AND LIENS. EXCEPT AS SET FORTH ON SCHEDULE 3(H),
THE COMPANY HAS GOOD AND MARKETABLE TITLE TO THE ASSETS OWNED BY IT AND THE
VALID AND ENFORCEABLE RIGHT TO RECEIVE AND/OR USE EACH OF THE ASSETS IN WHICH
THE COMPANY HAS ANY OTHER INTEREST, FREE AND CLEAR OF ALL LIENS. AS USED HEREIN
(I) "LIENS" SHALL MEAN ANY LIEN, ENCUMBRANCE, PLEDGE, MORTGAGE, SECURITY
INTEREST, LEASE, CHARGE, CONDITIONAL SALES CONTRACT, OPTION, RESTRICTION,
REVERSIONARY INTEREST, RIGHT OF FIRST REFUSAL, VOTING TRUST ARRANGEMENT,
PREEMPTIVE RIGHT, CLAIM UNDER BAILMENT OR STORAGE CONTRACT, EASEMENT OR ANY
OTHER ADVERSE CLAIM OR RIGHT WHATSOEVER; AND (II) "ASSETS" SHALL MEAN ALL OF THE
GOODWILL, ASSETS, PROPERTIES AND RIGHTS OF EVERY NATURE, KIND AND DESCRIPTION,
WHETHER TANGIBLE OR INTANGIBLE, REAL, PERSONAL OR MIXED, WHEREVER LOCATED AND
WHETHER OR NOT CARRIED OR REFLECTED ON THE BOOKS AND RECORDS OF THE COMPANY,
WHICH ARE OWNED BY THE COMPANY OR IN WHICH THE COMPANY HAS ANY INTEREST
(INCLUDING THE RIGHT TO USE).
(I)
NO CONFLICTS. THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS
AGREEMENT BY THE COMPANY AND THE CONSUMMATION BY THE COMPANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY WILL NOT (I) RESULT IN A VIOLATION OF THE ARTICLES OF
INCORPORATION OR BYLAWS OF THE COMPANY OR (II) CONFLICT WITH, OR CONSTITUTE A
DEFAULT (OR AN EVENT WHICH WITH NOTICE OR LAPSE OF TIME OR BOTH WOULD BECOME A
DEFAULT) UNDER, OR GIVE TO OTHERS ANY RIGHTS OF TERMINATION, AMENDMENT,
ACCELERATION OR CANCELLATION OF, ANY AGREEMENT, INDENTURE OR INSTRUMENT TO WHICH
THE COMPANY OR ANY OF ITS SUBSIDIARIES IS A PARTY, OR RESULT IN A VIOLATION OF
ANY LAW, RULE, REGULATION, ORDER, JUDGMENT OR DECREE (INCLUDING FEDERAL AND
STATE SECURITIES LAWS AND REGULATIONS) APPLICABLE TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES OR BY WHICH ANY PROPERTY OR ASSET OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES IS BOUND OR AFFECTED (EXCEPT FOR SUCH CONFLICTS, DEFAULTS,
TERMINATIONS, AMENDMENTS, ACCELERATIONS, CANCELLATIONS AND VIOLATIONS AS WOULD
NOT, INDIVIDUALLY OR IN THE AGGREGATE, HAVE A MATERIAL ADVERSE EFFECT).
(J)
SECURITY INTEREST. PURSUANT TO THE ATTACHED EXHIBIT C, THE
COMPANY HEREBY GRANTS A SECURITY INTEREST TO PURCHASER TO SECURE THE OBLIGATIONS
UNDER THE FIRST RESTATED NOTE AND THE SECOND RESTATED NOTE, AND ACKNOWLEDGES
THAT SUCH SECURITY INTEREST SHALL APPLY TO THE OBLIGATIONS OF THE COMPANY UNDER
THE REPLACEMENT NOTES.
4.
COVENANTS.
(A)
BEST EFFORTS. EACH PARTY SHALL USE ITS BEST EFFORTS TIMELY TO
SATISFY EACH OF THE CONDITIONS TO BE SATISFIED BY IT AS PROVIDED IN SECTIONS 5
AND 6 OF THIS AGREEMENT.
(B)
EXPENSES. EACH PARTY SHALL PAY SUCH PARTY'S EXPENSES IN CONNECTION
WITH THE TRANSACTIONS CONTEMPLATED BY THE AGREEMENT.
(C)
BOARD SEAT. DURING THE PERIOD THAT THE REPLACEMENT NOTES ARE
OUTSTANDING, ROBERT LAUTZ WILL CONTINUE TO BE APPOINTED TO THE COMPANY'S BOARD
OF DIRECTORS FOR SUCH PERIOD, AND THE COMPANY SHALL CONTINUE TO PROVIDE
MR. LAUTZ WITH THE SAME COMPENSATION MADE AVAILABLE TO ITS OTHER OUTSIDE
DIRECTORS. IN ADDITION, AS LONG AS PURCHASER OWNS IN EXCESS OF 300,000 SHARES OF
THE COMPANY (TAKING INTO ACCOUNT THE