TITLE TO THE COLLATERAL
FREE AND CLEAR OF ANY OTHER LIENS, ADVERSE CLAIMS OR OPTIONS OTHER THAN
PERMITTED ENCUMBRANCES.
EACH DEBTOR HAS RIGHTS IN OR THE RIGHT, POWER AND
AUTHORITY TO GRANT A SECURITY INTEREST IN THE COLLATERAL TO SECURED PARTY IN THE
MANNER PROVIDED HEREIN, FREE AND
4
CLEAR OF ANY OTHER LIENS, ADVERSE CLAIMS AND OPTIONS OTHER THAN PERMITTED
ENCUMBRANCES.
NO OTHER LIEN, ADVERSE CLAIM OR OPTION HAS BEEN CREATED BY ANY
DEBTOR OR IS KNOWN BY ANY DEBTOR TO EXIST WITH RESPECT TO ANY COLLATERAL OTHER
THAN PERMITTED ENCUMBRANCES.
NO FINANCING STATEMENT OR OTHER SECURITY
INSTRUMENT IS ON FILE IN ANY JURISDICTION COVERING ANY PART OF THE COLLATERAL
OTHER THAN THOSE IN FAVOR OF SECURED PARTY OTHER THAN PERMITTED ENCUMBRANCES.
AT THE TIME THE SECURITY INTEREST IN FAVOR OF SECURED PARTY ATTACHES TO ANY
AFTER-ACQUIRED PROPERTY INCLUDED WITHIN THE COLLATERAL, DEFENSIBLE TITLE TO SUCH
AFTER-ACQUIRED PROPERTY, FREE AND CLEAR OF ANY OTHER LIENS, ADVERSE CLAIMS OR
OPTIONS (OTHER THAN PERMITTED ENCUMBRANCES) WILL BE VESTED IN A DEBTOR.
SECTION 3.2
STATUS OF ACCOUNTS.
EACH ACCOUNT HEREAFTER ARISING WILL
REPRESENT, AND TO THE BEST KNOWLEDGE OF SUCH DEBTOR EACH ACCOUNT NOW EXISTING
REPRESENTS, THE VALID AND LEGALLY ENFORCEABLE OBLIGATIONS OF A BONA FIDE ACCOUNT
DEBTOR AND IS NOT AND WILL NOT BE SUBJECT TO CONTRA ACCOUNTS, SET-OFFS, DEFENSES
OR COUNTERCLAIMS BY OR AVAILABLE TO ACCOUNT DEBTORS OBLIGATED ON THE ACCOUNTS
EXCEPT AS DISCLOSED TO SECURED PARTY IN WRITING; AND THE AMOUNT SHOWN AS TO EACH
ACCOUNT ON SUCH DEBTOR'S BOOKS WILL BE THE TRUE AND UNDISPUTED AMOUNT OWING AND
UNPAID THEREON, SUBJECT TO ANY DISCOUNTS, ALLOWANCES, REBATES, CREDITS AND
ADJUSTMENTS TO WHICH THE ACCOUNT DEBTOR HAS A RIGHT AND WHICH HAVE ARISEN IN
SUCH DEBTOR'S ORDINARY COURSE OF BUSINESS, OR WHICH HAVE OTHERWISE BEEN
DISCLOSED TO SECURED PARTY IN WRITING.
SECTION 3.3
STATUS OF RELATED RIGHTS.
ALL RELATED RIGHTS ARE, AND
THOSE HEREAFTER ARISING WILL BE, VALID AND GENUINE.
SECTION 3.4
INVENTORY NOT COVERED BY OTHER DOCUMENTS.
NONE OF THE
INVENTORY IS, AND AT THE TIME THE SECURITY INTEREST IN FAVOR OF SECURED PARTY
ATTACHES NONE OF THE INVENTORY HEREAFTER ACQUIRED WILL BE, COVERED BY ANY
DOCUMENT (AS DEFINED IN THE CODE).
SECTION 3.5
NAME; ORGANIZATION; AUTHORITY.
THE EXACT LEGAL NAME OF
EACH DEBTOR IS SET OUT IN THE OPENING PARAGRAPH OF THIS AGREEMENT.
EACH DEBTOR
IS A CORPORATION OR A LIMITED LIABILITY COMPANY AS NOTED IN THE PREAMBLE HEREOF,
DULY ORGANIZED, VALIDLY EXISTING, AND IN GOOD STANDING UNDER THE LAWS OF THE
JURISDICTION OF ITS ORGANIZATION.
THE EXECUTION, DELIVERY AND PERFORMANCE OF
THIS AGREEMENT HAS BEEN DULY AUTHORIZED BY ALL COMPANY ACTION, AND THIS
AGREEMENT CONSTITUTES THE VALID AND BINDING OBLIGATION OF EACH DEBTOR,
ENFORCEABLE AGAINST EACH DEBTOR IN ACCORDANCE WITH ITS TERMS, EXCEPT AS THE
ENFORCEABILITY THEREOF MAY BE LIMITED OR AFFECTED BY BANKRUPTCY, INSOLVENCY,
REORGANIZATION, MORATORIUM OR SIMILAR LAWS AFFECTING THE ENFORCEMENT OF
CREDITORS RIGHTS GENERALLY AND BY GENERAL EQUITABLE PRINCIPLES.
SECTION 3.6
LOCATION.
AS OF THE DATE HEREOF, THE CHIEF EXECUTIVE
OFFICE AND CHIEF