OR
OTHER GOVERNMENTAL CHARGES OR LEVIES, EITHER NOT DELINQUENT OR BEING CONTESTED
IN GOOD FAITH BY APPROPRIATE PROCEEDINGS AND FOR WHICH BORROWER MAINTAINS
ADEQUATE RESERVES;
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(III)
LIENS (I) UPON OR IN ANY EQUIPMENT OR
SOFTWARE ACQUIRED OR HELD BY BORROWER OR ANY SUBSIDIARY TO SECURE THE PURCHASE
PRICE OF SUCH EQUIPMENT OR SOFTWARE OR INDEBTEDNESS INCURRED SOLELY FOR THE
PURPOSE OF FINANCING THE ACQUISITION OF SUCH EQUIPMENT OR SOFTWARE, INCLUDING
THE FINANCING OF THE COSTS OF SHIPPING, TAXES AND INSTALLATION, OR (II) EXISTING
ON SUCH EQUIPMENT OR SOFTWARE AT THE TIME OF ITS ACQUISITION, PROVIDED, IN EACH
CASE, THAT THE LIEN IS CONFINED SOLELY TO THE PROPERTY SO ACQUIRED AND
IMPROVEMENTS THEREON, AND THE PROCEEDS OF SUCH EQUIPMENT OR SOFTWARE;
(IV)
LIENS TO SECURE PAYMENT OF WORKERS'
COMPENSATION, EMPLOYMENT INSURANCE, OLD AGE PENSIONS, SOCIAL SECURITY OR OTHER
LIKE OBLIGATIONS INCURRED IN THE ORDINARY COURSE OF BUSINESS;
(V)
LIENS INCURRED IN CONNECTION WITH THE
EXTENSION, RENEWAL OR REFINANCING OF THE INDEBTEDNESS SECURED BY LIENS OF THE
TYPE DESCRIBED IN CLAUSES (I) THROUGH (III) ABOVE, PROVIDED THAT ANY EXTENSION,
RENEWAL OR REPLACEMENT LIEN SHALL BE LIMITED TO THE PROPERTY ENCUMBERED BY THE
EXISTING LIEN AND THE PRINCIPAL AMOUNT OF THE INDEBTEDNESS BEING EXTENDED,
RENEWED OR REFINANCED DOES NOT INCREASE;
(VI)
CARRIERS', WAREHOUSEMEN'S, MECHANIC'S,
MATERIALMEN'S, REPAIRMEN'S OR OTHER LIKE LIENS ARISING IN THE ORDINARY COURSE OF
BUSINESS AND SECURING OBLIGATIONS THAT ARE NOT DUE AND PAYABLE OR WHICH ARE
BEING CONTESTED IN GOOD FAITH FOR WHICH ADEQUATE RESERVES HAVE BEEN ESTABLISHED;
OR
(VII)
PLEDGES AND DEPOSITS MADE IN THE ORDINARY COURSE
OF BUSINESS IN COMPLIANCE WITH WORKMEN'S COMPENSATION, UNEMPLOYMENT INSURANCE
AND OTHER SOCIAL SECURITY LAWS OR REGULATIONS.
(F)
"PERMITTED TRANSFER" MEANS ANY
CONVEYANCE, SALE, LEASE, TRANSFER, LICENSE OR DISPOSITION BY BORROWER OF:
(I)
INVENTORY OR UPGRADE OR EXCHANGE OF
MACHINERY, IN EITHER CASE, IN THE ORDINARY COURSE OF BUSINESS AND FOR USUAL AND
ORDINARY PRICES;
(II)
ANY ASSETS IN THE ORDINARY COURSE OF
BUSINESS WHICH ARE REPLACED BY SUBSTITUTE ASSETS ACQUIRED OR LEASED; OR
(III)
LICENSES AND SIMILAR ARRANGEMENTS FOR THE
USE OF THE PROPERTY OF BORROWER IN THE ORDINARY COURSE OF BUSINESS;
(IV)
ANY ASSETS FOR FAIR MARKET VALUE WITH PRIOR
WRITTEN CONSENT OF THE SECURED PARTIES, NOT TO BE UNREASONABLY WITHHELD; OR
(V)
THE MIA ASSETS PURSUANT TO THE TERMS OF THE
MIA TERM SHEET DESCRIBED IN SECTION 6.3(F) OF THE LOAN AGREEMENT.
(G)
"UCC" MEANS THE UNIFORM COMMERCIAL CODE
AND/OR ANY OTHER APPLICABLE LAW OF EACH JURISDICTION IN WHICH THE BORROWER IS
INCORPORATED OR
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ORGANIZED (INCLUDING, WITHOUT LIMITATION THE STATE OF DELAWARE AND THE STATE OF
CALIFORNIA) AND ANY JURISDICTION AS TO ANY COLLATERAL LOCATED THEREIN.
2.
GRANT OF SECURITY INTEREST.
AS AN
INDUCEMENT FOR THE SECURED PARTIES TO ENTER INTO THE CONTEMPLATED TRANSACTIONS
AND TO SECURE THE COMPLETE AND TIMELY PAYMENT, PERFORMANCE AND DISCHARGE IN
FULL, AS THE CASE MAY BE, OF ALL OF THE OBLIGATIONS, THE BORROWER HEREBY,
UNCONDITIONALLY AND IRREVOCABLY, PLEDGES, GRANTS AND HYPOTHECATES TO THE SECURED
PARTIES, A CONTINUING FIRST PRIORITY SECURITY