CONTAINED IN THE PURCHASE AGREEMENT, DEBTOR OWNS
ALL RIGHT, TITLE, AND INTEREST IN THE COLLATERAL FREE AND CLEAR OF ALL LIENS,
ENCUMBRANCES, AND SECURITY INTERESTS, EXCEPT THE SECURITY INTEREST CREATED BY
THIS AGREEMENT OR OTHERWISE CONTEMPLATED BY THE CELTIC AGREEMENTS.
(F)
FIRST PRIORITY LIEN.
SUBJECT TO THE ACCURACY OF SECURED
PARTY'S REPRESENTATIONS AND WARRANTIES CONTAINED IN THE PURCHASE AGREEMENT, THE
LIENS GRANTED TO SECURED PARTY UNDER THIS AGREEMENT WILL CONSTITUTE A FIRST
PRIORITY LIEN ON THE COLLATERAL UPON THE FILING OF APPROPRIATE FINANCING
STATEMENTS (EXCEPT AS MAY OTHERWISE BE CONTEMPLATED BY THE CELTIC AGREEMENTS AS
EXPLAINED IN SUBSECTION 3(C) ABOVE) AND DEBTOR'S GRANT OF SUCH LIEN TO SECURED
PARTY DOES NOT CONSTITUTE A FRAUDULENT CONVEYANCE UNDER ANY APPLICABLE LAW.
(G)
FULL DISCLOSURE.
NO REPRESENTATION, WARRANTY OR OTHER
STATEMENT OF DEBTOR CONTAINED HEREIN, WHEN TAKEN AS A WHOLE, CONTAINS ANY UNTRUE
STATEMENT OF A
4
material fact or omits to state a material fact necessary to make the statements
contained herein not misleading.
(H)
NO EVENT OF DEFAULT.
NO EVENT OF DEFAULT EXISTS OR
POTENTIALLY EXISTS.
4.
DEBTOR'S COVENANTS.
DEBTOR HEREBY COVENANTS:
(A)
PAY AND PERFORM OBLIGATIONS.
TO PAY AND PERFORM THE
OBLIGATIONS TO SECURED PARTY WHEN THEY ARE DUE.
(B)
PROTECTION OF SECURITY INTEREST.
TO, AT THE REQUEST OF
SECURED PARTY, EXECUTE AND DELIVER TO SECURED PARTY ALL FINANCING STATEMENTS OR
OTHER DOCUMENTS THAT SECURED PARTY MAY REASONABLY REQUEST, IN FORM SATISFACTORY
TO SECURED PARTY, TO PERFECT AND CONTINUE PERFECTING SECURED PARTY'S SECURITY
INTEREST IN THE COLLATERAL.
SECURED PARTY SHALL PAY ALL EXPENSES, INCLUDING
ATTORNEYS FEES AND EXPENSES, RELATED TO THE PERFECTION AND CONTINUATION OF
SECURED PARTY'S SECURITY INTEREST IN THE COLLATERAL.
(C)
TRANSACTIONS INVOLVING COLLATERAL.
NOT TO, WITHOUT THE PRIOR
WRITTEN CONSENT OF SECURED PARTY, (I) SELL, ASSIGN, OR OTHERWISE TRANSFER THE
COLLATERAL EXCEPT IN THE ORDINARY COURSE OF BUSINESS, OR (II) PLEDGE, MORTGAGE,
ENCUMBER, OR OTHERWISE PERMIT THE COLLATERAL TO BE SUBJECT TO ANY LIEN, EXCEPT
EXISTING LIENS, CURRENT TAX LIENS, AND PURCHASE MONEY LIENS.
(D)
COMPLIANCE WITH LAWS.
TO COMPLY WITH ALL LAWS, STATUTES, AND
REGULATIONS PERTAINING TO THE COLLATERAL.
(E)
TAXES, ASSESSMENTS, AND LIENS.
TO PAY WHEN DUE ALL TAXES,
ASSESSMENTS, AND LIENS WITH REGARD TO THE COLLATERAL.
DEBTOR MAY WITHHOLD ANY
SUCH PAYMENT OR MAY ELECT TO CONTEST ANY LIEN IF DEBTOR IS CONDUCTING
APPROPRIATE PROCEEDINGS IN GOOD FAITH TO CONTEST THE OBLIGATION TO PAY AND SO
LONG AS SECURED PARTY'S INTEREST IS NOT JEOPARDIZED.
(F)
MAINTAIN INSURANCE.
TO MAINTAIN SUCH INSURANCE POLICIES AS
SECURED PARTY AND DEBTOR MUTUALLY DEEM REASONABLY NECESSARY OR DESIRABLE TO
CONTINUOUSLY INSURE THE COLLATERAL AGAINST FIRE, THEFT, AND OTHER HAZARDS
DESIGNATED AT ANY TIME BY SECURED PARTY, IN AN AMOUNT NOT LESS THAN ALL SUMS
SECURED HEREBY.
EACH SUCH POLICY SHALL NAME SECURED PARTY AS AN ADDITIONAL
INSURED AND LOSS PAYEE.
(G)
UNLAWFUL USE.
NOT TO USE THE COLLATERAL FOR ANY UNLAWFUL
PURPOSE OR IN ANY WAY THAT WOULD VOID ANY EFFECTIVE INSURANCE.
(H)
CERTAIN EVENTS.
NOT TO EFFECTUATE A CHANGE IN CONTROL (AS
DEFINED BELOW), LIQUIDATE OR DISSOLVE.