RELATED CREDIT OR LOAN AGREEMENTS ON THE DATE
HEREOF, THE COMPANY WILL NOT, AND WILL NOT PERMIT ANY SUBSIDIARY TO, DIRECTLY OR
INDIRECTLY, ENTER INTO, CREATE, INCUR, ASSUME OR SUFFER TO EXIST ANY
INDEBTEDNESS OF ANY KIND, THAT IS SENIOR OR PARI PASSU IN ANY RESPECT TO THE
COMPANY'S OBLIGATIONS UNDER THE NOTES, OTHER THAN INDEBTEDNESS SECURED BY
PURCHASE MONEY SECURITY INTERESTS (WHICH WILL BE SENIOR ONLY AS TO THE
UNDERLYING ASSETS COVERED THEREBY) AND INDEBTEDNESS UNDER CAPITAL LEASE
OBLIGATIONS (WHICH WILL BE SENIOR ONLY AS TO THE ASSETS COVERED THEREBY); AND
THE COMPANY WILL NOT, AND WILL NOT PERMIT ANY SUBSIDIARY TO, DIRECTLY OR
INDIRECTLY, INCUR ANY LIEN ON OR WITH RESPECT TO ANY OF ITS PROPERTY OR ASSETS
NOW OWNED OR HEREAFTER ACQUIRED OR ANY INTEREST THEREIN OR ANY INCOME OR PROFITS
THEREFROM, EXCEPT WITH RESPECT TO EXISTING INDEBTEDNESS.
(B)
SO LONG AS ANY NOTES ARE OUTSTANDING,
NEITHER THE COMPANY NOR ANY SUBSIDIARY SHALL, DIRECTLY OR INDIRECTLY, (I)
REDEEM, PURCHASE OR OTHERWISE ACQUIRE ANY CAPITAL STOCK OR SET ASIDE ANY MONIES
FOR SUCH A REDEMPTION, PURCHASE OR OTHER ACQUISITION (EXCEPT AS PERMITTED BY
SECTION 4.13(A)(I) OF THE PURCHASE AGREEMENT) OR (II) ISSUE ANY COMMON STOCK
EQUIVALENTS WITH AN EFFECTIVE PRICE OR A NUMBER OF UNDERLYING SHARES THAT FLOATS
OR RESETS OR OTHERWISE VARIES OR IS SUBJECT TO ADJUSTMENT BASED (DIRECTLY OR
INDIRECTLY) ON MARKET PRICES OF THE COMMON STOCK (A "FLOATING PRICE SECURITY).
(C)
THE COMPANY COVENANTS THAT IT WILL AT
ALL TIMES RESERVE AND KEEP AVAILABLE OUT OF ITS AUTHORIZED BUT UNISSUED AND
OTHERWISE UNRESERVED COMMON STOCK, SOLELY FOR THE PURPOSE OF ENABLING IT TO
ISSUE UNDERLYING SHARES AS REQUIRED HEREUNDER, THE NUMBER OF UNDERLYING SHARES
WHICH ARE THEN ISSUABLE AND DELIVERABLE UPON THE CONVERSION OF (AND OTHERWISE IN
RESPECT OF) THIS ENTIRE NOTE (TAKING INTO ACCOUNT THE ADJUSTMENTS SET FORTH IN
SECTION 10 AND DISREGARDING ANY LIMITATIONS SET FORTH IN SECTION 6(C)), FREE
FROM PREEMPTIVE RIGHTS OR
6
ANY OTHER CONTINGENT PURCHASE RIGHTS OF PERSONS OTHER THAN THE HOLDER.
THE
COMPANY COVENANTS THAT ALL UNDERLYING SHARES SO ISSUABLE AND DELIVERABLE SHALL,
UPON ISSUANCE IN ACCORDANCE WITH THE TERMS HEREOF, BE DULY AND VALIDLY
AUTHORIZED AND ISSUED AND FULLY PAID AND NONASSESSABLE.
(D)
THE COMPANY COVENANTS THAT FOR SO LONG
AS ANY NOTES ARE OUTSTANDING, THE COMPANY'S AGGREGATE CASH AND CASH EQUIVALENTS
SHALL AT ALL TIMES EQUAL THE GREATER OF (I) $1,000,000 OR (II) THE AMOUNT
DETERMINED BY THE FOLLOWING CALCULATION: (A) $3,000,000 MINUS (B) 80.0% OF THE
COMPANY'S ELIGIBLE RECEIVABLES (AS DEFINED BELOW).
For the purpose of this Section 3(d), the following terms shall have the
following meanings (for the purpose of these definitions, the term "Company"
shall mean the Company and each of its subsidiaries):
"Account Debtor" means the obligor on a Receivable.
"Eligible Receivables" means Receivables arising in the ordinary course of the
Company's business from the sale of goods or rendition of services; provided,
however, that for a Receivable to be an Eligible Receivable the following must
be true: (i) the Receivable