ANY PART OF ITS BUSINESS OR PROPERTY, EXCEPT FOR TRANSFERS (A) OF
INVENTORY IN THE ORDINARY COURSE OF BUSINESS; (B) OF WORN-OUT OR OBSOLETE
EQUIPMENT; (C) IN CONNECTION WITH PERMITTED LIENS AND PERMITTED INVESTMENTS; (D)
AMOUNTS ON DEPOSIT OR TO BE TRANSFERRED OR DEPOSITED AT CITIZENS BANK FOR
CURRENT PAYROLL PURPOSES IN ACCORDANCE WITH THIS AGREEMENT, AND (E) OF
NONEXCLUSIVE LICENSES AND SIMILAR ARRANGEMENTS FOR THE USE OF THE PROPERTY OF
BORROWER OR ITS SUBSIDIARIES IN THE ORDINARY COURSE OF BUSINESS.
7.2
CHANGES IN BUSINESS, MANAGEMENT, OWNERSHIP, OR BUSINESS LOCATIONS.
(A) ENGAGE IN OR PERMIT ANY OF ITS SUBSIDIARIES TO ENGAGE IN ANY BUSINESS OTHER
THAN THE BUSINESSES CURRENTLY ENGAGED IN BY BORROWER AND SUCH SUBSIDIARY, AS
APPLICABLE, OR REASONABLY RELATED THERETO; (B) LIQUIDATE OR DISSOLVE; OR (C) (I)
HAVE A CHANGE IN MANAGEMENT SUCH THAT ANY KEY PERSON CEASES TO BE INVOLVED IN
THE MANAGEMENT OF THE BORROWER, OR (II) ENTER INTO ANY TRANSACTION OR SERIES OF
RELATED TRANSACTIONS IN WHICH THE STOCKHOLDERS OF BORROWER IMMEDIATELY PRIOR TO
THE FIRST SUCH TRANSACTION OWN LESS THAN 50% OF THE VOTING STOCK OF BORROWER
IMMEDIATELY AFTER GIVING EFFECT TO SUCH TRANSACTION OR RELATED SERIES OF SUCH
TRANSACTIONS (OTHER THAN BY THE SALE OF BORROWER'S EQUITY SECURITIES IN A PUBLIC
OFFERING OR TO VENTURE CAPITAL OR OTHER INSTITUTIONAL OR STRATEGIC INVESTORS SO
LONG AS BORROWER IDENTIFIES TO BANK SUCH INVESTORS PRIOR TO THE CLOSING OF THE
TRANSACTION).
BORROWER SHALL NOT, WITHOUT AT LEAST THIRTY (30) DAYS PRIOR
WRITTEN NOTICE TO BANK: (1) ADD ANY NEW OFFICES OR BUSINESS LOCATIONS, INCLUDING
WAREHOUSES (UNLESS SUCH NEW OFFICES OR BUSINESS LOCATIONS CONTAIN LESS THAN
TWENTY THOUSAND DOLLARS ($20,000) IN BORROWER'S ASSETS OR PROPERTY), (2) CHANGE
ITS JURISDICTION OF ORGANIZATION, (3) CHANGE ITS ORGANIZATIONAL STRUCTURE OR
TYPE, (4) CHANGE ITS LEGAL NAME, OR (5) CHANGE ANY ORGANIZATIONAL NUMBER (IF
ANY) ASSIGNED BY ITS JURISDICTION OF ORGANIZATION.
9
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, 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, PERMIT ANY COLLATERAL NOT TO BE SUBJECT TO THE FIRST PRIORITY SECURITY
INTEREST GRANTED HEREIN, OR ENTER INTO ANY AGREEMENT, DOCUMENT, INSTRUMENT OR
OTHER ARRANGEMENT (EXCEPT WITH OR IN FAVOR OF BANK) WITH ANY PERSON WHICH
DIRECTLY OR INDIRECTLY PROHIBITS OR HAS THE EFFECT OF PROHIBITING BORROWER OR
ANY SUBSIDIARY FROM ASSIGNING, MORTGAGING, PLEDGING, GRANTING A SECURITY
INTEREST IN OR UPON, OR ENCUMBERING ANY OF BORROWER'S OR ANY SUBSIDIARY'S