COURSE
OF BUSINESS;
(C)
MECHANICS', CARRIERS', WORKMEN'S,
REPAIRMEN'S OR OTHER LIKE LIENS ARISING IN THE ORDINARY COURSE OF BUSINESS IN
RESPECT OF OBLIGATIONS NOT YET DUE OR WHICH ARE BEING CONTESTED IN GOOD FAITH
AND BY APPROPRIATE PROCEEDINGS;
(D)
EASEMENTS, RIGHTS-OF-WAY, ZONING
RESTRICTIONS AND OTHER SIMILAR MATTERS INCIDENTAL TO THE OWNERSHIP OF PROPERTY
WHICH DO NOT IN THE AGGREGATE MATERIALLY DETRACT FROM THE VALUE OF SUCH PROPERTY
OR ASSETS OR MATERIALLY IMPAIR THEIR USE IN THE OPERATION OF THE BUSINESS OF
BORROWER;
(E)
PURCHASE MONEY SECURITY INTERESTS IN
PROPERTY (INCLUDING ANY SECURITY INTEREST CREATED IN A LEASE TRANSACTION);
PROVIDED THAT (I) SUCH PROPERTY IS USED IN THE ORDINARY COURSE OF BORROWER'S
BUSINESS, (II) SUCH SECURITY INTERESTS SHALL ATTACH ONLY TO THE PROPERTY SO
PURCHASED (OR, IF APPLICABLE, LEASED), (III) THE AMOUNT OF THE PURCHASE MONEY
FINANCING SO SECURED DOES NOT EXCEED THE AMOUNT PERMITTED UNDER SECTION 10.1
HEREOF, AND (IV) THE PURCHASE (OR, IF APPLICABLE, LEASE) OCCURRED SUBSEQUENT TO
THE CLOSING DATE;
(F)
ALL PRECAUTIONARY FILINGS OF FINANCING
STATEMENTS UNDER THE UNIFORM COMMERCIAL CODE WHICH COVER PROPERTY THAT IS MADE
AVAILABLE TO OR USED BY BORROWER PURSUANT TO THE TERMS OF AN OPERATING LEASE OR
CAPITAL LEASE WITH AN AGGREGATE ASSET VALUE OF $1,500,000.00; AND
(G)
LIENS IN EXISTENCE ON THE DATE HEREOF AS SET
FORTH IN EXHIBIT 10.2 ATTACHED HERETO.
10.3
SALE OF ASSETS.
BORROWER WILL NOT SELL, CONVEY,
ASSIGN, LEASE OR OTHERWISE TRANSFER OR DISPOSE OF, VOLUNTARILY, BY OPERATION OF
LAW OR OTHERWISE, ANY OF ITS ASSETS TO ANY PERSON, EXCEPT THAT; (A) BORROWER MAY
SELL INVENTORY, EQUIPMENT AND FIXTURES DISPOSED OF IN THE ORDINARY COURSE OF ITS
BUSINESS; (B) BORROWER MAY DISPOSE OF INVENTORY AND EQUIPMENT WHICH IS WORN OUT
OR OBSOLETE OR NO LONGER USED OR USEFUL BY BORROWER IN ITS BUSINESS SO LONG AS
NO EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING.
35
10.4
LIABILITIES OF OTHERS.
BORROWER SHALL NOT
ASSUME, GUARANTEE, BECOME LIABLE AS A SURETY, ENDORSE, CONTINGENTLY AGREE TO
PURCHASE, OR OTHERWISE BE OR BECOME LIABLE, DIRECTLY OR INDIRECTLY (INCLUDING,
BUT NOT LIMITED TO, BY MEANS OF A MAINTENANCE AGREEMENT, AN ASSET OR STOCK
PURCHASE AGREEMENT, OR ANY OTHER AGREEMENT DESIGNED TO ENSURE ANY CREDITOR
AGAINST LOSS), FOR OR ON ACCOUNT OF THE OBLIGATION OF ANY PERSON, EXCEPT (A) BY
THE ENDORSEMENT OF NEGOTIABLE INSTRUMENTS FOR DEPOSIT OR COLLECTION OR SIMILAR
TRANSACTIONS IN THE ORDINARY COURSE OF THE BORROWER'S BUSINESS; (B) THOSE
LIABILITIES TO BE ASSUMED UNDER THE ASSET PURCHASE AGREEMENT BETWEEN GAIAM, INC.
AND GT BRANDS LLC, GT MERCHANDISING & LICENSING LLC, GYM TIME, LLC, BSBP
PRODUCTIONS LLC, AND GOODTIMES ENTERTAINMENT LLC, DATED JULY 8, 2005 ("GOODTIMES
AGREEMENT"); (C) UP TO AN AGGREGATE OF $10,000,000.00 IN CONNECTION WITH
ACQUISITIONS PERMITTED PURSUANT TO SECTION 10.5 HEREOF; AND (D) SUBJECT TO THE
LIMITATIONS CONTAINED IN SECTION 10.1(F) HEREOF, GUARANTEES MADE FROM TIME TO
TIME BY BORROWER IN THE ORDINARY COURSE OF ITS BUSINESS.
10.5
MERGER; ACQUISITIONS; BUSINESS FORM; ETC.
BORROWER SHALL NOT MERGE OR CONSOLIDATE WITH ANY ENTITY, OR ACQUIRE ALL OR