ONE-HALF OF ONE PERCENT (0.50%) OF THE GROSS FACE AMOUNT OF SUCH
ELIGIBLE ACCOUNT OR (II) IMMEDIATELY REPLACE SUCH DELINQUENT ACCOUNT WITH AN
OTHERWISE ELIGIBLE ACCOUNT.
(B)
RECEIVABLES PURCHASE.
FOLLOWING THE OCCURRENCE AND DURING THE
CONTINUANCE 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 COMPANY AGENT), THE COMPANIES SHALL BE DEEMED TO HEREBY HAVE SOLD,
ASSIGNED, TRANSFERRED, CONVEYED AND DELIVERED TO LAURUS, AND LAURUS SHALL BE
DEEMED TO HAVE PURCHASED AND RECEIVED FROM THE COMPANIES, ALL RIGHT, TITLE AND
INTEREST OF THE COMPANIES 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 NOT BE DEEMED AN EXERCISE BY LAURUS OF
ITS SECURED CREDITOR RIGHTS UNDER ARTICLE 9 OF THE UCC.
IMMEDIATELY FOLLOWING
LAURUS' REQUEST, THE COMPANIES SHALL 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, LAURUS'
STANDARD FORM OF ACCOUNTS RECEIVABLE PURCHASE AGREEMENT AND ACCOUNT DEBTOR
3
NOTIFICATION LETTERS, BUT ANY COMPANY'S FAILURE TO ENTER INTO ANY SUCH
DOCUMENTATION SHALL NOT IMPAIR OR AFFECT THE RECEIVABLES PURCHASE IN ANY MANNER
WHATSOEVER.
(C)
TERM LOAN.
SUBJECT TO THE TERMS AND CONDITIONS SET FORTH HEREIN
AND IN THE ANCILLARY AGREEMENTS, LAURUS SHALL MAKE A TERM LOAN (THE "TERM LOAN")
TO COMPANY AGENT (FOR THE BENEFIT OF COMPANIES) IN AN AGGREGATE AMOUNT EQUAL TO
$5,250,000.
THE TERM LOAN SHALL BE ADVANCED ON THE CLOSING DATE AND SHALL BE,
WITH RESPECT TO PRINCIPAL, PAYABLE IN CONSECUTIVE MONTHLY INSTALLMENTS OF
PRINCIPAL COMMENCING ON MARCH 1, 2007 AND ON THE FIRST DAY OF EACH MONTH
THEREAFTER, SUBJECT TO ACCELERATION UPON THE OCCURRENCE OF AN EVENT OF DEFAULT
OR TERMINATION OF THIS AGREEMENT. THE TERM LOAN SHALL BE EVIDENCED BY THE
SECURED NON-CONVERTIBLE TERM NOTE.
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 MATURITY DATE (AS DEFINED IN THE SECURED
NON-CONVERTIBLE TERM NOTE) (I) THE THEN AGGREGATE OUTSTANDING PRINCIPAL BALANCE
OF THE TERM LOAN TOGETHER WITH ACCRUED AND UNPAID INTEREST, FEES AND CHARGES
AND: (II) ALL OTHER AMOUNTS OWED LAURUS UNDER THE SECURED NON-CONVERTIBLE TERM
NOTE; (C) SHALL REPAY ON THE EXPIRATION OF THE REVOLVING TERM (I) THE THEN
AGGREGATE OUTSTANDING PRINCIPAL BALANCE OF THE REVOLVING LOANS TOGETHER WITH
ACCRUED AND UNPAID INTEREST, FEES AND CHARGES AND; (II) ALL OTHER AMOUNTS OWED
LAURUS UNDER THIS AGREEMENT AND THE ANCILLARY AGREEMENTS; AND (C) SUBJECT TO
SECTION 2(A)(II), SHALL REPAY ON ANY DAY ON WHICH THE THEN