NO FACTS, EVENTS OR
OCCURRENCES WHICH IN ANY WAY IMPAIR THE VALIDITY OR ENFORCEABILITY THEREOF OR
COULD REASONABLY BE EXPECTED TO REDUCE THE AMOUNT PAYABLE THEREUNDER AS SHOWN ON
SUCH GRANTOR'S BOOKS AND RECORDS AND ANY INVOICES, STATEMENTS AND OTHER REPORTS
DELIVERED TO THE ADMINISTRATIVE AGENT WITH RESPECT THERETO; (IV) SUCH GRANTOR
HAS NOT RECEIVED ANY NOTICE OF PROCEEDINGS OR ACTIONS WHICH ARE THREATENED OR
PENDING AGAINST ANY ACCOUNT DEBTOR WHICH MIGHT RESULT IN ANY ADVERSE CHANGE IN
SUCH ACCOUNT DEBTOR'S FINANCIAL CONDITION; AND (V) SUCH GRANTOR HAS NO KNOWLEDGE
THAT ANY ACCOUNT DEBTOR IS UNABLE GENERALLY TO PAY ITS DEBTS AS THEY BECOME
DUE.
FURTHER WITH RESPECT TO THE ACCOUNTS (I) THE AMOUNTS SHOWN ON SUCH RECORDS
AND ALL INVOICES, STATEMENTS AND COLLATERAL REPORTS WHICH MAY BE DELIVERED TO
THE ADMINISTRATIVE AGENT WITH RESPECT THERETO ARE ACTUALLY AND ABSOLUTELY OWING
TO SUCH GRANTOR AS INDICATED THEREON AND ARE NOT IN ANY WAY CONTINGENT; AND (II)
TO SUCH GRANTOR'S KNOWLEDGE, ALL ACCOUNT DEBTORS HAVE THE CAPACITY TO CONTRACT.
(I)
WITH RESPECT TO ANY MATERIAL INVENTORY, (I) SUCH INVENTORY IS
LOCATED AT ONE OF THE GRANTOR'S LOCATIONS SET FORTH ON THE PERFECTION
CERTIFICATE, (II) NO INVENTORY IS NOW, OR SHALL AT ANY TIME OR TIMES HEREAFTER
BE STORED AT ANY OTHER LOCATION WITHOUT THE ADMINISTRATIVE AGENT'S REASONABLE
PRIOR CONSENT, AND IF THE ADMINISTRATIVE AGENT GIVES SUCH CONSENT, SUCH GRANTOR
WILL CONCURRENTLY THEREWITH OBTAIN, TO THE EXTENT REQUIRED BY THE AMENDED AND
RESTATED CREDIT AGREEMENT, BAILEE, LANDLORD AND MORTGAGEE AGREEMENTS, (III) SUCH
GRANTOR HAS GOOD, INDEFEASIBLE AND MERCHANTABLE TITLE TO SUCH INVENTORY AND SUCH
INVENTORY IS NOT SUBJECT TO ANY LIEN OR SECURITY INTEREST OR DOCUMENT WHATSOEVER
EXCEPT FOR THE LIEN GRANTED TO THE ADMINISTRATIVE AGENT AND EXCEPT FOR LIENS
EXPRESSLY PERMITTED UNDER SECTION 7.2 OF THE AMENDED AND RESTATED CREDIT
AGREEMENT OR AS SET FORTH IN THE PERFECTION CERTIFICATE, (IV) EXCEPT AS
SPECIFICALLY DISCLOSED TO THE ADMINISTRATIVE AGENT, SUCH INVENTORY IS OF GOOD
AND MERCHANTABLE QUALITY, FREE FROM ANY DEFECTS IN ALL MATERIAL RESPECTS, (V)
SUCH INVENTORY IS NOT SUBJECT TO ANY LICENSING, PATENT, ROYALTY, TRADEMARK,
TRADE NAME OR COPYRIGHT AGREEMENTS WITH ANY THIRD PARTIES WHICH WOULD REQUIRE
ANY
8
consent of any third party upon sale or disposition of that Inventory or the
payment of any monies to any third party upon such sale or other disposition,
and (vi) to the Grantors' knowledge, the completion of manufacture, sale or
other disposition of such Inventory by the Administrative Agent following an
Event of Default shall not require the consent of any Person and shall not
constitute a breach or default under any contract or agreement to which such
Grantor is a party or to which such property is subject.
(J)
SUCH GRANTOR DOES NOT HAVE ANY INTEREST IN, OR TITLE TO, ANY
PATENT, TRADEMARK OR COPYRIGHT EXCEPT AS SET FORTH IN THE PERFECTION
CERTIFICATE.
THIS SECURITY AGREEMENT IS EFFECTIVE TO CREATE A VALID AND
CONTINUING LIEN ON AND, UPON FILING OF THE COPYRIGHT SECURITY AGREEMENTS WITH
THE UNITED STATES COPYRIGHT