NOTE,
PRIOR TO THE INCURRENCE OF ANY ADDITIONAL CONVERTIBLE
INDEBTEDNESS, I.E. CONVERTIBLE TO EQUITY AND/OR THE SALE OR ISSUANCE OF ANY
CONVERTIBLE EQUITY INTERESTS, I.E. CONVERTIBLE TO DEBT, OF THE COMPANY OR ANY OF
ITS SUBSIDIARIES, UNDERSTANDING THAT ANY FINANCING THAT INVOLVES PURE EQUITY OR
PURE DEBT, NO CONVERSION FEATURE, IS NOT INCLUDED IN THIS DEFINITION OF
(AN
"ADDITIONAL FINANCING").
THE COMPANY AND/OR ANY SUBSIDIARY OF THE COMPANY, AS
THE
24
CASE MAY BE, SHALL NOTIFY THE PURCHASER OF ITS INTENTION TO ENTER INTO SUCH
ADDITIONAL FINANCING.
IN CONNECTION THEREWITH, THE COMPANY AND/OR THE
APPLICABLE SUBSIDIARY THEREOF SHALL SUBMIT A FULLY EXECUTED TERM SHEET (A
"PROPOSED TERM SHEET") TO THE PURCHASER SETTING FORTH THE TERMS, CONDITIONS AND
PRICING OF ANY SUCH ADDITIONAL FINANCING (SUCH FINANCING TO BE NEGOTIATED ON
"ARM'S LENGTH" TERMS AND THE TERMS THEREOF TO BE NEGOTIATED IN GOOD FAITH)
PROPOSED TO BE ENTERED INTO BY THE COMPANY AND/OR SUCH SUBSIDIARY.
THE
PURCHASER SHALL HAVE THE RIGHT, BUT NOT THE OBLIGATION, TO DELIVER ITS OWN
PROPOSED TERM SHEET (THE "PURCHASER TERM SHEET") SETTING FORTH THE TERMS AND
CONDITIONS UPON WHICH THE PURCHASER WOULD BE WILLING TO PROVIDE SUCH ADDITIONAL
FINANCING TO THE COMPANY AND/OR SUCH SUBSIDIARY.
THE PURCHASER TERM SHEET SHALL
CONTAIN TERMS NO LESS FAVORABLE TO THE COMPANY AND/OR SUCH SUBSIDIARY THAN THOSE
OUTLINED IN PROPOSED TERM SHEET.
THE PURCHASER SHALL DELIVER SUCH PURCHASER
TERM SHEET
WITHIN TEN BUSINESS DAYS OF RECEIPT OF EACH SUCH PROPOSED TERM
SHEET.
IF THE PROVISIONS OF THE PURCHASER TERM SHEET ARE AT LEAST AS FAVORABLE
TO THE COMPANY AND/OR SUCH SUBSIDIARY, AS THE CASE MAY BE, AS THE PROVISIONS OF
THE PROPOSED TERM SHEET, THE COMPANY AND/OR SUCH SUBSIDIARY SHALL ENTER INTO AND
CONSUMMATE THE ADDITIONAL FINANCING TRANSACTION OUTLINED IN THE PURCHASER TERM
SHEET.
(B)
THE COMPANY WILL NOT, AND WILL NOT PERMIT ITS SUBSIDIARIES TO,
WHILE THE NOTE REMAINS OUTSTANDING, AGREE, DIRECTLY OR INDIRECTLY, TO ANY
RESTRICTION WITH ANY PERSON OR ENTITY WHICH LIMITS THE ABILITY OF THE PURCHASER
TO CONSUMMATE AN ADDITIONAL FINANCING WITH THE COMPANY OR ANY OF ITS
SUBSIDIARIES.
6.17
AUTHORIZATION AND RESERVATION OF SHARES.
THE COMPANY SHALL AT ALL
TIMES HAVE AUTHORIZED AND RESERVED A SUFFICIENT NUMBER OF SHARES OF COMMON STOCK
TO PROVIDE FOR THE CONVERSION OF THE NOTE AND EXERCISE OF THE WARRANTS.
6.18
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7.
COVENANTS OF THE PURCHASER.
THE
PURCHASER COVENANTS AND AGREES WITH THE COMPANY AS FOLLOWS:
7.1
CONFIDENTIALITY.
THE PURCHASER WILL NOT DISCLOSE, AND WILL NOT
INCLUDE IN ANY PUBLIC ANNOUNCEMENT, THE NAME OF THE COMPANY, UNLESS EXPRESSLY
AGREED TO BY THE COMPANY OR UNLESS SUCH DISCLOSURE IS REQUIRED BY LAW OR
APPLICABLE REGULATION, AND THEN ONLY TO THE EXTENT OF SUCH REQUIREMENT.
7.2
NON-PUBLIC INFORMATION.
THE PURCHASER WILL NOT EFFECT ANY SALES
IN THE SHARES OF THE COMPANY'S COMMON STOCK WHILE IN POSSESSION OF MATERIAL,
NON-PUBLIC INFORMATION REGARDING THE COMPANY IF SUCH SALES WOULD VIOLATE U.S.
SECURITIES LAW.
7.3
LIMITATION ON ACQUISITION OF COMMON STOCK OF THE COMPANY.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT,