FEES AND OTHER AMOUNTS THEN DUE AND OWING TO LAURUS HEREUNDER), IF
ANY, TO COMPANY BY THE NEXT SUCCEEDING BUSINESS DAY .
NOTWITHSTANDING THE
FOREGOING, FOLLOWING THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT, LAURUS, AT ITS OPTION, MAY (A) APPLY SUCH PROCEEDS TO THE OBLIGATIONS
IN SUCH ORDER AS LAURUS SHALL ELECT, (B) HOLD SUCH PROCEEDS AS CASH COLLATERAL
FOR THE OBLIGATIONS AND COMPANY HEREBY GRANTS TO LAURUS A SECURITY INTEREST IN
SUCH CASH COLLATERAL AMOUNTS AS SECURITY FOR THE OBLIGATIONS AND/OR (C) DO ANY
COMBINATION OF THE FOREGOING.
9
10.
INSPECTIONS AND APPRAISALS.
AT ALL TIMES DURING NORMAL BUSINESS HOURS,
LAURUS, AND/OR ANY AGENT OF LAURUS SHALL HAVE THE RIGHT UPON REASONABLE NOTICE
TO THE COMPANY TO (A) HAVE ACCESS TO, VISIT, INSPECT, REVIEW, EVALUATE AND MAKE
PHYSICAL VERIFICATION AND APPRAISALS OF COMPANY'S PROPERTIES AND THE COLLATERAL,
(B) INSPECT, AUDIT AND COPY (OR TAKE ORIGINALS IF NECESSARY) AND MAKE EXTRACTS
FROM COMPANY'S BOOKS AND RECORDS, INCLUDING MANAGEMENT LETTERS PREPARED BY
INDEPENDENT ACCOUNTANTS, AND (C) DISCUSS WITH COMPANY'S PRINCIPAL OFFICERS, AND
INDEPENDENT ACCOUNTANTS, COMPANY'S BUSINESS, ASSETS, LIABILITIES, FINANCIAL
CONDITION, RESULTS OF OPERATIONS AND BUSINESS PROSPECTS.
COMPANY WILL DELIVER
TO LAURUS ANY INSTRUMENT NECESSARY FOR LAURUS TO OBTAIN RECORDS FROM ANY SERVICE
BUREAU MAINTAINING RECORDS FOR COMPANY.
IF ANY INTERNALLY PREPARED FINANCIAL
INFORMATION, INCLUDING THAT REQUIRED UNDER THIS SECTION IS UNSATISFACTORY IN ANY
MANNER TO LAURUS, LAURUS MAY REQUEST THAT THE ACCOUNTANTS REVIEW THE SAME.
11.
FINANCIAL REPORTING.
COMPANY WILL DELIVER, OR CAUSE TO BE DELIVERED, TO
LAURUS EACH OF THE FOLLOWING, WHICH SHALL BE IN FORM AND DETAIL ACCEPTABLE TO
LAURUS:
(A)
AS SOON AS AVAILABLE, AND IN ANY EVENT WITHIN ONE HUNDRED TWENTY (120)
DAYS AFTER THE END OF EACH FISCAL YEAR OF COMPANY, COMPANY'S AUDITED FINANCIAL
STATEMENTS WITH A REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS OF
RECOGNIZED STANDING SELECTED BY COMPANY AND ACCEPTABLE TO LAURUS (THE
"ACCOUNTANTS"), WHICH ANNUAL FINANCIAL STATEMENTS SHALL INCLUDE COMPANY'S
BALANCE SHEET AS AT THE END OF SUCH FISCAL YEAR AND THE RELATED STATEMENTS OF
COMPANY'S INCOME, RETAINED EARNINGS AND CASH FLOWS FOR THE FISCAL YEAR THEN
ENDED, PREPARED, IF LAURUS SO REQUESTS, ON A CONSOLIDATING AND CONSOLIDATED
BASIS TO INCLUDE ALL SUBSIDIARIES AND AFFILIATES, ALL IN REASONABLE DETAIL AND
PREPARED IN ACCORDANCE WITH GAAP, TOGETHER WITH (I) COPIES OF ANY MANAGEMENT
LETTERS PREPARED BY SUCH ACCOUNTANTS; (II) A REPORT SIGNED BY THE ACCOUNTANTS
STATING THAT IN MAKING THE INVESTIGATIONS NECESSARY FOR SAID OPINION THEY
OBTAINED NO KNOWLEDGE, EXCEPT AS SPECIFICALLY STATED, OF ANY DEFAULT OR EVENT OF
DEFAULT; AND (III) A CERTIFICATE OF COMPANY'S PRESIDENT, CHIEF EXECUTIVE OFFICER
OR CHIEF FINANCIAL OFFICER STATING THAT SUCH FINANCIAL STATEMENTS HAVE BEEN
PREPARED IN ACCORDANCE WITH GAAP AND WHETHER OR NOT SUCH OFFICER HAS KNOWLEDGE
OF THE OCCURRENCE OF ANY DEFAULT OR EVENT OF DEFAULT HEREUNDER AND, IF SO,
STATING IN REASONABLE DETAIL THE FACTS WITH RESPECT THERETO;
(B)
AS SOON AS AVAILABLE AND IN ANY EVENT WITHIN FORTY FIVE (45) DAYS AFTER
THE END OF EACH QUARTER, AN UNAUDITED/INTERNAL BALANCE