RECEIVED AN OPINION OF COUNSEL OF SUCH SIGNIFICANT
SUBSIDIARY CONTAINING SUCH OPINIONS THAT ARE REASONABLY ACCEPTABLE TO THE
INVESTOR AND THAT ARE MATERIALLY IDENTICAL IN SUBSTANCE TO THE OPINIONS RECEIVED
ON THE DATE HEREOF WITH RESPECT TO THE SIGNIFICANT SUBSIDIARIES ENTERING INTO
THE SECURITY AGREEMENT ON THE DATE HEREOF;
(G)
MAKE ANY CAPITAL EXPENDITURES (OTHER THAN
WITH RESPECT TO NORMAL MAINTENANCE AND REPLACEMENT PROGRAMS IN THE ORDINARY
COURSE OF BUSINESS) EXCEEDING $1,000,000 IN ANY FISCAL YEAR FOR THE COMPANY AND
ITS SIGNIFICANT SUBSIDIARIES IN THE AGGREGATE; OR
(H)
PERMIT THE SUBSIDIARIES THAT ARE NOT PARTY
TO THE SECURITY AGREEMENT TO HAVE ASSETS IN AN AGGREGATE AMOUNT GREATER THAN
$500,000.
Section 7.
Defenses.
The obligations of the Company under this Note shall not be subject to
reduction, limitation, impairment, termination, defense, set-off, counterclaim
or recoupment for any reason.
Section 8.
Guaranty and Security
Agreement.
This Note is a senior secured obligation of the Company. The Company's
obligations under this Note are (i) guarantied by certain of its Subsidiaries,
and (ii) secured by a security
7
interest in substantially all of the assets of the Company and such
Subsidiaries, in each case pursuant to the terms and provisions of the Security
Agreement. This Note is subject to the terms and provisions of the Security
Agreement, and the Investor, by its acceptance of this Note, hereby acknowledges
and agrees to such terms and provisions.
Section 9.
Transfer of Note; Lost or
Stolen Note.
(A)
THE INVESTOR MAY SELL, TRANSFER OR
OTHERWISE DISPOSE OF ALL OR ANY PART OF THIS NOTE (INCLUDING WITHOUT LIMITATION
PURSUANT TO A PLEDGE) TO ANY PERSON OR ENTITY, SO LONG AS SUCH SALE, TRANSFER OR
DISPOSITION IS IN ACCORDANCE WITH THE PROVISIONS OF THE SECURITIES PURCHASE
AGREEMENT AND IS OF AT LEAST $500,000 IN PRINCIPAL AMOUNT. FROM AND AFTER THE
DATE OF ANY SUCH SALE, TRANSFER OR DISPOSITION, THE TRANSFEREE HEREOF SHALL BE
DEEMED TO BE THE HOLDER OF A NOTE IN THE PRINCIPAL AMOUNT ACQUIRED BY SUCH
TRANSFEREE, AND THE COMPANY SHALL, AS PROMPTLY AS PRACTICABLE, ISSUE AND DELIVER
TO SUCH TRANSFEREE A NEW NOTE IDENTICAL IN ALL RESPECTS TO THIS NOTE, IN THE
NAME OF SUCH TRANSFEREE AND, IF SUCH TRANSFEREE ACQUIRES LESS THAN THE ENTIRE
PRINCIPAL AMOUNT OF THIS NOTE, THE COMPANY SHALL CONTEMPORANEOUSLY ISSUE TO THE
INVESTOR A NEW NOTE IDENTICAL IN ALL RESPECTS TO THIS NOTE, REPRESENTING THE
OUTSTANDING BALANCE OF THIS NOTE. THE COMPANY SHALL BE ENTITLED TO TREAT THE
ORIGINAL INVESTOR AS THE HOLDER OF THIS ENTIRE NOTE UNLESS AND UNTIL IT RECEIVES
WRITTEN NOTICE OF THE SALE, TRANSFER OR DISPOSITION HEREOF.
(B)
UPON RECEIPT BY THE COMPANY OF EVIDENCE OF
THE LOSS, THEFT, DESTRUCTION OR MUTILATION OF THIS NOTE, AND (IN THE CASE OF
LOSS, THEFT OR DESTRUCTION) OF INDEMNITY OR SECURITY REASONABLY SATISFACTORY TO
THE COMPANY, AND UPON SURRENDER AND CANCELLATION OF THE NOTE, IF MUTILATED, THE
COMPANY SHALL EXECUTE AND DELIVER TO THE INVESTOR A NEW NOTE IDENTICAL IN ALL
RESPECTS TO THIS NOTE.
Section 10.
Attorneys' and