amount equal to (x) the Accounts Availability
minus (y) the Reserves.
The amount derived at any time from Section 2(a)(ii)(x)
minus 2(a)(ii)(y) shall be referred to as the "Formula Amount".
Company shall
execute and deliver to Laurus on the Closing Date a Minimum Borrowing Note and a
Secured Revolving Note evidencing the Loans funded on the Closing Date.
From
time to time thereafter, Company shall execute and deliver to Laurus immediately
prior to the final funding of each additional $750,000 tranche of Loans
(calculated on a cumulative basis for each such tranche) an additional Minimum
Borrowing Note evidencing such tranche, in the form of Note delivered by Company
to Laurus on the Closing Date. Notwithstanding anything herein to the contrary,
whenever during the Term the outstanding balance on the Revolving Note should
equal or exceed $2,250,000, to the extent that the outstanding balance on
Minimum Borrowing Note shall be less than $750,000 (the difference of $750,000
less the actual balance of the Minimum Borrowing Note, the "Available Minimum
Borrowing"), such portion of the balance of the Revolving Note as shall equal
the Available Minimum Borrowing shall be deemed to be simultaneously
extinguished on the Revolving Note and transferred to, and evidenced by, the
Minimum Borrowing Note (e.g., the Available Minimum Borrowing shall be $0).
(B)
NOTWITHSTANDING THE LIMITATIONS SET FORTH ABOVE, IF REQUESTED BY THE COMPANY,
LAURUS RETAINS THE RIGHT TO LEND TO COMPANY FROM TIME TO TIME SUCH AMOUNTS IN
EXCESS OF SUCH LIMITATIONS AS LAURUS MAY DETERMINE IN ITS SOLE DISCRETION.
IF COMPANY DOES NOT PAY ANY INTEREST, FEES, COSTS OR CHARGES TO LAURUS WHEN DUE,
COMPANY SHALL THEREBY BE DEEMED TO HAVE REQUESTED, AND LAURUS IS HEREBY
AUTHORIZED AT ITS DISCRETION TO MAKE AND CHARGE TO COMPANY'S ACCOUNT, A LOAN TO
COMPANY AS OF SUCH DATE IN AN AMOUNT EQUAL TO SUCH UNPAID INTEREST, FEES, COSTS
OR CHARGES.
IF 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 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 (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 COMPANY'S ACCOUNT AS A LOAN
AND ADDED TO THE OBLIGATIONS.
TO FACILITATE LAURUS' PERFORMANCE OR OBSERVANCE
OF SUCH COVENANTS OF COMPANY, COMPANY HEREBY IRREVOCABLY APPOINTS LAURUS, OR
LAURUS' DELEGATE,