INTEREST IN, AND A FIRST LIEN UPON
AND A RIGHT OF SET-OFF AGAINST ALL OF THE BORROWER'S RIGHT, TITLE AND INTEREST
OF WHATSOEVER KIND AND NATURE IN AND TO THE COLLATERAL (THE "SECURITY
INTEREST").
3.
REPRESENTATIONS, WARRANTIES, COVENANTS
AND AGREEMENTS OF THE BORROWER.
THE BORROWER REPRESENTS AND WARRANTS TO, AND
COVENANTS AND AGREES WITH, EACH OF THE SECURED PARTIES AS FOLLOWS:
(A)
THE BORROWER HAS THE REQUISITE CORPORATE
POWER AND AUTHORITY TO ENTER INTO THIS AGREEMENT AND TO OTHERWISE CARRY OUT ITS
OBLIGATIONS THEREUNDER.
THE EXECUTION, DELIVERY AND PERFORMANCE BY THE BORROWER
OF THIS AGREEMENT AND THE FILINGS CONTEMPLATED THEREIN HAVE BEEN DULY AUTHORIZED
BY ALL NECESSARY ACTION ON THE PART OF THE BORROWER AND NO FURTHER ACTION IS
REQUIRED BY THE BORROWER.
(B)
EXCEPT FOR THE SECURITY INTEREST GRANTED
HEREUNDER AND PERMITTED LIENS, THE BORROWER IS THE SOLE OWNER OF ITS RIGHTS IN
THE COLLATERAL, FREE AND CLEAR OF ANY LIENS, SECURITY INTERESTS OR ENCUMBRANCES,
AND IS FULLY AUTHORIZED TO GRANT THE SECURITY INTEREST IN AND TO PLEDGE THE
COLLATERAL.
THERE IS NOT ON FILE IN ANY GOVERNMENTAL OR REGULATORY AUTHORITY,
AGENCY OR RECORDING OFFICE AN EFFECTIVE FINANCING STATEMENT, SECURITY AGREEMENT
OR TRANSFER OR ANY NOTICE OF ANY OF THE FOREGOING (OTHER THAN THOSE THAT HAVE
BEEN FILED IN FAVOR OF THE SECURED PARTIES PURSUANT TO THIS AGREEMENT OR IN
CONNECTION WITH PERMITTED LIENS) COVERING OR AFFECTING ANY OF THE COLLATERAL.
SO LONG AS THIS AGREEMENT SHALL BE IN EFFECT, THE BORROWER SHALL NOT EXECUTE AND
SHALL NOT AUTHORIZE THE FILING OF
IN ANY SUCH OFFICE OR AGENCY ANY SUCH
FINANCING STATEMENT OR OTHER DOCUMENT OR INSTRUMENT (EXCEPT TO THE EXTENT FILED
OR RECORDED IN FAVOR OF THE SECURED PARTIES PURSUANT TO THE TERMS OF THIS
AGREEMENT OR IN CONNECTION WITH PERMITTED LIENS) WITHOUT THE CONSENT OF THE
SECURED PARTIES.
(C)
THE COMPANY REPRESENTS AND WARRANTS THAT IT
HAS NO PLACE OF BUSINESS OR OFFICES WHERE ITS RESPECTIVE BOOKS OF ACCOUNT AND
RECORDS ARE KEPT (OTHER THAN TEMPORARILY AT THE OFFICES OF ITS ATTORNEYS OR
ACCOUNTANTS) OR PLACES WHERE COLLATERAL IS STORED OR LOCATED, EXCEPT AS SET
FORTH ON SCHEDULE A ATTACHED HERETO.
(D)
BORROWER HAS NO KNOWLEDGE OF ANY CLAIM THAT
ANY OF THE COLLATERAL OR THE BORROWER'S USE OF ANY COLLATERAL VIOLATES THE
RIGHTS OF ANY THIRD PARTY.
THERE HAS BEEN NO ADVERSE DECISION OF WHICH THE
BORROWER IS AWARE AS TO THE BORROWER'S EXCLUSIVE (OR NONEXCLUSIVE, AS THE CASE
MAY BE) RIGHTS TO USE THE COLLATERAL IN ANY JURISDICTION, AND, TO THE KNOWLEDGE
OF THE BORROWER THERE IS NO PROCEEDING INVOLVING SAID RIGHTS PENDING OR
THREATENED BEFORE ANY COURT, JUDICIAL BODY, ADMINISTRATIVE OR REGULATORY AGENCY,
ARBITRATOR OR OTHER GOVERNMENTAL AUTHORITY.
5
(E)
THE BORROWER SHALL AT ALL TIMES MAINTAIN
ITS BOOKS OF ACCOUNT AND RECORDS RELATING TO THE COLLATERAL AT ITS PRINCIPAL
PLACE OF BUSINESS AND ITS COLLATERAL AT THE LOCATIONS SET FORTH ON SCHEDULE A
ATTACHED HERETO AND MAY NOT RELOCATE SUCH BOOKS OF ACCOUNT AND RECORDS UNLESS IT
DELIVERS TO EACH OF THE