AND/OR PAYMENT INTANGIBLES.
IF A DEFAULT OR EVENT OF
DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, GRANTOR, AT ITS OWN EXPENSE,
SHALL CAUSE THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS THEN ENGAGED BY
4
Grantor to prepare and deliver to Agent and each Lender at any time and from
time to time promptly upon Agent's request the following reports with respect to
Grantor: (i) a reconciliation of all Accounts; (ii) an aging of all Accounts;
(iii) trial balances; and (iv) a test verification of such Accounts as Agent may
request.
Grantor, at its own expense, shall deliver to Agent the results of
each physical verification, if any, which Grantor may in its discretion have
made, or caused any other Person to have made on its behalf, of all or any
portion of its Inventory.
4.
REPRESENTATIONS AND WARRANTIES.
GRANTOR REPRESENTS AND WARRANTS THAT:
(A)
GRANTOR HAS RIGHTS IN AND THE POWER TO
TRANSFER EACH ITEM OF THE COLLATERAL UPON WHICH IT PURPORTS TO GRANT A LIEN
HEREUNDER FREE AND CLEAR OF ANY AND ALL LIENS OTHER THAN PERMITTED ENCUMBRANCES.
(B)
NO EFFECTIVE SECURITY AGREEMENT, FINANCING
STATEMENT, EQUIVALENT SECURITY OR LIEN INSTRUMENT OR CONTINUATION STATEMENT
COVERING ALL OR ANY PART OF THE COLLATERAL IS ON FILE OR OF RECORD IN ANY PUBLIC
OFFICE, EXCEPT SUCH AS MAY HAVE BEEN FILED (I) BY GRANTOR IN FAVOR OF AGENT
PURSUANT TO THIS SECURITY AGREEMENT OR THE OTHER LOAN DOCUMENTS, AND (II)
IN
CONNECTION WITH ANY OTHER PERMITTED ENCUMBRANCES.
(C)
THIS SECURITY AGREEMENT IS EFFECTIVE TO
CREATE A VALID AND CONTINUING LIEN ON AND, UPON THE FILING OF THE APPROPRIATE
FINANCING STATEMENTS LISTED ON SCHEDULE I HERETO, A PERFECTED LIEN IN FAVOR OF
AGENT, FOR ITSELF AND THE BENEFIT OF LENDERS, ON THE COLLATERAL WITH RESPECT TO
WHICH A LIEN MAY BE PERFECTED BY FILING PURSUANT TO THE CODE.
SUCH LIEN IS
PRIOR TO ALL OTHER LIENS, EXCEPT PERMITTED ENCUMBRANCES THAT WOULD BE PRIOR TO
LIENS IN FAVOR OF AGENT FOR THE BENEFIT OF AGENT AND LENDERS AS A MATTER OF LAW,
AND IS ENFORCEABLE AS SUCH AS AGAINST ANY AND ALL CREDITORS OF AND PURCHASERS
FROM GRANTOR (OTHER THAN PURCHASERS AND LESSEES OF INVENTORY IN THE ORDINARY
COURSE OF BUSINESS AND NON-EXCLUSIVE LICENSEES OF GENERAL INTANGIBLES IN THE
ORDINARY COURSE OF BUSINESS).
EXCEPT AS SET FORTH IN SECTIONS 4(D) AND 4(H)
HEREOF, ALL ACTION BY GRANTOR NECESSARY OR DESIRABLE TO PROTECT AND PERFECT SUCH
LIEN ON EACH ITEM OF THE COLLATERAL HAS BEEN DULY TAKEN.
NO AUTHORIZATION,
APPROVAL OR CONSENT IS REQUIRED TO BE OBTAINED FROM ANY GOVERNMENTAL AUTHORITY
OR OTHER PERSON FOR THE GRANT OF THE SECURITY INTEREST HEREIN, THE PERFECTION
THEREOF OR THE EXERCISE BY AGENT OF ITS RIGHTS AND REMEDIES HEREUNDER.
(D)
SCHEDULE II HERETO LISTS ALL STOCK, MATERIAL
INSTRUMENTS, DOCUMENTS, LETTER OF CREDIT RIGHTS AND CHATTEL PAPER IN WHICH
GRANTOR HAS AN INTEREST AS OF THE DATE HEREOF.
ALL ACTION BY GRANTOR NECESSARY
OR DESIRABLE TO PROTECT AND PERFECT THE LIEN OF AGENT ON EACH ITEM SET FORTH ON
SCHEDULE