MATERIAL RESPECTS WITH THE PARENT'S
REPORTING, FILING AND OTHER OBLIGATIONS UNDER THE BYLAWS OR RULES OF THE
NATIONAL ASSOCIATION OF SECURITIES DEALERS ("NASD") AND SUCH EXCHANGES, AS
APPLICABLE.
(C)
MARKET REGULATIONS.
IT SHALL NOTIFY THE SEC, NASD AND APPLICABLE
STATE AUTHORITIES, IN ACCORDANCE WITH THEIR REQUIREMENTS, OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT, AND SHALL TAKE ALL OTHER NECESSARY ACTION AND
PROCEEDINGS AS MAY BE REQUIRED AND PERMITTED BY APPLICABLE LAW, RULE AND
REGULATION, FOR THE LEGAL AND VALID ISSUANCE OF THE SECURITIES TO LAURUS AND
PROMPTLY PROVIDE COPIES THEREOF TO LAURUS.
(D)
REPORTING REQUIREMENTS.
IT SHALL TIMELY FILE WITH THE SEC ALL
REPORTS REQUIRED TO BE FILED PURSUANT TO THE EXCHANGE ACT AND REFRAIN FROM
TERMINATING ITS STATUS AS AN ISSUER REQUIRED BY THE EXCHANGE ACT TO FILE REPORTS
THEREUNDER EVEN IF THE EXCHANGE ACT OR THE RULES OR REGULATIONS THEREUNDER WOULD
PERMIT SUCH TERMINATION.
(E)
USE OF FUNDS.
IT SHALL USE THE PROCEEDS OF THE LOANS (I) TO REPAY
IN FULL THE EXISTING INDEBTEDNESS AND (II) FOR GENERAL WORKING CAPITAL PURPOSES
ONLY.
(F)
ACCESS TO FACILITIES.
IT SHALL, AND SHALL CAUSE EACH OF ITS
SUBSIDIARIES TO, PERMIT ANY REPRESENTATIVES DESIGNATED BY LAURUS (OR ANY
SUCCESSOR OF LAURUS), UPON REASONABLE NOTICE AND DURING NORMAL BUSINESS HOURS,
AT COMPANY'S EXPENSE AND ACCOMPANIED BY A REPRESENTATIVE OF COMPANY AGENT
(PROVIDED THAT NO SUCH PRIOR NOTICE SHALL BE REQUIRED TO BE GIVEN AND NO SUCH
REPRESENTATIVE SHALL BE REQUIRED TO ACCOMPANY LAURUS IN THE EVENT LAURUS
BELIEVES SUCH ACCESS IS NECESSARY TO PRESERVE OR PROTECT THE COLLATERAL OR
FOLLOWING THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT), TO:
(I)
VISIT AND INSPECT ANY OF ITS OR ANY SUCH SUBSIDIARY'S PROPERTIES;
(II)
EXAMINE ITS OR ANY SUCH SUBSIDIARY'S CORPORATE AND FINANCIAL
RECORDS (UNLESS SUCH EXAMINATION IS NOT PERMITTED BY FEDERAL, STATE OR LOCAL LAW
OR BY CONTRACT) AND MAKE COPIES THEREOF OR EXTRACTS THEREFROM; AND
(III)
DISCUSS ITS OR ANY SUCH SUBSIDIARY'S AFFAIRS, FINANCES AND
ACCOUNTS WITH ITS OR ANY SUCH SUBSIDIARY'S DIRECTORS, OFFICERS AND ACCOUNTANTS.
Notwithstanding the foregoing, neither it nor any of its Subsidiaries shall
provide any material, non-public information to Laurus unless Laurus signs a
confidentiality agreement and otherwise complies with Regulation FD, under the
federal securities laws.
(G)
TAXES.
IT SHALL, AND SHALL CAUSE EACH OF ITS SUBSIDIARIES TO,
PROMPTLY PAY AND DISCHARGE, OR CAUSE TO BE PAID AND DISCHARGED, WHEN DUE AND
PAYABLE, ALL LAWFUL TAXES, ASSESSMENTS AND GOVERNMENTAL CHARGES OR LEVIES
IMPOSED UPON IT AND ITS SUBSIDIARIES' INCOME, PROFITS, PROPERTY OR BUSINESS, AS
THE CASE MAY BE; PROVIDED, HOWEVER, THAT ANY SUCH TAX, ASSESSMENT, CHARGE OR
LEVY NEED NOT BE PAID CURRENTLY IF (I) THE VALIDITY THEREOF SHALL CURRENTLY AND
DILIGENTLY BE CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS, (II) SUCH TAX,
ASSESSMENT, CHARGE
23
OR LEVY SHALL HAVE NO EFFECT ON THE LIEN PRIORITY OF LAURUS IN THE COLLATERAL,
AND (III) IF IT AND/OR SUCH SUBSIDIARY, AS APPLICABLE, SHALL HAVE SET ASIDE ON
ITS AND/OR SUCH SUBSIDIARY'S BOOKS ADEQUATE RESERVES WITH RESPECT