OF
SETOFF OF ANY KIND EXCEPT PERMITTED LIEN (AS DEFINED IN THE LOAN AGREEMENT) AND
THE LIENS IN FAVOR OF SECURED PARTY CREATED BY THIS AGREEMENT; (C) EXCEPT FOR
PERMITTED LIENS OR AS OTHERWISE HEREIN PROVIDED, DEBTOR WILL NOT HEREAFTER
WITHOUT SECURED PARTY'S PRIOR WRITTEN CONSENT SELL, PLEDGE, ENCUMBER, ASSIGN OR
OTHERWISE DISPOSE OF ANY OF THE COLLATERAL OR PERMIT ANY RIGHT OF SETOFF, LIEN
OR SECURITY INTEREST TO EXIST THEREON EXCEPT TO SECURED PARTY; (D) DEBTOR WILL
DEFEND THE COLLATERAL AGAINST ALL CLAIMS AND DEMANDS OF ALL PERSONS AT ANY TIME
CLAIMING THE SAME OR ANY INTEREST THEREIN;
(E) EACH ACCOUNT AND GENERAL
INTANGIBLE, IF INCLUDED IN THE DEFINITION OF COLLATERAL, IS GENUINE AND
ENFORCEABLE IN ACCORDANCE WITH ITS TERMS AND DEBTOR WILL DEFEND THE SAME AGAINST
ALL CLAIMS, DEMANDS, SETOFFS AND COUNTERCLAIMS AT ANY TIME ASSERTED; AND (F) AT
THE TIME ANY ACCOUNT OR GENERAL INTANGIBLE BECOMES SUBJECT TO THIS AGREEMENT,
SUCH ACCOUNT OR GENERAL INTANGIBLE WILL BE A GOOD AND VALID ACCOUNT REPRESENTING
A BONA FIDE SALE OF GOODS OR SERVICES BY DEBTOR AND SUCH GOODS WILL HAVE BEEN
SHIPPED TO THE RESPECTIVE ACCOUNT DEBTORS OR THE SERVICES WILL HAVE BEEN
PERFORMED FOR THE RESPECTIVE ACCOUNT DEBTORS, AND NO SUCH ACCOUNT OR GENERAL
INTANGIBLE WILL BE SUBJECT TO ANY CLAIM FOR CREDIT, ALLOWANCE OR ADJUSTMENT BY
ANY ACCOUNT DEBTOR OR ANY SETOFF, DEFENSE OR COUNTERCLAIM.
2
5.
GRANTORS' COVENANTS.
EACH GRANTOR COVENANTS THAT IT SHALL:
(A)
FROM TIME TO TIME AND AT ALL REASONABLE TIMES ALLOW THE BANK, BY
OR THROUGH ANY OF ITS OFFICERS, AGENTS, ATTORNEYS, OR ACCOUNTANTS, TO EXAMINE OR
INSPECT THE COLLATERAL, AND OBTAIN VALUATIONS AND AUDITS OF THE COLLATERAL, AT
SUCH GRANTOR'S EXPENSE, WHEREVER LOCATED.
EACH GRANTOR SHALL DO, OBTAIN, MAKE,
EXECUTE AND DELIVER ALL SUCH ADDITIONAL AND FURTHER ACTS, THINGS, DEEDS,
ASSURANCES AND INSTRUMENTS AS THE BANK MAY REQUIRE TO VEST IN AND ASSURE TO THE
BANK ITS RIGHTS HEREUNDER AND IN OR TO THE COLLATERAL, AND THE PROCEEDS THEREOF,
PROVIDED, HOWEVER, THAT WITH RESPECT TO ANY AGREEMENTS TO BE ENTERED INTO BY
THIRD PARTIES, INCLUDING WAIVERS FROM LANDLORDS, WAREHOUSEMEN AND MORTGAGEES,
GRANTORS SHALL BE REQUIRED TO USE GOOD FAITH AND COMMERCIALLY REASONABLE EFFORTS
TO OBTAIN SUCH EXECUTED AGREEMENTS.
EACH GRANTOR AGREES THAT, UPON THE
OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, THE BANK HAS THE
RIGHT TO NOTIFY (ON INVOICES OR OTHERWISE) ACCOUNT DEBTORS AND OTHER OBLIGORS OR
PAYORS ON ANY COLLATERAL OF ITS ASSIGNMENT TO THE BANK, AND THAT ALL PAYMENTS
THEREON SHOULD BE MADE DIRECTLY TO THE BANK, AND THAT THE BANK HAS FULL POWER
AND AUTHORITY TO COLLECT, COMPROMISE, ENDORSE, SELL OR OTHERWISE DEAL WITH THE
COLLATERAL IN ITS OWN NAME OR THAT OF SUCH GRANTOR;
(B)
KEEP THE COLLATERAL IN GOOD ORDER AND REPAIR AT ALL TIMES AND
IMMEDIATELY NOTIFY THE BANK OF ANY EVENT CAUSING A MATERIAL LOSS OR DECLINE IN
VALUE OF THE COLLATERAL, WHETHER OR NOT COVERED BY INSURANCE, AND THE AMOUNT OF
SUCH LOSS OR DEPRECIATION;
(C)
ONLY USE