COSTS AND REASONABLE EXPENSES INCURRED IN
THE EXERCISE OF ITS RIGHTS UNDER THIS SECTION.
9.
FILINGS.
BORROWER SHALL FILE ALL
REPORTS AND OTHER INFORMATION AND DOCUMENTS WHICH IT IS REQUIRED TO FILE WITH
THE SECURITIES AND EXCHANGE COMMISSION OR THE NASDAQ STOCK MARKET, IN CONNECTION
WITH THIS NOTE OR OTHERWISE.
10.
FURTHER ASSURANCES.
AT ANY TIME AND FROM
TIME TO TIME BORROWER SHALL EXECUTE AND DELIVER SUCH FURTHER INSTRUMENTS AND
TAKE SUCH FURTHER ACTION AS MAY REASONABLY BE REQUESTED BY LENDER TO EFFECT THE
PURPOSES OF THIS NOTE.
I.
NEGATIVE COVENANTS. BORROWER
COVENANTS AND AGREES THAT, UNTIL PAYMENT IN FULL OF ALL SECURED OBLIGATIONS, AND
UNTIL SUCH TIME AS LENDER HAS NO FURTHER OBLIGATION TO MAKE AN ADVANCE, BORROWER
WILL NOT DO ANY OF THE FOLLOWING WITHOUT EXPRESS WRITTEN CONSENT OF LENDER:
1.
DISPOSITIONS.
CONVEY, SELL, LEASE,
TRANSFER OR OTHERWISE DISPOSE OF (COLLECTIVELY, A "TRANSFER"), ALL OR ANY PART
OF ITS BUSINESS OR PROPERTY, OTHER THAN:
(I) TRANSFERS OF INVENTORY IN THE
ORDINARY COURSE OF BUSINESS; (II) TRANSFERS OF NON-EXCLUSIVE LICENSES FOR THE
USE OF THE PROPERTY OF BORROWER IN THE ORDINARY COURSE OF BUSINESS; OR
(III) TRANSFERS OF WORN-OUT OR OBSOLETE EQUIPMENT.
2.
CHANGE IN BUSINESS; CHANGE IN CONTROL
OR EXECUTIVE OFFICE.
ENGAGE IN ANY BUSINESS OTHER THAN THE BUSINESSES CURRENTLY
ENGAGED IN BY BORROWER AND ANY BUSINESS SUBSTANTIALLY SIMILAR OR RELATED THERETO
(OR INCIDENTAL THERETO); OR WITHOUT THIRTY (30) DAYS PRIOR WRITTEN NOTIFICATION
TO LENDER, RELOCATE ITS CHIEF EXECUTIVE OFFICE OR STATE OF INCORPORATION; OR
WITHOUT LENDER'S PRIOR WRITTEN CONSENT, CHANGE THE DATE ON WHICH ITS FISCAL YEAR
ENDS.
3.
MERGERS OR ACQUISITIONS.
MERGE OR
CONSOLIDATE OR AGREE TO MERGE OR CONSOLIDATE, WITH OR INTO ANY OTHER BUSINESS
ORGANIZATION, OR ACQUIRE ALL OR SUBSTANTIALLY ALL OF THE CAPITAL STOCK OR
PROPERTY OF ANOTHER PERSON.
4.
INDEBTEDNESS. CREATE, INCUR, ASSUME OR
BE OR REMAIN LIABLE WITH RESPECT TO ANY INDEBTEDNESS FOR BORROWED MONEY (OTHER
THAN TRADE DEBT), OTHER THAN THE SENIOR INDEBTEDNESS.
7
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