INTEREST IN THE COLLATERAL INCLUDING,
WITHOUT LIMITATION, AT SECURED PARTY'S REQUEST, THE EXECUTION AND DELIVERY OF A
SEPARATE SECURITY AGREEMENT WITH RESPECT TO THE BORROWER'S INTELLECTUAL PROPERTY
("INTELLECTUAL PROPERTY SECURITY AGREEMENT") IN WHICH THE SECURED PARTY HAS BEEN
GRANTED A SECURITY INTEREST HEREUNDER, SUBSTANTIALLY IN A FORM ACCEPTABLE TO THE
SECURED PARTY, WHICH INTELLECTUAL PROPERTY SECURITY AGREEMENT, OTHER THAN AS
STATED THEREIN, SHALL BE SUBJECT TO ALL OF THE TERMS AND CONDITIONS HEREOF.
(N)
THE BORROWER SHALL PERMIT THE SECURED
PARTIES AND ITS REPRESENTATIVES AND AGENTS UPON PRIOR WRITTEN CONSENT AND AT THE
EXPENSE OF THE SECURED PARTIES TO INSPECT THE COLLATERAL AT ANY TIME DURING
NORMAL BUSINESS HOURS, AND TO MAKE COPIES OF RECORDS PERTAINING TO ANY MATERIAL
ITEM OF COLLATERAL AS MAY BE REASONABLY REQUESTED BY THE SECURED PARTIES FROM
TIME TO TIME.
(O)
THE BORROWER WILL TAKE ALL STEPS IT
CONSIDERS REASONABLY NECESSARY TO DILIGENTLY PURSUE AND SEEK TO PRESERVE,
ENFORCE AND COLLECT ANY RIGHTS, CLAIMS, CAUSES OF ACTION AND ACCOUNTS RECEIVABLE
IN RESPECT OF THE COLLATERAL.
7
(P)
THE BORROWER SHALL PROMPTLY NOTIFY THE AGENT
IN SUFFICIENT DETAIL UPON BECOMING AWARE OF ANY ATTACHMENT, GARNISHMENT,
EXECUTION OR OTHER LEGAL PROCESS LEVIED AGAINST ANY COLLATERAL AND OF ANY OTHER
INFORMATION RECEIVED BY THE BORROWER THAT REASONABLY WOULD BE EXPECTED TO
SUBSTANTIALLY AFFECT THE VALUE OF THE COLLATERAL, THE SECURITY INTEREST OR THE
RIGHTS AND REMEDIES OF THE SECURED PARTIES HEREUNDER.
(Q)
THE BORROWER SHALL NOT USE OR PERMIT ANY
COLLATERAL TO BE USED UNLAWFULLY OR IN VIOLATION OF ANY PROVISION OF THIS
AGREEMENT OR ANY APPLICABLE STATUTE, REGULATION OR ORDINANCE OR ANY POLICY OF
INSURANCE COVERING THE COLLATERAL WHERE VIOLATION IS REASONABLY LIKELY TO HAVE A
MATERIAL ADVERSE EFFECT ON THE SECURED PARTIES' RIGHTS IN THE COLLATERAL OR
SECURED PARTIES' ABILITY TO FORECLOSE ON THE COLLATERAL.
(R)
OTHER THAN PERMITTED LIENS, THE BORROWER
SHALL NOT GRANT TO ANY PERSON OR ENTITY ANY RIGHTS OR INTEREST IN OR TO ANY OF
THE COLLATERAL THAT ARE SENIOR TO, OR PARI PASSU WITH, THE SECURED PARTIES.
(S)
THE BORROWER SHALL NOTIFY THE AGENT OF ANY
CHANGE IN THE BORROWER'S NAME, IDENTITY, CHIEF PLACE OF BUSINESS, CHIEF
EXECUTIVE OFFICE OR RESIDENCE WITHIN 30 DAYS OF SUCH CHANGE.
4.
DEFAULTS.
THE FOLLOWING EVENTS SHALL
BE "EVENTS OF DEFAULT":
(A)
THE OCCURRENCE OF AN EVENT OF DEFAULT (AS
DEFINED IN THE DEBENTURES) UNDER THE DEBENTURES WHICH SHALL NOT HAVE BEEN CURED
WITHIN 30 DAYS, TO THE SATISFACTION OF THE AGENT;
(B)
ANY MATERIAL REPRESENTATION OR WARRANTY OF
THE BORROWER IN THIS AGREEMENT OR IN THE INTELLECTUAL PROPERTY SECURITY
AGREEMENT, SHALL PROVE TO HAVE BEEN INCORRECT IN ANY MATERIAL RESPECT WHEN MADE;
AND
(C)
THE FAILURE BY THE BORROWER TO OBSERVE OR
PERFORM ANY OF ITS OBLIGATIONS HEREUNDER OR, IF APPLICABLE, IN THE INTELLECTUAL
PROPERTY SECURITY AGREEMENT, FOR TEN (10) TRADING DAYS (AS DEFINED IN THE
DEBENTURES) AFTER RECEIPT BY THE BORROWER OF WRITTEN NOTICE OF SUCH FAILURE FROM
THE SECURED PARTIES.
5.
DUTY TO HOLD IN TRUST.
UPON THE
OCCURRENCE AND DURING