IN FAVOR OF LAURUS IN ANY MATERIAL
RESPECT.
13.
COVENANTS.
EACH OF THE COMPANY AND THE SUBSIDIARY GUARANTOR COVENANTS AS
FOLLOWS:
(A)
NEITHER THE COMPANY NOR THE SUBSIDIARY GUARANTOR WILL, WITHOUT THE PRIOR
WRITTEN CONSENT OF LAURUS, WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD,
CHANGE (I) ITS NAME AS IT APPEARS IN THE OFFICIAL FILINGS IN THE STATE OF ITS
INCORPORATION OR FORMATION, (II) THE TYPE OF LEGAL ENTITY IT IS, (III) ITS
ORGANIZATION IDENTIFICATION NUMBER, IF ANY, ISSUED BY ITS STATE OF
INCORPORATION, (IV) ITS STATE OF INCORPORATION OR (V) AMEND ITS CERTIFICATE OF
INCORPORATION, BY-LAWS OR OTHER ORGANIZATIONAL DOCUMENT IF SUCH AMENDMENT COULD
REASONABLY BE EXPECTED HAVE A MATERIAL ADVERSE EFFECT. NOTWITHSTANDING THE
FOREGOING, THE AMENDMENTS TO THE COMPANY'S CERTIFICATE OF INCORPORATION PROPOSED
AND SET FORTH IN THE RESOLUTIONS OF THE COMPANY'S BOARD OF DIRECTORS DATED APRIL
14, 2003 AND SET FORTH ON SCHEDULE 13(A) HERETO (THE "APRIL 14TH AMENDMENTS")
SHALL NOT REQUIRE THE CONSENT OF LAURUS.
(B)
THE OPERATION OF THE COMPANY'S AND THE SUBSIDIARY GUARANTOR 'S BUSINESS IS
AND WILL CONTINUE TO BE IN COMPLIANCE IN ALL MATERIAL RESPECTS WITH ALL
APPLICABLE FEDERAL, STATE AND LOCAL LAWS, RULES AND ORDINANCES, INCLUDING TO ALL
LAWS, RULES, REGULATIONS AND ORDERS RELATING TO TAXES, PAYMENT AND WITHHOLDING
OF PAYROLL TAXES, EMPLOYER AND EMPLOYEE CONTRIBUTIONS AND SIMILAR ITEMS,
SECURITIES, EMPLOYEE RETIREMENT AND WELFARE BENEFITS, EMPLOYEE HEALTH SAFETY AND
ENVIRONMENTAL MATTERS.
(C)
EACH OF THE COMPANY AND THE SUBSIDIARY GUARANTOR WILL PAY OR DISCHARGE
WHEN DUE ALL TAXES, ASSESSMENTS AND GOVERNMENTAL CHARGES OR LEVIES IMPOSED UPON
THE COMPANY OR THE SUBSIDIARY GUARANTOR OR ANY OF THE COLLATERAL UNLESS SUCH
AMOUNTS ARE BEING DILIGENTLY CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS
PROVIDED THAT (I) ADEQUATE RESERVES WITH RESPECT THERETO ARE MAINTAINED ON THE
BOOKS OF THE COMPANY OR THE SUBSIDIARY GUARANTOR IN CONFORMITY WITH GAAP AND
(II) THE RELATED LIEN SHALL HAVE NO EFFECT ON THE PRIORITY OF THE LIENS IN FAVOR
OF LAURUS OR THE VALUE OF THE ASSETS IN WHICH LAURUS HAS A LIEN.
(D)
UPON POSSESSION OF ACTUAL KNOWLEDGE, EACH OF THE COMPANY AND THE
SUBSIDIARY GUARANTOR WILL PROMPTLY INFORM LAURUS IN WRITING OF: (I) THE
COMMENCEMENT OF ALL PROCEEDINGS AND INVESTIGATIONS BY OR BEFORE AND/OR THE
RECEIPT OF ANY NOTICES FROM, ANY GOVERNMENTAL OR NONGOVERNMENTAL BODY AND ALL
ACTIONS AND PROCEEDINGS IN ANY COURT OR BEFORE ANY ARBITRATOR AGAINST OR IN ANY
WAY CONCERNING ANY EVENT WHICH MIGHT SINGLY OR IN THE AGGREGATE,
15
have a Material Adverse Effect; (ii) any amendment of the Company's or the
Subsidiary Guarantor's certificate of incorporation, by-laws or other
organizational document if such amendment could reasonably be expected to have a
Material Adverse Effect, provided however, that the April 14th Amendments shall
not require the consent of Laurus; (iii) any change which has had or might have
a Material Adverse Effect; (iv) any Event of Default or Default; (v) any default
or any event which with the passage of time or giving of notice or both would
constitute a default under