OF SUCH MERGER OR CONSOLIDATION; (IX) MATERIALLY CHANGE THE NATURE OF THE
BUSINESS IN WHICH IT IS PRESENTLY ENGAGED; (X) BECOME SUBJECT TO (INCLUDING,
WITHOUT LIMITATION, BY WAY OF AMENDMENT TO OR MODIFICATION OF) ANY AGREEMENT OR
INSTRUMENT WHICH BY ITS TERMS WOULD (UNDER ANY CIRCUMSTANCES) RESTRICT ITS OR
25
ANY OF ITS SUBSIDIARIES' RIGHT TO PERFORM THE PROVISIONS OF THIS AGREEMENT OR
ANY OF THE ANCILLARY AGREEMENTS; (XI) CHANGE ITS FISCAL YEAR OR MAKE ANY CHANGES
IN ACCOUNTING TREATMENT AND REPORTING PRACTICES WITHOUT PRIOR WRITTEN NOTICE TO
LAURUS EXCEPT AS REQUIRED BY GAAP OR IN THE TAX REPORTING TREATMENT OR EXCEPT AS
REQUIRED BY LAW; (XII) ENTER INTO ANY TRANSACTION WITH ANY EMPLOYEE, DIRECTOR OR
AFFILIATE, EXCEPT IN THE ORDINARY COURSE OF BUSINESS PURSUANT TO THE REASONABLE
REQUIREMENTS OF ITS OR ITS SUBSIDIARIES BUSINESS WHICH ARE FULLY DISCLOSED TO
LAURUS AND THAT ARE NO LESS FAVORABLE TO IT OR ITS SUBSIDIARIES THAN WOULD BE
OBTAINED ON A COMPARABLE ARMS-LENGTH TRANSACTION WITH A PERSON NOT AN AFFILIATE;
(XIII) BILL ACCOUNTS UNDER ANY NAME EXCEPT THE PRESENT NAME OF SUCH COMPANY; OR
(XIV) SELL, LEASE, TRANSFER OR OTHERWISE DISPOSE OF ANY OF ITS PROPERTIES OR
ASSETS, OR ANY OF THE PROPERTIES OR ASSETS OF ITS SUBSIDIARIES, EXCEPT FOR
(1) THE SALE OF INVENTORY IN THE ORDINARY COURSE OF BUSINESS AND (2) THE
DISPOSITION OR TRANSFER IN THE ORDINARY COURSE OF BUSINESS DURING ANY FISCAL
YEAR OF OBSOLETE AND WORN-OUT EQUIPMENT AND ONLY TO THE EXTENT THAT (X) THE
PROCEEDS OF ANY SUCH DISPOSITION ARE USED TO ACQUIRE REPLACEMENT EQUIPMENT WHICH
IS SUBJECT TO LAURUS' SECURITY INTEREST OF AT LEAST THE SAME PRIORITY AS THE
LIEN ON THE EQUIPMENT WHICH WAS DISPOSED OF OR ARE USED TO REPAY LOANS OR TO PAY
GENERAL CORPORATE EXPENSES, OR (Y) FOLLOWING THE OCCURRENCE OF AN EVENT OF
DEFAULT WHICH CONTINUES TO EXIST, THE PROCEEDS OF WHICH ARE REMITTED TO LAURUS
TO BE HELD AS CASH COLLATERAL FOR THE OBLIGATIONS.
(M)
REISSUANCE OF SECURITIES.
THE PARENT SHALL
REISSUE CERTIFICATES REPRESENTING THE SECURITIES WITHOUT THE LEGENDS SET FORTH
IN SECTION 39 BELOW AT SUCH TIME AS:
(I)
THE HOLDER THEREOF IS PERMITTED TO
DISPOSE OF SUCH SECURITIES PURSUANT TO RULE 144(K) UNDER THE SECURITIES ACT; OR
(II)
UPON RESALE SUBJECT TO AN EFFECTIVE
REGISTRATION STATEMENT AFTER SUCH SECURITIES ARE REGISTERED UNDER THE SECURITIES
ACT.
The Parent agrees to cooperate with Laurus in connection with all resales
pursuant to Rule 144(d) and Rule 144(k) and provide legal opinions necessary to
allow such resales provided the Parent and its counsel receive reasonably
requested representations from Laurus and broker, if any.
(N)
OPINION.
ON THE CLOSING DATE, IT SHALL
DELIVER TO LAURUS AN OPINION ACCEPTABLE TO LAURUS FROM EACH COMPANY'S LEGAL
COUNSEL.
EACH COMPANY WILL PROVIDE, AT THE COMPANIES' JOINT AND SEVERAL
EXPENSE, SUCH OTHER LEGAL OPINIONS IN THE FUTURE AS ARE REASONABLY NECESSARY FOR
THE CONVERSION OF THE NOTES AND THE EXERCISE OF THE WARRANTS.
(O)
LEGAL NAME, ETC.
IT SHALL NOT, WITHOUT
PROVIDING LAURUS WITH 30 DAYS