AND PAYMENTS SHALL BE COMPUTED ON
THE BASIS OF ACTUAL DAYS ELAPSED IN A YEAR OF 360 DAYS.
AT LAURUS' OPTION,
LAURUS MAY CHARGE THE COMPANIES' ACCOUNT FOR SAID INTEREST.
(III)
EFFECTIVE UPON THE OCCURRENCE OF ANY EVENT
OF DEFAULT AND FOR SO LONG AS ANY EVENT OF DEFAULT SHALL BE CONTINUING, THE
CONTRACT RATE SHALL AUTOMATICALLY BE INCREASED AS SET FORTH IN THE NOTES (SUCH
INCREASED RATE, THE "DEFAULT RATE"), AND ALL OUTSTANDING OBLIGATIONS, INCLUDING
UNPAID INTEREST, SHALL CONTINUE TO ACCRUE INTEREST FROM THE DATE OF SUCH EVENT
OF DEFAULT AT THE DEFAULT RATE APPLICABLE TO SUCH OBLIGATIONS.
THE CONTRACT
RATE WILL NOT INCREASE TO THE DEFAULT RATE UNTIL ANY APPLICABLE GRACE PERIOD HAS
ELAPSED WITH RESPECT TO SUCH EVENT OF DEFAULT.
(IV)
IN NO EVENT SHALL THE AGGREGATE INTEREST
PAYABLE HEREUNDER EXCEED THE MAXIMUM RATE PERMITTED UNDER ANY APPLICABLE LAW OR
REGULATION, AS IN EFFECT FROM TIME TO TIME (THE "MAXIMUM LEGAL RATE"), AND IF
ANY PROVISION OF THIS AGREEMENT OR ANY ANCILLARY AGREEMENT IS IN CONTRAVENTION
OF ANY SUCH LAW OR REGULATION, INTEREST PAYABLE UNDER THIS AGREEMENT AND EACH
ANCILLARY AGREEMENT SHALL BE COMPUTED ON THE BASIS OF THE MAXIMUM LEGAL RATE (SO
THAT SUCH INTEREST WILL NOT EXCEED THE MAXIMUM LEGAL RATE).
(V)
THE COMPANIES SHALL JOINTLY AND SEVERALLY
PAY PRINCIPAL, INTEREST AND ALL OTHER AMOUNTS PAYABLE HEREUNDER, OR UNDER ANY
ANCILLARY AGREEMENT, WITHOUT ANY DEDUCTION WHATSOEVER, INCLUDING ANY DEDUCTION
FOR ANY SET-OFF OR COUNTERCLAIM.
(B)
PAYMENTS; CERTAIN CLOSING CONDITIONS.
(I)
CLOSING/ANNUAL PAYMENTS.
UPON EXECUTION
OF THIS AGREEMENT BY EACH COMPANY AND LAURUS, THE COMPANIES SHALL JOINTLY AND
SEVERALLY PAY TO LAURUS CAPITAL MANAGEMENT, LLC A CLOSING PAYMENT IN AN AMOUNT
EQUAL TO THREE AND NINE-TENTHS PERCENT (3.90%) OF THE CAPITAL AVAILABILITY
AMOUNT.
SUCH PAYMENT SHALL BE DEEMED FULLY EARNED ON THE CLOSING DATE AND SHALL
NOT BE SUBJECT TO REBATE OR PRORATION FOR ANY REASON.
(II)
OVERADVANCE PAYMENT.
WITHOUT AFFECTING
LAURUS' RIGHTS HEREUNDER IN THE EVENT THE LOANS EXCEED THE FORMULA AMOUNT (EACH
SUCH EVENT, AN "OVERADVANCE"), ALL SUCH OVERADVANCES SHALL BEAR ADDITIONAL
INTEREST AT A RATE EQUAL TO FIVE PERCENT (5%) PER ANNUM ABOVE THE CONTRACT RATE
FOR ALL TIMES SUCH AMOUNTS SHALL BE IN EXCESS OF THE FORMULA AMOUNT.
ALL
AMOUNTS THAT ARE INCURRED PURSUANT TO THIS SECTION 5(B)(III) SHALL BE DUE AND
PAYABLE BY THE COMPANIES MONTHLY, IN ARREARS, ON THE FIRST BUSINESS DAY OF EACH
CALENDAR MONTH AND UPON EXPIRATION OF THE TERM.
5
(III)
FINANCIAL INFORMATION DEFAULT.
WITHOUT
AFFECTING LAURUS' OTHER RIGHTS AND REMEDIES, IN THE EVENT ANY COMPANY FAILS TO
DELIVER THE FINANCIAL INFORMATION REQUIRED BY SECTION 11 ON OR BEFORE THE DATE
REQUIRED BY THIS AGREEMENT, THE COMPANIES SHALL JOINTLY AND SEVERALLY PAY LAURUS
AN AGGREGATE FEE IN THE AMOUNT OF $250.00 PER WEEK (OR PORTION THEREOF) FOR EACH
SUCH FAILURE UNTIL SUCH FAILURE IS CURED TO LAURUS' SATISFACTION OR WAIVED IN
WRITING BY LAURUS.
ALL AMOUNTS THAT ARE INCURRED PURSUANT TO THIS
SECTION 5(B)(IV) SHALL BE DUE AND PAYABLE BY THE COMPANIES MONTHLY, IN ARREARS,
ON