CHARGED WITH THE DUTY OF
EXECUTING AND ISSUING STOCK CERTIFICATES TO EXECUTE AND ISSUE THE NECESSARY
CERTIFICATES FOR SHARES OF COMMON STOCK UPON THE CONVERSION OF THIS NOTE.
3.9
REGISTRATION RIGHTS.
THE HOLDER HAS BEEN GRANTED REGISTRATION RIGHTS WITH
RESPECT TO THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE AS
MORE FULLY SET FORTH IN A REGISTRATION RIGHTS AGREEMENT DATED THE DATE HEREOF.
ARTICLE IV
EVENT OF DEFAULT
The occurrence of any of the following events is an Event of Default ("Event of
Default"):
4.1
FAILURE TO PAY PRINCIPAL, INTEREST OR OTHER FEES.
SUBJECT TO THE GRACE
PERIOD SET FORTH IN SECTION 1.2 HEREOF, THE BORROWER FAILS TO PAY ANY
INSTALLMENT OF PRINCIPAL, INTEREST OR OTHER FEES HEREON OR IN RESPECT OF ANY
OTHER PROMISSORY NOTE ISSUED PURSUANT TO THE PURCHASE AGREEMENT WHEN DUE.
4.2
BREACH OF COVENANT.
THE BORROWER BREACHES ANY COVENANT OR OTHER TERM OR
CONDITION OF THIS NOTE OR THE PURCHASE AGREEMENT (AS HEREAFTER DEFINED) IN ANY
MATERIAL RESPECT AND SUCH BREACH, IF SUBJECT TO CURE, CONTINUES FOR A PERIOD OF
FIVE (5) DAYS AFTER THE OCCURRENCE THEREOF.
6
4.3
BREACH OF REPRESENTATIONS AND WARRANTIES.
ANY MATERIAL REPRESENTATION OR
WARRANTY OF THE BORROWER MADE HEREIN, IN THE PURCHASE AGREEMENT, OR IN ANY
AGREEMENT, STATEMENT OR CERTIFICATE GIVEN IN WRITING PURSUANT HERETO OR IN
CONNECTION THEREWITH SHALL BE FALSE OR MISLEADING.
4.4 RECEIVER OR TRUSTEE.
THE BORROWER SHALL MAKE AN ASSIGNMENT FOR THE BENEFIT
OF CREDITORS, OR APPLY FOR OR CONSENT TO THE APPOINTMENT OF A RECEIVER OR
TRUSTEE FOR IT OR FOR A SUBSTANTIAL PART OF ITS PROPERTY OR BUSINESS; OR SUCH A
RECEIVER OR TRUSTEE SHALL OTHERWISE BE APPOINTED.
4.5
JUDGMENTS.
ANY MONEY JUDGMENT, WRIT OR SIMILAR FINAL PROCESS SHALL BE
ENTERED OR FILED AGAINST THE BORROWER OR ANY OF ITS PROPERTY OR OTHER ASSETS FOR
MORE THAN $250,000, AND SHALL REMAIN UNVACATED, UNBONDED OR UNSTAYED FOR A
PERIOD OF NINETY (90) DAYS.
4.6
BANKRUPTCY.
BANKRUPTCY, INSOLVENCY, REORGANIZATION OR LIQUIDATION
PROCEEDINGS OR OTHER PROCEEDINGS OR RELIEF UNDER ANY BANKRUPTCY LAW OR ANY LAW
FOR THE RELIEF OF DEBTORS SHALL BE INSTITUTED BY OR AGAINST THE BORROWER.
4.7
STOP TRADE.
AN SEC STOP TRADE ORDER OR PRINCIPAL MARKET TRADING
SUSPENSION OF THE COMMON STOCK FOR 5 CONSECUTIVE TRADING DAYS OR 5 TRADING DAYS
DURING A PERIOD OF 10 CONSECUTIVE TRADING DAYS, EXCLUDING IN ALL CASES A
SUSPENSION OF ALL TRADING ON A PRINCIPAL MARKET.
4.8
CROSS DEFAULT.
A DEFAULT SHALL HAVE OCCURRED UNDER ANY DOCUMENT,
INSTRUMENT OR AGREEMENT BY AND BETWEEN THE COMPANY AND WELLS FARGO BUSINESS
CREDIT, INC., WHICH HAS NOT BEEN CURED WITHIN ANY APPLICABLE CURE OR GRACE
PERIOD, OTHER THAN THOSE FINANCIAL COVENANT DEFAULTS SPECIFIED ON SCHEDULE
2.6(B) TO THE PURCHASE AGREEMENT.
4.9
DEFAULT UNDER RELATED AGREEMENT.
AN EVENT OF DEFAULT OCCURS UNDER AND AS
DEFINED IN THE SECURITY AGREEMENT.
ARTICLE V
DEFAULT PAYMENT
5.1
DEFAULT PAYMENT.
IF AN EVENT OF DEFAULT OCCURS, THE HOLDER, AT ITS
OPTION, MAY ELECT TO REQUIRE THE BORROWER TO MAKE A DEFAULT PAYMENT ("DEFAULT