TO BE APPLIED ON ACCOUNT OF THE
OBLIGATIONS UNDER THE LOAN DOCUMENTS.
8.
REGISTRATION OF INTELLECTUAL PROPERTY
RIGHTS.
(A)
(INTENTIONALLY LEFT BLANK)
(B)
BORROWER SHALL (I) PROTECT, DEFEND AND
MAINTAIN THE VALIDITY AND ENFORCEABILITY OF THE TRADEMARKS, PATENTS AND
COPYRIGHTS WHICH ARE NECESSARY TO THE CONDUCT OF ITS BUSINESS, (II) USE ITS
REASONABLE EFFORTS TO DETECT INFRINGEMENTS OF THE TRADEMARKS, PATENTS AND
COPYRIGHTS AND PROMPTLY ADVISE LENDER IN WRITING OF INFRINGEMENTS DETECTED AND
(III) NOT ALLOW ANY TRADEMARKS, PATENTS OR COPYRIGHTS TO BE ABANDONED, FORFEITED
OR DEDICATED TO THE PUBLIC WITHOUT THE WRITTEN CONSENT OF LENDER, WHICH SHALL
NOT BE UNREASONABLY WITHHELD.
(C)
LENDER MAY AUDIT BORROWER'S INTELLECTUAL
PROPERTY COLLATERAL TO CONFIRM COMPLIANCE WITH THIS SECTION, PROVIDED SUCH AUDIT
MAY NOT OCCUR MORE OFTEN THAN TWICE PER YEAR, UNLESS AN EVENT OF DEFAULT HAS
OCCURRED AND IS CONTINUING.
LENDER HAVE THE RIGHT, BUT NOT THE OBLIGATION, TO
TAKE, AT BORROWER'S SOLE REASONABLE EXPENSE, ANY ACTIONS THAT BORROWER IS
REQUIRED UNDER THIS SECTION TO TAKE BUT WHICH BORROWER FAILS TO TAKE, AFTER
FIFTEEN (15) CALENDAR DAYS' NOTICE TO BORROWER.
BORROWER SHALL REIMBURSE AND
INDEMNIFY LENDER FOR ALL REASONABLE COSTS AND REASONABLE EXPENSES INCURRED IN
THE EXERCISE OF ITS RIGHTS UNDER THIS SECTION.
9.
FILINGS.
BORROWER SHALL FILE ALL
REPORTS AND OTHER INFORMATION AND DOCUMENTS WHICH IT IS REQUIRED TO FILE WITH
THE SECURITIES AND EXCHANGE COMMISSION OR THE OVER-THE-COUNTER MARKET, IN
CONNECTION WITH THIS NOTE OR OTHERWISE.
10.
FURTHER ASSURANCES.
AT ANY TIME AND FROM
TIME TO TIME BORROWER SHALL EXECUTE AND DELIVER SUCH FURTHER INSTRUMENTS AND
TAKE SUCH FURTHER ACTION AS MAY REASONABLY BE REQUESTED BY LENDER TO EFFECT THE
PURPOSES OF THIS NOTE.
I.
NEGATIVE COVENANTS. BORROWER
COVENANTS AND AGREES THAT, UNTIL PAYMENT IN FULL OF ALL SECURED OBLIGATIONS, AND
UNTIL SUCH TIME AS LENDER HAS NO FURTHER OBLIGATION TO MAKE AN ADVANCE, BORROWER
WILL NOT DO ANY OF THE FOLLOWING WITHOUT EXPRESS WRITTEN CONSENT OF LENDER:
1.
DISPOSITIONS.
CONVEY, SELL, LEASE,
TRANSFER OR OTHERWISE DISPOSE OF (COLLECTIVELY, A "TRANSFER"), ALL OR ANY PART
OF ITS BUSINESS OR PROPERTY, OTHER THAN:
(I) TRANSFERS OF INVENTORY IN THE
ORDINARY COURSE OF BUSINESS; (II) TRANSFERS OF NON-EXCLUSIVE LICENSES FOR THE
USE OF THE
7
PROPERTY OF BORROWER IN THE ORDINARY COURSE OF BUSINESS; OR (III) TRANSFERS OF
WORN-OUT OR OBSOLETE EQUIPMENT.
2.
CHANGE IN BUSINESS; CHANGE IN CONTROL
OR EXECUTIVE OFFICE.
ENGAGE IN ANY BUSINESS OTHER THAN THE BUSINESSES CURRENTLY
ENGAGED IN BY BORROWER AND ANY BUSINESS SUBSTANTIALLY SIMILAR OR RELATED THERETO
(OR INCIDENTAL THERETO); OR WITHOUT THIRTY (30) DAYS PRIOR WRITTEN NOTIFICATION
TO LENDER, RELOCATE ITS CHIEF EXECUTIVE OFFICE OR STATE OF INCORPORATION; OR
WITHOUT LENDER'S PRIOR WRITTEN CONSENT, CHANGE THE DATE ON WHICH ITS FISCAL YEAR
ENDS.
3.
MERGERS OR ACQUISITIONS.
MERGE OR
CONSOLIDATE OR AGREE TO MERGE OR CONSOLIDATE, WITH OR INTO ANY OTHER BUSINESS
ORGANIZATION, OR ACQUIRE ALL OR SUBSTANTIALLY ALL OF THE CAPITAL STOCK OR
PROPERTY OF ANOTHER PERSON.
4.
INDEBTEDNESS. CREATE, INCUR, ASSUME OR
BE OR REMAIN LIABLE WITH RESPECT TO ANY INDEBTEDNESS FOR