OF BORROWER'S
EMPLOYEES.
6.6
INTENTIONALLY OMITTED.
6.7
FURTHER ASSURANCES.
BORROWER SHALL EXECUTE ANY FURTHER INSTRUMENTS
AND TAKE FURTHER ACTION AS BANK REASONABLY REQUESTS TO PERFECT OR CONTINUE
BANK'S SECURITY INTEREST IN THE COLLATERAL OR TO EFFECT THE PURPOSES OF THIS
AGREEMENT.
7
NEGATIVE COVENANTS
Borrower shall not do any of the following without Bank's prior written consent.
7.1
DISPOSITIONS.
CONVEY, SELL, LEASE, TRANSFER OR OTHERWISE DISPOSE
OF (COLLECTIVELY A "TRANSFER"), OR PERMIT ANY OF ITS SUBSIDIARIES TO TRANSFER,
ALL OR ANY PART OF ITS BUSINESS OR PROPERTY, EXCEPT FOR TRANSFERS (I) OF
INVENTORY IN THE ORDINARY COURSE OF BUSINESS; (II) OF NON-EXCLUSIVE LICENSES AND
SIMILAR ARRANGEMENTS FOR THE USE OF THE PROPERTY OF BORROWER OR ITS SUBSIDIARIES
IN THE ORDINARY COURSE OF BUSINESS; OR (III) OF WORN-OUT OR OBSOLETE EQUIPMENT.
7.2
CHANGES IN BUSINESS, OWNERSHIP, MANAGEMENT OR BUSINESS LOCATIONS.
ENGAGE IN OR PERMIT ANY OF ITS SUBSIDIARIES TO ENGAGE IN ANY BUSINESS OTHER THAN
THE BUSINESSES CURRENTLY ENGAGED IN BY BORROWER OR REASONABLY RELATED THERETO,
OR HAVE A MATERIAL CHANGE IN ITS OWNERSHIP (OTHER THAN BY THE SALE OF BORROWER'S
EQUITY SECURITIES IN A PUBLIC OFFERING OR TO VENTURE CAPITAL INVESTORS SO LONG
AS BORROWER IDENTIFIES TO BANK THE VENTURE CAPITAL INVESTORS PRIOR TO THE
CLOSING OF THE INVESTMENT), OR MANAGEMENT.
BORROWER SHALL NOT, WITHOUT AT LEAST
THIRTY (30) DAYS PRIOR WRITTEN NOTICE TO BANK: (I) RELOCATE ITS CHIEF EXECUTIVE
OFFICE, OR ADD ANY NEW OFFICES OR BUSINESS LOCATIONS, INCLUDING WAREHOUSES
(UNLESS SUCH NEW OFFICES OR BUSINESS LOCATIONS CONTAIN LESS THAN TEN THOUSAND
DOLLARS ($10,000.00) IN BORROWER'S ASSETS OR PROPERTY), OR (II) CHANGE ITS
JURISDICTION OF ORGANIZATION, OR (III) CHANGE
9
ITS ORGANIZATIONAL STRUCTURE OR TYPE, OR (IV) CHANGE ITS LEGAL NAME, OR
(V) CHANGE ANY ORGANIZATIONAL NUMBER (IF ANY) ASSIGNED BY ITS JURISDICTION OF
ORGANIZATION.
7.3
MERGERS OR ACQUISITIONS.
MERGE OR CONSOLIDATE, OR PERMIT ANY OF
ITS SUBSIDIARIES TO MERGE OR CONSOLIDATE, WITH ANY OTHER PERSON, OR ACQUIRE, OR
PERMIT ANY OF ITS SUBSIDIARIES TO ACQUIRE, ALL OR SUBSTANTIALLY ALL OF THE
CAPITAL STOCK OR PROPERTY OF ANOTHER PERSON.
A SUBSIDIARY MAY MERGE OR
CONSOLIDATE INTO ANOTHER SUBSIDIARY OR INTO BORROWER.
7.4
INDEBTEDNESS.
CREATE, INCUR, ASSUME, OR BE LIABLE FOR ANY
INDEBTEDNESS, OR PERMIT ANY SUBSIDIARY TO DO SO, OTHER THAN PERMITTED
INDEBTEDNESS.
7.5
ENCUMBRANCE.
CREATE, INCUR, OR ALLOW ANY LIEN ON ANY OF ITS
PROPERTY, INCLUDING THE INTELLECTUAL PROPERTY, OR ASSIGN OR CONVEY ANY RIGHT TO
RECEIVE INCOME, INCLUDING THE SALE OF ANY ACCOUNTS, OR PERMIT ANY OF ITS
SUBSIDIARIES TO DO SO, EXCEPT FOR PERMITTED LIENS, OR PERMIT ANY COLLATERAL NOT
TO BE SUBJECT TO THE FIRST PRIORITY SECURITY INTEREST GRANTED HEREIN.
THE
COLLATERAL MAY ALSO BE SUBJECT TO PERMITTED LIENS.
7.6
DISTRIBUTIONS; INVESTMENTS.
(I) DIRECTLY OR INDIRECTLY ACQUIRE OR
OWN ANY PERSON, OR MAKE ANY INVESTMENT IN ANY PERSON, OTHER THAN PERMITTED
INVESTMENTS, OR PERMIT ANY OF ITS SUBSIDIARIES TO DO SO; OR (II) PAY ANY
DIVIDENDS OR MAKE ANY DISTRIBUTION OR PAYMENT OR REDEEM, RETIRE OR PURCHASE ANY
CAPITAL STOCK.
7.7
TRANSACTIONS WITH AFFILIATES.