DEFAULT OCCURS UNDER THE
CONVERTIBLE DEBENTURES, AND AFTER THE ANY APPLICABLE CURE OR GRACE PERIOD, THEN
IN EACH SUCH CASE THE SECURED PARTY MAY DECLARE THE OBLIGATIONS TO BE DUE AND
PAYABLE IMMEDIATELY, BY A NOTICE IN WRITING TO THE COMPANY, AND UPON ANY SUCH
DECLARATION, THE OBLIGATIONS SHALL BECOME IMMEDIATELY DUE AND PAYABLE.
(B)
UPON THE OCCURRENCE OF AN EVENT OF DEFAULT
UNDER THE CONVERTIBLE DEBENTURES, AND AFTER THE ANY APPLICABLE CURE OR GRACE
PERIOD, THE SECURED PARTY SHALL: (I) BE ENTITLED TO RECEIVE ALL DISTRIBUTIONS
WITH RESPECT TO THE PLEDGED PROPERTY, (II) TO CAUSE THE PLEDGED PROPERTY TO BE
TRANSFERRED INTO THE NAME OF THE SECURED PARTY OR ITS NOMINEE, (III) TO DISPOSE
OF THE PLEDGED PROPERTY, AND (IV) TO REALIZE UPON ANY AND ALL RIGHTS IN THE
PLEDGED PROPERTY THEN HELD BY THE SECURED PARTY.
SECTION 5.2.
METHOD OF REALIZING UPON THE
PLEDGED PROPERTY: OTHER REMEDIES.
Upon the occurrence of an Event of Default under the Convertible Debentures, and
after any applicable cure or grace period, in addition to any rights and
remedies available at law or in equity, the following provisions shall govern
the Secured Party's right to realize upon the Pledged Property:
4
(A)
ANY ITEM OF THE PLEDGED PROPERTY MAY BE
SOLD FOR CASH OR OTHER VALUE IN ANY NUMBER OF LOTS AT BROKERS BOARD, PUBLIC
AUCTION OR PRIVATE SALE AND MAY BE SOLD WITHOUT DEMAND, ADVERTISEMENT OR NOTICE
(EXCEPT THAT THE SECURED PARTY SHALL GIVE THE COMPANY TEN (10) DAYS' PRIOR
WRITTEN NOTICE OF THE TIME AND PLACE OR OF THE TIME AFTER WHICH A PRIVATE SALE
MAY BE MADE (THE "SALE NOTICE")), WHICH NOTICE PERIOD IS HEREBY AGREED TO BE
COMMERCIALLY REASONABLE.
AT ANY SALE OR SALES OF THE PLEDGED PROPERTY, THE
COMPANY MAY BID FOR AND PURCHASE THE WHOLE OR ANY PART OF THE PLEDGED PROPERTY
AND, UPON COMPLIANCE WITH THE TERMS OF SUCH SALE, MAY HOLD, EXPLOIT AND DISPOSE
OF THE SAME WITHOUT FURTHER ACCOUNTABILITY TO THE SECURED PARTY.
THE COMPANY
WILL EXECUTE AND DELIVER, OR CAUSE TO BE EXECUTED AND DELIVERED, SUCH
INSTRUMENTS, DOCUMENTS, ASSIGNMENTS, WAIVERS, CERTIFICATES, AND AFFIDAVITS AND
SUPPLY OR CAUSE TO BE SUPPLIED SUCH FURTHER INFORMATION AND TAKE SUCH FURTHER
ACTION AS THE SECURED PARTY REASONABLY SHALL REQUIRE IN CONNECTION WITH ANY SUCH
SALE.
(B)
ANY CASH BEING HELD BY THE SECURED PARTY AS
PLEDGED PROPERTY AND ALL CASH PROCEEDS RECEIVED BY THE SECURED PARTY IN RESPECT
OF, SALE OF, COLLECTION FROM, OR OTHER REALIZATION UPON ALL OR ANY PART OF THE
PLEDGED PROPERTY SHALL BE APPLIED AS FOLLOWS:
(i)
to the payment of all amounts due the
Secured Party for the expenses reimbursable to it hereunder or owed to it
pursuant to Section 8.3 hereof;
(ii)
to the payment of the Obligations then due
and unpaid.
(iii)
the balance, if any, to the person or
persons entitled thereto, including, without limitation, the Company.
(C)
IN ADDITION TO ALL OF THE RIGHTS AND
REMEDIES WHICH THE SECURED PARTY MAY HAVE PURSUANT TO THIS AGREEMENT, THE