OF THE
LOCKBOX AGREEMENT DATED AUGUST
, 2003 OR SUCH OTHER FINANCIAL INSTITUTION
REASONABLY ACCEPTABLE TO LAURUS IN WRITING AS MAY BE SELECTED BY THE SUBSIDIARY
GUARANTOR (THE "THE SUBSIDIARY GUARANTOR LOCKBOX BANK").
WITHIN 20 DAYS OF THE
9
Closing Date, the Subsidiary Guarantor shall and shall cause the Lockbox Bank to
enter into all such documentation acceptable to Laurus pursuant to which, among
other things, the Lockbox Bank agrees to:
(a) sweep the Lockbox on a daily
basis and deposit all checks received therein to an account designated by Laurus
in writing and (b) comply only with the instructions or other directions of
Laurus concerning the Lockbox.
All of the Subsidiary Guarantor's invoices,
account statements and other written or oral communications directing,
instructing, demanding or requesting payment of any Account of the Subsidiary
Guarantor or any other amount constituting Collateral shall conspicuously direct
that all payments be made to the Lockbox or such other address as Laurus may
direct in writing.
If, notwithstanding the instructions to Account Debtors, the
Subsidiary Guarantor receives any payments, the Subsidiary Guarantor shall
immediately remit such payments to Laurus in their original form with all
necessary endorsements.
Until so remitted, the Subsidiary Guarantor shall hold
all such payments in trust for and as the property of Laurus and shall not
commingle such payments with any of its other funds or property.
The Subsidiary
Guarantor shall pay Laurus five percent (5%) of the amount of any payment so
received by the Subsidiary Guarantor and not delivered in kind to Laurus within
ten (10) Business Days following the Subsidiary Guarantor's receipt thereof.
(C)
AT LAURUS' ELECTION, IF AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING
BEYOND ANY APPLICABLE GRACE PERIOD, LAURUS MAY NOTIFY THE COMPANY'S ACCOUNT
DEBTORS OF LAURUS' SECURITY INTEREST IN THE ACCOUNTS, COLLECT THEM DIRECTLY AND
CHARGE THE REASONABLE COLLECTION COSTS AND EXPENSES THEREOF TO THE COMPANY'S
ACCOUNT.
9.
COLLECTION AND MAINTENANCE OF COLLATERAL.
(A)
LAURUS MAY VERIFY THE COMPANY'S AND GUARANTOR SUBSIDIARY'S ACCOUNTS
UTILIZING AN AUDIT CONTROL COMPANY OR ANY OTHER AGENT OF LAURUS.
(B)
LAURUS WILL CREDIT (CONDITIONAL UPON FINAL COLLECTION) ALL PROCEEDS OF
ACCOUNTS TO THE COMPANY'S ACCOUNT ONE (1) BUSINESS DAY AFTER RECEIPT BY LAURUS
OF GOOD FUNDS IN DOLLARS OF THE UNITED STATES OF AMERICA IN LAURUS' ACCOUNT.
ANY AMOUNT RECEIVED BY LAURUS AFTER 12:00 NOON (NEW YORK TIME) ON ANY BUSINESS
DAY SHALL BE DEEMED RECEIVED ON THE NEXT BUSINESS DAY.
(C)
AS LAURUS RECEIVES THE PROCEEDS OF ACCOUNTS, IT SHALL APPLY SUCH PROCEEDS
TO (A) REVOLVING CREDIT ADVANCES INCLUDING OVERADVANCES MADE BY LAURUS, IF ANY,
(B) THE INTEREST AND FEES EARNED BY LAURUS WITH RESPECT TO SUCH ACCOUNTS, AND
(C) ANY UNDISPUTED AMOUNTS OTHERWISE DUE LAURUS PURSUANT TO SECTIONS 2, 5(B), 20
AND 24 HEREOF WHICH HAVE THERETOFORE NOT BEEN PAID, AND IF NO REVOLVING CREDIT
ADVANCES ARE THEN OUTSTANDING, PAY TO THE COMPANY WITHIN TWO (2) BUSINESS DAYS
THE AGGREGATE AMOUNT (IN EXCESS OF $7,500) SO COLLECTED.
FOLLOWING THE
OCCURRENCE AND DURING THE CONTINUANCE