CLEARING ACCOUNT AGREEMENT

[SOFT]

This CLEARING ACCOUNT AGREEMENT (the "Agreement") is entered into this 29 th day of July 2004 by and among (A) Commerce Bank, N.A., having its principal place of business at 1701 Route 70 East, Cherry Hill, New Jersey, 08034 (the "Clearing Bank"), (B) POWERCOLD CORPORATION, having its principal place of business at  115 Canfield Street, LaVernia, TX 78121; PowerCold Products, Inc., 115 Canfield Street, LaVernia, TX  78121; PowerCold ComfortAir Solutions, Inc., 12345 Starkey Avenue, Largo, FL  33773 (each of the entities referred to in this clause (B), the "Borrower"), and (C) LAURUS MASTER FUND, LTD., having its principal place of business at 825 Third Avenue, 14^th Floor, New York, NY 10022 (together with its successors and assigns, the "Lender").

RECITALS

A.

Lender has provided financing (the "Loan") to Borrower, which Loan is (A) evidenced by (i) a Secured Convertible Term Note (as amended, modified or supplementated from time to time, the "Note") dated the date hereof and executed by Borrower, (ii) a Securities Purchase Agreement (as amended, modified or supplemented from time to time, the Securities Purchase Agreement) dated as of the date hereof by and between Borrower and the Lender and (iii) certain other Related Agreements referred to in the Securities Purchase Agreement (expressly excluding the Warrant)  (as amended, modified or supplemented from time to time, the Related Agreements) and (B) secured by a Master Security Agreement dated as of the date hereof by and among Borrower and the Lender (the "Security Instrument"), encumbering Borrowers interest in certain assets (the "Assets") more particularly described in the Security Instrument.

B.

Borrower and Lender have agreed that all Accounts (as defined in the Security Instrument) be deposited with a financial institution acceptable to Lender into an account designated by and established for the benefit of Lender, and Borrower, and Lender desire to retain Clearing Bank to provide the services described herein.

NOW THEREFORE, for Ten Dollars and in consideration of the mutual promises contained herein and for other good and valuable consideration the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1.

Defined Terms.  In addition to capitalized terms defined elsewhere in this Agreement, the following capitalized terms shall have the respective meanings set forth below:

"Business Day" shall mean any day other than a Saturday, Sunday or any day on which commercial banks in the state in which the Clearing Account has been opened, are authorized or required to close.

"Cash Management Address" shall mean the address to which all Accounts will be sent or deposited.

"Deposit Bank" shall mean the bank or banks selected by Borrower from time to time to maintain the Deposit Account, which shall initially be the bank specified on Exhibit A.

"Designee" shall mean initially Laurus Capital Management, L.L.C., an agent of Lender acting for the benefit of Lender.  Lender may from time to time designate another agent to act as Designee hereunder, upon prior written notice of such designation to Borrower and Clearing Bank.

"Minimum Balance" shall mean $100,000.

"Obligations" shall mean any and all debt, liabilities and obligations of Borrower to Lender pursuant to or in connection with the Loan, including without limitation, the indebtedness evidenced by the Note and any and all debt, liabilities and obligations of Borrower under the Security Instrument, the Securities Purchase Agreement and the Related Agreements.

2.

Duties of the Clearing Bank.

(a)

Clearing Bank shall receive and process any deposits to the Clearing Account, as defined in paragraph 2(c), presented by Borrower or any of its agents at any of Clearing Banks branch offices. Clearing Bank shall not be responsible for the nature of the deposits to the Clearing Account.

(b)

Clearing Bank shall receive and process all mail sent to the Cash Management Address and deposit all Accounts therein contained in the Clearing Account and receive and process all wire transactions to the Clearing Account, in accordance with the lockbox agreement between Borrower and Clearing Bank attached hereto as Exhibit B.

(c)

In order to further secure the performance by Borrower of the Obligations and as a material inducement for Lender to make the Loan, (i) Clearing Bank has established and will maintain a collection account (the "Clearing Account," Account Number 7916655041), into which Clearing Bank shall deposit all Accounts specified in Sections 2(a) and 2(b) received by it with respect to the Assets, (ii) the Clearing Account shall be entitled "Laurus Capital Management - PWCL Clearing Account," provided, that Lender shall have the option to cause Clearing Bank to change the designation of such account; and (iii) Clearing Bank acknowledges that the Clearing Account is subject to a security interest in favor of Lender, and shall designate the Clearing Account on its books as subject to a security interest in favor of Lender. The Clearing Account shall be assigned the federal tax identification number of Borrower.

(d)

Upon request of Lender or Designee, Clearing Bank shall deliver to Lender or Designee, as applicable, copies of all statements and other information concerning the Clearing Account, as Lender or Designee shall reasonably request.

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