OF LAURUS, OR THOSE PREVIOUSLY DISCLOSED BY THE COMPANY ON THE DATE HEREOF
AS REQUIRED BY APPLICABLE SECURITIES LAW; (D) IT WILL NOT WITHOUT LAURUS' PRIOR
WRITTEN CONSENT, SELL, EXCHANGE OR OTHERWISE DISPOSE OF THE COLLATERAL OR ANY OF
THE COMPANY'S RIGHTS THEREIN OR PERMIT ANY LIEN OR SECURITY INTEREST TO ATTACH
TO SAME, EXCEPT THAT CREATED BY THIS AGREEMENT OR SALES OF INVENTORY OR THE
DISPOSITION OF OBSOLETE OR WORN OUT EQUIPMENT IN THE ORDINARY COURSE OF BUSINESS
OR OTHERWISE
4.
SELL THE COLLATERAL IN EXCESS OF
$150,000, IN THE ORDINARY COURSE OF BUSINESS ; (E) IT WILL ALLOW LAURUS AND/OR
LAURUS' REPRESENTATIVES FREE ACCESS TO AND THE RIGHT OF INSPECTION OF THE
COMPANY'S PREMISES WHERE THE BOOKS AND RECORDS RELATING TO THE COLLATERAL ARE
LOCATED; AND (F) IT HEREBY INDEMNIFIES AND SAVES LAURUS HARMLESS FROM ALL LOSS,
COSTS, DAMAGE, LIABILITY AND/OR EXPENSE, INCLUDING REASONABLE ATTORNEYS' FEES,
THAT LAURUS MAY SUSTAIN OR INCUR TO ENFORCE PAYMENT, PERFORMANCE OR FULFILLMENT
OF ANY OF THE OBLIGATIONS OR IN THE ENFORCEMENT OF THIS AGREEMENT OR IN THE
PROSECUTION OR DEFENSE OF ANY ACTION OR PROCEEDING EITHER AGAINST LAURUS OR THE
COMPANY CONCERNING ANY MATTER GROWING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT AND/OR ANY OF THE OBLIGATIONS AND/OR ANY OF THE COLLATERAL.
5.
LAURUS AGREES TO TERMINATE THE SECURITY
INTEREST IN THE COLLATERAL UPON THE COMPANY TENDERING THE FINAL PAYMENT IN
SATISFACTION OF THE OBLIGATIONS.
LAURUS AGREES TO JOIN WITH THE COMPANY IN
EXECUTING TERMINATION STATEMENTS AND OTHER INSTRUMENTS PURSUANT TO THE CODE IN
FORM SATISFACTORY TO THE COMPANY AND IN EXECUTING SUCH OTHER DOCUMENTS OR
INSTRUMENTS AS MAY BE REQUIRED OR DEEMED NECESSARY BY THE COMPANY FOR PURPOSES
OF TERMINATING THE SECURITY INTEREST IN THE COLLATERAL.
6.
THE COMPANY SHALL BE IN DEFAULT UNDER
THIS AGREEMENT UPON THE HAPPENING OF ANY OF THE FOLLOWING EVENTS OR CONDITIONS
(EACH, A "DEFAULT"):
(A) IT SHALL FAIL TO PAY WHEN DUE OR PUNCTUALLY PERFORM
ANY OF THE OBLIGATIONS; (B) ANY COVENANT, WARRANTY, REPRESENTATION OR STATEMENT
MADE OR FURNISHED TO LAURUS BY THE COMPANY OR ON ITS BEHALF WAS FALSE IN ANY
MATERIAL RESPECT WHEN MADE OR FURNISHED AND SUCH FAILURE SHALL HAVE A MATERIAL
ADVERSE EFFECT ON THE COMPANY; (C) IT SHALL FAIL TO COMPLY WITH ANY TERM OR
PROVISION SET FORTH IN THIS AGREEMENT AND SUCH FAILURE (TO THE EXTENT NOT
COVERED BY ANY OTHER CLAUSE OF THIS SECTION 5) SHALL REMAIN UNCURED FOR A PERIOD
OF TWO (2) BUSINESS DAYS AFTER THE DATE ON WHICH LAURUS NOTIFIED THE COMPANY OF
SUCH FAILURE UNLESS THE COMPANY CAN NOT REMEDY SUCH DEFAULT WITHIN SUCH TIME
PERIOD; (D) A DEFAULT SHALL OCCUR UNDER THE PREFERRED STOCK OR (E) DEFAULT SHALL
OCCUR UNDER ANY OTHER DOCUMENT, INSTRUMENT OR AGREEMENT BETWEEN LAURUS AND THE
COMPANY AND/OR SECURITY ISSUED IN CONNECTION THEREWITH, WHICH SUCH DEFAULT IS
NOT CURED WITHIN ANY APPLICABLE CURE OR GRACE PERIOD.
7.
UPON THE OCCURRENCE OF ANY DEFAULT AND
AT ANY TIME THEREAFTER, LAURUS MAY DECLARE ALL OBLIGATIONS IMMEDIATELY DUE AND
PAYABLE