RIGHTS UNDER THE LOAN DOCUMENTS.
LENDER SHALL USE REASONABLE EFFORTS
TO AVOID INTERFERING WITH BORROWER'S BUSINESS IN CONNECTION WITH THE ACTIVITIES
PERMITTED UNDER THIS SECTION.
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2.4.
INSURANCE.
BORROWER, FOR ITSELF AND ON BEHALF
OF ITS SUBSIDIARIES MUST MAINTAIN INSURANCE ON THE RESPECTIVE BUSINESSES SIMILAR
IN ALL MATERIAL RESPECTS TO THAT HISTORICALLY MAINTAINED PURSUANT TO THEIR
STANDARD OPERATING PRACTICES.
2.5.
PRESERVATION OF RIGHTS.
BORROWER AND ITS
SUBSIDIARIES MUST OBTAIN, PRESERVE AND MAINTAIN IN GOOD STANDING, AS APPLICABLE,
ALL MATERIAL LEGAL RIGHTS, PRIVILEGES AND FRANCHISES NECESSARY OR DESIRABLE FOR
THE CONDUCT OF THEIR BUSINESSES, EXCEPT TO THE EXTENT FAILURE TO SO OBTAIN WOULD
NOT HAVE A MATERIAL ADVERSE EFFECT.
2.6.
PAYMENT OF EXPENSES.
BORROWER MUST PAY ALL
REASONABLE OUT-OF-POCKET COSTS AND EXPENSES INCURRED BY LENDER IN CONNECTION
WITH THE MAKING, DISBURSEMENT AND ADMINISTRATION OF THE LOAN, AS WELL AS ANY
REVISIONS, EXTENSIONS, RENEWALS OR "WORKOUTS" OF THE LOAN, AND IN THE EXERCISE
OF ANY OF LENDER'S RIGHTS OR REMEDIES UNDER THIS AGREEMENT.
SUCH COSTS AND
EXPENSES INCLUDE REASONABLE OUT-OF-POCKET LEGAL FEES AND EXPENSES OF LENDER PAID
TO LENDER'S OUTSIDE COUNSEL AND ANY OTHER REASONABLE OUT-OF-POCKET FEES AND
COSTS FOR SERVICES.
BORROWER ACKNOWLEDGES THAT THE LOAN FEE DOES NOT INCLUDE
AMOUNTS PAYABLE BY BORROWER UNDER THIS SECTION.
ALL SUCH SUMS INCURRED BY
LENDER AND NOT REIMBURSED BY BORROWER WITHIN 30 DAYS OF LENDER'S WRITTEN REQUEST
TO BORROWER ARE CONSIDERED ADDITIONAL LOANS TO BORROWER AND BEARING INTEREST AT
THE PAST-DUE RATE PROVIDED IN THE NOTE.
2.7.
FINANCIAL AND OTHER INFORMATION.
(A)
BORROWER WILL MAKE ALL REQUIRED REGULATORY
FILINGS ON A TIMELY BASIS, INCLUDING FILING ON SECURITIES EXCHANGE COMMISSION
("SEC") FORMS 10-K AND 10-Q.
SUCH FILINGS WILL, IN ALL MATERIAL RESPECTS, BE IN
THE FORM REQUIRED BY APPLICABLE SEC RULES AND REGULATIONS AND INCLUDE THE
FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION THAT ARE REQUIRED BY
APPLICABLE LAW AND REGULATIONS TO BE INCLUDED THEREIN BY BORROWER.
(B)
BORROWER SHALL PROVIDE TO LENDER COPIES OF
ITS UNITED STATES FEDERAL TAX RETURNS, AND ANY EXTENSIONS THEREOF, TOGETHER WITH
ALL SUPPORTING SCHEDULES, WITHIN THIRTY (30) DAYS OF FILING DATE.
(C)
ON WRITTEN REQUEST BY LENDER TO BORROWER,
BORROWER MUST PROMPTLY PROVIDE LENDER WITH ANY OTHER FINANCIAL OR OTHER
INFORMATION CONCERNING ITS AFFAIRS AND PROPERTIES AS LENDER MAY REASONABLY
REQUEST.
2.8.
NOTICES.
BORROWER MUST PROMPTLY NOTIFY LENDER
IN WRITING OF:
(A)
ANY LITIGATION AFFECTING BORROWER OR ANY OF
ITS SUBSIDIARIES WHERE THE AMOUNT CLAIMED IS FIVE HUNDRED THOUSAND DOLLARS
($500,000) OR MORE;
(B)
ANY NOTICE THAT BORROWER'S OR ANY OF ITS
SUBSIDIARIES' BUSINESS FAILS IN ANY RESPECT TO COMPLY WITH ANY APPLICABLE LAW,
REGULATION OR COURT ORDER, IF SUCH NON-COMPLIANCE WOULD HAVE A MATERIAL ADVERSE
EFFECT; AND
(C)
THE OCCURRENCE OF ANY MATERIAL ADVERSE
EFFECT.
2.9.
NOTICE OF CHANGE.
BORROWER MUST GIVE LENDER
PRIOR WRITTEN NOTICE OF ANY CHANGE IN:
(A)
THE LOCATION OF ITS CHIEF EXECUTIVE OFFICE;
AND
(B)
BORROWER'S NAME, BUSINESS STRUCTURE OR STATE
OF FORMATION.
3
SECTION 3
NEGATIVE COVENANTS OF BORROWER
SO LONG AS THE LOAN REMAINS OUTSTANDING:
3.1.
NEGATIVE COVENANTS.
WITHOUT LENDER'S