TO THE FINAL FUNDING
OF EACH ADDITIONAL $2,000,000 TRANCHE OF LOANS ALLOCATED TO ANY MINIMUM
BORROWING NOTE ISSUED AFTER THE DATE HEREOF (CALCULATED ON A CUMULATIVE BASIS
FOR EACH SUCH TRANCHE) AN ADDITIONAL MINIMUM BORROWING NOTE EVIDENCING SUCH
TRANCHE, SUBSTANTIALLY IN THE FORM OF THE MINIMUM BORROWING NOTE DELIVERED BY
THE COMPANIES TO LAURUS ON THE CLOSING DATE.
NOTWITHSTANDING ANYTHING HEREIN TO
THE CONTRARY, WHENEVER DURING THE TERM THE OUTSTANDING BALANCE ON THE MINIMUM
BORROWING NOTE SHALL BE LESS THAN THE MINIMUM BORROWING AMOUNT (SUCH AMOUNT
BEING REFERRED TO HEREIN AS THE "TRANSFERABLE AMOUNT") TO THE EXTENT THAT THE
OUTSTANDING BALANCE ON THE REVOLVING NOTE SHOULD EQUAL OR EXCEED $2,000,000,
THAT PORTION OF THE BALANCE OF THE REVOLVING NOTE THAT EXCEEDS $2,000,000, BUT
DOES NOT EXCEED THE TRANSFERABLE AMOUNT, SHALL BE SEGREGATED FROM THE
OUTSTANDING BALANCE UNDER THE REVOLVING NOTE AND ALLOCATED TO AND AGGREGATED
WITH THE THEN EXISTING BALANCE OF THE NEXT UNISSUED SERIALIZED MINIMUM BORROWING
NOTE (THE "NEXT UNISSUED SERIALIZED NOTE"); PROVIDED THAT SUCH SEGREGATED AMOUNT
SHALL REMAIN SUBJECT TO THE TERMS AND CONDITIONS OF SUCH REVOLVING NOTE UNTIL A
NEW SERIALIZED MINIMUM BORROWING NOTE IS ISSUED AS SET FORTH BELOW.
THE NEXT
UNISSUED SERIALIZED NOTE SHALL REMAIN IN BOOK ENTRY FORM UNTIL THE BALANCE
THEREUNDER SHALL EQUAL THE MINIMUM BORROWING AMOUNT, AT WHICH TIME A NEW
SERIALIZED MINIMUM BORROWING NOTE IN THE FACE AMOUNT EQUAL TO THE MINIMUM
BORROWING AMOUNT WILL BE ISSUED AND REGISTERED AS SET FORTH IN THE REGISTRATION
RIGHTS AGREEMENT (AND THE OUTSTANDING BALANCE UNDER THE REVOLVING NOTE SHALL AT
SUCH TIME BE CORRESPONDINGLY REDUCED IN THE AMOUNT EQUAL TO THE MINIMUM
BORROWING AMOUNT AS A RESULT OF THE ISSUANCE OF SUCH NEW SERIALIZED MINIMUM
BORROWING NOTE).
2
(II)
NOTWITHSTANDING THE LIMITATIONS SET FORTH
ABOVE, IF REQUESTED BY ANY COMPANY, LAURUS RETAINS THE RIGHT TO LEND TO SUCH
COMPANY FROM TIME TO TIME SUCH AMOUNTS IN EXCESS OF SUCH LIMITATIONS AS LAURUS
MAY DETERMINE IN ITS SOLE DISCRETION AND IN THE CASE OF LOANS MADE BY LAURUS
WITH THE ACTUAL KNOWLEDGE THAT SUCH LOAN EXCEEDS SUCH LIMITATIONS AND WHICH ARE
NOT PROTECTIVE IN NATURE, ON SUCH TERMS AND CONDITIONS MUTUALLY AGREED TO AMONG
LAURUS AND COMPANIES.
(III)
IF ANY INTEREST, FEES, COSTS OR CHARGES
PAYABLE TO LAURUS HEREUNDER ARE NOT PAID WHEN DUE, EACH OF THE COMPANIES SHALL
THEREBY BE DEEMED TO HAVE REQUESTED, AND LAURUS IS HEREBY AUTHORIZED AT ITS
DISCRETION TO MAKE AND CHARGE TO THE COMPANIES' ACCOUNT, A LOAN AS OF SUCH DATE
IN AN AMOUNT EQUAL TO SUCH UNPAID INTEREST, FEES, COSTS OR CHARGES.
(IV)
IF ANY COMPANY AT ANY TIME FAILS TO PERFORM OR
OBSERVE ANY OF THE COVENANTS CONTAINED IN THIS AGREEMENT OR ANY ANCILLARY
AGREEMENT, LAURUS MAY, BUT NEED NOT, PERFORM OR OBSERVE SUCH COVENANT ON BEHALF
AND IN THE NAME, PLACE AND STEAD OF SUCH COMPANY (OR, AT LAURUS' OPTION, IN
LAURUS' NAME) AND MAY, BUT NEED NOT, TAKE ANY AND ALL OTHER ACTIONS WHICH LAURUS
MAY DEEM NECESSARY TO CURE OR CORRECT SUCH FAILURE