BORROWED MONEY (OTHER
THAN TRADE DEBT), OTHER THAN THE SENIOR INDEBTEDNESS AND THE INDEBTEDNESS
EVIDENCED BY THIS NOTE.
5.
ENCUMBRANCES.
CREATE, INCUR, ASSUME OR
SUFFER TO EXIST ANY LIEN WITH RESPECT TO ANY OF ITS PROPERTY, OR ASSIGN OR
OTHERWISE CONVEY ANY RIGHT TO RECEIVE INCOME, INCLUDING THE SALE OF ANY
ACCOUNTS, EXCEPT FOR PERMITTED LIENS AND LIENS DISCLOSED ON THE SCHEDULE.
AGREE
WITH ANY PERSON OTHER THAN LENDER NOT TO GRANT A SECURITY INTEREST IN, OR
OTHERWISE ENCUMBER, ANY OF ITS PROPERTY.
6.
DISTRIBUTIONS.
PAY ANY DIVIDENDS OR
MAKE ANY OTHER DISTRIBUTION OR PAYMENT ON ACCOUNT OF OR IN REDEMPTION,
RETIREMENT OR PURCHASE OF ANY CAPITAL STOCK, EXCEPT THAT BORROWER MAY REPURCHASE
THE STOCK OF FORMER EMPLOYEES PURSUANT TO STOCK REPURCHASE AGREEMENTS AS LONG AS
AN EVENT OF DEFAULT DOES NOT EXIST PRIOR TO SUCH REPURCHASE OR WOULD NOT EXIST
AFTER GIVING EFFECT TO SUCH REPURCHASE.
7.
INVESTMENTS.
DIRECTLY OR INDIRECTLY
ACQUIRE OR OWN, OR MAKE ANY INVESTMENT IN OR TO ANY PERSON, OR PERMIT ANY OF ITS
SUBSIDIARIES SO TO DO, OTHER THAN INVESTMENTS SET FORTH ON THE SCHEDULE; OR
MAINTAIN OR INVEST ANY OF ITS PROPERTY WITH A PERSON UNLESS SUCH PERSON HAS
ENTERED INTO A CONTROL AGREEMENT WITH LENDER, IN FORM AND SUBSTANCE SATISFACTORY
TO LENDER; OR SUFFER OR PERMIT ANY SUBSIDIARY TO BE A PARTY TO, OR BE BOUND BY,
AN AGREEMENT THAT RESTRICTS SUCH SUBSIDIARY FROM PAYING DIVIDENDS OR OTHERWISE
DISTRIBUTING PROPERTY TO BORROWER.
8.
TRANSACTIONS WITH AFFILIATES.
DIRECTLY
OR INDIRECTLY ENTER INTO OR PERMIT TO EXIST ANY MATERIAL TRANSACTION WITH ANY
AFFILIATE OF BORROWER EXCEPT FOR TRANSACTIONS THAT ARE IN THE ORDINARY COURSE OF
BORROWER'S BUSINESS, UPON FAIR AND REASONABLE TERMS THAT ARE NO LESS FAVORABLE
TO BORROWER THAN WOULD BE OBTAINED IN AN ARM'S LENGTH TRANSACTION WITH A
NON-AFFILIATED PERSON.
9.
NEGATIVE PLEDGE AGREEMENTS.
OTHER THAN
SENIOR LOAN DOCUMENTS, PERMIT THE INCLUSION IN ANY CONTRACT TO WHICH IT BECOMES
A PARTY OF ANY PROVISIONS THAT COULD RESTRICT OR INVALIDATE THE CREATION OF A
SECURITY INTEREST IN ANY OF BORROWER'S PROPERTY.
8
J.
EVENTS OF DEFAULT.
1.
DEFINITION OF EVENT OF DEFAULT.
THE
OCCURRENCE OF ANY ONE OR MORE OF THE FOLLOWING EVENTS SHALL CONSTITUTE AN "EVENT
OF DEFAULT" HEREUNDER:
(A)
BORROWER'S BREACH OF THE OBLIGATION TO PAY
ANY AMOUNT OF THE SECURED OBLIGATIONS ON THE DATE THAT IT IS DUE AND PAYABLE;
(B)
BORROWER'S FAILURE TO PERFORM, KEEP OR
OBSERVE ANY OF ITS COVENANTS, CONDITIONS, PROMISES, AGREEMENTS OR OBLIGATIONS
UNDER ANY OF THE LOAN DOCUMENTS OR ANY OTHER AGREEMENT WITH ANY PERSON IF SUCH
FAILURE MAY HAVE A MATERIAL ADVERSE EFFECT ON BORROWER'S ASSETS, OPERATIONS OR
CONDITION, FINANCIAL OR OTHERWISE;
(C)
BORROWER'S COMMENCEMENT OF VOLUNTARY
BANKRUPTCY PROCEEDINGS, OR BORROWER'S FILING OF A PETITION OR ANSWER OR CONSENT
SEEKING REORGANIZATION OR RELEASE, UNDER THE FEDERAL BANKRUPTCY CODE, OR ANY
OTHER APPLICABLE FEDERAL OR STATE LAW RELATING TO CREDITOR RIGHTS AND REMEDIES,
OR BORROWER'S CONSENT TO THE FILING OF ANY SUCH PETITION OR THE APPOINTMENT OF A
RECEIVER, LIQUIDATOR, ASSIGNEE, TRUSTEE OR OTHER