COMMON SHARES INTO A SMALLER NUMBER OF SHARES, THE
CONVERSION PRICE IN EFFECT IMMEDIATELY PRIOR TO SUCH COMBINATION WILL BE
PROPORTIONATELY INCREASED.
9.
COVENANTS.
(A)
AFFIRMATIVE COVENANTS.
UNTIL ALL PRINCIPAL AND INTEREST AND ANY OTHER
AMOUNTS DUE AND PAYABLE UNDER THIS NOTE HAVE BEEN PAID IN FULL IN CASH, THE
COMPANY SHALL, AND SHALL CAUSE EACH SIGNIFICANT SUBSIDIARY TO:
(I)
PROVIDE PROMPT WRITTEN NOTICE TO THE HOLDER OF THE OCCURRENCE OF ANY EVENT
OF DEFAULT, OR ANY EVENT WHICH WITH THE GIVING OF NOTICE OR LAPSE OF TIME, OR
BOTH, WOULD CONSTITUTE AN EVENT OF DEFAULT, HEREUNDER;
(II)
DO OR CAUSE TO BE DONE ALL THINGS REASONABLY NECESSARY TO PRESERVE, RENEW
AND KEEP IN FULL FORCE AND EFFECT ITS LEGAL EXISTENCE; AND
(III)
(A)
KEEP PROPER BOOKS OF RECORD AND ACCOUNT IN WHICH FULL, TRUE AND
CORRECT ENTRIES ARE MADE OF ALL DEALINGS AND TRANSACTIONS IN RELATION TO ITS
BUSINESS AND ACTIVITIES, (B) PERMIT ANY REPRESENTATIVES DESIGNATED BY THE
HOLDER, UPON REASONABLE PRIOR NOTICE, TO VISIT AND INSPECT ITS PROPERTIES, TO
EXAMINE AND MAKE EXTRACTS FROM ITS BOOKS AND RECORDS, AND TO DISCUSS ITS
AFFAIRS, FINANCES AND CONDITION WITH ITS OFFICERS AND INDEPENDENT ACCOUNTANTS,
ALL AT SUCH REASONABLE TIMES AND AS OFTEN AS REASONABLY REQUESTED, AND (C)
PROVIDE TO THE HOLDER THE SAME INFORMATION RIGHTS AS IT PROVIDES TO ITS
STOCKHOLDERS.
(B)
NEGATIVE COVENANTS.
UNTIL ALL PRINCIPAL AND INTEREST AND ANY OTHER AMOUNTS
DUE AND PAYABLE UNDER THIS NOTE HAVE BEEN PAID IN FULL IN CASH, THE COMPANY
SHALL NOT, AND SHALL NOT PERMIT ANY SUBSIDIARY TO:
(I)
CREATE, INCUR, ASSUME OR PERMIT TO EXIST ANY INDEBTEDNESS OR GUARANTEE,
DIRECTLY OR INDIRECTLY, EXCEPT:
(A)
INDEBTEDNESS WITH RESPECT TO EQUIPMENT LEASES OR TRADE ACCOUNTS OF
THE COMPANY OR ANY SUBSIDIARY ARISING IN THE ORDINARY COURSE OF BUSINESS;
8
(B)
INDEBTEDNESS INCURRED IN THE ORDINARY COURSE ARISING OUT OF ANY
LEASE AGREEMENT FOR THE PREMISES OF THE COMPANY OR ANY SIGNIFICANT SUBSIDIARY;
(C)
INDEBTEDNESS INCURRED IN THE ORDINARY COURSE OF THE COMPANY OR ANY
SIGNIFICANT SUBSIDIARY FOR EMPLOYEE-RELATED OBLIGATIONS OR COMMITMENTS,
INCLUDING, BUT NOT LIMITED TO, OBLIGATIONS FOR THE PAYMENT OF SALARIES, ACCRUED
VACATION DAYS, SEVERANCE, PRIOR NOTICE PERIODS, MANAGERS' INSURANCE, PENSION
FUNDS AND OTHER APPROVED EMPLOYEE BENEFITS;
(D)
INDEBTEDNESS FOR TAXES (INCLUDING MUNICIPALITY RATES), ASSESSMENTS,
LEVIES TO STATUTORY BODIES AND GOVERNMENT AGENCIES, OR SIMILAR CHARGES, IN ALL
CASES PROVIDED THAT SUCH OBLIGATIONS WERE INCURRED IN THE ORDINARY COURSE OF
BUSINESS THAT ARE NOT YET DUE AND PAYABLE;
(E)
INDEBTEDNESS UNDER THE CONVERTIBLE NOTES;
(F)
INDEBTEDNESS THAT IS BY ITS TERMS SUBORDINATE TO THE INDEBTEDNESS
UNDER THE CONVERTIBLE NOTES UP TO $15,000,000;
(G)
INDEBTEDNESS, NOT GREATER THAN $6,500,000 IN THE AGGREGATE UNDER
(I) THAT CERTAIN PROMISSORY NOTE MADE BY THE COMPANY AND PAYABLE TO SYNTEK
CAPITAL AG DATED DECEMBER 16, 2005 AS AMENDED AS OF THE DATE HEREOF (THE "SYNTEK
NOTE") AND (II) THAT CERTAIN LETTER OF CREDIT MADE BY THE COMPANY IN FAVOR OF
SYNTEK CAPITAL AG IN CONNECTION WITH THE SYNTEK NOTE (THE "SYNTEK LETTER OF
CREDIT");
(H)
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