ITS RIGHTS TO
OWN OR USE ANY INTELLECTUAL PROPERTY EXCEPT AS COULD NOT BE REASONABLY EXPECTED
TO RESULT IN A MATERIAL ADVERSE EFFECT, IN EACH CASE INDIVIDUALLY OR IN THE
AGGREGATE.
3.12.7
THE GRANTOR HAS NOT RECEIVED ANY WRITTEN NOTICE THAT REMAINS OUTSTANDING
CHALLENGING THE VALIDITY, ENFORCEABILITY, OR OWNERSHIP OF ANY INTELLECTUAL
PROPERTY EXCEPT WHERE THOSE CHALLENGES COULD NOT REASONABLY BE EXPECTED TO
RESULT IN A MATERIAL ADVERSE EFFECT, AND TO THE GRANTOR'S KNOWLEDGE AT THE DATE
HEREOF THERE ARE NO FACTS UPON WHICH SUCH A CHALLENGE COULD VALIDLY BE MADE.
3.12.8
THE GRANTOR OWNS DIRECTLY OR IS ENTITLED TO USE, BY LICENSE OR
OTHERWISE, ALL INTELLECTUAL PROPERTY NECESSARY FOR THE CONDUCT OF THE GRANTOR'S
BUSINESS AS CONDUCTED AS OF THE DATE OF THIS AGREEMENT.
3.12.9
THE GRANTOR USES ADEQUATE STANDARDS OF QUALITY IN THE MANUFACTURE,
DISTRIBUTION, AND SALE OF ALL PRODUCTS SOLD AND IN THE PROVISION OF ALL SERVICES
RENDERED UNDER OR IN CONNECTION WITH ALL TRADEMARKS AND HAS TAKEN ALL
COMMERCIALLY REASONABLE ACTION NECESSARY TO INSURE THAT ALL LICENSEES OF THE
TRADEMARKS OWNED OR LICENSED BY THE GRANTOR USE SUCH ADEQUATE STANDARDS OF
QUALITY, EXCEPT WHERE THE FAILURE TO USE ADEQUATE STANDARDS OF QUALITY COULD NOT
REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.
3.12.10
THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THE NOTE AND THIS
SECURITY AGREEMENT WILL NOT RESULT IN THE TERMINATION OR MATERIAL IMPAIRMENT OF
ANY OF THE INTELLECTUAL PROPERTY.
3.13.
INSURANCE.
EXHIBIT "H" CONTAINS A DESCRIPTION OF ALL INSURANCE WHICH THE GRANTOR MAINTAINS
OR HAS MAINTAINED ON ITS BEHALF.
ALL OF SUCH INSURANCE IS IN FULL FORCE AND
EFFECT.
ARTICLE IV
COVENANTS
From the date of this Security Agreement and thereafter until this Security
Agreement is terminated, the Grantor agrees:
9
4.1.
GENERAL.
4.1.1
INSPECTION.
THE GRANTOR WILL PERMIT THE SECURED PARTY, BY ITS
REPRESENTATIVES AND AGENTS (I) TO INSPECT THE COLLATERAL, (II) TO EXAMINE AND
MAKE COPIES OF THE RECORDS OF THE GRANTOR RELATING TO THE COLLATERAL AND
(III) TO DISCUSS THE COLLATERAL AND THE RELATED RECORDS OF THE GRANTOR WITH, AND
TO BE ADVISED AS TO THE SAME BY, THE GRANTOR'S OFFICERS AND EMPLOYEES (AND, IN
THE CASE OF ANY RECEIVABLE AFTER THE OCCURRENCE AND DURING THE CONTINUANCE OF AN
EVENT OF DEFAULT, WITH ANY PERSON OR ENTITY WHICH IS OR MAY BE OBLIGATED
THEREON), ALL AT SUCH REASONABLE TIMES AND INTERVALS DURING GRANTOR'S REGULAR
BUSINESS HOURS AS THE SECURED PARTY MAY DETERMINE, UPON REASONABLE PRIOR NOTICE
AND ALL AT THE GRANTOR'S EXPENSE.
4.1.2
TAXES.
THE GRANTOR WILL PAY WHEN DUE ALL TAXES, ASSESSMENTS AND
GOVERNMENTAL CHARGES AND LEVIES UPON THE COLLATERAL OWNED BY THE GRANTOR, EXCEPT
(I) THOSE WHICH ARE BEING CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS AND
WITH RESPECT TO WHICH ADEQUATE RESERVES HAVE BEEN SET ASIDE IN ACCORDANCE WITH
GAAP AND WITH RESPECT TO WHICH NO LIEN EXISTS, AND (II) THOSE WHICH BY REASON OF
THE AMOUNT INVOLVED OR THE REMEDIES AVAILABLE TO THE TAXING AUTHORITY COULD NOT
REASONABLY BE EXPECTED TO HAVE A MATERIAL