Common use of Collateral Reserve Account Clause in Contracts

Collateral Reserve Account. Within sixty (60) days after the --------------------------- Closing Date, Borrower shall establish and maintain with Lender a Collateral Reserve Account into which Borrower shall transfer and deliver all cash, checks, drafts, items and other instruments for the payment of money which it now has or may at any time hereafter receive in full or partial payment for the Inventory Collateral or otherwise as proceeds of the Accounts Receivable Collateral and, pending such transfer and delivery, Borrower shall be deemed to hold same in trust for the benefit of Lender. Borrower shall not be entitled to draw on the Collateral Reserve Account without the prior written consent of Lender; provided, however, that, at any time during which deposits exist in the ------- Collateral Reserve Account, Lender may withdraw such deposits, or any portion thereof, therefrom, for application against the Obligations in such manner as Lender, in its sole discretion, may determine. Lender may, additionally, at any time in its sole discretion, direct Account Debtors to make payments on the Accounts Receivable Collateral, or portions thereof, directly to Lender, and the Account Debtors are hereby authorized and directed to do so by Borrower upon Lender's direction, and the funds so received shall be also deposited in the Collateral Reserve Account, or, at the election of Lender, upon its receipt thereof, be applied directly to repayment of the Obligations in such order as Lender, in its sole discretion, shall determine. Notwithstanding the foregoing, however, so long as no Event of Default exists, Lender agrees to settle with Borrower as to any funds which may exist in the Collateral Reserve Account from time to time hereafter on a mutually agreeable periodic basis.

Collateral Reserve Account. Within sixty (60) days after the --------------------------- Closing DateSimultaneously herewith, Borrower Obligor shall establish and maintain with Lender Agent a Collateral Reserve Account into which Borrower and shall transfer and deliver deposit in the Collateral Reserve Account all items of payment received (including, without limitation, cash, checks, drafts, items and other instruments for the payment of money money) which it now has or may at any time hereafter receive in full or partial payment for the Inventory Collateral or otherwise as proceeds of the Accounts Receivable Collateral. All collected balances in the Collateral Reserve Account shall be applied by Agent on a daily basis in payment of amounts outstanding under the Obligations (first to interest, then to principal) then due and payable. Obligor shall not be entitled to draw on the Collateral Reserve Account without the prior written consent of Agent; provided, however, that, at any time during which collected balances exist in the Collateral Reserve Account, if there are no amounts outstanding under the Obligations, and provided that no Default Condition or Event of Default is in existence, Obligor may withdraw such collected balances, or any portion thereof, therefrom. Upon the occurrence of an Event of Default, the Agent may, additionally, at any time in its sole discretion, require that the Obligor obtain a lockbox with the Agent and direct Account Debtors to make payments on the Accounts Receivable Collateral, or portions thereof, to the lockbox or directly payable to the order of the Agent, and the Account Debtors are hereby authorized and directed to do so by Obligor upon Agent's direction, and the funds so received shall be also deposited in the Collateral Reserve Account and applied as aforesaid. In addition, after the occurrence of an Event of Default, the Obligor shall transfer and deliver to the Agent all such items of payment which it now has or may at any time hereafter receive in full or partial payment for the Inventory Collateral or otherwise as proceeds of the Accounts Receivable Collateral and, pending such transfer and deliverydelivery to the Agent, Borrower Obligor shall be deemed to hold same in trust for the benefit of LenderAgent. Borrower shall not be entitled to draw on the Collateral Reserve Account without the prior written consent of Lender; provided, however, that, at any time during which deposits exist in the ------- Collateral Reserve Account, Lender may withdraw such deposits, or any portion thereof, therefrom, for application against the Obligations in such manner as Lender, in its sole discretion, may determine. Lender may, additionally, at any time in its sole discretion, direct Account Debtors to make payments on the Accounts Receivable Collateral, or portions thereof, directly to Lender, and the Account Debtors are hereby authorized and directed to do so by Borrower upon Lender's direction, and the funds so received shall be also deposited in the Collateral Reserve Account, or, at the election of Lender, upon its receipt thereof, be applied directly to repayment of the Obligations in such order as Lender, in its sole discretion, shall determine. Notwithstanding the foregoing, however, so long as no Event of Default exists, Lender agrees to settle with Borrower as to any funds which may exist in the Collateral Reserve Account from time to time hereafter on a mutually agreeable periodic basis.AT: 1030545v10 139

Collateral Reserve Account. Within sixty (60) days after the --------------------------- Closing DateSimultaneously herewith, Borrower shall establish and maintain with Lender a Collateral Reserve Account into which Borrower shall transfer and deliver all cash, checks, drafts, items and other instruments for the payment of money which it now has or may at any time hereafter receive in full or partial payment for the Inventory Collateral or otherwise as proceeds of the Accounts Receivable Collateral and, pending such transfer and delivery, Borrower shall be deemed to hold same in trust for the benefit of Lender. Borrower shall not be entitled to draw on the Collateral Reserve Account without the prior written consent of Lender; provided, however, that, at any time during which deposits exist in the ------- Collateral Reserve Account, Lender may withdraw such deposits, or any portion thereof, therefrom, for application against the Obligations in such manner as Lender, in its sole discretion, may determine. Lender may, additionally, at any time in its sole discretion, direct Account Debtors to make payments on the Accounts Receivable Collateral, or portions thereof, directly to Lender, and the Account Debtors are hereby authorized and directed to do so by Borrower upon Lender's direction, and the funds so received shall be also deposited in the Collateral Reserve Account, or, at the election of Lender, upon its receipt thereof, be applied directly to repayment of the Obligations in such order as Lender, in its sole discretion, shall determine. Notwithstanding the foregoing, however, so long as no Event of Default exists, Lender agrees to settle with Borrower as to any funds which may exist in the Collateral Reserve Account from time to time hereafter on a mutually agreeable periodic basis.