SOON AS AVAILABLE, BUT IN ANY EVENT
WITHIN TWENTY (20) DAYS AFTER THE END OF EACH QUARTER, A COMPANY PREPARED
CONSOLIDATED BALANCE SHEET, INCOME, AND CASH FLOW STATEMENT COVERING BORROWER'S
CONSOLIDATED OPERATIONS DURING SUCH PERIOD, PREPARED IN ACCORDANCE WITH GAAP,
CONSISTENTLY APPLIED, IN A FORM REASONABLY ACCEPTABLE TO BANK AND CERTIFIED BY A
RESPONSIBLE OFFICER; (B) AS SOON AS AVAILABLE, BUT IN ANY EVENT WITHIN ONE
HUNDRED TWENTY (120) DAYS AFTER THE END OF BORROWER'S FISCAL YEAR, AUDITED
CONSOLIDATED FINANCIAL STATEMENTS OF BORROWER PREPARED IN ACCORDANCE WITH GAAP,
CONSISTENTLY APPLIED, TOGETHER WITH AN UNQUALIFIED OPINION ON SUCH FINANCIAL
STATEMENTS OF AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTING FIRM REASONABLY
ACCEPTABLE TO BANK; (C) IF APPLICABLE, COPIES OF ALL STATEMENTS, REPORTS AND
NOTICES SENT OR MADE AVAILABLE GENERALLY BY BORROWER TO ITS SECURITY HOLDERS OR
TO ANY HOLDERS OF SUBORDINATED DEBT AND ALL REPORTS ON FORMS 10-K AND 10-Q FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION; (D) PROMPTLY UPON RECEIPT OF NOTICE
THEREOF, A 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 FIFTY THOUSAND DOLLARS ($50,000) OR MORE; (E) SUCH BUDGETS, SALES
PROJECTIONS, OPERATING PLANS OR OTHER FINANCIAL INFORMATION AS BANK MAY
REASONABLY REQUEST FROM TIME TO TIME GENERALLY PREPARED BY BORROWER IN THE
ORDINARY COURSE OF BUSINESS; AND (F) WITHIN TWENTY (20) DAYS OF THE LAST DAY OF
EACH FISCAL QUARTER, A REPORT SIGNED BY BORROWER, IN FORM REASONABLY ACCEPTABLE
TO BANK, LISTING ANY APPLICATIONS OR REGISTRATIONS THAT BORROWER HAS MADE OR
FILED IN RESPECT OF ANY PATENTS, COPYRIGHTS OR TRADEMARKS AND THE STATUS OF ANY
OUTSTANDING APPLICATIONS OR REGISTRATIONS, AS WELL AS ANY MATERIAL CHANGE IN
BORROWER'S INTELLECTUAL PROPERTY, INCLUDING BUT NOT LIMITED TO ANY SUBSEQUENT
OWNERSHIP RIGHT OF BORROWER IN OR TO ANY TRADEMARK, PATENT OR COPYRIGHT NOT
SPECIFIED IN EXHIBITS A, B, AND C OF THE INTELLECTUAL PROPERTY SECURITY
AGREEMENT DELIVERED TO BANK BY BORROWER IN CONNECTION WITH THIS AGREEMENT.
Within fifteen (15) days after the last day of each month, Borrower shall
deliver to Bank a Borrowing Base Certificate signed by a Responsible Officer in
substantially the form of Exhibit C hereto, together with aged listings of
accounts receivable and accounts payable.
Within twenty (20) after the last day of each month, Borrower shall deliver to
Bank a Compliance Certificate signed by a Responsible Officer in substantially
the form of Exhibit D hereto.
Bank shall have a right from time to time hereafter to audit Borrower's Accounts
and appraise Collateral at Borrower's expense, provided that such audits will be
conducted no more often than every six (6) months unless an Event of Default has
occurred and is continuing.
6.4
INVENTORY; RETURNS.
BORROWER SHALL KEEP ALL INVENTORY IN GOOD AND
MARKETABLE CONDITION, FREE FROM ALL MATERIAL DEFECTS EXCEPT FOR INVENTORY FOR
WHICH ADEQUATE RESERVES HAVE BEEN MADE.
RETURNS AND ALLOWANCES, IF ANY, AS
BETWEEN BORROWER AND ITS ACCOUNT DEBTORS SHALL BE ON THE SAME BASIS AND IN
ACCORDANCE WITH THE USUAL