THE
DATE OF THE STOCKHOLDERS MEETING (AS DEFINED IN SECTION 4.15), EXCEPT FOR
ISSUANCES SPECIFIED IN SECTION 12(C)(III) OF THE DEBENTURE, THE BORROWER SHALL
NOT ISSUE SHARES OF COMMON STOCK OR COMMON STOCK EQUIVALENTS ENTITLING ANY
PERSON TO ACQUIRE SHARES OF COMMON STOCK, AT A PRICE PER SHARE LESS THAN $0.35
(SUBJECT TO EQUITABLE ADJUSTMENTS FOR STOCK SPLITS, RECOMBINATIONS AND SIMILAR
EVENTS).
4.11.
INDEMNIFICATION OF LENDER.
IN ADDITION TO THE
INDEMNITY PROVIDED IN THE REGISTRATION RIGHTS AGREEMENT, THE BORROWER WILL
INDEMNIFY AND HOLD THE LENDER AND THEIR DIRECTORS, OFFICERS, SHAREHOLDERS,
PARTNERS, EMPLOYEES AND AGENTS (EACH, A "LENDER PARTY") HARMLESS FROM ANY AND
ALL LOSSES, LIABILITIES, OBLIGATIONS, CLAIMS, CONTINGENCIES, DAMAGES, COSTS AND
EXPENSES, INCLUDING ALL JUDGMENTS, AMOUNTS PAID IN SETTLEMENTS, COURT COSTS AND
REASONABLE ATTORNEYS' FEES AND COSTS OF INVESTIGATION (COLLECTIVELY, "LOSSES")
THAT ANY THE LENDER PARTY MAY SUFFER OR INCUR AS A RESULT OF OR RELATING TO ANY
MISREPRESENTATION, BREACH OR INACCURACY OF ANY REPRESENTATION, WARRANTY,
COVENANT OR AGREEMENT MADE BY THE BORROWER IN ANY TRANSACTION DOCUMENT.
IN
ADDITION TO THE INDEMNITY CONTAINED HEREIN, THE BORROWER WILL REIMBURSE THE
LENDER PARTY FOR ITS REASONABLE LEGAL AND OTHER EXPENSES (INCLUDING THE COST OF
ANY INVESTIGATION, PREPARATION AND TRAVEL IN CONNECTION THEREWITH) INCURRED IN
CONNECTION THEREWITH, AS SUCH EXPENSES ARE INCURRED.
4.12.
NON-PUBLIC INFORMATION.
FOLLOWING THE DATE OF THIS
AGREEMENT, THE BORROWER COVENANTS AND AGREES THAT NEITHER IT NOR ANY OTHER
PERSON ACTING ON ITS BEHALF WILL PROVIDE THE LENDER OR ITS AGENTS OR COUNSEL
WITH ANY INFORMATION THAT THE BORROWER BELIEVES CONSTITUTES MATERIAL NON-PUBLIC
INFORMATION, UNLESS PRIOR THERETO THE LENDER SHALL HAVE EXECUTED A WRITTEN
AGREEMENT REGARDING THE CONFIDENTIALITY AND USE OF SUCH INFORMATION.
THE
BORROWER UNDERSTANDS AND CONFIRMS THAT THE LENDER SHALL BE RELYING ON THE
FOREGOING REPRESENTATIONS IN EFFECTING TRANSACTIONS IN SECURITIES OF THE
BORROWER.
4.13.
USE OF PROCEEDS.
THE BORROWER SHALL USE THE NET
PROCEEDS FROM THE SALE OF THE SECURITIES HEREUNDER FOR WORKING CAPITAL PURPOSES
AND NOT FOR THE SATISFACTION OF ANY PORTION OF THE BORROWER'S DEBT (OTHER THAN
PAYMENT OF TRADE PAYABLES AND ACCRUED EXPENSES IN THE ORDINARY COURSE OF THE
BORROWER'S BUSINESS AND PRIOR PRACTICES), TO REDEEM ANY COMMON STOCK OR COMMON
STOCK EQUIVALENTS OR TO SETTLE ANY OUTSTANDING ACTION.
4.14.
RESTRICTIONS ON PURCHASE OF COMMON STOCK FROM THIRD
PARTIES.
THE LENDER AGREES THAT NEITHER THE LENDER NOR ITS AFFILIATES SHALL
PURCHASE FROM A PARTY OTHER THAN
20
the Borrower or otherwise acquire from a party other than the Borrower any
shares of Common Stock or securities convertible into or exercisable for shares
of Common Stock, other than by acquiring and converting Debentures or acquiring
and exercising Warrants, unless after any such purchase the total shares of
Common Stock beneficially owned by the Lender and its Affiliates (assuming full
conversion of all outstanding Debentures and full exercise of all outstanding
Warrants) would represent less than 19.999% of outstanding shares of Common
Stock.
The Lender further agrees that, so long as it shall hold any Securities,
it shall not beneficially own more than 19.999% of