BECOME DUE AND
PAYABLE IN FULL IN CASH (FREE OF ANY CLAIM OF SUBORDINATION), WITHOUT ANY
FURTHER ACTION BY THE HOLDER, AND THE BORROWER SHALL IMMEDIATELY BE OBLIGATED TO
REPURCHASE THIS DEBENTURE PURSUANT TO THE PRECEDING PARAGRAPH AS IF THE HOLDER
HAD DELIVERED AN EVENT NOTICE IMMEDIATELY PRIOR TO THE OCCURRENCE OF SUCH
BANKRUPTCY EVENT.
(C)
IN CONNECTION WITH ANY EVENT OF DEFAULT,
THE HOLDER NEED NOT PROVIDE AND THE BORROWER HEREBY WAIVES ANY PRESENTMENT,
DEMAND, PROTEST OR OTHER NOTICE OF ANY KIND, AND THE HOLDER MAY IMMEDIATELY AND
WITHOUT EXPIRATION OF ANY GRACE PERIOD ENFORCE ANY AND ALL OF ITS RIGHTS AND
REMEDIES HEREUNDER AND ALL OTHER REMEDIES AVAILABLE TO IT UNDER APPLICABLE LAW.
ANY SUCH DECLARATION MAY BE RESCINDED AND ANNULLED BY THE HOLDER AT ANY TIME
PRIOR TO PAYMENT HEREUNDER. NO SUCH RESCISSION OR ANNULMENT SHALL AFFECT ANY
SUBSEQUENT EVENT OF DEFAULT OR IMPAIR ANY RIGHT CONSEQUENT THERETO.
8.
RANKING.
THIS DEBENTURE RANKS PARI
PASSU WITH ALL DEBENTURES ISSUED TO SF CAPITAL PARTNERS, LTD. ("SF CAPITAL") AND
IS SENIOR TO ALL OTHER EXISTING AND HEREAFTER CREATED INDEBTEDNESS OF THE
BORROWER. OTHER THAN PERMITTED INDEBTEDNESS, NO INDEBTEDNESS OF THE BORROWER IS
SENIOR TO THIS DEBENTURE IN RIGHT OF PAYMENT, WHETHER WITH RESPECT OF INTEREST,
DAMAGES OR UPON LIQUIDATION OR DISSOLUTION OR OTHERWISE. THE BORROWER WILL NOT,
AND WILL NOT PERMIT ANY SUBSIDIARY TO, DIRECTLY OR INDIRECTLY, ENTER INTO,
CREATE, INCUR, ASSUME OR SUFFER TO EXIST ANY INDEBTEDNESS OF ANY KIND, ON OR
WITH RESPECT TO ANY OF ITS PROPERTY OR ASSETS NOW OWNED OR HEREAFTER ACQUIRED OR
ANY INTEREST THEREIN OR ANY INCOME OR PROFITS THEREFROM, THAT IS SENIOR IN ANY
RESPECT TO THE BORROWER'S OBLIGATIONS UNDER THE DEBENTURE, OTHER THAN PERMITTED
INDEBTEDNESS.
9.
CHARGES, TAXES AND EXPENSES.
ISSUANCE
OF CERTIFICATES FOR UNDERLYING SHARES UPON CONVERSION OF (OR OTHERWISE IN
RESPECT OF) THIS DEBENTURE SHALL BE MADE WITHOUT CHARGE TO THE HOLDER FOR ANY
ISSUE OR TRANSFER TAX, WITHHOLDING TAX, TRANSFER AGENT FEE OR OTHER INCIDENTAL
TAX OR EXPENSE IN RESPECT OF THE ISSUANCE OF SUCH CERTIFICATE, ALL OF WHICH
TAXES AND EXPENSES SHALL BE PAID BY THE BORROWER; PROVIDED, HOWEVER, THAT THE
BORROWER SHALL NOT BE REQUIRED TO PAY ANY TAX WHICH MAY BE PAYABLE IN RESPECT OF
ANY TRANSFER INVOLVED IN THE REGISTRATION OF ANY CERTIFICATES FOR UNDERLYING
SHARES OR DEBENTURES IN A NAME OTHER THAN THAT OF THE HOLDER. THE HOLDER SHALL
BE RESPONSIBLE FOR ALL OTHER TAX LIABILITY THAT MAY ARISE AS A RESULT OF HOLDING
OR TRANSFERRING THIS DEBENTURE OR RECEIVING UNDERLYING SHARES IN RESPECT HEREOF.
7
10.
RESERVATION OF UNDERLYING SHARES.
THE
BORROWER COVENANTS THAT IT WILL AT ALL TIMES RESERVE AND KEEP AVAILABLE OUT OF
THE AGGREGATE OF ITS AUTHORIZED BUT UNISSUED AND OTHERWISE UNRESERVED COMMON
STOCK, SOLELY FOR THE PURPOSE OF ENABLING IT TO ISSUE UNDERLYING SHARES AS
REQUIRED HEREUNDER, THE NUMBER OF UNDERLYING SHARES WHICH ARE THEN ISSUABLE AND
DELIVERABLE UPON THE CONVERSION OF (AND OTHERWISE IN RESPECT OF) THIS ENTIRE
DEBENTURE (TAKING INTO ACCOUNT THE ADJUSTMENTS OF