PAYMENTS IN TRUST FOR AND AS
THE PROPERTY OF LAURUS AND SHALL NOT COMMINGLE SUCH PAYMENTS WITH ANY OF ITS
OTHER FUNDS OR PROPERTY.
(B)
AT LAURUS' ELECTION, FOLLOWING THE OCCURRENCE OF AN EVENT OF
DEFAULT WHICH IS CONTINUING, LAURUS MAY NOTIFY EACH COMPANY'S ACCOUNT DEBTORS OF
LAURUS' SECURITY INTEREST IN THE ACCOUNTS, COLLECT THEM DIRECTLY AND CHARGE THE
COLLECTION COSTS AND EXPENSES THEREOF TO COMPANY'S AND THE ELIGIBLE SUBSIDIARIES
JOINT AND SEVERAL ACCOUNT.
9.
COLLECTION AND MAINTENANCE OF COLLATERAL.
(A)
LAURUS MAY VERIFY EACH COMPANY'S ACCOUNTS FROM TIME TO TIME, BUT
NOT MORE OFTEN THAN ONCE EVERY THREE (3) MONTHS, UNLESS AN EVENT OF DEFAULT HAS
OCCURRED AND IS CONTINUING OR LAURUS BELIEVES THAT SUCH VERIFICATION IS
NECESSARY TO PRESERVE OR PROTECT THE COLLATERAL, UTILIZING AN AUDIT CONTROL
COMPANY OR ANY OTHER AGENT OF LAURUS.
(B)
PROCEEDS OF ACCOUNTS RECEIVED BY LAURUS WILL BE DEEMED RECEIVED ON
THE BUSINESS DAY AFTER LAURUS' RECEIPT OF SUCH PROCEEDS IN GOOD FUNDS IN DOLLARS
OF THE UNITED STATES OF AMERICA TO AN ACCOUNT DESIGNATED BY LAURUS.
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 OF ANY COMPANY, IT
SHALL (I) APPLY SUCH PROCEEDS, AS REQUIRED, TO AMOUNTS OUTSTANDING UNDER THE
NOTES, AND (II) REMIT ALL SUCH REMAINING PROCEEDS (NET OF INTEREST, FEES AND
OTHER AMOUNTS THEN DUE AND OWING TO LAURUS HEREUNDER) TO COMPANY AGENT (FOR THE
BENEFIT OF THE APPLICABLE COMPANIES) UPON REQUEST (BUT NO MORE OFTEN THAN TWICE
A WEEK).
NOTWITHSTANDING THE FOREGOING, FOLLOWING THE OCCURRENCE AND DURING THE
CONTINUANCE OF AN EVENT OF DEFAULT, LAURUS, AT ITS OPTION, MAY (A) APPLY SUCH
PROCEEDS TO THE OBLIGATIONS IN SUCH ORDER AS LAURUS SHALL ELECT, (B) HOLD ALL
SUCH PROCEEDS AS CASH COLLATERAL FOR THE OBLIGATIONS AND EACH COMPANY HEREBY
GRANTS TO LAURUS A SECURITY INTEREST IN SUCH CASH COLLATERAL AMOUNTS AS SECURITY
FOR THE OBLIGATIONS AND/OR (C) DO ANY COMBINATION OF THE FOREGOING.
10.
INSPECTIONS AND APPRAISALS.
AT ALL TIMES DURING NORMAL BUSINESS
HOURS, LAURUS, AND/OR ANY AGENT OF LAURUS SHALL HAVE THE RIGHT TO (A) HAVE
ACCESS TO, VISIT, INSPECT, REVIEW, EVALUATE AND MAKE PHYSICAL VERIFICATION AND
APPRAISALS OF EACH COMPANY'S PROPERTIES AND THE COLLATERAL, (B) INSPECT, AUDIT
AND COPY (OR TAKE ORIGINALS IF NECESSARY) AND MAKE EXTRACTS FROM EACH COMPANY'S
BOOKS AND RECORDS, INCLUDING MANAGEMENT LETTERS PREPARED BY THE ACCOUNTANTS, AND
(C) DISCUSS WITH EACH COMPANY'S DIRECTORS, PRINCIPAL OFFICERS, AND INDEPENDENT
ACCOUNTANTS, EACH COMPANY'S BUSINESS, ASSETS, LIABILITIES, FINANCIAL CONDITION,
RESULTS OF OPERATIONS AND BUSINESS PROSPECTS.
EACH COMPANY WILL DELIVER TO
LAURUS ANY INSTRUMENT NECESSARY FOR LAURUS TO OBTAIN RECORDS FROM ANY SERVICE
BUREAU MAINTAINING RECORDS FOR SUCH COMPANY.
IF ANY INTERNALLY PREPARED
FINANCIAL INFORMATION, INCLUDING THAT REQUIRED UNDER THIS SECTION IS
UNSATISFACTORY IN ANY MANNER TO LAURUS, LAURUS MAY REQUEST THAT THE ACCOUNTANTS
REVIEW THE SAME.
10
11.
FINANCIAL REPORTING.
COMPANY AGENT WILL DELIVER, OR CAUSE TO BE
DELIVERED, TO LAURUS EACH OF