taxes, liens, security interests and encumbrances of every
kind and nature relating to (i) all indebtedness now owing or that may accrue in
the future in connection with that certain Loan and Security Agreement dated as
of December 19, 2001 between us and Foothill Capital Corporation, as such
agreement may be supplemented, modified of amended from time to time (the
"Foothill Loan and Security Agreement"), (ii) "Permitted Liens" as such term is
defined in the Foothill Loan and Security Agreement and (iii) participations in
factored accounts receivable and agreements related thereto, whether now
existing or hereafter entered into.
4.
WE SHALL BE IN DEFAULT UNDER THIS AGREEMENT UPON THE HAPPENING OF
ANY OF THE FOLLOWING EVENTS OR CONDITIONS, EACH SUCH EVENT OR CONDITION AN
"EVENT OF DEFAULT" (A) WE SHALL FAIL TO PAY WHEN DUE OR PUNCTUALLY PERFORM ANY
OF THE OBLIGATIONS, AND SUCH DEFAULT IS NOT CURED WITHIN THREE (3) BUSINESS
DAYS; (B) ANY COVENANT, WARRANTY, REPRESENTATION OR STATEMENT MADE OR FURNISHED
TO YOU BY US OR ON OUR BEHALF WAS FALSE IN ANY MATERIAL RESPECT WHEN MADE OR
FURNISHED AND SHALL NOT BE CURED FOR A PERIOD OF THIRTY (30) DAYS AFTER THE
OCCURRENCE THEREOF; (C) THE LOSS, THEFT, SUBSTANTIAL DAMAGE, DESTRUCTION, SALE
OR ENCUMBRANCE OF A MATERIAL PORTION OF THE COLLATERAL OR THE MAKING OF ANY
LEVY, SEIZURE OR ATTACHMENT THEREOF OR THEREON EXCEPT TO THE EXTENT SAID LEVY,
SEIZURE OR ATTACHMENT DOES NOT SECURE INDEBTEDNESS IN EXCESS OF $100,000 AND
SUCH LEVY, SEIZURE OR ATTACHMENT HAS NOT BEEN REMOVED OR OTHERWISE RELEASED
WITHIN 10 DAYS OF THE CREATION OR THE ASSERTION THEREOF; (D) WE SHALL BECOME
INSOLVENT, CEASE OPERATIONS, DISSOLVE, TERMINATE OUR BUSINESS EXISTENCE, MAKE AN
ASSIGNMENT FOR THE BENEFIT OF CREDITORS, SUFFER THE APPOINTMENT OF A RECEIVER,
TRUSTEE, LIQUIDATOR OR CUSTODIAN OF ALL OR ANY PART OF OUR PROPERTY; (E) ANY
PROCEEDINGS UNDER ANY BANKRUPTCY OR INSOLVENCY LAW SHALL BE COMMENCED BY OR
AGAINST US AND IF COMMENCED AGAINST US SHALL NOT BE DISMISSED WITHIN 60 DAYS;
(F) WE SHALL REPUDIATE OR PURPORT TO REVOKE OUR OBLIGATIONS UNDER THE NOTE OR AN
EVENT OF DEFAULT SHALL HAVE OCCURRED UNDER AND AS DEFINED IN THE NOTE.
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5.
UPON THE OCCURRENCE OF ANY EVENT OF DEFAULT AND AT ANY TIME
THEREAFTER, YOU MAY DECLARE ALL OBLIGATIONS IMMEDIATELY DUE AND PAYABLE AND YOU
SHALL HAVE THE REMEDIES OF A SECURED PARTY PROVIDED IN THE UNIFORM COMMERCIAL
CODE AS IN EFFECT IN THE STATE OF NEW YORK, THIS AGREEMENT AND OTHER APPLICABLE
LAW.
UPON THE OCCURRENCE OF ANY EVENT OF DEFAULT AND AT ANY TIME THEREAFTER YOU
WILL HAVE THE RIGHT TO TAKE POSSESSION OF THE COLLATERAL AND TO MAINTAIN SUCH
POSSESSION ON OUR PREMISES OR TO REMOVE THE COLLATERAL OR ANY PART THEREOF TO
SUCH OTHER PREMISES AS YOU MAY DESIRE.
UPON YOUR REQUEST, WE SHALL ASSEMBLE THE
COLLATERAL AND MAKE IT AVAILABLE TO YOU AT A PLACE DESIGNATED BY YOU.
IF ANY
NOTIFICATION OF INTENDED DISPOSITION OF ANY COLLATERAL IS REQUIRED BY LAW, SUCH
NOTIFICATION,