILABLE TO
BORROWERS, (III) A CASH BALANCE REPORT, INCLUDING ACCOUNT STATEMENTS DETAILING
CASH MANAGEMENT TYPES OF INVESTMENTS HELD AND MATURITY DATES, AND (IV) IF AT ANY
TIME DURING SUCH FISCAL QUARTER THE SUM OF THE CREDIT EXTENSIONS UNDER SECTIONS
2.1.1, 2.1.2, 2.1.3 AND 2.1.4 EXCEEDS $12,000,0000, A DULY COMPLETED BORROWING
BASE CERTIFICATE SIGNED BY A RESPONSIBLE OFFICER OF EACH BORROWER AND PARENT.
(C)
ALLOW BANK TO AUDIT EACH BORROWER'S
COLLATERAL AT BORROWERS' EXPENSE. (WITHOUT LIMITATION ON THE FOREGOING,
BORROWERS SHALL COOPERATE WITH BANK COMPLETING, WITHIN 90 DAYS AFTER THE
EFFECTIVE DATE, AN AUDIT OF EACH BORROWER'S COLLATERAL AND BOOKS AND RECORDS.)
(D)
IF DURING A FISCAL QUARTER BORROWERS DESIRE
TO OBTAIN CREDIT EXTENSIONS UNDER SECTIONS 2.1.1, 2.1.2, 2.1.3 AND 2.1.4 THAT
AGGREGATE IN EXCESS OF $12,000,000, AND PREVIOUSLY DURING SUCH FISCAL QUARTER
BORROWERS HAVE NOT PROVIDED BANK WITH A DULY COMPLETED BORROWING BASE
CERTIFICATE SIGNED BY A RESPONSIBLE OFFICER OF EACH BORROWER AND PARENT, THEN
BORROWERS' SHALL FIRST PROVIDE BANK WITH SUCH A BORROWING BASE CERTIFICATE.
6.3
INVENTORY; RETURNS. KEEP ALL INVENTORY IN GOOD
AND MARKETABLE CONDITION, FREE FROM MATERIAL DEFECTS. RETURNS AND ALLOWANCES
BETWEEN ANY BORROWER AND ITS ACCOUNT DEBTORS SHALL FOLLOW SUCH BORROWER'S
CUSTOMARY PRACTICES AS THEY EXIST AT THE EFFECTIVE DATE. BORROWERS MUST PROMPTLY
NOTIFY BANK OF ALL RETURNS, RECOVERIES, DISPUTES AND CLAIMS THAT INVOLVE MORE
THAN FIVE HUNDRED THOUSAND DOLLARS ($500,000) AND (I) RELATE TO A SINGLE
CUSTOMER OR (II) RELATE TO RETURNS OF A SINGLE PRODUCT WITHIN A FISCAL QUARTER.
6.4
TAXES; PENSIONS. MAKE, AND CAUSE PARENT AND
EACH OF PARENT'S SUBSIDIARIES TO MAKE, TIMELY PAYMENT OF ALL MATERIAL FOREIGN,
FEDERAL, STATE, AND LOCAL TAXES OR ASSESSMENTS (OTHER THAN TAXES AND ASSESSMENTS
10
WHICH SUCH PERSON 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 (IN ALL MATERIAL RESPECTS)
WITH THEIR TERMS.
6.5
INSURANCE. KEEP ITS BUSINESS AND THE COLLATERAL INSURED FOR RISKS
AND IN AMOUNTS STANDARD FOR COMPANIES IN BORROWERS' INDUSTRY AND LOCATION AND AS
BANK MAY REASONABLY REQUEST. INSURANCE POLICIES SHALL BE IN A FORM AND WITH
COMPANIES THAT ARE SATISFACTORY TO BANK. ON AND AFTER THE DATE OF THE INITIAL
CREDIT EXTENSION, ALL PROPERTY POLICIES SHALL HAVE