OR SUCH OTHER INVENTORY REPORTS AS ARE
REQUESTED BY BANK IN ITS GOOD FAITH BUSINESS JUDGMENT.
(D)
WITHIN THIRTY (30) DAYS AFTER THE LAST DAY
OF EACH MONTH, DELIVER TO BANK WITH THE MONTHLY FINANCIAL STATEMENTS, A DULY
COMPLETED COMPLIANCE CERTIFICATE SIGNED BY A RESPONSIBLE OFFICER SETTING FORTH
CALCULATIONS SHOWING COMPLIANCE WITH THE FINANCIAL COVENANTS SET FORTH IN THIS
AGREEMENT.
(E)
ALLOW BANK TO AUDIT BORROWER'S COLLATERAL
AT BORROWER'S EXPENSE, SUCH EXPENSE NOT TO EXCEED $3,500 PER YEAR, UPON
REASONABLE NOTICE TO BORROWER; PROVIDED, THAT BORROWER SHALL BE OBLIGATED TO PAY
NOT MORE THAN ONE (1) AUDIT PER YEAR. NOTWITHSTANDING THE FOREGOING, DURING THE
CONTINUANCE OF AN EVENT OF DEFAULT, BANK MAY, IN BANK'S SOLE DISCRETION, AUDIT
BORROWER'S COLLATERAL AT BORROWER'S EXPENSE.
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
TWENTY-FIVE THOUSAND DOLLARS ($25,000).
7
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
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 LOSS PAYABLE AND ADDITIONAL INSURED ENDORSEMENTS) SHALL PROVIDE
THAT THE INSURER MUST GIVE BANK AT LEAST TWENTY (20) DAYS NOTICE BEFORE
CANCELING, 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. IF BORROWER FAILS TO OBTAIN INSURANCE AS
REQUIRED UNDER THIS SECTION 6.5 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 6.5, AND TAKE
ANY ACTION UNDER THE POLICIES BANK DEEMS PRUDENT.
6.6.
OPERATING ACCOUNTS.
(A)
MAINTAIN ITS DEPOSITORY AND OPERATING
ACCOUNTS AND SECURITIES ACCOUNTS WITH BANK AND BANK'S AFFILIATES.
(B)
IN ADDITION, FOR EACH COLLATERAL ACCOUNT
THAT BORROWER AT ANY TIME MAINTAINS, BORROWER SHALL CAUSE THE APPLICABLE BANK OR
FINANCIAL