THE HOLDBACK, THEN WITH RESPECT TO SUCH PORTION OF THE ESCROW FUNDS
SUBJECT TO HOLDBACK AND FOR AS LONG AS ANY SUCH ESCROW AMOUNT REMAINS PAYABLE TO
THE SELLERS HEREUNDER (THE "OUTSTANDING ESCROW AMOUNT"):
6.12.1.
IF PURCHASER ISSUES
SENIOR NOTES (AS DEFINED BELOW), THEN:
.
SUCH OUTSTANDING ESCROW AMOUNT SHALL BE
SUBORDINATED IN RIGHT OF PAYMENT TO ANY AMOUNTS DUE AND OUTSTANDING (AT OR PRIOR
TO THE TIME OF PAYMENT OF ANY OUTSTANDING ESCROW AMOUNT) UNDER THE PURCHASER'S
SENIOR CONVERTIBLE NOTES (AS AMENDED, THE "SENIOR NOTES") ISSUED PURSUANT TO THE
SECURITIES PURCHASE AGREEMENT DATED ON OR ABOUT THE DATE HEREOF (AS AMENDED,
COLLECTIVELY, THE "SENIOR DEBT"), PROVIDED THAT, SENIOR DEBT SHALL NOT INCLUDE
ANY AMOUNT OF PRINCIPAL UNDER THE SENIOR NOTES IN EXCESS OF THE MAXIMUM PRIORITY
SENIOR NOTE AMOUNT, AS DEFINED AND SET FORTH IN THE SUBORDINATION AGREEMENT.
.
WITHOUT DEROGATING FROM THE PROVISIONS OF
SECTION , ANY INDEBTEDNESS INCURRED BY THE PURCHASER AFTER THE DATE
HEREOF THAT IS SUBORDINATED BY ITS TERMS IN RIGHT OF PAYMENT TO THE SENIOR DEBT,
SHALL ALSO BE SUBORDINATED IN RIGHT OF PAYMENT TO SUCH OUTSTANDING ESCROW
AMOUNT.
.
PURCHASER SHALL GRANT TO THE SELLERS, FOR
THE RATABLE INTEREST OF THE SELLERS, A SECOND PRIORITY PERFECTED SECURITY
INTEREST IN ANY PROPERTY OR OTHER ASSETS IN WHICH A FIRST PRIORITY SECURITY
INTEREST HAS BEEN (OR WILL BE) GRANTED TO SECURE THE SENIOR DEBT, BUT SUBJECT TO
SUCH FIRST PRIORITY INTEREST, AS SET FORTH IN THE SECURITY AND PLEDGE AGREEMENT
AND THE SUBORDINATION AGREEMENT.
SELLERS SHALL RECEIVE SUCH SECURITY
AGREEMENTS, ASSIGNMENTS AND OTHER DOCUMENTS, AND THE PURCHASER SHALL MAKE SUCH
FILINGS AND TAKE SUCH OTHER ACTIONS, AS GRANTED TO HOLDERS OF SENIOR DEBT, TO
CREATE AND PERFECT SUCH SECOND PRIORITY SECURITY INTEREST, SUBJECT TO THE
SUBORDINATION, IN ALL RESPECTS, OF THE OUTSTANDING ESCROW AMOUNT TO THE RIGHTS
OF SUCH HOLDERS OF SENIOR DEBT AND CLARIFYING THE JUNIOR STATUS OF ANY LIENS
SECURING SUCH OUTSTANDING ESCROW AMOUNT AS SET FORTH IN THE SECURITY AND PLEDGE
AGREEMENT AND THE SUBORDINATION AGREEMENT.
6.12.2.
IF PURCHASER DOES NOT
ISSUE SENIOR NOTES, THEN:
.
SUCH OUTSTANDING ESCROW AMOUNT (A) SHALL
RANK PARI PASSU WITH UNSECURED INDEBTEDNESS TO TRADE CREDITORS INCURRED IN THE
ORDINARY COURSE OF BUSINESS, CONSISTENT WITH PAST PRACTICE AND NOT OUTSTANDING
FOR MORE THAN 120 DAYS AFTER THE DATE SUCH PAYABLE WAS CREATED, AND (B) SHALL BE
SENIOR TO ALL OTHER INDEBTEDNESS OF THE PURCHASER OTHER THAN PERMITTED SENIOR
INDEBTEDNESS (AS DEFINED BELOW).
"Permitted Senior Indebtedness" shall mean means the principal of (and premium,
if any), interest on, and all fees and other amounts (including, without
limitation, any
reasonable out-of-pocket costs, enforcement expenses (including reasonable
out-of-pocket legal fees and disbursements), collateral protection expenses and
other reimbursement or indemnity obligations relating thereto) payable by
Purchaser under or in connection with any inventory and receivables credit
facility based on a customary borrowing base entered into by Purchaser with one
or more financial institutions (and on terms and conditions) to fund the working
capital needs of Purchaser; provided, however, that