NOT SUBJECT TO ANY PRESENT, FUTURE
CONTINGENT OFFSETS OR COUNTERCLAIMS, AND (III) DO NOT REPRESENT BILL AND HOLD
SALES, CONSIGNMENT SALES, GUARANTEED SALES, SALE OR RETURN OR OTHER SIMILAR
UNDERSTANDINGS OR OBLIGATIONS OF ANY AFFILIATE OR SUBSIDIARY OF SUCH COMPANY.
IT HAS NOT MADE, NOR WILL IT MAKE, ANY AGREEMENT WITH ANY ACCOUNT DEBTOR FOR ANY
EXTENSION OF TIME FOR THE PAYMENT OF ANY ACCOUNT, ANY COMPROMISE OR SETTLEMENT
FOR LESS THAN THE FULL AMOUNT THEREOF, ANY RELEASE OF ANY ACCOUNT DEBTOR FROM
LIABILITY THEREFOR, OR ANY DEDUCTION THEREFROM EXCEPT A DISCOUNT OR ALLOWANCE
FOR PROMPT OR EARLY
8
PAYMENT ALLOWED BY IT IN THE ORDINARY COURSE OF ITS BUSINESS CONSISTENT WITH
HISTORICAL PRACTICE AND AS PREVIOUSLY DISCLOSED TO LAURUS IN WRITING.
(M)
IT SHALL KEEP AND MAINTAIN ITS EQUIPMENT IN
GOOD OPERATING CONDITION, EXCEPT FOR ORDINARY WEAR AND TEAR, AND SHALL MAKE ALL
NECESSARY REPAIRS AND REPLACEMENTS THEREOF SO THAT THE VALUE AND OPERATING
EFFICIENCY SHALL AT ALL TIMES BE MAINTAINED AND PRESERVED.
IT SHALL NOT PERMIT
ANY SUCH ITEMS TO BECOME A FIXTURE TO REAL ESTATE OR ACCESSIONS TO OTHER
PERSONAL PROPERTY.
(N)
IT SHALL MAINTAIN AND KEEP ALL OF ITS BOOKS
AND RECORDS CONCERNING THE COLLATERAL AT THE LOCATIONS LISTED IN
SCHEDULE 12(AA).
(O)
EXCEPT FOR INVENTORY WHICH IS IN TRANSIT IN
THE ORDINARY COURSE OF BUSINESS, MOTOR VEHICLES, SALES OF INVENTORY IN THE
ORDINARY COURSE OF BUSINESS AND DISPOSITIONS OF EQUIPMENT PERMITTED BY
SECTION 7(E) OF THIS AGREEMENT, IT SHALL MAINTAIN AND KEEP THE TANGIBLE
COLLATERAL AT THE ADDRESSES LISTED IN SCHEDULE 12(AA), PROVIDED, THAT (I) IT MAY
CHANGE SUCH LOCATIONS OR OPEN A NEW LOCATION, PROVIDED THAT IT PROVIDES LAURUS
AT LEAST TEN (10) DAYS PRIOR WRITTEN NOTICE OF SUCH CHANGES OR NEW LOCATION AND
(II) PRIOR TO SUCH CHANGE OR OPENING OF A NEW LOCATION WHERE COLLATERAL HAVING A
VALUE OF MORE THAN $150,000 WILL BE LOCATED, IT EXECUTES AND DELIVERS TO LAURUS
SUCH AGREEMENTS DEEMED REASONABLY NECESSARY OR PRUDENT BY LAURUS, INCLUDING
LANDLORD AGREEMENTS, MORTGAGEE AGREEMENTS AND WAREHOUSE AGREEMENTS, EACH IN FORM
AND SUBSTANCE SATISFACTORY TO LAURUS, TO ADEQUATELY PROTECT AND MAINTAIN LAURUS'
SECURITY INTEREST IN SUCH COLLATERAL.
(P)
SCHEDULE 7(P) LISTS ALL BANKS AND OTHER
FINANCIAL INSTITUTIONS AT WHICH IT MAINTAINS DEPOSITS AND/OR OTHER ACCOUNTS, AND
SUCH SCHEDULE CORRECTLY IDENTIFIES THE NAME, ADDRESS AND TELEPHONE NUMBER OF
EACH SUCH DEPOSITORY, THE NAME IN WHICH THE ACCOUNT IS HELD, A DESCRIPTION OF
THE PURPOSE OF THE ACCOUNT, AND THE COMPLETE ACCOUNT NUMBER.
IT SHALL NOT
ESTABLISH ANY DEPOSITORY OR OTHER BANK ACCOUNT WITH ANY FINANCIAL INSTITUTION
(OTHER THAN THE ACCOUNTS SET FORTH ON SCHEDULE 7(P)) WITHOUT LAURUS' PRIOR
WRITTEN CONSENT.
(Q)
ALL INVENTORY MANUFACTURED BY IT IN THE
UNITED STATES OF AMERICA SHALL BE PRODUCED IN ACCORDANCE WITH THE REQUIREMENTS
OF THE FEDERAL FAIR LABOR STANDARDS ACT OF 1938, AS AMENDED AND ALL RULES,
REGULATIONS AND ORDERS RELATED THERETO OR PROMULGATED THEREUNDER.
8.
PAYMENT OF ACCOUNTS.
(A)
EACH COMPANY WILL DEPOSIT ALL PAYMENTS IT
RECEIVES WITH RESPECT TO ACCOUNTS AND OTHER COLLATERAL