NOT FOR PERSONAL, FAMILY, HOUSEHOLD, OR AGRICULTURAL PURPOSES.
6
AFFIRMATIVE COVENANTS
Borrower shall do all of the following:
6.1
GOVERNMENT COMPLIANCE.
BORROWER SHALL MAINTAIN ITS AND ALL
SUBSIDIARIES' LEGAL EXISTENCE AND GOOD STANDING IN ITS JURISDICTION OF FORMATION
AND MAINTAIN QUALIFICATION IN EACH JURISDICTION IN WHICH THE FAILURE TO SO
QUALIFY WOULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON
BORROWER'S BUSINESS OR OPERATIONS.
BORROWER SHALL COMPLY, AND 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 OR OPERATIONS OR WOULD REASONABLY BE EXPECTED TO CAUSE A
MATERIAL ADVERSE CHANGE.
6.2
FINANCIAL STATEMENTS, REPORTS, CERTIFICATES.
(A)
BORROWER SHALL 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
FIFTY (150) 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 REASONABLY ACCEPTABLE TO BANK;
(III) WITHIN FIVE (5) DAYS OF FILING, COPIES OF ALL STATEMENTS, REPORTS AND
NOTICES MADE AVAILABLE TO BORROWER'S SECURITY HOLDERS OR TO ANY HOLDERS OF
SUBORDINATED DEBT AND ALL REPORTS ON FORM 10-K, 10-Q AND 8-K FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION; (IV) A PROMPT REPORT OF ANY LEGAL ACTIONS
PENDING OR THREATENED AGAINST BORROWER OR ANY SUBSIDIARY THAT COULD RESULT IN
DAMAGES OR COSTS TO BORROWER OR ANY SUBSIDIARY OF TWENTY-FIVE THOUSAND DOLLARS
($25,000) OR MORE; (V) PROMPT NOTICE OF ANY MATERIAL CHANGE IN THE COMPOSITION
OF THE INTELLECTUAL PROPERTY, OR THE REGISTRATION OF ANY COPYRIGHT, INCLUDING
ANY SUBSEQUENT OWNERSHIP RIGHT OF BORROWER IN OR TO ANY COPYRIGHT, PATENT OR
TRADEMARK NOT SHOWN IN THE IP AGREEMENT OR KNOWLEDGE OF AN EVENT THAT MATERIALLY
ADVERSELY AFFECTS THE VALUE OF THE INTELLECTUAL PROPERTY COLLATERAL; (VI) A
PROMPT REPORT OF ANY COMPLAINTS FILED WITH THE TEXAS WORKFORCE COMMISSION
("TWC") AGAINST BORROWER IN THE AGGREGATE OF $25,000 OR MORE; AND (VII) BUDGETS,
SALES PROJECTIONS, OPERATING PLANS OR OTHER FINANCIAL INFORMATION REASONABLY
REQUESTED BY BANK.
(B)
WITHIN THIRTY (30) DAYS AFTER THE LAST DAY OF EACH MONTH, BORROWER
SHALL DELIVER TO BANK WITH THE MONTHLY FINANCIAL STATEMENTS A COMPLIANCE
CERTIFICATE SIGNED BY A RESPONSIBLE OFFICER IN THE FORM OF EXHIBIT B.
(C)
BORROWER WILL ALLOW BANK TO AUDIT BORROWER'S COLLATERAL,
INCLUDING, BUT NOT LIMITED TO, BORROWER'S ACCOUNTS AND ACCOUNTS RECEIVABLE, AT
BORROWER'S EXPENSE, UPON REASONABLE NOTICE TO BORROWER; PROVIDED, HOWEVER, PRIOR
TO THE OCCURRENCE OF AN EVENT OF DEFAULT, BORROWER SHALL BE OBLIGATED TO PAY FOR
NOT MORE THAN ONE (1) AUDIT PER YEAR.
AFTER THE OCCURRENCE OF AN EVENT OF
DEFAULT, BANK MAY AUDIT BORROWER'S COLLATERAL, INCLUDING, BUT NOT LIMITED TO,
BORROWER'S