ON THE COLLATERAL.
ONCE ANY SUCH NOTICE HAS
BEEN GIVEN TO ANY ACCOUNT DEBTOR OR OTHER PERSON OBLIGATED ON THE COLLATERAL,
NONE OF THE GRANTORS SHALL GIVE ANY CONTRARY INSTRUCTIONS TO SUCH ACCOUNT DEBTOR
OR OTHER PERSON WITHOUT AGENT'S PRIOR WRITTEN CONSENT.
4
(C)
AGENT MAY AT ANY TIME IN AGENT'S OWN NAME, IN THE NAME OF A
NOMINEE OF AGENT OR IN THE NAME OF ANY GRANTOR COMMUNICATE (BY MAIL, TELEPHONE,
FACSIMILE OR OTHERWISE) WITH ACCOUNT DEBTORS, PARTIES TO CONTRACTUAL OBLIGATIONS
AND OBLIGORS IN RESPECT OF INSTRUMENTS TO VERIFY WITH SUCH PERSONS, TO AGENT'S
SATISFACTION, THE EXISTENCE, AMOUNT, TERMS OF, AND ANY OTHER MATTER RELATING TO,
ACCOUNTS, INSTRUMENTS, CHATTEL PAPER AND/OR PAYMENT INTANGIBLES; PROVIDED, THAT
IF NO EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, AGENT SHALL ONLY USE A
NOMINEE NAME FOR SUCH COMMUNICATION.
IF AN EVENT OF DEFAULT SHALL HAVE OCCURRED
AND BE CONTINUING, EACH GRANTOR, AT ITS OWN EXPENSE, SHALL CAUSE THE INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS THEN ENGAGED BY SUCH 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 SUCH 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.
EACH GRANTOR, AT ITS
OWN EXPENSE, SHALL DELIVER TO AGENT THE RESULTS OF EACH PHYSICAL VERIFICATION,
IF ANY, WHICH SUCH 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
Each Grantor, jointly and severally, represents and warrants that:
(A)
EACH 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 (OTHER THAN THOSE INSTRUMENTS AND STATEMENTS AGENT IS
AUTHORIZED TO TERMINATE AND RELEASE IN FULL UPON THE INITIAL FUNDING OF THE
LOANS) IS ON FILE OR OF RECORD IN ANY PUBLIC OFFICE, EXCEPT SUCH AS MAY HAVE
BEEN FILED (I) BY ANY GRANTOR IN FAVOR OF AGENT PURSUANT TO THIS AGREEMENT OR
THE OTHER LOAN DOCUMENTS AND (II) IN CONNECTION WITH ANY OTHER PERMITTED
ENCUMBRANCES.
(C)
THIS AGREEMENT IS EFFECTIVE TO CREATE A VALID AND CONTINUING LIEN
ON AND, UPON THE FILING OF THE APPROPRIATE FINANCING STATEMENTS IN THE FILING
OFFICES LISTED ON SCHEDULE I HERETO OR THE ENTERING INTO OF THREE-PARTY CONTROL
AGREEMENTS, AS APPLICABLE, 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