COLLATERAL THE SAME DEGREE OF CARE
AND PROTECTION WHICH IT GIVES TO ITS OWN PROPERTY; PROVIDED, HOWEVER, THAT THE
COMPANY SHALL HAVE NO LIABILITY TO BORROWER FOR ANY LOSSES, COSTS, EXPENSES OR
DAMAGES DUE TO ANY ACTS OR OMISSIONS OF THIRD PARTIES, OR DUE TO ANY ACTS OF GOD
OR OTHER CAUSES BEYOND ITS CONTROL.
THE COMPANY SHALL HAVE NO DUTY TO PRESERVE
ANY RIGHTS WITH RESPECT TO ANY COLLATERAL, INCLUDING, WITHOUT LIMITATION, RIGHTS
AGAINST PRIOR PARTIES, OR TO TAKE, OR TO NOTIFY BORROWER OF THE NEED TO TAKE,
ANY ACTION RESPECTING ANY RIGHTS, PRIVILEGES OR OPTIONS RELATING TO ANY
COLLATERAL.
TO REPLACE ANY CERTIFICATES, HOWEVER, BORROWER SHALL NOT BE
REQUIRED TO SUPPLY ANY BOND OR OTHER INDEMNITY.
(B)
BORROWER SHALL FURNISH TO THE COMPANY, PROMPTLY UPON RECEIPT
THEREOF, COPIES OF ALL MATERIAL NOTICES, REQUESTS AND OTHER DOCUMENTS RECEIVED
BY BORROWER RELATING TO COLLATERAL UNLESS THE SAME WERE SENT BY THE COMPANY.
(C)
BORROWER SHALL NOT (I) SELL, ASSIGN, TRANSFER OR OTHERWISE DISPOSE
OF ANY COLLATERAL, OR CREATE OR SUFFER TO EXIST ANY LIEN, SECURITY INTEREST,
ASSIGNMENT BY OPERATION OF LAW OR OTHER CHARGE OR ENCUMBRANCE ON, OR WITH
RESPECT TO, ANY COLLATERAL, EXCEPT FOR THE SECURITY INTEREST CREATED BY THIS
AGREEMENT AND THE RIGHTS, REMEDIES AND RESTRICTIONS IMPOSED BY THE OPTION
AGREEMENT; OR (II) ATTEMPT ANY ACTION PROHIBITED BY PARAGRAPH (C)(I) OF THIS
SECTION 6.
NOTWITHSTANDING THE FOREGOING, BORROWER MAY TRANSFER SHARES TO
PERMITTED TRANSFEREES PURSUANT TO THE OPTION AGREEMENT OR FOLLOWING THE VESTING
OF SUCH SHARES PROVIDED SUCH TRANSFER IS IN ACCORDANCE WITH THE OPTION
AGREEMENT; PROVIDED, HOWEVER, THAT THE SHARES SO TRANSFERRED SHALL REMAIN
SUBJECT TO THE SECURITY INTEREST CREATED BY THIS AGREEMENT AND ANY SUCH
PERMITTED TRANSFEREE(S) SHALL, AS A CONDITION TO ANY TRANSFER, AGREE TO BE
SUBJECT TO THE PROVISIONS OF THIS AGREEMENT.
SECTION 7.
DEFAULTS.
A DEFAULT (AN "EVENT OF DEFAULT") SHALL BE DEEMED TO HAVE
OCCURRED HEREUNDER IF (A) BORROWER FAILS IN ANY MATERIAL RESPECT TO PERFORM ANY
MATERIAL OBLIGATION HEREUNDER, IF ANY MATERIAL REPRESENTATION OR WARRANTY
HEREUNDER WAS UNTRUE IN ANY MATERIAL RESPECT WHEN MADE, OR IF ANY DEFAULT OR
EVENT OF DEFAULT BY BORROWER OCCURS UNDER THE NOTE OR ANY AGREEMENT EVIDENCING,
OR CONSTITUTING OR GRANTING SECURITY FOR, THE OBLIGATIONS, AND (B) THE COMPANY
GIVES TO BORROWER WRITTEN NOTICE THEREOF AND SUCH DEFAULT SHALL NOT HAVE BEEN
CURED WITHIN FOURTEEN (14) DAYS OR SUCH ADDITIONAL TIME AS DETERMINED BY THE
BOARD OF DIRECTORS OF THE COMPANY.
SECTION 8.
REMEDIES.
UPON AND AFTER THE OCCURRENCE OF ANY EVENT OF DEFAULT
WHICH IS THEN CONTINUING OR WHICH HAS NOT BEEN CURED WITHIN THE TIME PERIOD
GIVEN FOR SUCH CURE:
(A)
THE COMPANY MAY EXERCISE ITS RIGHTS WITH RESPECT TO THE
COLLATERAL, WITHOUT REGARD TO THE EXISTENCE OF ANY OTHER SECURITY OR SOURCE OF
PAYMENT FOR OBLIGATIONS, INCLUDING WITHOUT LIMITATION THE RIGHTS SET FORTH IN
SECTION 2, AND MAY DEMAND, SUE FOR COLLECTION OR MAKE ANY OTHER COMPROMISE OR
SETTLEMENT WITH RESPECT TO OTHER RIGHTS AND REMEDIES PROVIDED FOR HEREIN OR
OTHERWISE AVAILABLE TO