CONTINUE TO HAVE, A
PERFECTED SECURITY INTEREST IN ALL OF THE COLLATERAL WHICH SHALL BE SUBJECT TO
THE PRIOR LIENS OF TRIDENT GROWTH FUND, L.P. ("TRIDENT")
AND TO THE TERMS OF
THE INTERCREDITOR AGREEMENT REFERRED TO IN SECTION 8 HEREOF.
BORROWER WILL
IMMEDIATELY ADVISE LENDER IN WRITING OF ANY MATERIAL LOSS OR DAMAGE TO THE
COLLATERAL.
3.3.
FINANCIAL STATEMENTS.
ALL FINANCIAL STATEMENTS NOW OR IN THE
FUTURE DELIVERED TO LENDER HAVE BEEN, AND WILL BE, PREPARED IN CONFORMITY WITH
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.
3.4.
TAXES; COMPLIANCE WITH LAW.
BORROWER HAS FILED, AND WILL FILE,
WHEN DUE, ALL TAX RETURNS AND REPORTS REQUIRED BY APPLICABLE LAW, AND BORROWER
HAS PAID, AND WILL PAY, WHEN DUE, ALL TAXES, ASSESSMENTS, DEPOSITS AND
CONTRIBUTIONS NOW OR IN THE FUTURE OWED BY BORROWER (OTHER THAN ANY THE AMOUNT
OR VALIDITY OF WHICH ARE CURRENTLY BEING CONTESTED IN GOOD FAITH BY APPROPRIATE
PROCEEDINGS AND WITH RESPECT TO WHICH RESERVES IN CONFORMITY WITH GAAP HAVE BEEN
PROVIDED ON THE BOOKS OF THE BORROWER).
BORROWER HAS COMPLIED, AND WILL COMPLY,
IN ALL MATERIAL RESPECTS, WITH ALL APPLICABLE LAWS, RULES AND REGULATIONS.
3.5.
USE OF PROCEEDS.
THE PROCEEDS OF THE LOANS SHALL BE USED FOR
GENERAL WORKING CAPITAL PURPOSES.
4.
NEGATIVE COVENANTS.
BORROWER SHALL NOT, WITHOUT LENDER'S PRIOR
WRITTEN CONSENT, WHICH, WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD OR
DELAYED, DO ANY OF THE FOLLOWING:
(I) SELL OR TRANSFER ANY COLLATERAL, EXCEPT
FOR THE SALE OF FINISHED INVENTORY IN THE ORDINARY COURSE OF BORROWER'S
BUSINESS, AND THE SALE OF OBSOLETE OR UNNEEDED EQUIPMENT IN THE ORDINARY COURSE
OF BUSINESS; (II) GRANT A SECURITY INTEREST IN INTELLECTUAL PROPERTY TO ANY
THIRD PARTY; (III) PAY OR DECLARE ANY DIVIDENDS OR OTHER DISTRIBUTIONS TO
SHAREHOLDERS; (IV) REDEEM, RETIRE, PURCHASE OR OTHERWISE ACQUIRE, DIRECTLY OR
INDIRECTLY, ANY OF BORROWER'S CAPITAL STOCK (OTHER THAN AS PROVIDED IN
AGREEMENTS GRANTING OPTIONS TO THE BORROWER'S EMPLOYEES WHICH PERMIT REDEMPTION
OF OPTIONS AND/OR CAPITAL STOCK UPON TERMINATION OF EMPLOYMENT); (V) CREATE,
INCUR, GUARANTEE, ENDORSE (EXCEPT IN THE COURSE OF COLLECTION), ASSUME OR SUFFER
TO EXIST ANY INDEBTEDNESS, EXCEPT (A) INDEBTEDNESS TO THE LENDER, (B) OPEN
ACCOUNT TRADE DEBT INCURRED IN THE ORDINARY COURSE OF BUSINESS AND NOT PAST DUE,
(C) THE AMOUNTS OWING TO TRIDENT, OR (D) INDEBTEDNESS OUTSTANDING ON THE DATE
HEREOF; (VI) CREATE, INCUR ASSUME OR PERMIT TO EXIST ANY MORTGAGE, PLEDGE,
ENCUMBRANCE OR OTHER SECURITY INTEREST OR LIEN UPON ANY ASSETS OR REVENUES NOW
OWNED OR HEREAFTER ACQUIRED, EXCEPT FOR (A) LIENS FOR TAXES NOT YET DUE OR WHICH
ARE BEING CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS, PROVIDED THAT
ADEQUATE RESERVES WITH RESPECT THERETO ARE MAINTAINED ON THE BOOKS OF THE
BORROWER IN CONFORMITY WITH GAAP, (B) LIENS IN EXISTENCE ON THE DATE HEREOF
SECURING INDEBTEDNESS PERMITTED HEREIN, (C) LIENS IN FAVOR OF TRIDENT;
(VII) MAKE OR HAVE OUTSTANDING ANY LOANS OR ADVANCES TO OR MAKE ANY INVESTMENT
OR ACQUIRE ANY INTEREST WHATSOEVER IN, ANY PERSON, FIRM OR CORPORATION, EXCEPT
AS ACCEPTABLE TO THE LENDER IN ITS SOLE DISCRETION; OR (VIII) ACQUIRE, MERGE