SUCH SECURITY INTEREST IS PRIOR TO ALL OTHER LIENS IN EXISTENCE ON THE DATE
HEREOF.
6
(D)
NO EFFECTIVE SECURITY AGREEMENT, MORTGAGE, DEED OF TRUST, FINANCING
STATEMENT, EQUIVALENT SECURITY OR LIEN INSTRUMENT OR CONTINUATION STATEMENT
COVERING ALL OR ANY PART OF THE COLLATERAL IS OR WILL BE ON FILE OR OF RECORD IN
ANY PUBLIC OFFICE, EXCEPT THOSE RELATING TO PERMITTED LIENS.
(E)
COMPANY SHALL NOT DISPOSE OF ANY OF THE COLLATERAL WHETHER BY SALE, LEASE
OR OTHERWISE EXCEPT FOR THE SALE OF INVENTORY IN THE ORDINARY COURSE OF BUSINESS
AND FOR THE DISPOSITION OR TRANSFER IN THE ORDINARY COURSE OF BUSINESS DURING
ANY FISCAL YEAR OF OBSOLETE AND WORN-OUT EQUIPMENT HAVING AN AGGREGATE FAIR
MARKET VALUE OF NOT MORE THAN $25,000 AND ONLY TO THE EXTENT THAT (I) THE
PROCEEDS OF ANY SUCH DISPOSITION ARE USED TO ACQUIRE REPLACEMENT EQUIPMENT WHICH
IS SUBJECT TO LAURUS' FIRST PRIORITY SECURITY INTEREST OR (II) FOLLOWING THE
OCCURRENCE OF AN EVENT OF DEFAULT THE PROCEEDS OF WHICH ARE REMITTED TO LAURUS
TO BE HELD AS CASH COLLATERAL FOR THE OBLIGATIONS.
(F)
COMPANY SHALL DEFEND THE RIGHT, TITLE AND INTEREST OF LAURUS IN AND TO
THE COLLATERAL AGAINST THE CLAIMS AND DEMANDS OF ALL PERSONS WHOMSOEVER, AND
TAKE SUCH ACTIONS, INCLUDING (I) ALL ACTIONS NECESSARY TO GRANT LAURUS "CONTROL"
OF ANY INVESTMENT PROPERTY, DEPOSIT ACCOUNTS, LETTER-OF-CREDIT RIGHTS OR
ELECTRONIC CHATTEL PAPER OWNED BY COMPANY, WITH ANY AGREEMENTS ESTABLISHING
CONTROL TO BE IN FORM AND SUBSTANCE SATISFACTORY TO LAURUS, (II) THE PROMPT (BUT
IN NO EVENT LATER THAN TWO BUSINESS DAYS FOLLOWING LAURUS' REQUEST THEREFOR)
DELIVERY TO LAURUS OF ALL ORIGINAL INSTRUMENTS, CHATTEL PAPER, NEGOTIABLE
DOCUMENTS AND CERTIFICATED STOCK OWNED BY A COMPANY (IN EACH CASE, ACCOMPANIED
BY STOCK POWERS, ALLONGES OR OTHER INSTRUMENTS OF TRANSFER EXECUTED IN BLANK),
(III) NOTIFICATION OF LAURUS' INTEREST IN COLLATERAL AT LAURUS' REQUEST, AND
(IV) THE INSTITUTION OF LITIGATION AGAINST THIRD PARTIES AS SHALL BE PRUDENT IN
ORDER TO PROTECT AND PRESERVE COMPANY'S AND LAURUS' RESPECTIVE AND SEVERAL
INTERESTS IN THE COLLATERAL.
(G)
COMPANY SHALL PROMPTLY, AND IN ANY EVENT WITHIN TWO (2) BUSINESS DAYS
AFTER THE SAME IS ACQUIRED BY IT, NOTIFY LAURUS OF ANY COMMERCIAL TORT CLAIM (AS
DEFINED IN THE UCC) ACQUIRED BY IT AND UNLESS OTHERWISE CONSENTED BY LAURUS,
COMPANY SHALL ENTER INTO A SUPPLEMENT TO THIS AGREEMENT GRANTING TO LAURUS A
LIEN IN SUCH COMMERCIAL TORT CLAIM.
(H)
COMPANY SHALL PLACE NOTATIONS UPON ITS BOOKS AND RECORDS AND ANY FINANCIAL
STATEMENT OF COMPANY TO DISCLOSE LAURUS' LIEN IN THE COLLATERAL.
(I)
IF COMPANY RETAINS POSSESSION OF ANY CHATTEL PAPER OR INSTRUMENT WITH
LAURUS' CONSENT, SUCH CHATTEL PAPER AND INSTRUMENTS SHALL BE MARKED WITH THE
FOLLOWING LEGEND:
"THIS WRITING AND OBLIGATIONS EVIDENCED OR SECURED HEREBY ARE
SUBJECT TO THE SECURITY INTEREST OF LAURUS MASTER FUND, LTD."
(J)
COMPANY SHALL PERFORM IN A REASONABLE TIME ALL OTHER STEPS REQUESTED BY
LAURUS TO CREATE AND MAINTAIN IN LAURUS' FAVOR A VALID PERFECTED FIRST LIEN IN
ALL COLLATERAL SUBJECT ONLY TO PERMITTED LIENS.
(K)
COMPANY SHALL NOTIFY