ANY INDEBTEDNESS, OR PERMIT ANY SUBSIDIARY SO TO DO, OTHER THAN
PERMITTED INDEBTEDNESS, OR PREPAY ANY INDEBTEDNESS OR TAKE ANY ACTIONS WHICH
IMPOSE ON BORROWER AN OBLIGATION TO PREPAY ANY INDEBTEDNESS, EXCEPT INDEBTEDNESS
TO BANK.
7.5
ENCUMBRANCES.
CREATE, INCUR, ASSUME OR ALLOW 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, OR PERMIT ANY OF ITS SUBSIDIARIES SO TO DO,
EXCEPT FOR PERMITTED LIENS, OR COVENANT TO ANY OTHER PERSON THAT BORROWER IN THE
FUTURE WILL REFRAIN FROM CREATING, INCURRING, ASSUMING OR ALLOWING ANY LIEN WITH
RESPECT TO ANY OF BORROWER'S PROPERTY.
7.6
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 (I) 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,
AND (II) REPURCHASE THE STOCK OF FORMER EMPLOYEES PURSUANT TO STOCK REPURCHASE
AGREEMENTS BY THE CANCELLATION OF INDEBTEDNESS OWED BY SUCH FORMER EMPLOYEES TO
BORROWER REGARDLESS OF WHETHER AN EVENT OF DEFAULT EXISTS.
7.7
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 PERMITTED INVESTMENTS, OR MAINTAIN OR INVEST ANY OF ITS PROPERTY WITH
A PERSON OTHER THAN BANK OR BANK'S AFFILIATES OR PERMIT ANY SUBSIDIARY TO DO SO
UNLESS SUCH PERSON HAS ENTERED INTO A CONTROL AGREEMENT WITH BANK, IN FORM AND
SUBSTANCE SATISFACTORY TO BANK, OR SUFFER OR PERMIT ANY SUBSIDIARY TO BE A PARTY
TO, OR BE BOUND BY, AN AGREEMENT THAT RESTRICTS SUCH SUBSIDIARY FROM PAYING
DIVIDENDS OR OTHERWISE DISTRIBUTING PROPERTY TO BORROWER.
7.8
TRANSACTIONS WITH AFFILIATES.
DIRECTLY OR INDIRECTLY ENTER INTO OR PERMIT
TO EXIST ANY MATERIAL TRANSACTION WITH ANY AFFILIATE OF BORROWER EXCEPT FOR
TRANSACTIONS THAT ARE IN THE ORDINARY COURSE OF BORROWER'S BUSINESS, UPON FAIR
AND REASONABLE TERMS THAT ARE NO LESS FAVORABLE TO BORROWER THAN WOULD BE
OBTAINED IN AN ARM'S LENGTH TRANSACTION WITH A NON-AFFILIATED PERSON.
7.9
SUBORDINATED DEBT.
MAKE ANY PAYMENT IN RESPECT OF ANY SUBORDINATED DEBT,
OR PERMIT ANY OF ITS SUBSIDIARIES TO MAKE ANY SUCH PAYMENT, EXCEPT IN COMPLIANCE
WITH THE TERMS OF SUCH SUBORDINATED DEBT (INCLUDING TERMS PROHIBITING SUCH
PAYMENTS IN THE APPLICABLE SUBORDINATION AGREEMENT IN FAVOR OF BANK), OR AMEND
ANY PROVISION AFFECTING BANK'S RIGHTS CONTAINED IN ANY DOCUMENTATION RELATING TO
THE SUBORDINATED DEBT WITHOUT BANK'S PRIOR WRITTEN CONSENT.
7.10 INVENTORY AND EQUIPMENT.
STORE THE INVENTORY OR THE EQUIPMENT WITH A
BAILEE, WAREHOUSEMAN, OR SIMILAR THIRD PARTY UNLESS THE THIRD PARTY HAS BEEN
NOTIFIED OF BANK'S SECURITY INTEREST AND BANK (A) HAS RECEIVED AN ACKNOWLEDGMENT
FROM THE THIRD PARTY THAT IT IS HOLDING OR WILL HOLD THE INVENTORY OR EQUIPMENT
FOR BANK'S BENEFIT OR (B) IS IN POSSESSION OF THE WAREHOUSE RECEIPT, WHERE
NEGOTIABLE,