OR PERMITTED TO LAPSE, IF, IN THE
GOOD FAITH JUDGMENT OF BORROWER, SUCH TERMINATION OR LAPSE IS IN THE BEST
INTERESTS OF BORROWER AND ITS SUBSIDIARIES, TAKEN AS A WHOLE, AND (B) BORROWER
MAY NOT PERMIT ITS QUALIFICATION TO DO BUSINESS IN THE JURISDICTION OF ITS CHIEF
EXECUTIVE OFFICE TO TERMINATE OR LAPSE; AND PROVIDED, FURTHER, THAT THIS
SECTION 6.2 SHALL NOT BE CONSTRUED TO PROHIBIT ANY OTHER TRANSACTION THAT IS
OTHERWISE PERMITTED IN SECTION 7 OF THIS AGREEMENT.
BORROWER SHALL COMPLY, AND SHALL HAVE EACH SUBSIDIARY COMPLY, WITH ALL LAWS,
ORDINANCES AND REGULATIONS TO WHICH IT IS SUBJECT, NONCOMPLIANCE WITH WHICH
COULD HAVE A MATERIAL ADVERSE EFFECT ON BORROWER'S BUSINESS
6.2.
FINANCIAL STATEMENTS, REPORTS, CERTIFICATES.
(A)
DELIVER TO BANK:
(I) AS SOON AS AVAILABLE,
BUT NO LATER THAN THIRTY (30) DAYS AFTER THE LAST DAY OF EACH MONTH, A COMPANY
PREPARED CONSOLIDATED BALANCE SHEET AND INCOME STATEMENT COVERING BORROWER'S
CONSOLIDATED OPERATIONS DURING THE PERIOD CERTIFIED BY A RESPONSIBLE OFFICER AND
IN A FORM ACCEPTABLE TO BANK; (II) AS SOON AS AVAILABLE, BUT NO LATER THAN
ONE-HUNDRED TWENTY (120) DAYS AFTER THE LAST DAY OF BORROWER'S FISCAL YEAR,
AUDITED CONSOLIDATED FINANCIAL STATEMENTS PREPARED UNDER GAAP, CONSISTENTLY
APPLIED, TOGETHER WITH AN UNQUALIFIED OPINION ON THE FINANCIAL STATEMENTS FROM
AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTING FIRM ACCEPTABLE TO BANK IN ITS
REASONABLE DISCRETION; (III) WITHIN FIVE (5) DAYS OF DELIVERY, COPIES OF ALL
STATEMENTS, REPORTS AND NOTICES MADE AVAILABLE TO BORROWER'S SECURITY HOLDERS OR
TO ANY HOLDERS OF SUBORDINATED DEBT; (IV) WITHIN FIVE (5) DAYS OF FILING, ALL
REPORTS ON FORM 10-K, 10-Q AND 8-K FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR A LINK THERETO ON BORROWER'S OR ANOTHER WEBSITE ON THE INTERNET;
(V) A PROMPT REPORT OF ANY LEGAL ACTIONS PENDING OR THREATENED AGAINST BORROWER
OR ANY OF ITS SUBSIDIARIES THAT COULD RESULT IN DAMAGES OR COSTS TO BORROWER OR
ANY OF ITS SUBSIDIARIES OF TWENTY-FIVE THOUSAND DOLLARS ($25,000) OR MORE;
(VI) PROMPT NOTICE OF AN EVENT THAT MATERIALLY AND ADVERSELY AFFECTS THE VALUE
OF THE INTELLECTUAL PROPERTY; (VII) A PROMPT REPORT OF ANY COMPLAINTS FILED WITH
THE TEXAS WORKFORCE COMMISSION ("TWC") AGAINST BORROWER IN THE AGGREGATE OF
$25,000 OR MORE; AND (VIII) BUDGETS, SALES PROJECTIONS, OPERATING PLANS AND
OTHER FINANCIAL INFORMATION REASONABLY REQUESTED BY BANK.
(B)
BORROWER'S 10K, 10Q, AND 8K REPORTS REQUIRED
TO BE DELIVERED PURSUANT TO SECTION 6.2(A)(IV) 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 WITH THE COMPLIANCE CERTIFICATE
REQUIRED BY SECTION 6.2(D).
(C)
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) 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)