PROVIDE LENDER WITH TEN (10) BUSINESS DAYS PRIOR WRITTEN NOTICE OF ITS
INTENTION TO MAKE REPAYMENT OF THIS NOTE, WHETHER BEFORE OR AFTER THE MATURITY
DATE, SO THAT LENDER MAY ELECT, IN ITS SOLE DISCRETION, TO EXERCISE ITS
CONVERSION RIGHTS (AS DEFINED HEREIN).
D.
CONDITIONS OF ADVANCES.
1.
CONDITIONS PRECEDENT TO INITIAL
ADVANCE.
THE OBLIGATION OF LENDER TO MAKE THE INITIAL ADVANCE IS SUBJECT TO THE
CONDITION PRECEDENT THAT LENDER SHALL HAVE RECEIVED, IN FORM AND SUBSTANCE
SATISFACTORY TO LENDER, THE FOLLOWING:
(A)
THIS NOTE;
(B)
A CERTIFICATE OF THE SECRETARY OF BORROWER
WITH RESPECT TO INCUMBENCY AND RESOLUTIONS AUTHORIZING THE EXECUTION AND
DELIVERY OF THIS NOTE;
(C)
UCC NATIONAL FORM FINANCING STATEMENT;
(D)
PAYMENT OF THE FEES AND LENDER EXPENSES IN
THE AMOUNT OF $9659.00;
(E)
TO PROVIDE EVIDENCE OF INSURANCE WHICH
SATISFIES THE REQUIREMENTS OF SECTION 7 HEREOF; AND
(F)
A STOCK CERTIFICATE REPRESENTING THE
NUMBER OF SHARES OF COMMON STOCK OF THE BORROWER EQUAL TO: (1) $75,000;
DIVIDED
BY (2) THE PRICE PER SHARE OF THE COMMON STOCK OF THE BORROWER ON THE DATE OF
THIS NOTE (SUCH SHARES THE "COMMITMENT SHARES") .
(G)
SUCH OTHER DOCUMENTS, AND COMPLETION OF SUCH
OTHER MATTERS, AS LENDER MAY REASONABLY DEEM NECESSARY OR APPROPRIATE.
2.
CONDITIONS PRECEDENT TO ALL ADVANCES.
THE OBLIGATION OF LENDER TO MAKE ANY ADVANCE, IS FURTHER SUBJECT TO THE
FOLLOWING CONDITIONS:
(A)
THE REPRESENTATIONS AND WARRANTIES
CONTAINED HEREIN SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS ON AND AS OF
THE DATE OF SUCH REQUEST FOR ADVANCE AND ON THE EFFECTIVE DATE OF EACH ADVANCE
AS THOUGH MADE AT AND AS OF EACH SUCH DATE, AND NO EVENT OF DEFAULT SHALL HAVE
OCCURRED AND BE CONTINUING, OR WOULD EXIST AFTER GIVING EFFECT TO SUCH ADVANCE
(PROVIDED, HOWEVER, THAT THOSE REPRESENTATIONS AND WARRANTIES EXPRESSLY
REFERRING TO ANOTHER DATE SHALL BE TRUE, CORRECT AND COMPLETE IN ALL MATERIAL
RESPECTS AS OF SUCH DATE).
THE MAKING OF EACH
2
Advance shall be deemed to be a representation and warranty by Borrower on the
date of such Advance as to the material accuracy of the facts referred to in
this Section.
(B)
BORROWER HAS BORROWED THE MAXIMUM AMOUNT
PERMISSIBLE UNDER THE SENIOR LOAN DOCUMENTS (AS DEFINED BELOW), AS AMENDED, SUCH
AMOUNT HAS BEEN OUTSTANDING FOR AT LEAST FORTY FIVE (45) DAYS AND BORROWER HAS
PROVIDED EVIDENCE OF THE FOREGOING REASONABLY SATISFACTORY TO LENDER.
LENDER
MAY WAIVE THE REQUIREMENTS OF THIS SECTION D.2.(B) BY PROVIDING WRITING OF SUCH
WAIVER TO BORROWER.
(C)
BORROWER'S TANGIBLE NET WORTH, AS DETERMINED
IN ACCORDANCE WITH U.S. GENERAL ACCEPTED ACCOUNTING PRINCIPALS, AT THE END OF
THE CALENDAR MONTH PRIOR SUCH ADVANCE, IS AT LEAST $3,000,000.
(D)
BORROWER'S RATIO OF EBITDA (EARNINGS BEFORE
INTEREST, TAXES, DEPRECIATION AND AMORTIZATION) TO DEBT SERVICE AT THE END OF
THE CALENDAR MONTH PRIOR TO SUCH ADVANCE IS AT LEAST 3.00 TO 1.00.
Notwithstanding the foregoing, Lender may waive the requirements of Section
D.2.(c) and Section D.2.(d) by providing writing of such waiver to Borrower.
E.
SECURITY INTEREST.
1.
GRANT