JURISDICTION OF ORGANIZATION, (3) CHANGE ITS ORGANIZATIONAL STRUCTURE OR TYPE,
(4) CHANGE ITS LEGAL NAME (WHETHER SUCH NAME IS IN ENGLISH OR FRENCH OR
OTHERWISE), OR (5) CHANGE ANY ORGANIZATIONAL NUMBER (IF ANY) ASSIGNED BY ITS
JURISDICTION OF ORGANIZATION.
IF BORROWER INTENDS TO DELIVER ANY PORTION OF THE
COLLATERAL VALUED, INDIVIDUALLY OR IN THE AGGREGATE, IN EXCESS OF TWO HUNDRED
FIFTY THOUSAND DOLLARS ($250,000) TO A BAILEE, AND BANK AND SUCH BAILEE ARE NOT
ALREADY PARTIES TO A BAILEE AGREEMENT GOVERNING BOTH THE COLLATERAL AND THE
LOCATION TO WHICH BORROWER INTENDS TO DELIVER THE COLLATERAL, THEN BORROWER WILL
FIRST RECEIVE THE WRITTEN CONSENT OF BANK, AND SUCH BAILEE SHALL EXECUTE AND
DELIVER A BAILEE AGREEMENT IN FORM AND SUBSTANCE SATISFACTORY TO BANK IN ITS
SOLE DISCRETION.
15
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 (INCLUDING,
WITHOUT LIMITATION, BY THE FORMATION OF ANY SUBSIDIARY).
A SUBSIDIARY OF
BORROWER OR ANY GUARANTOR THAT ITSELF IS NOT A BORROWER OR A GUARANTOR MAY ENTER
INTO ANY MERGER OR CONSOLIDATION WITH ANOTHER SUBSIDIARY OF BORROWER THAT ITSELF
IS NOT A BORROWER OR A GUARANTOR.
7.4
INDEBTEDNESS.
(A) CREATE, INCUR, ASSUME, OR BE LIABLE FOR ANY INDEBTEDNESS, OR PERMIT ANY
SUBSIDIARY TO DO SO, OTHER THAN PERMITTED INDEBTEDNESS.
(B) WITHOUT LIMITING THE GENERALITY OF SECTION 7.4(A), ALL PRESENT AND FUTURE
INDEBTEDNESS OF BORROWER TO ITS OFFICERS, DIRECTORS, AND EQUITYHOLDERS ("INSIDE
DEBT") SHALL, AT ALL TIMES, BE SUBORDINATED TO THE OBLIGATIONS PURSUANT TO A
SUBORDINATION AGREEMENT ON BANK'S STANDARD FORM.
BORROWER REPRESENTS AND
WARRANTS THAT THERE IS NO INSIDE DEBT PRESENTLY OUTSTANDING, EXCEPT FOR THE
FOLLOWING: NONE. PRIOR TO INCURRING ANY INSIDE DEBT IN THE FUTURE, BORROWER
SHALL CAUSE THE PERSON TO WHOM SUCH INSIDE DEBT WILL BE OWED TO EXECUTE AND
DELIVER TO BANK A SUBORDINATION AGREEMENT ON BANK'S STANDARD FORM.
7.5
ENCUMBRANCE.
CREATE, INCUR, ALLOW, OR SUFFER
ANY LIEN ON ANY OF THE COLLATERAL, 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, OR 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 FROM ASSIGNING, MORTGAGING, PLEDGING, GRANTING A
SECURITY INTEREST IN OR UPON, OR ENCUMBERING ANY OF BORROWER'S INTELLECTUAL
PROPERTY.
7.6
MAINTENANCE OF COLLATERAL ACCOUNTS.
MAINTAIN
ANY COLLATERAL ACCOUNT EXCEPT PURSUANT TO THE TERMS OF SECTION 6.8(B) HEREOF.
7.7
DISTRIBUTIONS; INVESTMENTS.
(A) PAY ANY
DIVIDENDS OR MAKE ANY DISTRIBUTION OR PAYMENT OR REDEEM, RETIRE OR PURCHASE ANY
CAPITAL STOCK PROVIDED THAT (I) BORROWER MAY CONVERT ANY OF ITS CONVERTIBLE
SECURITIES INTO OTHER SECURITIES PURSUANT TO THE TERMS OF