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 EACH COMPANY'S INVOICES, ACCOUNT STATEMENTS AND
OTHER WRITTEN OR ORAL COMMUNICATIONS DIRECTING, INSTRUCTING, DEMANDING OR
REQUESTING PAYMENT OF ANY ACCOUNT OF ANY COMPANY OR ANY OTHER AMOUNT
CONSTITUTING COLLATERAL SHALL CONSPICUOUSLY DIRECT THAT ALL PAYMENTS BE MADE TO
THE LOCKBOX OR FOLLOWING THE OCCURRENCE AND DURING THE CONTINUATION OF AN EVENT
OF DEFAULT SUCH OTHER ADDRESS AS LAURUS MAY DIRECT IN WRITING.
IF,
NOTWITHSTANDING THE INSTRUCTIONS TO ACCOUNT DEBTORS, ANY COMPANY RECEIVES ANY
PAYMENTS, SUCH COMPANY SHALL IMMEDIATELY REMIT SUCH PAYMENTS TO LAURUS IN THEIR
ORIGINAL FORM WITH ALL NECESSARY ENDORSEMENTS.
UNTIL SO REMITTED, SUCH COMPANY
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.
(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 THE
COMPANIES' JOINT AND SEVERAL ACCOUNT.
10
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, UTILIZING AN AUDIT CONTROL
COMPANY OR ANY OTHER AGENT OF LAURUS.
(B)
PROCEEDS OF ACCOUNTS RECEIVED BY LAURUS WILL
BE DEEMED RECEIVED ON THE SAME DAY OF 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 P.M. (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 ONCE EACH BUSINESS DAY).
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