WHICH, IF DETERMINED ADVERSELY TO THE PURCHASER WOULD HAVE
A MATERIAL ADVERSE EFFECT ON THE PURCHASER'S ABILITY TO CONSUMMATE THE
TRANSACTIONS CONTEMPLATED BY THE TRANSACTION AGREEMENTS.
THE PURCHASER IS NOT
SUBJECT TO ANY ACTION THAT WOULD HAVE A MATERIAL ADVERSE EFFECT ON THE
PURCHASER'S ABILITY TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THE
TRANSACTION AGREEMENTS.
ARTICLE 5
COVENANTS OF THE COMPANY
5.1
CONDUCT OF BUSINESS.
(A)
EXCEPT AS
EXPRESSLY CONTEMPLATED BY THIS AGREEMENT OR CONSENTED TO IN WRITING BY THE
PURCHASER, FROM THE DATE HEREOF THROUGH THE CLOSING DATE, THE COMPANY AND ITS
SUBSIDIARIES SHALL CONDUCT THEIR BUSINESSES IN THE ORDINARY COURSE, CONSISTENT
WITH PAST PRACTICE.
THE COMPANY SHALL GIVE THE PURCHASER PROMPT NOTICE OF ANY
EVENT, CONDITION OR CIRCUMSTANCE KNOWN OR THAT BECOMES KNOWN TO THE COMPANY
OCCURRING FROM THE DATE HEREOF THROUGH THE CLOSING DATE THAT WOULD CONSTITUTE A
VIOLATION OR BREACH OF (A) ANY REPRESENTATION OR WARRANTY, WHETHER MADE AS OF
THE DATE HEREOF OR AS OF THE CLOSING DATE OR (B) ANY COVENANT OF THE COMPANY
CONTAINED IN THIS AGREEMENT; PROVIDED, HOWEVER, THAT NO SUCH NOTIFICATION SHALL
RELIEVE OR CURE ANY SUCH BREACH OR VIOLATION OF ANY SUCH REPRESENTATION,
WARRANTY OR COVENANT OR OTHERWISE AFFECT THE ACCURACY OF ANY SUCH REPRESENTATION
OR WARRANTY FOR THE PURPOSES OF SECTION 7.1.
(B)
WITHOUT LIMITING THE PROVISIONS OF
SECTION 5.1(A), EXCEPT AS OTHERWISE EXPRESSLY CONTEMPLATED BY THE TERMS OF THIS
AGREEMENT OR AGREED IN WRITING BY THE PURCHASER, FROM AND AFTER THE DATE HEREOF
THROUGH THE CLOSING DATE AND FOLLOWING THE CLOSING DATE FOR SO LONG AS (X)
*CONFIDENTIAL TREATMENT REQUESTED
31
THE NOTE REMAINS CONVERTIBLE INTO COMMON STOCK OR (Y) THE PURCHASER OWNS A
QUALIFYING OWNERSHIP INTEREST (COLLECTIVELY, THE "RESTRICTED PERIOD"), THE
COMPANY SHALL NOT, AND WILL CAUSE ITS SUBSIDIARIES NOT TO:
(I)
AMEND THE CERTIFICATE OF INCORPORATION
OR BYLAWS OR THE ORGANIZATIONAL DOCUMENTS OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES, OR INCREASE OR DECREASE ITS AUTHORIZED CAPITAL, EXCEPT (1) AS
CONTEMPLATED BY SECTIONS 5.1(B)(IV), 6.4 AND 6.9 OR SECTION 7(B) OF THE NOTE AND
(2) AS REQUIRED IN ORDER TO DESIGNATE ONE OR MORE SERIES OF PREFERRED STOCK OR
TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK, IN EACH CASE, TO
THE EXTENT NECESSARY TO CONSUMMATE A PERMITTED EQUITY OFFERING;
(II)
RECAPITALIZE OR OTHERWISE CHANGE ITS
CAPITAL STRUCTURE IN A MANNER THAT WOULD RESULT IN A CHANGE OF CONTROL OF THE
POWER TO VOTE 50% OR MORE OF THE VOTING SECURITIES OR OTHER INTERESTS OF THE
COMPANY HAVING THE VOTING POWER TO DIRECT OR CAUSE THE DIRECTION OF MANAGEMENT
POLICIES OF THE COMPANY;
(III)
AUTHORIZE OR ISSUE, OR OBLIGATE ITSELF TO
ISSUE, ANY EQUITY SECURITY (INCLUDING ANY COMPANY OPTION OR OTHER SECURITY
CONVERTIBLE INTO OR EXERCISABLE OR EXCHANGEABLE FOR ANY EQUITY SECURITY), EXCEPT
FOR (A) THE ISSUANCE OF THE NOTE OR THE CONVERSION SHARES, (B) THE ISSUANCE OF
ANY COMMON STOCK UPON THE EXERCISE OF COMPANY OPTIONS, (C) THE ISSUANCE OF
COMPANY OPTIONS TO PURCHASE NOT MORE THAN 3,500,000 SHARES OF COMMON STOCK