COMPANY SHALL DEFEND THE RIGHT, TITLE AND INTEREST OF LAURUS IN
AND TO THE COLLATERAL AGAINST THE CLAIMS AND DEMANDS OF ALL PERSONS WHOMSOEVER,
AND TAKE SUCH ACTIONS, INCLUDING (I) ALL ACTIONS NECESSARY TO GRANT LAURUS
"CONTROL" OF ANY INVESTMENT PROPERTY, DEPOSIT ACCOUNTS, LETTER-OF-CREDIT RIGHTS
OR ELECTRONIC CHATTEL PAPER OWNED BY COMPANY, WITH ANY AGREEMENTS ESTABLISHING
CONTROL TO BE IN FORM AND SUBSTANCE SATISFACTORY TO LAURUS, (II) THE PROMPT (BUT
IN NO EVENT LATER THAN FIVE (5) BUSINESS DAYS FOLLOWING LAURUS' REQUEST
THEREFOR) DELIVERY TO LAURUS OF ALL ORIGINAL INSTRUMENTS, CHATTEL PAPER,
NEGOTIABLE DOCUMENTS AND CERTIFICATED STOCK OWNED BY THE COMPANY (IN EACH CASE,
ACCOMPANIED BY STOCK POWERS, ALLONGES OR OTHER INSTRUMENTS OF TRANSFER EXECUTED
IN BLANK), (III) NOTIFICATION OF LAURUS' INTEREST IN COLLATERAL AT LAURUS'
REQUEST, AND (IV) THE INSTITUTION OF LITIGATION AGAINST THIRD PARTIES AS SHALL
BE PRUDENT IN ORDER TO PROTECT AND PRESERVE COMPANY'S AND LAURUS' RESPECTIVE AND
SEVERAL INTERESTS IN THE COLLATERAL.
7
(G)
COMPANY SHALL PROMPTLY, AND IN ANY EVENT WITHIN TEN (10)
BUSINESS
DAYS AFTER THE SAME IS ACQUIRED BY IT, NOTIFY LAURUS OF ANY COMMERCIAL TORT
CLAIM (AS DEFINED IN THE UCC) ACQUIRED BY IT AND UNLESS OTHERWISE CONSENTED BY
LAURUS, COMPANY SHALL ENTER INTO A SUPPLEMENT TO THIS AGREEMENT GRANTING TO
LAURUS A LIEN IN SUCH COMMERCIAL TORT CLAIM.
(H)
COMPANY SHALL PLACE NOTATIONS UPON ITS BOOKS AND RECORDS AND ANY
FINANCIAL STATEMENT OF COMPANY TO DISCLOSE LAURUS' LIEN IN THE COLLATERAL.
(I)
IF COMPANY RETAINS POSSESSION OF ANY CHATTEL PAPER OR INSTRUMENT
WITH LAURUS' CONSENT, UPON LAURUS' REQUEST SUCH CHATTEL PAPER AND INSTRUMENTS
SHALL BE MARKED WITH THE FOLLOWING LEGEND:
"THIS WRITING AND OBLIGATIONS
EVIDENCED OR SECURED HEREBY ARE SUBJECT TO THE SECURITY INTEREST OF LAURUS
MASTER FUND, LTD."
(J)
COMPANY SHALL PERFORM IN A REASONABLE TIME ALL OTHER STEPS
REQUESTED BY LAURUS TO CREATE AND MAINTAIN IN LAURUS' FAVOR A VALID PERFECTED
FIRST LIEN IN ALL COLLATERAL SUBJECT ONLY TO PERMITTED LIENS.
(K)
COMPANY SHALL NOTIFY LAURUS PROMPTLY AND IN ANY EVENT WITHIN THREE
(3) BUSINESS DAYS AFTER OBTAINING KNOWLEDGE THEREOF (I) OF ANY EVENT OR
CIRCUMSTANCE THAT TO COMPANY'S KNOWLEDGE WOULD CAUSE LAURUS TO CONSIDER ANY THEN
EXISTING ACCOUNT AS NO LONGER CONSTITUTING AN ELIGIBLE ACCOUNT; (II) OF ANY
MATERIAL DELAY IN COMPANY'S PERFORMANCE OF ANY OF ITS OBLIGATIONS TO ANY ACCOUNT
DEBTOR; (III) OF ANY ASSERTION BY ANY ACCOUNT DEBTOR OF ANY MATERIAL CLAIMS,
OFFSETS OR COUNTERCLAIMS; (IV) OF ANY ALLOWANCES, CREDITS AND/OR MONIES GRANTED
BY COMPANY TO ANY ACCOUNT DEBTOR; (V) OF ALL MATERIAL ADVERSE INFORMATION
RELATING TO THE FINANCIAL CONDITION OF AN ACCOUNT DEBTOR; (VI) OF ANY MATERIAL
RETURN OF GOODS; AND (VII) OF ANY LOSS, DAMAGE OR DESTRUCTION OF ANY OF THE
COLLATERAL.
(L)
ALL ELIGIBLE ACCOUNTS (I) EXCEPT IN THE CASE OF ACCOUNTS OF
GREAT LAKES, WHICH ARE BILLED ON A CONSTRUCTION COMPLETION BASIS, REPRESENT
COMPLETE BONA FIDE TRANSACTIONS WHICH REQUIRE NO FURTHER ACT UNDER ANY
CIRCUMSTANCES ON COMPANY'S PART TO MAKE SUCH ACCOUNTS PAYABLE BY THE ACCOUNT
DEBTORS, (II) ARE NOT SUBJECT