(INCLUDING THE PAYMENT OF
TAXES, THE SATISFACTION OF LIENS, THE PERFORMANCE OF OBLIGATIONS OWED TO ACCOUNT
DEBTORS, LESSORS OR OTHER OBLIGORS, THE PROCUREMENT AND MAINTENANCE OF
INSURANCE, THE EXECUTION OF ASSIGNMENTS, SECURITY AGREEMENTS AND FINANCING
STATEMENTS, AND THE ENDORSEMENT OF INSTRUMENTS).
THE AMOUNT OF ALL MONIES
EXPENDED AND ALL COSTS AND EXPENSES (INCLUDING ATTORNEYS' FEES AND LEGAL
EXPENSES) INCURRED BY LAURUS IN CONNECTION WITH OR AS A RESULT OF THE
PERFORMANCE OR OBSERVANCE OF SUCH AGREEMENTS OR THE TAKING OF SUCH ACTION BY
LAURUS SHALL BE CHARGED TO THE COMPANIES' ACCOUNT AS A LOAN AND ADDED TO THE
OBLIGATIONS.
TO FACILITATE LAURUS' PERFORMANCE OR OBSERVANCE OF SUCH COVENANTS
BY EACH COMPANY, EACH COMPANY HEREBY IRREVOCABLY APPOINTS LAURUS, OR LAURUS'
DELEGATE, ACTING ALONE, AS SUCH COMPANY'S ATTORNEY IN FACT (WHICH APPOINTMENT IS
COUPLED WITH AN INTEREST) WITH THE RIGHT (BUT NOT THE DUTY) FROM TIME TO TIME TO
CREATE, PREPARE, COMPLETE, EXECUTE, DELIVER, ENDORSE OR FILE IN THE NAME AND ON
BEHALF OF SUCH COMPANY ANY AND ALL INSTRUMENTS, DOCUMENTS, ASSIGNMENTS, SECURITY
AGREEMENTS, FINANCING STATEMENTS, APPLICATIONS FOR INSURANCE AND OTHER
AGREEMENTS AND WRITINGS REQUIRED TO BE OBTAINED, EXECUTED, DELIVERED OR ENDORSED
BY SUCH COMPANY.
(V)
LAURUS WILL ACCOUNT TO COMPANY AGENT MONTHLY
WITH A STATEMENT OF ALL LOANS AND OTHER ADVANCES, CHARGES AND PAYMENTS MADE
PURSUANT TO THIS AGREEMENT, AND SUCH ACCOUNT RENDERED BY LAURUS SHALL BE DEEMED
FINAL, BINDING AND CONCLUSIVE UNLESS LAURUS IS NOTIFIED BY COMPANY AGENT IN
WRITING TO THE CONTRARY WITHIN THIRTY (30) DAYS OF THE DATE EACH ACCOUNT WAS
RENDERED SPECIFYING THE ITEM OR ITEMS TO WHICH OBJECTION IS MADE.
(VI)
DURING THE TERM, THE COMPANIES MAY BORROW AND
PREPAY LOANS IN ACCORDANCE WITH THE TERMS AND CONDITIONS HEREOF.
(B)
MINIMUM BORROWING AMOUNT.
AFTER A
REGISTRATION STATEMENT REGISTERING THE REGISTRABLE SECURITIES HAS BEEN DECLARED
EFFECTIVE BY THE SEC, CONVERSIONS OF THE MINIMUM BORROWING AMOUNT INTO THE
COMMON STOCK MAY BE INITIATED AS SET FORTH IN THE RESPECTIVE MINIMUM BORROWING
NOTE.
FROM AND AFTER THE DATE UPON WHICH ANY OUTSTANDING PRINCIPAL OF THE
MINIMUM BORROWING AMOUNT (AS EVIDENCED BY THE FIRST MINIMUM BORROWING NOTE) IS
CONVERTED INTO COMMON STOCK (THE "FIRST CONVERSION DATE"), (I) CORRESPONDING
AMOUNTS OF ALL OUTSTANDING
3
LOANS (NOT ATTRIBUTABLE TO THE THEN OUTSTANDING MINIMUM BORROWING AMOUNT)
EXISTING ON OR MADE AFTER THE FIRST CONVERSION DATE WILL BE AGGREGATED IN
ACCORDANCE WITH SECTION 2(A)(I) AND (II) THE COMPANIES WILL ISSUE A NEW
(SERIALIZED) MINIMUM BORROWING NOTE TO LAURUS IN ACCORDANCE WITH
SECTION 2(A)(I), AND (III) THE PARENT SHALL PREPARE AND FILE A SUBSEQUENT
REGISTRATION STATEMENT WITH THE SEC TO REGISTER SUCH SUBSEQUENT MINIMUM
BORROWING NOTE AS SET FORTH IN THE REGISTRATION RIGHTS AGREEMENT.
3.
REPAYMENT OF THE LOANS.
THE COMPANIES
(A) MAY PREPAY THE OBLIGATIONS FROM TIME TO TIME IN ACCORDANCE WITH THE TERMS
AND PROVISIONS OF THE NOTES (AND SECTION 17 HEREOF IF SUCH PREPAYMENT IS DUE TO
A TERMINATION OF THIS AGREEMENT); (B) SHALL REPAY ON THE EXPIRATION OF THE TERM
(I) THE THEN AGGREGATE OUTSTANDING PRINCIPAL BALANCE OF THE LOANS