INTO A BLOCKED ACCOUNT
MAINTAINED BY SUCH COMPANY (THE "BLOCKED ACCOUNTS") WITH A BANK OR SUCH OTHER
FINANCIAL INSTITUTION ACCEPTED BY LAURUS IN WRITING AS MAY BE SELECTED BY SUCH
COMPANY (THE "BLOCKED ACCOUNT BANK") PURSUANT TO THE TERMS OF THE CERTAIN
AGREEMENTS AMONG ONE OR MORE COMPANIES, WORKING CAPITAL LENDER AND THE BLOCKED
ACCOUNT BANK.
EACH COMPANY, IF REQUESTED BY LAURUS, SHALL AND SHALL CAUSE THE
BLOCKED ACCOUNT BANK TO ENTER INTO ALL SUCH DOCUMENTATION ACCEPTABLE TO LAURUS
PURSUANT TO WHICH, AMONG OTHER THINGS, THE BLOCKED ACCOUNT BANK AGREES TO:
(A) SWEEP THE BLOCKED ACCOUNT ON A DAILY BASIS TO AN ACCOUNT DESIGNATED BY
WORKING CAPITAL LENDER OR LAURUS IN WRITING AND (B) COMPLY ONLY WITH THE
INSTRUCTIONS OR OTHER DIRECTIONS OF WORKING CAPITAL LENDER
9
OR LAURUS CONCERNING THE BLOCKED ACCOUNT.
UNTIL AMOUNTS RECEIVED BY SUCH
COMPANY ARE REMITTED AS REQUIRED ABOVE, 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)
SUBJECT TO THE TERMS OF THE INTERCREDITOR
AGREEMENT, 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, 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 OR REPRESENTATIVE OF