LENDER A STATEMENT OF THE BORROWER'S CHIEF FINANCIAL OFFICER SETTING FORTH
DETAILS AS TO SUCH LIABILITY AND THE ACTION WHICH THE BORROWER PROPOSES TO TAKE
WITH RESPECT THERETO.
(M)
DISPUTES.
PROMPTLY UPON KNOWLEDGE THEREOF, NOTICE OF (I) ANY
DISPUTES OR CLAIMS BY THE BORROWER'S CUSTOMERS
EXCEEDING $10,000 INDIVIDUALLY
OR $20,000 IN THE AGGREGATE DURING ANY FISCAL YEAR; (II) CREDIT MEMOS; AND
(III) ANY GOODS RETURNED TO OR RECOVERED BY THE BORROWER.
(N)
OFFICERS AND DIRECTORS.
PROMPTLY UPON KNOWLEDGE THEREOF, NOTICE
OF ANY CHANGE IN THE PERSONS CONSTITUTING THE BORROWER'S OFFICERS AND DIRECTORS.
(O)
COLLATERAL.
PROMPTLY UPON KNOWLEDGE THEREOF, NOTICE OF ANY LOSS
OF OR MATERIAL DAMAGE TO ANY COLLATERAL OR OF ANY SUBSTANTIAL ADVERSE CHANGE IN
ANY COLLATERAL OR THE PROSPECT OF PAYMENT THEREOF.
(P)
COMMERCIAL TORT CLAIMS.
PROMPTLY UPON KNOWLEDGE THEREOF, NOTICE
OF ANY COMMERCIAL TORT CLAIMS IT MAY BRING AGAINST ANY PERSON, INCLUDING THE
NAME AND ADDRESS OF EACH DEFENDANT, A SUMMARY OF THE FACTS, AN ESTIMATE OF THE
BORROWER'S DAMAGES, COPIES OF ANY COMPLAINT OR DEMAND LETTER SUBMITTED BY THE
BORROWER, AND SUCH OTHER INFORMATION AS THE LENDER MAY REQUEST.
(Q)
INTELLECTUAL PROPERTY.
(i)
30 days prior written notice of Borrower's intent to acquire
material Intellectual Property Rights; and upon request shall provide the Lender
with copies of all proposed documents and agreements concerning such rights.
(ii)
Promptly upon knowledge thereof, notice of (A) any Infringement
of its Intellectual Property Rights by others, (B) claims that the Borrower is
Infringing another Person's Intellectual Property Rights and (C) any threatened
cancellation, termination or material limitation of its Intellectual Property
Rights.
(iii)
Promptly upon receipt, copies of all registrations and filings
with respect to its Intellectual Property Rights.
(R)
REPORTS TO OWNERS.
PROMPTLY UPON THEIR DISTRIBUTION, COPIES OF
ALL FINANCIAL STATEMENTS, REPORTS AND PROXY STATEMENTS WHICH THE BORROWER SHALL
HAVE SENT TO ITS OWNERS.
(S)
SEC FILINGS.
PROMPTLY AFTER THE SENDING OR FILING THEREOF, COPIES
OF ALL REGULAR AND PERIODIC REPORTS WHICH THE BORROWER SHALL FILE WITH THE
SECURITIES AND EXCHANGE COMMISSION OR ANY NATIONAL SECURITIES EXCHANGE.
28
(T)
TAX RETURNS OF BORROWER.
AS SOON AS POSSIBLE, AND IN ANY EVENT
NO LATER THAN 30 DAYS AFTER THEY ARE FILED, COPIES OF THE STATE AND FEDERAL
INCOME TAX RETURNS AND ALL SCHEDULES THERETO OF THE BORROWER.
(U)
VIOLATIONS OF LAW.
PROMPTLY UPON KNOWLEDGE THEREOF, NOTICE OF THE
BORROWER'S VIOLATION OF ANY LAW, RULE OR REGULATION, THE NON-COMPLIANCE WITH
WHICH COULD MATERIALLY AND ADVERSELY AFFECT THE FINANCIAL CONDITION, PROPERTIES
OR OPERATIONS OF THE BORROWER.
(V)
OTHER REPORTS.
FROM TIME TO TIME, WITH REASONABLE PROMPTNESS, ANY
AND ALL RECEIVABLES SCHEDULES, INVENTORY REPORTS, COLLECTION REPORTS, DEPOSIT
RECORDS, EQUIPMENT SCHEDULES, COPIES OF INVOICES TO ACCOUNT DEBTORS, SHIPMENT
DOCUMENTS AND DELIVERY RECEIPTS FOR GOODS SOLD, AND SUCH OTHER MATERIAL,
REPORTS, RECORDS OR INFORMATION AS THE LENDER MAY REQUEST.
Section 6.2
Financial Covenants.
(A)
MINIMUM AVAILABILITY.
THE BORROWER SHALL MAINTAIN AT ALL
TIMES AVAILABILITY NOT LESS THAN THE AMOUNTS SET FORTH FOR SUCH DATE AS FOLLOWS:
Dates
Minimum Availability
Closing through 12/02/05
$
2,000,000.00