ADVANCE MADE WITH RESPECT TO SUCH
ELIGIBLE.
(B)
FOLLOWING THE OCCURRENCE OF AN EVENT OF DEFAULT, LAURUS MAY, AT ITS
OPTION, ELECT TO CONVERT THE CREDIT FACILITY CONTEMPLATED HEREBY TO AN ACCOUNTS
RECEIVABLE PURCHASE FACILITY.
UPON SUCH ELECTION BY LAURUS (SUBSEQUENT NOTICE
OF WHICH LAURUS SHALL PROVIDE TO THE COMPANY), THE COMPANY AND GUARANTOR
SUBSIDIARY SHALL BE DEEMED TO HEREBY HAVE SOLD, ASSIGNED, TRANSFERRED, CONVEYED
AND DELIVERED TO LAURUS, AND LAURUS SHALL BE DEEMED TO HAVE PURCHASED, AT A
PRICE OF NOT LESS THAN 85% OF THE AMOUNT OF THE OUTSTANDING ACCOUNTS, AND
RECEIVED FROM THE COMPANY AND GUARANTOR SUBSIDIARY, ALL RIGHT, TITLE AND
INTEREST OF THE COMPANY AND GUARANTOR SUBSIDIARY IN AND TO ALL ACCOUNTS WHICH
SHALL AT ANY TIME CONSTITUTE ELIGIBLE ACCOUNTS (THE "RECEIVABLES PURCHASE").
ALL OUTSTANDING LOANS HEREUNDER SHALL BE DEEMED OBLIGATIONS UNDER SUCH ACCOUNTS
RECEIVABLE PURCHASE FACILITY.
THE CONVERSION TO AN ACCOUNTS RECEIVABLE PURCHASE
FACILITY IN ACCORDANCE WITH THE TERMS HEREOF SHALL BE DEEMED AN EXERCISE BY
LAURUS OF ITS SECURED CREDITOR RIGHTS UNDER ARTICLE 9 OF THE UCC BUT SHALL NOT
PREVENT LAURUS FROM PURSUING ANY OTHER REMEDIES OTHERWISE AVAILABLE TO IT.
IMMEDIATELY FOLLOWING LAURUS' REQUEST, THE COMPANY SHALL EXECUTE AND CAUSE
GUARANTOR SUBSIDIARY TO EXECUTE ALL SUCH FURTHER DOCUMENTATION AS MAY BE
REQUIRED BY LAURUS TO MORE FULLY SET FORTH THE ACCOUNTS RECEIVABLE PURCHASE
FACILITY HEREIN CONTEMPLATED, INCLUDING, WITHOUT LIMITATION, AND SUBJECT TO THE
COMPANY'S APPROVAL, WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD, LAURUS'
STANDARD FORM OF ACCOUNTS RECEIVABLE PURCHASE AGREEMENT AND ACCOUNT DEBTOR
NOTIFICATION LETTERS, BUT THE
3
Company's or Guarantor Subsidiary's failure to enter into any such documentation
shall not impair or affect the Receivables Purchase in any manner whatsoever.
3.
REPAYMENT OF THE LOANS.
THE COMPANY SHALL BE REQUIRED TO (A) MAKE
A MANDATORY PREPAYMENT HEREUNDER WITHIN TEN (10) DAYS OF THE DATE ON WHICH THE
AGGREGATE OUTSTANDING PRINCIPAL BALANCE OF THE REVOLVING CREDIT ADVANCES MADE BY
LAURUS TO THE COMPANY HEREUNDER IS IN EXCESS OF THE FORMULA AMOUNT, IN AN AMOUNT
EQUAL TO SUCH EXCESS; AND (B) REPAY ON THE EXPIRATION OF THE TERM (I) THE THEN
AGGREGATE OUTSTANDING PRINCIPAL BALANCE OF THE LOANS MADE BY LAURUS TO THE
COMPANY HEREUNDER TOGETHER WITH ACCRUED AND UNPAID INTEREST, FEES AND CHARGES
AND (II) ALL OTHER AMOUNTS OWED LAURUS UNDER THIS AGREEMENT AND THE ANCILLARY
AGREEMENTS.
ANY PAYMENTS OF PRINCIPAL, INTEREST, FEES OR ANY OTHER AMOUNTS
PAYABLE HEREUNDER OR UNDER ANY ANCILLARY AGREEMENT SHALL BE MADE PRIOR TO 12:00
NOON (NEW YORK TIME) ON THE DUE DATE THEREOF IN IMMEDIATELY AVAILABLE FUNDS.
4.
PROCEDURE FOR REVOLVING CREDIT ADVANCES.
THE COMPANY MAY BY
WRITTEN NOTICE REQUEST A BORROWING OF REVOLVING CREDIT ADVANCES PRIOR TO 12:00
NOON (NEW YORK TIME) ON THE BUSINESS DAY OF ITS REQUEST TO INCUR, ON THAT DAY, A
REVOLVING CREDIT ADVANCE.
TOGETHER WITH EACH REQUEST FOR A REVOLVING CREDIT
ADVANCE (OR AT SUCH OTHER INTERVALS AS LAURUS MAY REQUEST), THE COMPANY SHALL
DELIVER TO LAURUS A BORROWING BASE CERTIFICATE IN THE FORM OF EXHIBIT A, WHICH
SHALL BE