Schedule 5.2 to Credit Agreement – Borrower Reporting Requirements to Administrative Agent

Summary

This schedule outlines the documents and reports that the borrower must regularly provide to the administrative agent, and, if requested, to each lender. The borrower is required to submit detailed financial and operational reports on a weekly, monthly, and annual basis, including account roll-forwards, aging reports, inventory details, tax receipts, and customer lists. Some reports must be provided more frequently if certain financial thresholds are not met. The administrative agent may also request additional information as needed.

EX-10.4 5 l20125aexv10w4.txt EX-10.4 SCHEDULE 5.2 Exhibit 10.4 SCHEDULE 5.2 Provide Administrative Agent with each of the documents set forth below at the following times in form satisfactory to Administrative Agent (and if so requested by Administrative Agent, with copies for each Lender): Weekly, provided, (a) an Account roll-forward with supporting details however, that if, at supplied from sales journals, collection journals, any time, Excess credit registers and any other records, Availability shall be in an amount less (b) notice of all claims, offsets, or disputes than $1,500,000, the asserted by Account Debtors with respect to Borrower's documents identified and its Subsidiaries' Accounts, and in (a), (b) and (c) shall be provided on (c) copies of invoices together with corresponding a daily basis until shipping and delivery documents, and credit memos such time as Excess together with corresponding supporting documentation, Availability shall be with respect to invoices and credit memos in excess of in an amount equal to an amount determined in the sole discretion of or in excess of Administrative Agent, from time to time, and $1,500,000 (d) a detailed report of all Investments made by Borrower to any of its Subsidiaries during the prior week. Each Monthly Period (e) a Borrowing Base Certificate, (no later than the 10th Business Day (f) a detailed aging, by total, of Borrower's after the start of Accounts, together with a reconciliation and supporting such Monthly Period) documentation for any reconciling items noted (delivered electronically in an acceptable format, if Borrower has implemented electronic reporting), (g) a detailed calculation of those Accounts that are not eligible for the Borrowing Base, if Borrower has not implemented electronic reporting, (h) a report in form and substance satisfactory to Administrative Agent and certified by Borrower as being accurate and complete listing all Accounts relating to Government Contracts as of such date, which shall include the amount and age of each such Account, showing separately those which are more than 30, 60, 90 or 120 days old (delivered electronically in an acceptable format, if

Borrower has implemented electronic reporting) and a description of all Liens, set-offs, defenses and counterclaims with respect thereto, together with a reconciliation of such schedule with the schedule delivered in the previous month, (i) Inventory system/perpetual reports specifying the cost and the wholesale market value of Borrower's and its Subsidiaries' Inventory, by category, with additional detail showing additions to and deletions therefrom (delivered electronically in an acceptable format, if Borrower has implemented electronic reporting), (j) a detailed Inventory system/perpetual report together with a reconciliation to Borrower's general ledger accounts (delivered electronically in an acceptable format, if Borrower has implemented electronic reporting), (k) a detailed calculation of Inventory categories that are not eligible for the Borrowing Base, if Borrower has not implemented electronic reporting, (l) a summary aging, by vendor, of Borrower's and its Subsidiaries' accounts payable and any book overdraft (delivered electronically in an acceptable format, if Borrower has implemented electronic reporting) and an aging, by vendor, of any held checks, (m) certified copies of tax receipts evidencing such payment by Borrower of its taxes, including real estate and ad valorem taxes, (n) a detailed report of Borrower's and its Subsidiaries' backlog, (o) a detailed report regarding Borrower's and its Subsidiaries' cash and Cash Equivalents, including an indication of which amounts constitute Qualified Cash, and (p) a monthly Account roll-forward, in a format acceptable to Administrative Agent in its discretion, tied to the beginning and ending account receivable balances of Borrower's general ledger. Each Monthly Period (q) a reconciliation of Accounts, trade accounts (on the last Business payable, and Inventory of Borrower's general ledger Day of such Monthly accounts to its monthly financial statements including Period) any book reserves related to each category, in each case with respect to the prior Monthly Period. Annually (r) a detailed list of Borrower's and its Subsidiaries' customers, with address and contact information.

-2- (s) a physical Inventory. Upon request by (t) copies of purchase orders and invoices for Administrative Agent Inventory acquired by Borrower or its Subsidiaries, and (u) such other reports as to the Collateral or the financial condition of Borrower and its Subsidiaries, as Administrative Agent may reasonably request.

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