Common use of Treatment of the Preferred Stock Clause in Contracts

Treatment of the Preferred Stock. The Company covenants and -------------------------------- agrees that (i) so long as federal income tax laws prohibit a deduction for distributions made by the Company with respect to preferred stock, it shall treat all distributions paid by it on the Preferred Stock as non-deductible dividends on all of its tax returns and (ii) it shall treat the Preferred Stock as preferred stock in all of its financial statements and other reports and shall treat all distributions paid by it on the Preferred Stock as dividends on preferred stock in such statements and reports. The Company acknowledges and agrees that the increased dividend rate on the Preferred Stock provided for in the Certificate of Designation upon the occurrence of certain Events of Noncompliance has been negotiated by (and is intended by) the Company and the Purchasers as a reasonable increase in yield necessitated by the increased risk to the holders of the Preferred Stock which would arise upon any such occurrence. The Company agrees that the Preferred Stock is stock which participates in corporate growth to a significant extent within the meaning of Treasury Regulation (S)1.305-5(a), and hence will not be treated as preferred stock for purposes of IRC (S)305 and the regulations thereunder. Accordingly, the Company has determined that there will not be constructive distributions under Treasury Regulation (S)1.305-5(b) with respect to the Preferred Stock.

Treatment of the Preferred Stock. The Company covenants and -------------------------------- agrees that (i) so long as federal income tax laws prohibit a deduction for distributions made by the Company with respect to preferred stock, it shall treat all distributions paid by it on the Preferred Stock as non-deductible dividends on all of its tax returns and (ii) it shall treat the Preferred Stock as preferred stock in all of its financial statements and other reports and shall treat all distributions paid by it on the Preferred Stock as dividends on preferred stock in such statements and reports. The Company acknowledges and agrees that the increased dividend rate on the Preferred Stock provided for in the Certificate of Designation upon the occurrence of certain Events of Noncompliance has been negotiated by (and is intended by) the Company and the Purchasers as a reasonable increase in yield necessitated by the increased risk to the holders of the Preferred Stock which would arise upon any such occurrence. The Company agrees that the capital of the Company (as such term is used in Section 154 of the DGCL) in respect of the Preferred Stock is stock which participates in corporate growth issued pursuant to a significant extent within this Agreement shall be equal to the meaning aggregate par value of Treasury Regulation (S)1.305-5(a), such shares and hence will that it shall not be treated as preferred stock for purposes increase the capital of IRC (S)305 and the regulations thereunder. Accordingly, the Company has determined that there will not be constructive distributions under Treasury Regulation (S)1.305-5(b) with respect to any shares of the Company's capital stock at any time on or after the date of this Agreement. The Company also agrees that it shall not create any special reserves under Section 171 of the DGCL without the prior written consent of the holders of at least a majority of the outstanding Preferred Stock.

Treatment of the Preferred Stock. The Company covenants and -------------------------------- agrees that (i) so long as federal income tax laws prohibit a deduction for distributions made by the Company with respect to preferred stock, it shall treat all distributions paid by it on the Preferred Stock as non-deductible dividends on all of its tax returns and (ii) it shall treat the Preferred Stock as preferred stock in all of its financial statements and other reports and shall treat all distributions paid by it on the Preferred Stock as dividends on preferred stock in such statements and reports. The Company acknowledges and agrees that the increased dividend rate on the Preferred Stock provided for in Part E of the Certificate Articles of Designation Organization upon the occurrence of certain Events of Noncompliance has been negotiated by (and is intended by) the Company and the Purchasers as a reasonable increase in yield necessitated by the increased risk to the holders of the Preferred Stock which would arise upon any such occurrence. The Company agrees that the Preferred Stock is stock which participates in corporate growth to a significant extent within the meaning of Treasury Regulation (S)1.305-5(a), and hence will not be treated as preferred stock for purposes of IRC (S)305 and the regulations thereunder. Accordingly, the Company has determined that there will not be constructive distributions under Treasury Regulation (S)1.305-5(b) with respect to the Preferred Stock.

Treatment of the Preferred Stock. The Company covenants and -------------------------------- agrees that (i) so long as federal income tax laws prohibit a deduction for distributions made by the Company with respect to preferred stock, it shall treat all distributions paid by it on the Preferred Stock as non-deductible dividends on all of its tax returns and (ii) it shall treat the Preferred Stock as preferred stock in all of its financial statements and other reports and shall treat all distributions paid by it on the Preferred Stock as dividends on preferred stock in such statements and reports. The Purchasers understand and agree that the Preferred Stock will be reflected on the balance sheets of the Company as "redeemable preferred stock" or other similar caption and will not be included in "Shareholders' Equity." The Company acknowledges and agrees that the increased dividend rate on the Preferred Stock provided for in the Certificate of Designation upon the occurrence of certain Events of Noncompliance has been negotiated by (and is intended by) the Company and the Purchasers as a reasonable increase in yield necessitated by the increased risk to the holders of the Preferred Stock which would arise upon any such occurrence. The Company agrees that the Preferred Stock is stock which participates in corporate growth to a significant extent within the meaning of Treasury Regulation (S)1.305-5(a), and hence will not be treated as preferred stock for purposes of IRC (S)305 and the regulations thereunder. Accordingly, the Company has determined that there will not be constructive distributions under Treasury Regulation (S)1.305-5(b) with respect to the Preferred Stock.