INVESTOR WITH THE OPPORTUNITY TO ACCEPT OR REFUSE TO ACCEPT
SUCH MATERIAL NONPUBLIC INFORMATION AND THE INVESTOR ELECTING TO RECEIVE SUCH
MATERIAL NONPUBLIC INFORMATION SHALL ENTER INTO AN APPROPRIATE CONFIDENTIALITY
AGREEMENT WITH THE COMPANY WITH RESPECT THERETO.
4.6.
LIENS.
THE COMPANY SHALL NOT ENCUMBER,
MORTGAGE, PLEDGE, ASSIGN OR GRANT ANY LIEN IN ANY COLLATERAL TO ANY PERSON OTHER
THAN THE INVESTORS, EXCEPT FOR PERMITTED LIENS.
4.7.
USE AND DISPOSITION OF COLLATERAL.
THE
COMPANY SHALL: (A) NOT DISPOSE OF ANY OF THE COLLATERAL WHETHER BY SALE, LEASE
OR OTHERWISE EXCEPT FOR (I) THE SALE OF INVENTORY IN THE ORDINARY COURSE OF
BUSINESS, (II) THE DISPOSITION OR TRANSFER OF OBSOLETE, EXCESS OR WORN-OUT
8
EQUIPMENT IN THE ORDINARY COURSE OF BUSINESS, (III) THE SALE OF ASSETS
CONSTITUTING THE NEW HAVEN BUSINESS, THE NORTH CAROLINA BUSINESS OR LARK TO A
NON-AFFILIATED THIRD PARTY IN STRICT ACCORDANCE WITH, AND ONLY TO THE EXTENT
PERMITTED BY, THE PURCHASE AGREEMENT, INCLUDING WITHOUT LIMITATION THE MANDATORY
PREPAYMENT PROVISIONS CONTAINED THEREIN, AND IN ALL EVENTS, THE PROCEEDS FROM
ANY SUCH DISPOSITION SHALL REMAIN SUBJECT TO THE LIENS CREATED HEREBY, AND (IV)
ANY CASH ADVANCE OR CAPITAL CONTRIBUTION TO LARK; PROVIDED, THAT, THE INVESTORS
HAVE A FIRST PRIORITY, SECURITY INTEREST IN (X) ANY NOTE, INSTRUMENT OR SECURITY
EVIDENCING THE ADVANCE OR CAPITAL CONTRIBUTION TO LARK AND (Y) EXCEPT AS
OTHERWISE PERMITTED UNDER SECTION 5.6(P) OF THE PURCHASE AGREEMENT, ANY CASH
ADVANCE OR CAPITAL CONTRIBUTION MADE TO LARK; AND (B) KEEP AND MAINTAIN THE
EQUIPMENT IN GOOD OPERATING CONDITION, EXCEPT FOR ORDINARY WEAR AND TEAR, AND
SHALL MAKE ALL NECESSARY REPAIRS AND REPLACEMENTS THEREOF SO THAT THE VALUE AND
OPERATING EFFICIENCY SHALL AT ALL TIMES BE MAINTAINED AND PRESERVED.
FOR THE
AVOIDANCE OF DOUBT, THE COMPANY MAY FREELY TRANSFER OR DISPOSE OF ITS RIGHTS
UNDER ITS INTELLECTUAL PROPERTY, INCLUDING, WITHOUT LIMITATION, ANY LICENSES AND
OTHER ARRANGEMENTS WITH RESPECT THERETO.
4.8.
RISK OF LOSS; INSURANCE.
THE COMPANY SHALL
BEAR THE FULL RISK OF LOSS FROM ANY LOSS OF ANY NATURE WHATSOEVER WITH RESPECT
TO THE COLLATERAL.
THE COMPANY SHALL KEEP THE COLLATERAL INSURED AS FOLLOWS:
(A)
CASUALTY INSURANCE.
MAINTAIN EXTENDED
COVERAGE CASUALTY INSURANCE WRITTEN IN THE NAME OF THE COMPANY IN THE BROADEST
"ALL RISKS" FORM AVAILABLE ON A FULL REPLACEMENT COST BASIS COVERING ALL
COLLATERAL.
SUCH INSURANCE SHALL BE IN AMOUNTS AND WITH DEDUCTIBLE AMOUNTS THAT
ARE CUSTOMARY FOR COMPANIES IN THE SAME INDUSTRY AS THE COMPANY IN THE SAME
GEOGRAPHIC MARKET AS THE COMPANY, BUT IN NO EVENT SHALL THE COVERAGE BE LESS
THAN THE FULL INSURABLE VALUE OF THE COVERED COLLATERAL.
(B)
LIABILITY INSURANCE.
MAINTAIN COMMERCIAL
GENERAL LIABILITY INSURANCE IN THE NAME OF EACH OF THE INVESTORS, INCLUDING A
CONTRACTUAL LIABILITY ENDORSEMENT AND A COMPLETED OPERATIONS AND PERSONAL INJURY
COVERAGE, WITH A COMBINED SINGLE LIMIT FOR ANY ONE OCCURRENCE OF AT LEAST
$3,000,000.
(C)
POLICY TERMS.
ALL POLICIES SHALL MEET THE
FOLLOWING REQUIREMENTS:
(I)
OVERALL BLANKET OR EXCESS COVERAGE
POLICIES MAY BE SUPPLIED PROVIDED, HOWEVER, THAT ALL INSURANCE SHALL BE IN
AMOUNTS SUFFICIENT TO PREVENT ANY INSURED