Common use of Working Capital Note Clause in Contracts

Working Capital Note. If the Adjusted Working Capital will be less than negative $1,750,000, the holders of Old Notes may, but need not, enter into a working capital line of credit with the Company in an amount not to exceed $1.0 million (the “Working Capital Note”). The Working Capital Note will be subordinated to the Company’s senior debt, will bear interest at five percent (5%) per annum (with interest accruing for the first year) and will be repaid in twelve equal monthly installments of principal and interest commencing on the first day of the thirteenth month after the Effective Time, provided that prior to the first payment of principal and interest a holder of all or a portion of the Working Capital Note may elect to convert the principal and interest due to such holder into common stock of Parent at a conversion price of $3.00 per share in lieu of repayment. The form of Working Capital Note and any credit agreement memorializing the obligation will be subject to the approval of Parent.