A "LIEN") IN OR UPON
ANY OF ITS ASSETS, EXCEPT:
(I)
LIENS FOR TAXES, ASSESSMENTS OR SIMILAR CHARGES INCURRED IN THE
ORDINARY COURSE OF BUSINESS THAT ARE NOT YET DUE AND PAYABLE,
(II)
LIENS CREATED PURSUANT TO THE SECURITY AGREEMENT, AND
(III)
LIENS CREATED TO SECURE THE SYNTEK NOTE, WHICH SUCH LIENS SHALL
ONLY CONSIST OF THE SYNTEK LETTER OF CREDIT;
(IV)
LIENS CREATED IN CONNECTION WITH SECTION 6(A)(II), (VII) AND
(VIII) ABOVE;
(C)
ENTER INTO ANY TRANSACTION, INCLUDING, WITHOUT LIMITATION, THE
PURCHASE, SALE, OR EXCHANGE OF PROPERTY OR THE RENDERING OF ANY SERVICE WITH ANY
AFFILIATE, EXCEPT PURSUANT TO THE REASONABLE REQUIREMENTS OF THE COMPANY'S OR
SUCH SUBSIDIARY'S BUSINESS AND UPON FAIR AND
6
reasonable terms no less favorable to the Company or such Subsidiary, than would
obtain in a comparable arm's length transaction with a Person not an Affiliate
as reasonably determined by the Audit Committee of the Company's Board of
Directors;
(D)
DECLARE ANY CASH DIVIDENDS ON ANY SHARES OF ANY CLASS OF ITS
CAPITAL STOCK OR MEMBERSHIP INTERESTS, OR APPLY ANY OF ITS PROPERTY OR ASSETS TO
THE PURCHASE, REDEMPTION OR OTHER RETIREMENT OF, OR SET APART ANY SUM FOR THE
PAYMENT OF ANY CASH DIVIDENDS ON, OR FOR THE PURCHASE, REDEMPTION OR OTHER
RETIREMENT OF, OR MAKE ANY OTHER DISTRIBUTION BY REDUCTION OF CAPITAL OR
OTHERWISE IN RESPECT OF, ANY SHARES OF ANY CLASS OF ITS CAPITAL STOCK OR
MEMBERSHIP INTERESTS, PROVIDED, HOWEVER, THAT (I) ANY SUBSIDIARY WHOLLY OWNED BY
THE COMPANY MAY PAY DIVIDENDS DIRECTLY TO THE COMPANY AND (II) THIS RESTRICTION
SHALL NOT APPLY TO THE REPURCHASE OF SHARES OF COMMON STOCK FROM EMPLOYEES,
OFFICERS, DIRECTORS, CONSULTANTS OR OTHER PERSONS PERFORMING SERVICES FOR THE
COMPANY OR ANY SUBSIDIARY PURSUANT TO AGREEMENTS UNDER WHICH THE COMPANY HAS THE
OPTION TO REPURCHASE SUCH SHARES UPON THE OCCURRENCE OF CERTAIN EVENTS, SUCH AS
THE TERMINATION OF EMPLOYMENT;
(E)
SELL, TRANSFER, LEASE OR OTHERWISE DISPOSE (INCLUDING PURSUANT TO
A MERGER) OF ANY ASSET WITH A VALUE GREATER THAN $1,000,000, EXCEPT (A) SALES,
TRANSFERS, LEASES AND OTHER DISPOSITIONS OF INVENTORY, USED, OBSOLETE OR SURPLUS
EQUIPMENT OR OTHER PROPERTY AND INVESTMENTS IN EACH CASE IN THE ORDINARY COURSE
OF BUSINESS OR (B) SUCH SALES, TRANSFERS OR DISPOSITIONS FOR CASH WHICH ARE
REASONABLY APPROVED BY THE AUDIT COMMITTEE OF THE COMPANY'S BOARD OF DIRECTORS;
(F)
CREATE OR ACQUIRE ANY NEW SIGNIFICANT SUBSIDIARY, UNLESS (I) SUCH
SIGNIFICANT SUBSIDIARY PROMPTLY, AND IN NO EVENT LATER THAN FIFTEEN BUSINESS
DAYS, BECOMES A PARTY TO THE SECURITY AGREEMENT IN THE MANNER PROVIDED THEREIN
AND COMPLIES WITH ALL OF THE TERMS, PROVISIONS AND REQUIREMENTS THEREOF,
INCLUDING, WITHOUT LIMITATION, TAKING SUCH ACTIONS TO CREATE AND PERFECT LIENS
ON SUCH SIGNIFICANT SUBSIDIARY'S ASSETS, AND (II) THE INVESTOR SHALL HAVE
RECEIVED AN OPINION OF COUNSEL OF SUCH SIGNIFICANT SUBSIDIARY CONTAINING SUCH
OPINIONS THAT ARE REASONABLY ACCEPTABLE TO THE INVESTOR AND THAT ARE MATERIALLY
IDENTICAL IN SUBSTANCE TO THE OPINIONS RECEIVED ON THE DATE HEREOF WITH RESPECT
TO THE SIGNIFICANT SUBSIDIARIES ENTERING INTO THE SECURITY AGREEMENT ON THE