Common use of Preservation of NOLs Clause in Contracts

Preservation of NOLs. The Company and the Investor have discussed, and the Investor is aware, of, the importance to the Company of preserving the benefits of its substantial net operating loss carry forwards ("NOLs") under the requirements of the Code and Treasury Regulations. In furtherance of this objective, and notwithstanding anything in this Agreement to the contrary, The Company will notify Investor and the Other Investors in writing when, in consultation its independent auditors, it has determined that additional acquisitions of its equity securities by any of the Investor or Other Investors may subject the utilization of its NOLs to the Section 382 Limitation (as defined under the Code). Investor covenants, upon receipt of such notice and delivery of similar notices to the Other Investors, that neither it nor its affiliates will acquire any additional Common Stock of the Company until such time as Investor requests and receives written approval from the Company, which approval shall not be unreasonably withheld and shall be provided solely on the basis of whether the Company and its independent auditors have determined that such proposed acquisition by Investor, upon consideration of the relevant facts and circumstances known to the Company, would more likely than not subject the Company to the Section 382 Limitation with respect to the utilization of its NOLs. The Company and the Investor hereby further agree, following the Closing, to continue to explore the feasibility of, and to use good faith commercial efforts to implement, if determined by the Board of Directors to be in the best interest of the Company, additional mechanisms to ensure protection of the Company's NOLs in order to avoid the imposition of the Section 382 Limitation on the Company, including without limitation the possible adoption at the next annual meeting of shareholders of a charter amendment to impose restrictions upon the transfer of the Common Stock of the Company. The Company agrees that the Stock Purchase Agreements entered into with Other Investors will contain provisions no less restrictive than the restrictions imposed upon the Investor under this Section 6.4.

Preservation of NOLs. The Company and the Investor have discussed, and the Investor is aware, of, the importance to the Company of preserving the benefits of its substantial net operating loss carry forwards ("NOLs") under the requirements of the Code and Treasury Regulations. In furtherance of this objective, and notwithstanding anything in this Agreement to the contrary, The Company will notify Investor and the Other Investors in writing when, in consultation its independent auditors, it has determined that additional acquisitions of its equity securities by any of the Investor or Other Investors may subject the utilization of its NOLs to the Section 382 Limitation (as defined under the Code). Investor covenants, upon receipt of such notice and delivery of similar notices to the Other Investors, that neither it nor its affiliates will acquire any additional Common Stock of the Company until such time as Investor requests and receives written approval from the Company, which approval shall not be unreasonably withheld and shall be provided solely on the basis of whether the Company and its independent auditors have determined that such proposed acquisition by Investor, upon consideration of the relevant facts and circumstances known to the Company, would more likely than not subject the Company to the Section 382 Limitation with respect to the utilization of its NOLs. The Company and the Investor hereby further agree, following the Closing, to continue to explore the feasibility of, and to use good faith commercial efforts to implement, if determined by the Board of Directors to be in the best interest of the Company, additional mechanisms to ensure protection of the Company's NOLs in order to avoid the imposition of the Section 382 Limitation on the Company, including without limitation the possible adoption at the next annual meeting of shareholders of a charter amendment to impose restrictions upon the transfer of the Common Stock of the Company. The Company agrees that the Stock Purchase Agreements entered into with Other Investors will contain provisions no less restrictive than the restrictions imposed upon the Investor under this Section 6.4. Notwithstanding any other provision of this Section 6.4, nothing in this Agreement shall (X) prohibit the Investor from making any proposal, as permitted by Section 7 of the Confidentiality Agreement, or, upon approval of the Board of Directors, effecting any transaction which would have the effect of subjecting the utilization of the Company's NOLs to the Section 382 Limitation, or (Y) extend the term of the covenants contained in Section 6.3 of this Agreement.