THE OCCURRENCE AND DURING THE CONTINUANCE OF AN
EVENT OF DEFAULT, ALL PROCEEDS PAYABLE UNDER SUCH CASUALTY POLICY SHALL, AT THE
OPTION OF THE BANK, BE PAYABLE TO BANK ON ACCOUNT OF THE OBLIGATIONS.
IF
BORROWER FAILS TO OBTAIN INSURANCE AS REQUIRED UNDER THIS SECTION 6.4 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 6.4, AND TAKE ANY ACTION UNDER THE POLICIES BANK DEEMS
PRUDENT.
6.5
ACCOUNTS
(A)
TO PERMIT BANK TO MONITOR BORROWER'S FINANCIAL PERFORMANCE AND
CONDITION, MAINTAIN ALL OF BORROWER'S AND ITS DOMESTIC SUBSIDIARIES' DEPOSITORY
AND OPERATING ACCOUNTS AND SECURITIES/INVESTMENT ACCOUNTS WITH BANK AND BANK'S
AFFILIATES; PROVIDED, HOWEVER, THAT BORROWER SHALL HAVE NINETY (90) DAYS FROM
THE EFFECTIVE DATE TO CLOSE ITS EXISTING ACCOUNTS WITH KEYBANK (THE "PERMITTED
ACCOUNTS") AND TRANSFER ALL FUNDS HELD THEREIN TO AN ACCOUNT MAINTAINED WITH
BANK.
(B)
FOR ANY COLLATERAL ACCOUNT THAT BANK IN ITS SOLE DISCRETION
PERMITS BORROWER TO MAINTAIN, 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 WHICH 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) THE PERMITTED ACCOUNTS UP UNTIL THE DATE THAT IS
NINETY (90) DAYS FROM THE EFFECTIVE DATE.
6.6
INVENTORY; RETURNS; NOTICES OF ADJUSTMENTS.
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 (INCLUDING THE ISSUANCE OF CREDIT AND/OR DEBIT MEMORANDA) AS
THEY EXIST AT THE EFFECTIVE DATE.
IF, AT ANY TIME DURING THE TERM OF THIS
AGREEMENT, ANY ACCOUNT DEBTOR ASSERTS AN ADJUSTMENT IN EXCESS OF ONE HUNDRED
THOUSAND DOLLARS ($100,000.00), BORROWER ISSUES A CREDIT MEMORANDUM IN AN AMOUNT
IN EXCESS OF ONE HUNDRED THOUSAND DOLLARS ($100,000.00), OR ANY REPRESENTATION,
WARRANTY OR COVENANT SET FORTH IN THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS IS
NO LONGER TRUE IN ALL MATERIAL RESPECTS, BORROWER WILL PROMPTLY ADVISE BANK.
6.7
FINANCIAL COVENANT - ADJUSTED QUICK RATIO.
MAINTAIN AT ALL TIMES,
TO BE TESTED AS OF THE LAST DAY OF EACH MONTH, AN ADJUSTED QUICK RATIO OF AT
LEAST 1.50 TO 1.0.
6.8
PROTECTION AND REGISTRATION OF INTELLECTUAL PROPERTY RIGHTS
12
(A)
(I) USE COMMERCIALLY REASONABLE EFFORTS TO PROTECT, DEFEND
AND MAINTAIN THE VALIDITY AND ENFORCEABILITY OF ITS INTELLECTUAL PROPERTY THAT
IS MATERIAL TO ITS BUSINESS; (II) PROMPTLY ADVISE BANK IN WRITING OF MATERIAL
INFRINGEMENTS OF ITS INTELLECTUAL PROPERTY; AND (III) NOT