Amount into the Common Stock of the Company
may be initiated as set forth in the 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 Loans (not
attributable to the then outstanding Minimum Borrowing Amount) existing on or
made after the First Conversion Date will be aggregated until they reach the sum
of $750,000 and (ii) the Company will issue a new (serialized) Minimum Borrowing
Note to Laurus in respect of such $750,000 aggregation, and (iii) the Company
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.
REPAYMENT OF THE LOANS. COMPANY (A) MAY PREPAY THE OBLIGATIONS IN EXCESS OF THE
MINIMUM BORROWING AMOUNT FROM TIME TO TIME IN ACCORDANCE WITH THE TERMS AND
PROVISIONS OF THE NOTES (AND SECTION 16 HEREOF IF SUCH PREPAYMENT IS DUE TO A
TERMINATION OF THIS AGREEMENT); AND (B) SHALL REPAY ON THE EXPIRATION OF THE
TERM (I) THE THEN AGGREGATE OUTSTANDING PRINCIPAL BALANCE OF THE LOANS MADE BY
LAURUS TO 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.
PROCEDURE FOR LOANS.
COMPANY MAY BY WRITTEN NOTICE REQUEST A BORROWING OF LOANS
PRIOR TO 12:00 P.M.. (NEW YORK TIME) ON THE BUSINESS DAY OF ITS REQUEST TO
INCUR, ON THE NEXT BUSINESS DAY, A LOAN.
TOGETHER WITH EACH REQUEST FOR A LOAN
(OR AT SUCH OTHER INTERVALS AS LAURUS MAY REQUEST), COMPANY SHALL DELIVER TO
LAURUS A BORROWING BASE CERTIFICATE IN THE FORM OF EXHIBIT A, WHICH SHALL BE
CERTIFIED AS TRUE AND CORRECT BY THE CHIEF EXECUTIVE OFFICER, CHIEF FINANCIAL
OFFICER OR THE CONTROLLER OF COMPANY TOGETHER WITH ALL SUPPORTING DOCUMENTATION
RELATING THERETO.
ALL LOANS SHALL BE DISBURSED FROM WHICHEVER OFFICE OR OTHER
PLACE LAURUS MAY DESIGNATE FROM TIME TO TIME AND SHALL BE CHARGED TO COMPANY'S
ACCOUNT ON LAURUS' BOOKS.
THE PROCEEDS OF EACH LOAN MADE BY LAURUS SHALL BE
MADE AVAILABLE TO COMPANY ON THE BUSINESS DAY FOLLOWING THE BUSINESS DAY SO
REQUESTED IN ACCORDANCE WITH THE TERMS OF THIS SECTION 4 BY WAY OF CREDIT TO
COMPANY'S OPERATING ACCOUNT MAINTAINED WITH SUCH BANK AS COMPANY DESIGNATED TO
LAURUS.
ANY AND ALL OBLIGATIONS DUE AND OWING HEREUNDER MAY BE CHARGED TO
COMPANY'S ACCOUNT AND SHALL CONSTITUTE LOANS.
10Z-3
INTEREST, PAYMENTS AND WARRANTS.
INTEREST.
EXCEPT AS MODIFIED BY SECTION 5(A)(III) BELOW, COMPANY SHALL PAY INTEREST AT THE
CONTRACT RATE ON THE UNPAID PRINCIPAL BALANCE OF EACH LOAN UNTIL SUCH TIME AS
SUCH LOAN IS COLLECTED IN FULL IN GOOD FUNDS IN