DATE (BUT, IN ANY
EVENT, NOT LATER THAN THE FIRST DAY OF THE COMPANY'S FISCAL YEAR IMMEDIATELY
FOLLOWING THE FISCAL YEAR IN WHICH THE EFFECTIVE DATE OCCURS).
THE COMPANY
SHALL ELECT THE CALENDAR YEAR AS ITS FISCAL YEAR IN CONNECTION WITH ITS ELECTION
OF S CORPORATION STATUS.
SECTION 6.2
CHANGE OF SHAREHOLDER STATUS.
NEITHER THE COMPANY NOR
ANY SHAREHOLDER MAY CAUSE OR EFFECT A CHANGE IN THE STATUS OF A SHAREHOLDER OR
RELATED PARTY THAT WOULD CAUSE (I) THE SHAREHOLDER TO BECOME AN INELIGIBLE
S CORPORATION HOLDER, (II) THE COMPANY TO BECOME INELIGIBLE FOR S CORPORATION
STATUS OR (III) THE S CORPORATION STATUS OF THE COMPANY TO TERMINATE.
SECTION 6.3
EXERCISE OF A WARRANT.
FOR SO LONG AS THE COMPANY
MAINTAINS ITS STATUS AS AN S CORPORATION, NO SHAREHOLDER MAY EXERCISE A WARRANT
IF, AS A RESULT OF SUCH EXERCISE, THE COMPANY BECOMES INELIGIBLE FOR S
CORPORATION STATUS.
SECTION 6.4
SHAREHOLDER ACKNOWLEDGMENT OF S CORPORATION STATUS.
EACH SHAREHOLDER ACKNOWLEDGES THAT A TERMINATION OF THE COMPANY'S STATUS AS AN S
CORPORATION BY REASON OF A TRANSFER OF SHARES OR THE EXERCISE OF A WARRANT IN
VIOLATION OF THIS ARTICLE VI OR A CHANGE OF STATUS PURSUANT TO SECTION 6.2 MAY
CAUSE MATERIAL ADVERSE TAX EFFECTS TO THE OTHER SHAREHOLDERS.
FOR THIS REASON,
ANY SHAREHOLDER WHO CONTEMPLATES A TRANSFER OF SHARES, AN EXERCISE OF A WARRANT
OR A CHANGE OF STATUS PURSUANT TO SECTION 6.2 AGREES TO ADVISE THE COMPANY AT
LEAST THIRTY (30) DAYS (OR SUCH SHORTER PERIOD AS THE COMPANY MAY AGREE) IN
ADVANCE OF ANY SUCH TRANSFER, EXERCISE OR CHANGE OF STATUS, SO THAT THE COMPANY
MAY TAKE ACTION TO PRESERVE ITS STATUS AS AN S CORPORATION.
EACH SHAREHOLDER
AGREES THAT ANY SUCH TRANSFER, EXERCISE OR CHANGE OF STATUS THAT CAUSES THE
COMPANY TO BECOME INELIGIBLE FOR S CORPORATION STATUS MAY AND SHOULD BE
ENJOINED.
SECTION 6.5
INADVERTENT TERMINATION.
IF THE COMPANY'S STATUS AS AN
S CORPORATION IS TERMINATED INADVERTENTLY AND THE COMPANY WISHES TO OBTAIN A
RULING UNDER SECTION 1362(F), OR A SUCCESSOR PROVISION, OF THE CODE, EACH
SHAREHOLDER AGREES TO MAKE ANY ADJUSTMENTS REQUIRED PURSUANT TO SECTION
1362(F)(4), OR A SUCCESSOR PROVISION, OF THE CODE AND APPROVED BY THE BOARD.
A
SHAREHOLDER'S OBLIGATION TO MAKE SUCH ADJUSTMENTS SHALL CONTINUE AFTER THE
SHAREHOLDER HAS CEASED TO OWN SHARES IN THE COMPANY AND AFTER THIS AGREEMENT HAS
TERMINATED.
SECTION 6.6
FURTHER ASSURANCES.
EACH SHAREHOLDER AGREES TO TAKE ALL
ACTIONS NECESSARY TO ENABLE AND ALLOW THE COMPANY TO ELECT, AND MAINTAIN AN
ELECTION, TO BE TREATED AS AN
12
S CORPORATION UNDER THE CODE, INCLUDING, WITHOUT LIMITATION, CONSENTING TO THE
ELECTION PURSUANT TO SECTION 1362 OF THE CODE.
SECTION 6.7
TRANSFER RESTRICTIONS RELATING TO THE COMPANY'S STATUS
AS AN S CORPORATION.
(A)
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, UPON
AND AFTER THE EFFECTIVE DATE, NO SHAREHOLDER MAY TRANSFER AND NO PERSON MAY
ACQUIRE, THE LEGAL, ECONOMIC OR BENEFICIAL OWNERSHIP OF, OR ANY OTHER INTEREST
IN, ANY SHARE IF SUCH TRANSFER OR ACQUISITION WOULD CAUSE THE COMPANY TO