BY THE CLOSE OF BUSINESS ON EACH BUSINESS DAY INTO AN ACCOUNT WITH THE
COLLATERAL AGENT (THE "CONCENTRATION ACCOUNT") AND ALL COLLECTED AMOUNTS HELD IN
THE CONCENTRATION ACCOUNT SHALL BE APPLIED AS PROVIDED IN SECTION 14.
FOR
PURPOSES HEREOF A "DOMINION EVENT" SHALL MEAN ANY PERIOD (I) COMMENCING ON THE
DATE ON WHICH EITHER (X) AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING OR
(Y) THE SPECIFIED LIQUIDITY AMOUNT (BASED ON THE BORROWING BASE CERTIFICATE LAST
DELIVERED) IS LESS THAN THE GREATER OF (X) $60,000,000 AND (Y) 10% OF THE
AGGREGATE REVOLVING CREDIT COMMITMENTS AND (II) ENDING ON THE FIRST DATE
THEREAFTER ON WHICH (X) NO EVENT OF DEFAULT EXISTS AND (Y) THE SPECIFIED
LIQUIDITY AMOUNT (BASED ON THE BORROWING BASE CERTIFICATE LAST DELIVERED) HAS
BEEN EQUAL TO OR GREATER THAN THE GREATER OF (M) $60,000,000 AND (N) 10% OF THE
AGGREGATE REVOLVING CREDIT COMMITMENTS FOR 30 CONSECUTIVE DAYS (THE "LIQUIDITY
CURE"); PROVIDED, HOWEVER, THAT A LIQUIDITY CURE MAY BE USED AS THE BASIS FOR
THE TERMINATION OF A DOMINION EVENT NO MORE THAN TWO TIMES IN ANY FISCAL YEAR;
PROVIDED FURTHER, HOWEVER, THAT NO DOMINION EVENT SHALL BE DEEMED TO HAVE
OCCURRED FOR THE PERIOD FROM THE CLOSING DATE TO THE DATE WHICH IS 30 DAYS AFTER
THE CLOSING DATE.
4
Section 5. Representations and Warranties.
Each Grantor represents and warrants
as follows:
(A) SUCH GRANTOR'S EXACT LEGAL NAME, LOCATION, CHIEF EXECUTIVE OFFICE, TYPE OF
ORGANIZATION, JURISDICTION OF ORGANIZATION AND ORGANIZATIONAL IDENTIFICATION
NUMBER IS SET FORTH IN SCHEDULE II HERETO.
(B) SUCH GRANTOR IS THE LEGAL AND BENEFICIAL OWNER OF THE COLLATERAL GRANTED OR
PURPORTED TO BE GRANTED BY IT FREE AND CLEAR OF ANY LIEN, CLAIM, OPTION OR RIGHT
OF OTHERS, EXCEPT FOR THE SECURITY INTEREST CREATED UNDER THIS AGREEMENT OR
PERMITTED UNDER THE CREDIT AGREEMENT.
NO EFFECTIVE FINANCING STATEMENT OR OTHER
INSTRUMENT SIMILAR IN EFFECT COVERING ALL OR ANY PART OF SUCH COLLATERAL OR
LISTING SUCH GRANTOR OR ANY TRADE NAME OF SUCH GRANTOR AS DEBTOR IS ON FILE IN
ANY RECORDING OFFICE, EXCEPT SUCH AS MAY HAVE BEEN FILED IN FAVOR OF THE
COLLATERAL AGENT RELATING TO THE LOAN DOCUMENTS OR AS OTHERWISE PERMITTED UNDER
THE CREDIT AGREEMENT.
(C) ALL OF THE INVENTORY OF SUCH GRANTOR ARE LOCATED AT THE PLACES SPECIFIED
THEREFOR IN SCHEDULE III HERETO.
(D) NONE OF THE RECEIVABLES IS EVIDENCED BY A PROMISSORY NOTE OR OTHER
INSTRUMENT THAT HAS NOT BEEN DELIVERED TO THE COLLATERAL AGENT.
(E) SUCH GRANTOR HAS NO DEPOSIT ACCOUNTS, OTHER THAN THE PLEDGED DEPOSIT
ACCOUNTS LISTED ON SCHEDULE I HERETO.
(F) THIS AGREEMENT CREATES IN FAVOR OF THE COLLATERAL AGENT FOR THE BENEFIT OF
THE SECURED PARTIES A VALID SECURITY INTEREST IN THE COLLATERAL GRANTED BY SUCH
GRANTOR, SECURING THE PAYMENT OF THE SECURED OBLIGATIONS; UPON THE FILING OF
FINANCING STATEMENTS, ALL FILINGS AND OTHER ACTIONS NECESSARY TO PERFECT THE
SECURITY INTEREST IN THE COLLATERAL GRANTED BY SUCH GRANTOR WILL HAVE BEEN DULY
MADE OR TAKEN AND ARE IN FULL FORCE AND EFFECT; AND SUCH SECURITY