A
LOCAL DDA) UNLESS BORROWERS, CONTEMPORANEOUS WITH SUCH ESTABLISHMENT, THE
BORROWERS DELIVER TO THE LENDER PROOF OF MAILING TO ANY SUCH INSTITUTION, A
NOTIFICATION (IN FORM SATISFACTORY TO THE LENDER) OF THE LENDER'S INTEREST IN
SUCH DDA.
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(D)
THE BORROWERS WILL ESTABLISH AND MAINTAIN SEPARATE ACCOUNTS
EXCLUSIVELY FOR PURPOSES OF PAYROLL AND PAYROLL TAX DEPOSITS AND PAYMENTS.
7-2.
CREDIT CARD RECEIPTS.
(A)
ANNEXED HERETO AS EXHIBIT 7-2, IS A SCHEDULE WHICH DESCRIBES ALL
CREDIT CARD PROCESSORS, WHICH TERM SHALL INCLUDE ANY "INSTANT CREDIT" PROVIDERS
AND ANY OTHER ARRANGEMENTS TO WHICH THE BORROWERS ARE A PARTY WITH RESPECT TO
THE PAYMENT TO THE BORROWERS OF THE PROCEEDS OF ALL CREDIT CARD CHARGES FOR
SALES BY THE BORROWERS.
(B)
THE BORROWERS SHALL DELIVER TO THE LENDER, AS A CONDITION TO THE
EFFECTIVENESS OF THIS AGREEMENT, PROOF OF THE MAILING TO EACH OF THE CREDIT CARD
PROCESSORS OF A NOTICE IN FORM SATISFACTORY TO THE LENDER, WHICH NOTICE PROVIDES
THAT PAYMENT OF ALL CREDIT CARD CHARGES SUBMITTED BY THE BORROWERS TO THAT
CREDIT CARD PROCESSOR PAYABLE TO THE BORROWERS BY SUCH CREDIT CARD PROCESSOR
SHALL BE DIRECTED TO THE BLOCKED ACCOUNT. BORROWERS SHALL OBTAIN AND DELIVER TO
LENDER THE ACKNOWLEDGMENT AND CONSENT OF ANY CREDIT CARD PROCESSOR TO THE TERMS
OF SUCH NOTICE. THE BORROWERS SHALL NOT CHANGE SUCH DIRECTION OR DESIGNATION
EXCEPT UPON AND WITH THE PRIOR WRITTEN CONSENT OF THE LENDER.
7-3.
THE CONCENTRATION ACCOUNT, THE BLOCKED ACCOUNT AND THE FUNDING
ACCOUNTS.
(A)
THE FOLLOWING ACCOUNTS HAVE BEEN OR WILL BE ESTABLISHED (AND ARE
SO REFERRED TO HEREIN):
(I)
THE CONCENTRATION ACCOUNT: ESTABLISHED BY THE LENDER WITH THE
CHASE MANHATTAN BANK, N.A.
(II)
THE FUNDING ACCOUNT: HAS BEEN ESTABLISHED BY BORROWERS WITH
SOVEREIGN BANK.
(III)
THE BLOCKED ACCOUNT: HAS BEEN ESTABLISHED BY BORROWERS WITH
SOVEREIGN BANK.
(B)
THE CONTENTS OF ALL DDA'S AND THE BLOCKED ACCOUNT CONSTITUTE
COLLATERAL AND PROCEEDS OF COLLATERAL.
(C)
THE BORROWERS SHALL PAY ALL FEES AND CHARGES OF, AND MAINTAIN SUCH
IMPRESSED BALANCES AS MAY BE REQUIRED BY THE LENDER OR BY ANY BANK IN WHICH ANY
ACCOUNT IS OPENED AS REQUIRED HEREBY (EVEN IF SUCH ACCOUNT IS OPENED BY THE
LENDER).
7-4.
PROCEEDS AND COLLECTION OF ACCOUNTS.
(A)
ALL RECEIPTS CONSTITUTE COLLATERAL AND PROCEEDS OF COLLATERAL AND
SHALL BE HELD IN TRUST BY THE BORROWERS FOR THE LENDER; SHALL NOT BE COMMINGLED
WITH ANY OF THE BORROWERS' OTHER FUNDS; AND SHALL BE DEPOSITED AND/OR
TRANSFERRED ONLY TO THE BLOCKED ACCOUNT.
(B)
THE BORROWERS SHALL CAUSE THE ACH OR WIRE TRANSFER TO THE BLOCKED
ACCOUNT, NO LESS FREQUENTLY THAN TWICE PER WEEK AND DAILY FOLLOWING THE
OCCURRENCE AND DURING
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the continuance of an Event of Default (whether or not there is then an
outstanding balance in the Loan Account) of:
(I)
THE THEN CONTENTS OF EACH DDA (OTHER THAN (A) ANY LOCAL DDA AND
(B) THE FUNDING ACCOUNT), EACH SUCH TRANSFER TO BE NET OF ANY MINIMUM BALANCE,
NOT TO EXCEED FIVE THOUSAND ($5,000) DOLLARS MAINTAINED IN THE SUBJECT DDA BY
THE BANK