Common use of Status of Receivables and Other Collateral Clause in Contracts

Status of Receivables and Other Collateral. The Borrower represents and warrants that (a) it is and shall be the sole owner, free and clear of all Liens except in favor of the Lender or otherwise permitted under Section 8.2 hereunder, of and fully authorized to sell, transfer, pledge and/or grant a security interest in each and every item of all Collateral owned by it; (b) each Eligible Receivable is and shall be a good and valid account representing an undisputed bona fide indebtedness incurred or an amount indisputably owed by the account debtor therein named, for a fixed sum as set forth in the invoice relating thereto with respect to an absolute sale and delivery upon the specified terms of goods sold by the Borrower, or work, labor and/or services theretofore rendered by the Borrower; (c) no Eligible Receivable is or shall be subject to any defense, offset, counterclaim, discount or allowance (as of the time of its creation) except as may be stated in the invoice relating thereto or discounts and allowances as may be customary in the Borrower's business; (d) none of the transactions underlying or giving rise to any Eligible Receivable shall violate any applicable state or federal laws or regulations, and all documents relating to any Receivable shall be legally sufficient under such laws or regulations and shall be legally enforceable in accordance with their terms, subject, as to enforceability, to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creators' rights generally; (e) to the best of the Borrower's knowledge, each account debtor, guarantor or endorser with respect to any Eligible Receivable is solvent and able to pay all Receivables on which it is obligated in full when due; (f) all documents and agreements relating to Eligible Receivables shall be true and correct and in all respects what they purport to be; (g) to the best of the Borrower's knowledge, all signatures and endorsements that appear on all documents and agreements relating to Eligible Receivables shall be genuine and all signatories and endorsers with respect thereto shall have full capacity to contract; (h) it shall maintain books and records pertaining to the Collateral owned by it in detail, form and scope as the Lender shall reasonably require; (i) the Borrower will immediately notify the Lender if any Receivables arise out of contracts with the United States or any department, agency or instrumentality thereof, and will, upon request from the Lender, execute any instruments and take any steps required by the Lender in order that all monies due or to become due under any such contract shall be assigned to the Lender and notice thereof given under the Federal Assignment of Claims Act; (j) it will, immediately upon learning thereof, report to the Lender any material loss or destruction of, or substantial damage to, any of the Collateral, and any other matters adversely affecting the value, enforceability or collectibility of any of the Collateral; (k) if any amount payable under or in connection with any Receivable is evidenced by a promissory note or other instrument, as such terms are defined in the Uniform Commercial Code, such promissory note or instrument shall be immediately pledged, endorsed, assigned and delivered to the Lender as additional collateral; (l) it shall not re-date any invoice or sale or make sales on extended dating beyond that customary in the industry; and (m) it shall not be entitled to pledge the Lender's credit on any purchases or for any purpose whatsoever.

Status of Receivables and Other Collateral. The Borrower covenants, represents and warrants that that: (a) it is and shall be the sole owner, free and clear of all Liens except in favor of the Lender Agent or otherwise permitted under Section 8.2 hereunder, of and fully authorized to sell, transfer, pledge and/or grant a security interest in each and every item of all said Collateral owned by it; (b) each it will not seek to qualify, or maintain the qualification of, a Receivable as an Eligible Receivable is and unless such Receivable shall be a good and valid account representing an undisputed bona fide indebtedness incurred or an amount indisputably owed by the account debtor Customer therein named, for a fixed sum as set forth in the invoice relating thereto with respect to an absolute sale and delivery upon the specified terms of goods sold by the Borrower, or work, labor and/or services theretofore rendered by the Borrower; (c) no it will not seek to qualify, or maintain the qualification of, a Receivable as an Eligible Receivable unless such Receivable or portion thereof which it seeks to so qualify is or shall be not subject to any defense, offset, counterclaim, discount or allowance (as of the time of its creation) except as may be stated in the invoice relating thereto or discounts and allowances as may be customary in the Borrower's business; (d) none of the transactions underlying or giving rise to any Eligible Receivable shall violate any applicable state or federal Federal laws or regulationsregulations in any material respect, and all documents relating to any Eligible Receivable shall be legally sufficient under such laws or regulations and shall be legally enforceable in accordance with their terms, subject, terms (subject as to enforceability, enforcement of remedies to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or and other similar laws affecting creatorsthe enforcement of creditors' rights generallygenerally from time to time in effect and to general principles of equity); (e) it will not seek to qualify, or maintain the qualification of, a Receivable as an Eligible Receivable unless to the best of the Borrower's its knowledge, each account debtorCustomer, guarantor or endorser with respect to any Eligible such Receivable is solvent and will continue to be fully able to pay all Eligible Receivables on which it is obligated in full when due; (f) it will not seek to qualify, or maintain the qualification of, a Receivable as an Eligible Receivable unless all documents and agreements relating to Eligible Receivables such Receivable shall be true and correct and in all respects what they purport to be; (g) it will not seek to qualify, or maintain the qualification of, a Receivable as an Eligible Receivable unless to the best of the Borrower's its knowledge, all signatures and endorsements that appear on all documents and agreements relating to Eligible Receivables such Receivable shall be genuine and all signatories and endorsers with respect thereto shall have full capacity to contract; (h) it shall maintain books and records pertaining to the Collateral owned by it in such detail, form and scope as the Lender shall reasonably requireare customary for businesses similarly situated; (i) it will not seek to qualify, or maintain the Borrower will qualification of, a Receivable as an Eligible Receivable unless it shall have immediately notify notified the Lender if Agent as to any Receivables arise accounts arising out of contracts with the United States or any department, agency or instrumentality thereof, and will, upon request from the Lender, execute shall have executed any instruments and take taken any steps required by the Lender Agent in order that all monies due or to become due under any such contract shall be assigned to the Lender Agent and notice thereof given to the United States Government under the Federal Assignment of Claims Act; (j) it will, immediately upon learning thereof, report to the Lender Agent any material loss or destruction of, or substantial damage to, any of the Collateral, and any other matters adversely affecting the value, enforceability or collectibility collectability of any of the Collateral; (k) if any amount payable under or in connection with any Receivable in excess of $100,000 is evidenced by a promissory note or other instrument, as such terms are defined in the Uniform Commercial Code, such promissory note or instrument shall be immediately pledged, endorsed, assigned and delivered to the Lender Agent as additional collateral; (l) it shall not re-date any invoice or sale or make sales on extended dating beyond that customary in the industry; and (m) it shall conduct a physical count of its inventory at such intervals as the Collateral Monitor (in consultation with the Agent) may request and promptly supply the Collateral Monitor and the Agent with a copy of such counts accompanied by a report of the value (based on the lower of cost (on a FIFO basis) or market value) of such inventory; and (n) it is not nor shall it be entitled to pledge the Lender's Lenders' credit on any purchases or for any purpose whatsoever.

Status of Receivables and Other Collateral. The Borrower covenants, represents and warrants that that: (a) it is and shall be the sole owner, free and clear of all Liens except in favor of the Lender Agent or otherwise permitted under Section 8.2 hereunder, of and fully authorized to sell, transfer, pledge and/or grant a security interest in each and every item of all said Collateral owned by it; (b) each Eligible Receivable is and shall be a good and valid account representing an undisputed bona fide indebtedness incurred or an amount indisputably owed by the account debtor therein named, for a fixed sum as set forth in the invoice relating thereto with respect to an absolute sale and delivery upon the specified terms of goods sold by the Borrower, or work, labor and/or services theretofore rendered by the Borrower; (c) no Eligible Receivable is or shall be subject to any defense, offset, counterclaim, discount or allowance (as of the time of its creation) except as may be stated in the invoice relating thereto or discounts and allowances as may be customary in the Borrower's business; (d) none of the transactions underlying or giving rise to any Eligible Receivable shall violate any applicable state or federal laws or regulations, and all documents relating to any Eligible Receivable shall be legally sufficient under such laws or regulations and shall be legally enforceable in accordance with their terms, subject, as to enforceability, to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creators' rights generally; (ec) to the best of the Borrower's knowledgeits knowledge without inquiry, each account debtorCustomer, guarantor or endorser with respect to any Eligible Receivable is solvent and will continue to be fully able to pay all Eligible Receivables on which it is obligated in full when due; (fd) all documents and agreements relating to Eligible Receivables shall be true and correct and in all respects what they purport to be; (ge) to the best of the Borrower's its knowledge, all signatures and endorsements that appear on all documents and agreements relating to Eligible Receivables shall be genuine and all signatories and endorsers with respect thereto shall have full capacity to contract; (hf) it shall maintain books and records pertaining to the Collateral owned by it in such detail, form and scope as the Lender Agent shall reasonably require; (ig) the Borrower it will immediately notify the Lender Agent if any Receivables accounts arise out of contracts with the United States or any department, agency or instrumentality thereof, and will, upon request from the Lender, will execute any instruments and take any steps required by the Lender Agent in order that all monies due or to become due under any such contract shall be assigned to the Lender Agent and notice thereof given to the United States Government under the Federal Assignment of Claims ActAct of 1940; (jh) it will, immediately upon learning thereof, report to the Lender Agent any material loss or destruction of, or substantial damage to, any of the Collateral, and any other matters adversely affecting the value, enforceability or collectibility collectability of any of the Collateral; (ki) if any amount payable under or in connection with any Eligible Receivable is evidenced by a promissory note or other instrument, as such terms are defined in the Uniform Commercial Code, such promissory note or instrument shall be immediately promptly pledged, endorsed, assigned and delivered to the Lender Agent as additional collateral; (lj) it shall not re-date any invoice or sale or make sales on extended dating beyond that customary in the industry; and (mk) it is not nor shall not it be entitled to pledge the Lender's Lenders' credit on any purchases or for any purpose whatsoever.

Status of Receivables and Other Collateral. The Borrower represents and warrants that (a) it is and shall be the sole owner, free and clear of all Liens except in favor of the Lender or otherwise permitted under Section 8.2 SECTION 7.2 hereunder, of and fully authorized to sell, transfer, pledge and/or grant a security interest in each and every item of all Collateral owned by it; (b) each Eligible Receivable is and shall be a good and valid account representing an undisputed bona fide indebtedness incurred or an amount indisputably owed by the account debtor therein named, for a fixed sum as set forth in the invoice relating thereto with respect to an absolute sale and delivery upon the specified terms of goods sold by the Borrower, or work, labor and/or services theretofore rendered by the Borrower; (c) no Eligible Receivable is or shall be subject to any defense, offset, counterclaim, discount or allowance (as of the time of its creation) except as may be stated in the invoice relating thereto or discounts and allowances as may be customary in the Borrower's business; (d) none of the transactions underlying or giving rise to any Eligible Receivable shall violate any applicable state or federal laws or regulations, and all documents relating to any Receivable shall be legally sufficient under such laws or regulations and shall be legally enforceable in accordance with their terms, subject, as to enforceability, to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creators' rights generally; (e) to the best of the Borrower's knowledge, each account debtor, guarantor or endorser with respect to any Eligible Receivable is solvent and able to pay all Receivables on which it is obligated in full when due; (f) all documents and agreements relating to Eligible Receivables shall be true and correct and in all respects what they purport to be; (g) to the best of the Borrower's knowledge, all signatures and endorsements that appear on all documents and agreements relating to Eligible Receivables shall be genuine and all signatories and endorsers with respect thereto shall have full capacity to contract; (h) it shall maintain books and records pertaining to the Collateral owned by it in detail, form and scope as the Lender shall reasonably require; (i) the Borrower will immediately notify the Lender if any Receivables arise out of contracts with the United States or any department, agency or instrumentality thereof, and will, upon request from the Lender, execute any instruments and take any steps required by the Lender in order that all monies due or to become due under any such contract shall be assigned to the Lender and notice thereof given under the Federal Assignment of Claims Act; (j) it will, immediately upon learning thereof, report to the Lender any material loss or destruction of, or substantial damage to, any of the Collateral, and any other matters adversely affecting the value, enforceability or collectibility collectability of any of the Collateral; (k) if any amount payable under or in connection with any Receivable is evidenced by a promissory note or other instrument, as such terms are defined in the Uniform Commercial Code, such promissory note or instrument shall be immediately pledged, endorsed, assigned and delivered to the Lender as additional collateral; (l) it shall not re-date redate any invoice or sale or make sales on extended dating beyond that customary in the industry; and (m) it shall not be entitled to pledge the Lender's credit on any purchases or for any purpose whatsoever.

Status of Receivables and Other Collateral. The Borrower represents and warrants that (a) it the Borrower is and shall be the sole owner, free and clear of all Liens Liens, except in favor of the Lender or otherwise permitted under Section 8.2 7.2 hereunder, of and fully authorized to sell, transfer, pledge and/or grant a security interest in each and every item of all Collateral owned by itthe Borrower; (b) each Eligible Receivable is and shall be a good and valid account representing an undisputed bona fide indebtedness incurred or an amount indisputably owed by the account debtor therein named, for a fixed sum as set forth in the invoice relating thereto with respect to an absolute sale and delivery upon the specified terms of goods sold by the Borrower, or work, labor and/or services theretofore rendered by the Borrower; (c) no Eligible Receivable is or shall be subject to any defense, offset, counterclaim, discount or allowance (as of the time of its creation) except as may be stated in the invoice relating thereto or discounts and allowances as may be customary in the Borrower's business; (d) none of the transactions underlying or giving rise to any Eligible Receivable shall violate any applicable state or federal laws or regulations, and all documents relating to any Eligible Receivable shall be legally sufficient under such laws or regulations and shall be legally enforceable in accordance with their terms, subject, as to enforceability, to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creators' rights generally; (e) to the best of the Borrower's knowledge, each account debtor, guarantor or endorser with respect to any Eligible Receivable is solvent and able to pay all Receivables on which it is obligated in full when due; (f) all documents and agreements relating to Eligible Receivables shall be true and correct and in all respects what they purport to be; (g) to the best of the Borrower's knowledge, all signatures and endorsements that appear on all documents and agreements relating to Eligible Receivables shall be genuine and all signatories and endorsers with respect thereto shall have full capacity to contract; (h) it the Borrower shall maintain books and records pertaining to the respective Collateral owned by it each of them in detail, form and scope as the Lender shall reasonably require; (i) concurrently with the delivery by the Borrower to the Lender of any accounts receivable aging or any sales report summary hereunder, the Borrower will immediately notify disclose to the Lender which Receivables, if any Receivables any, arise out of contracts with the United States or any department, agency agency, or instrumentality thereof, and will, upon request from the Lender, execute or cause to be executed any instruments and take any steps required by the Lender in order that all monies due or to become due under any such contract shall be assigned to the Lender and notice thereof given under the Federal Assignment of Claims Act; (j) it the Borrower will, immediately upon learning promptly after any Responsible Officer learns thereof, report to the Lender any material loss or destruction of, or substantial damage to, any of the Collateral, and any other matters adversely materially affecting the value, enforceability enforceability, or collectibility collectability of any of the Collateral; (k) if any amount payable under or in connection with any Receivable is evidenced by a promissory note or other instrument, as such terms are defined in the Uniform Commercial Code, such promissory note or other instrument shall be immediately promptly pledged, endorsed, assigned assigned, and delivered to the Lender as additional collateralCollateral; (l) it the Borrower shall not re-date redate any invoice or sale or make or allow to be made sales on extended dating beyond that customary in the industry; and (m) it the Borrower shall conduct cycle counts of its inventory at such intervals as the Lender may request and promptly supply the Lender with a copy of such counts upon the written request of the Lender, accompanied by a report of the value (based on the lower of cost, on a FIFO basis, or market value) of such inventory; and (n) the Borrower shall not be entitled to pledge the Lender's credit on any purchases or for any purpose whatsoeverpurpose.

Status of Receivables and Other Collateral. The Borrower With respect to the Collateral of any Loan Party at the time the Collateral becomes subject to Agent's Lien, each Loan Party covenants, represents and warrants that warrants: (a) it is and such Loan Party shall be the sole owner, free and clear of all Liens (except for the Liens granted in the favor of Agent for the Lender or otherwise permitted under Section 8.2 hereunderbenefit of Lenders and Permitted Liens), of and shall be fully authorized to sell, transfer, pledge and/or grant a security interest in each and every item of all Collateral owned by itsaid Collateral; (b) each Eligible Receivable is and Account shall be a good and valid account receivable or other right of payment owing to such Loan Party, representing an undisputed bona fide indebtedness incurred or an amount indisputably owed by the account debtor obligor therein named, for a fixed sum as set forth in the invoice relating thereto with respect to an absolute sale and delivery upon the specified terms of goods sold by the Borrower, or work, labor and/or services theretofore rendered by the Borrowerapplicable documents evidencing such Account; (c) no Eligible Receivable is or material portion of the Accounts shall be subject to any defense, offset, counterclaim, discount or allowance (as of the time of its creation) except as may be stated in the invoice relating thereto or discounts and allowances as may be customary in the Borrower's business62 allowance; (d) none of the transactions underlying or giving rise to any Eligible Receivable Account shall violate any applicable state or federal laws or regulations, and all documents relating to any Receivable thereto shall be legally sufficient under such laws or regulations and shall be legally enforceable in accordance with their terms, subject, as to enforceability, to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creators' rights generally; (e) to the best of the Borrower's knowledgeall agreements, each account debtor, guarantor or endorser with respect instruments and other documents relating to any Eligible Receivable is solvent and able to pay all Receivables on which it is obligated in full when due; (f) all documents and agreements relating to Eligible Receivables Account shall be true and correct and in all material respects what they purport to be; (gf) to the best of the Borrower's knowledge, all signatures and endorsements that appear on all agreements, instruments and other documents and agreements relating to Eligible Receivables any Account shall be genuine and all signatories and endorsers with respect thereto shall have full capacity to contract; (hg) it such Loan Party shall maintain books and records pertaining to the said Collateral owned by it in such detail, form and scope as the Lender Agent shall reasonably require; and (ih) the Borrower will immediately notify the Lender if any Receivables arise out of contracts with the United States or any department, agency or instrumentality thereof, and will, upon request from the Lender, execute any instruments and take any steps required by the Lender in order that all monies due or to become due under any such contract shall be assigned to the Lender and notice thereof given under the Federal Assignment of Claims Act; (j) it Loan Party will, immediately upon learning thereof, report to the Lender Agent any material loss or destruction of, or substantial damage to, of any of the Collateral, and any other matters adversely affecting the value, enforceability or collectibility of any of the Collateral; (k) if any amount payable under or in connection with any Receivable is evidenced by a promissory note or other instrument, as such terms are defined in the Uniform Commercial Code, such promissory note or instrument shall be immediately pledged, endorsed, assigned and delivered to the Lender as additional collateral; (l) it shall not re-date any invoice or sale or make sales on extended dating beyond that customary in the industry; and (m) it shall not be entitled to pledge the Lender's credit on any purchases or for any purpose whatsoever.

Status of Receivables and Other Collateral. The Each Borrower covenants, represents and warrants that that: (a) it is and shall be the sole owner, free and clear of all Liens except in favor of the Lender Agent or otherwise permitted under Section 8.2 hereunder, of and fully authorized to sell, transfer, pledge and/or grant a security interest in each and every item of all said Collateral owned by it; (b) each it will not seek to qualify, or maintain the qualification of, a Receivable as an Eligible Receivable is and unless such Receivable shall be a good and valid account representing an undisputed bona fide indebtedness incurred or an amount indisputably owed by the account debtor Customer therein named, for a fixed sum as set forth in the invoice relating thereto with respect to an absolute sale and delivery upon the specified terms of goods sold by the a Borrower, or work, labor and/or services theretofore rendered by the a Borrower; (c) no it will not seek to qualify, or maintain the qualification of, a Receivable as an Eligible Receivable unless such Receivable or portion thereof which it seeks to so qualify is or shall be not subject to any defense, offset, counterclaim, discount or allowance (as of the time of its creation) except as may be stated in the invoice relating thereto or discounts and allowances as may be customary in the such Borrower's business; (d) none of the transactions underlying or giving rise to any Eligible Receivable shall violate any applicable state or federal Federal laws or regulations, and all documents relating to any Eligible Receivable shall be legally sufficient under such laws or regulations and shall be legally enforceable in accordance with their terms, subject, terms (subject as to enforceability, enforcement of remedies to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or and other similar laws affecting creatorsthe enforcement of creditors' rights generallygenerally from time to time in effect and to general principles of equity); (e) it will not seek to qualify, or maintain the qualification of, a Receivable as an Eligible Receivable unless to the best of the Borrower's its knowledge, each account debtorCustomer, guarantor or endorser with respect to any Eligible such Receivable is solvent and will continue to be fully able to pay all Eligible Receivables on which it is obligated in full when due; (f) it will not seek to qualify, or maintain the qualification of, a Receivable as an Eligible 91 Receivable unless all documents and agreements relating to Eligible Receivables such Receivable shall be true and correct and in all respects what they purport to be; (g) it will not seek to qualify, or maintain the qualification of, a Receivable as an Eligible Receivable unless to the best of the Borrower's its knowledge, all signatures and endorsements that appear on all documents and agreements relating to Eligible Receivables such Receivable shall be genuine and all signatories and endorsers with respect thereto shall have full capacity to contract; (h) it shall maintain books and records pertaining to the Collateral owned by it in such detail, form and scope as the Lender shall reasonably requireare customary for businesses similarly situated; (i) it will not seek to qualify, or maintain the Borrower will qualification of, a Receivable as an Eligible Receivable unless it shall have immediately notify notified the Lender if Agent as to any Receivables arise accounts arising out of contracts with the United States or any department, agency or instrumentality thereof, and will, upon request from the Lender, execute shall have executed any instruments and take taken any steps required by the Lender Agent in order that all monies due or to become due under any such contract shall be assigned to the Lender Agent and notice thereof given to the United States Government under the Federal Assignment of Claims Act; (j) j)it will not seek to qualify, or maintain the qualification of, a Receivable as an Eligible Receivable unless it will, immediately upon learning thereof, report to the Lender Agent any material loss or destruction of, or substantial damage to, any of the Collateral, and any other matters adversely affecting the value, enforceability or collectibility of any of the Collateral; (k) if any amount payable under or in connection with any Receivable is evidenced by a promissory note or other instrument, as such terms are defined in the Uniform Commercial Code, such promissory note or instrument shall be immediately pledged, endorsed, assigned and delivered to the Lender Agent as additional collateral; (l) it nor any other Borrower shall not re-date any invoice or sale or make sales on extended dating beyond that customary in the industry; and (m) it and each other Borrower shall conduct a physical count of its inventory at such intervals as the Agent may reasonably request and promptly supply the Agent with a copy of such counts accompanied by a report of the value (based on the lower of cost (on a FIFO basis or market value) of such inventory; and (n) it nor any other Borrower is not nor shall it be entitled to pledge the Lender's Lenders' credit on any purchases or for any purpose whatsoever.

Status of Receivables and Other Collateral. The Borrower represents ------------------------------------------ and warrants that (a) it the Borrower or any Subsidiary, as applicable, is and shall be the sole owner, free and clear of all Liens except in favor of the Lender Agent or otherwise permitted under Section 8.2 7.2 hereunder, of and fully ----------- authorized to sell, transfer, pledge and/or grant a security interest in each and every item of all said Collateral owned by itthe Borrower or any such Subsidiary; (b) each Eligible Receivable is and shall be a good and valid account representing an undisputed bona fide indebtedness incurred or an amount indisputably owed by the account debtor therein named, for a fixed sum as set forth in the invoice relating thereto with respect to an absolute sale and delivery upon the specified terms of goods sold by one or more of the BorrowerCompanies, or work, labor and/or services theretofore rendered by the Borrowerapplicable Company; (c) no Eligible Receivable is or shall be subject to any defense, offset, counterclaim, discount or allowance (as of the time of its creation) except as may be stated in the invoice relating thereto or discounts and allowances as may be customary in the Borrowerapplicable Company's business; (d) none of the transactions underlying or giving rise to any Eligible Receivable shall violate any applicable state or federal laws or regulations, and all documents relating to any Receivable shall be legally sufficient under such laws or regulations and shall be legally enforceable in accordance with their terms, subject, as to enforceability, to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creatorscreditors' rights generally; (e) to the best of the Borrower's knowledge, each account debtor, guarantor or endorser with respect to any Eligible Receivable is solvent and able to pay all Receivables on which it is obligated in full when due; (f) all documents and agreements relating to Eligible Receivables shall be true and correct and in all respects what they purport to be; (g) to the best of the Borrower's knowledge, all signatures and endorsements that appear on all documents and agreements relating to Eligible Receivables shall be genuine and all signatories and endorsers with respect thereto shall have full capacity to contract; (h) it the Borrower and each of its Subsidiaries shall maintain books and records pertaining to the respective Collateral owned by it each of them in detail, form and scope as the Lender Agent shall reasonably require; (i) concurrently with the delivery by the Borrower to the Agent of any accounts receivable aging or any sales report summary hereunder, the Borrower will immediately notify disclose to the Lender Agent which Receivables, if any Receivables any, arise out of contracts with the United States or any department, agency or instrumentality thereof, and will, upon request from the LenderAgent, execute or cause to be executed any instruments and take any steps required by the Lender Agent in order that all monies due or to become due under any such contract shall be assigned to the Lender Agent and notice thereof given under the Federal Assignment of Claims Act; (j) it the Borrower will, immediately upon learning promptly after any Responsible Officer learns thereof, report to the Lender Agent any material loss or destruction of, or substantial damage to, any of the Collateral, and any other matters adversely affecting the value, enforceability or collectibility of any of the Collateral; (k) if any amount payable under or in connection with any Receivable is evidenced by a promissory note or other instrument, as such terms are defined in the Uniform Commercial Code, such promissory note or instrument shall be immediately pledged, endorsed, assigned and delivered to the Lender as additional collateral; (l) it shall not re-date any invoice or sale or make sales on extended dating beyond that customary in the industry; and (m) it shall not be entitled to pledge the Lender's credit on any purchases or for any purpose whatsoever.materially

Status of Receivables and Other Collateral. The Each of the Borrower and Apparel Canada covenants, represents and warrants that that: (a) it is the Borrower and Apparel Canada shall be the sole owner, free and clear of all Liens except in favor favour of the Lender or otherwise permitted under Section 8.2 hereunder, of and fully authorized to sell, transfer, pledge pledge, hypothecate and/or grant a security interest in each and every item of all said Collateral owned respectively by it; (b) each it will not seek to qualify, or maintain the qualification of, a Receivable as an Eligible Receivable is and unless such Receivable shall be a good and valid account representing an undisputed bona fide indebtedness incurred or an amount indisputably owed by the account debtor Customer therein named, for a fixed sum as set forth in the invoice relating thereto with respect to an absolute sale and delivery upon the specified terms of goods sold by the BorrowerBorrower or Apparel Canada, or work, labor labour and/or services theretofore rendered by the BorrowerBorrower or Apparel Canada; (c) no it will not seek to qualify, or maintain the qualification of, a Receivable as an Eligible Receivable unless such Receivable or portion thereof which it seeks to so qualify is or shall be not subject to any defensedefense (including, without limitation, compensation), offset, counterclaim, discount or allowance (as of the time of its creation) except as may be stated in the invoice relating thereto or discounts and allowances as may be customary in the Borrower's or Apparel Canada's business; (d) none of the transactions underlying or giving rise to any Eligible Receivable shall violate any applicable provincial, state or federal Federal laws or regulationsregulations in any material respect, and all documents relating to any Eligible Receivable shall be legally sufficient under such laws or regulations and shall be legally enforceable in accordance with their terms, subject, terms (subject as to enforceability, enforcement of remedies to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or and other similar laws affecting creatorsthe enforcement of creditors' rights generallygenerally from time to time in effect and to general principles of equity); (e) it will not seek to qualify, or maintain the qualification of, a Receivable as an Eligible Receivable unless to the best of the Borrower's knowledgeits knowledge (without independent inquiry), each account debtorCustomer, guarantor or endorser with respect to any Eligible such Receivable is solvent and will continue to be fully able to pay all Eligible Receivables on which it is obligated in full when due; (f) it will not seek to qualify, or maintain the qualification of, a Receivable as an Eligible Receivable unless all documents and agreements relating to Eligible Receivables such Receivable shall be true and correct and in all respects what they purport to be; (g) it will not seek to qualify, or maintain the qualification of, a Receivable as an Eligible Receivable unless to the best of the Borrower's its knowledge, all signatures and endorsements that appear on all documents and agreements relating to Eligible Receivables such Receivable shall be genuine and all signatories and endorsers with respect thereto shall have full capacity to contract; (h) it shall maintain books and records pertaining to the Collateral owned by it in such detail, form and scope as the Lender shall reasonably requireare customary for businesses similarly situated; (i) it will not seek to qualify, or maintain the Borrower will qualification of, a Receivable as an Eligible Receivable unless it shall have immediately notify notified the Lender if as to any Receivables arise accounts arising out of contracts with Canada or the United States or any political subdivision, department, agency or instrumentality thereof, and will, upon request from the Lender, execute shall have executed any instruments and take taken any steps required by the Lender in order that all monies due or to become due under any such contract shall be assigned to the Lender and notice thereof given under the Federal Assignment of Claims ActLender; (j) it will, immediately upon learning thereof, report to the Lender any material loss or destruction of, or substantial damage to, any of the Collateral, and any other matters adversely affecting the value, enforceability or collectibility of any of the Collateral; (k) if any amount payable under or in connection with any Receivable is evidenced by a promissory note or other instrument, as such terms are defined in the Uniform Commercial Code, such promissory note or instrument shall be immediately pledged, endorsed, assigned and delivered to the Lender as additional collateral; (lk) neither it nor Apparel Canada shall not re-date any invoice or sale or make sales on extended dating beyond that customary in the industry; (l) it shall conduct a physical count of its inventory at such intervals as the Lender may request (but not more often than one time in any Fiscal Year unless an Event of Default has occurred and is continuing) and promptly supply the Lender with a copy of such counts accompanied by a report of the value (based on the lower of cost (on a FIFO basis) or market value) of such inventory; and (m) neither it nor Apparel Canada shall not be entitled to pledge the Lender's credit on any purchases or for any purpose whatsoever.

Status of Receivables and Other Collateral. The Each Borrower covenants, represents and warrants that that: (a) it is and shall be the sole owner, free and clear of all Liens except in favor of the Lender Agent or otherwise permitted under Section 8.2 hereunder, of and fully authorized to sell, transfer, pledge and/or grant a security interest in each and every item of all said Collateral owned by it; (b) each it will not seek to qualify, or maintain the qualification of, a Receivable as an Eligible Receivable is and unless such Receivable shall be a good and valid account representing an undisputed bona fide indebtedness incurred or an amount indisputably owed by the account debtor Customer therein named, for a fixed sum as set forth in the invoice relating thereto with respect to an absolute sale and delivery upon the specified terms of goods sold by the such Borrower, or work, labor and/or services theretofore rendered by the such Borrower; (c) no it will not seek to qualify, or maintain the qualification of, a Receivable as an Eligible Receivable unless such Receivable which it seeks to so qualify is or shall be not subject to any defense, offset, counterclaim, discount or allowance (as of the time of its creation) except as may be stated in the invoice relating thereto or discounts and allowances as may be customary in the such Borrower's business; (d) none of the transactions underlying or giving rise to any Eligible Receivable shall violate any applicable state or federal laws or regulations, and all documents relating to any Eligible Receivable shall be legally sufficient under such laws or regulations and shall be legally enforceable in accordance with their terms, subject, as to enforceability, to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creators' rights generally; (e) it will not seek to qualify, or maintain the qualification of, a Receivable as an Eligible Receivable unless to the best of the Borrower's its knowledge, each account debtorCustomer, guarantor or endorser with respect to any Eligible such Receivable is solvent and will continue to be fully able to pay all Eligible Receivables on which it is obligated in full when due; (f) it will not seek to qualify, or maintain the qualification of, a Receivable as an Eligible Receivable unless all documents and agreements relating to Eligible Receivables such Receivable shall be true and correct and in all respects what they purport to be; (g) it will not seek to qualify, or maintain the qualification of, a Receivable as an Eligible Receivable unless to the best of the Borrower's its knowledge, all signatures and endorsements that appear on all documents and agreements relating to Eligible Receivables such Receivable shall be genuine and all signatories and endorsers with respect thereto shall have full capacity to contract; (h) it shall maintain books and records pertaining to the Collateral owned by it in such detail, form and scope as the Lender Agent shall reasonably require; (i) it will not seek to qualify, or maintain the Borrower will qualification of, a Receivable as an Eligible Receivable unless it shall have immediately notify notified the Lender if Agent as to any Receivables arise accounts arising out of contracts with the United States or any department, agency or instrumentality thereof, and will, upon request from the Lender, execute shall have executed any instruments and take taken any steps required by the Lender Agent in order that all monies due or to become due under any such contract shall be assigned to the Lender Agent and notice thereof given to the United States Government under the Federal Assignment of Claims Act; (j) it will, immediately upon learning thereof, report to the Lender Agent any material loss or destruction of, or substantial damage to, any of the Collateral, and any other matters adversely affecting the value, enforceability or collectibility collectability of any of the Collateral; (k) if any amount payable under or in connection with any Receivable is evidenced by a promissory note or other instrument, as such terms are defined in the Uniform Commercial Code, such promissory note or instrument shall be immediately pledged, endorsed, assigned and delivered to the Lender Agent as additional collateral; (l) it shall not re-date any invoice or sale or make sales on extended dating beyond that customary in the industry; and (m) it shall conduct a cycle count of its inventory at such intervals as the Agent may reasonably request and promptly supply the Agent with a copy of such counts accompanied by a report of the value (based on the lower of cost (on a FIFO basis) or market value) of such inventory; and (n) it is not nor shall it be entitled to pledge the Lender's Lenders' credit on any purchases or for any purpose whatsoever.

Status of Receivables and Other Collateral. The Each Borrower covenants, represents and warrants that that: (a) it is and shall be the sole owner, free and clear of all Liens except in favor of the Lender Agent or otherwise permitted under Section 8.2 hereunder, of and fully authorized to sell, transfer, pledge and/or grant a security interest in each and every item of all said Collateral owned by it; (b) each Eligible Receivable is and shall be a good and valid account representing an undisputed bona fide indebtedness incurred or an amount indisputably owed by the account debtor Customer therein named, for a fixed sum as set forth in the invoice relating thereto with respect to an absolute sale and delivery upon the specified terms of goods sold by the a Borrower, or work, labor and/or services theretofore rendered by the a Borrower; (c) no Eligible Receivable is or shall be subject to any defense, offset, counterclaim, discount or allowance (as of the time of its creation) except as may be stated in the invoice relating thereto or discounts and allowances as may be customary in the such Borrower's business; (d) none of the transactions underlying or giving rise to any Eligible Receivable shall violate any applicable state or federal laws or regulations, and all documents relating to any Receivable shall be legally sufficient under such laws or regulations and shall be legally enforceable in accordance with their terms, subject, as to enforceability, to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creators' rights generally; (e) to the best of the Borrower's knowledge, each account debtor, guarantor or endorser with respect to any Eligible Receivable is solvent and able to pay all Receivables on which it is obligated in full when due; (f) all documents and agreements relating to Eligible Receivables shall be true and correct and in all respects what they purport to be; (g) 0 to the best of the Borrower's its knowledge, all signatures and endorsements that appear on all documents and agreements relating to Eligible Receivables shall be genuine and all signatories and endorsers with respect thereto shall have full capacity to contract; (h9) it shall maintain books and records pertaining to the Collateral owned by it in such detail, form and scope as the Lender Agent shall reasonably require; (ih) the Borrower it will immediately notify the Lender Agent if any Receivables accounts arise out of contracts with the United States or any department, agency or instrumentality thereof, and will, upon request from the Lender, will execute any instruments and take any steps required by the Lender Agent in order that all monies due or to become due under any such contract shall be assigned to the Lender Agent and notice thereof given to the United States Government under the Federal Assignment of Claims Act; (ji) it will, immediately upon learning thereof, report to the Lender Agent any material loss or destruction of, or substantial damage to, any of the Collateral, and any other matters adversely affecting the value, enforceability or collectibility collectability of any of the Collateral; (k0) if any amount payable under or in connection with any Receivable is evidenced by a promissory note or other instrument, as such terms are defined in the Uniform Commercial Code, such -76- 82 promissory note or instrument shall be immediately pledged, endorsed, assigned and delivered to the Lender Agent as additional collateral; (lk) it shall not re-date any invoice or sale or make sales on extended dating beyond that customary in the industry; (I) it shall conduct a physical count of its inventory at such intervals as the Agent may request and promptly supply the Agent with a copy of such counts accompanied by a report of the value (based on the lower of cost (on a FIFO basis) or market value) of such inventory; provided, that the Agent shall not request a physical count for any twelve-month period, more frequently than once during such period (unless a Default or an Event of Default has occurred and is continuing in which case as often as the Agent may request) and (m) it is not nor shall not it be entitled to pledge the Lender's Lenders' credit on any purchases or for any purpose whatsoever.

Status of Receivables and Other Collateral. The Each Borrower covenants, represents and warrants that that: (ai) it is and shall be the sole ownerowner of all Receivables, free and clear of all Liens Liens, except in favor of the Lender Bank or otherwise permitted under Section 8.2 hereunderthis Agreement, of and fully authorized to sell, transfer, pledge and/or grant a security interest in each and every item of all Collateral owned by itthe Collateral; (bii) each Eligible Receivable is and set forth in a Borrowing Base Certificate shall be a good and valid account representing an undisputed bona fide indebtedness incurred or an amount indisputably owed by the account debtor Customer therein named, for a fixed sum as set forth in the invoice loan agreements or other documentation relating thereto with respect to an absolute sale and delivery upon the specified terms of goods sold by the Borrower, or work, labor and/or services theretofore rendered by the Borrowerthereto; (ciii) no Eligible Receivable set forth in a Borrowing Base Certificate is or shall be subject to any defense, offset, counterclaim, discount or allowance allowance; (as iv) no credit, discount or extension, or agreement therefor will be granted on any Receivables, except in accordance with this Agreement; (v) each copy of a statement of account of any Receivable delivered to the Bank will be a genuine copy of the time original statement of its creation) except as may be stated in account sent to the invoice relating thereto or discounts and allowances as may be customary in Customer named therein by the Borrower's business; (dvi) none of the transactions underlying or giving rise to any Eligible Receivable shall violate any applicable state or federal laws or regulations, and all documents relating to any Receivable shall be legally sufficient under such laws or regulations and shall be legally enforceable in accordance with their terms, subject, as to enforceability, to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creators' rights generally; (evii) to the best of the Borrower's its knowledge, each account debtorCustomer, guarantor or endorser (as a group) with respect to any Eligible Receivable set forth in a Borrowing Base Certificate is solvent and will continue to be fully able to pay all Receivables on which it is obligated in full when due; (fviii) all documents and agreements relating to Eligible Receivables shall be true and correct and in all respects what they purport to be; (g) to the best of the Borrower's knowledge, all signatures and endorsements that appear on all documents and agreements relating to Eligible Receivables shall be genuine and all signatories and endorsers with respect thereto shall have full capacity to contract; (h) it shall maintain books and records pertaining to the Collateral owned by it in detail, form and scope as the Lender shall reasonably require; (i) the Borrower will immediately notify the Lender if any Receivables arise out of contracts with the United States or any department, agency or instrumentality thereof, and will, upon request from the Lender, execute any instruments and take any steps required by the Lender in order that all monies due or to become due under any such contract shall be assigned to the Lender and notice thereof given under the Federal Assignment of Claims Act; (j) it will, immediately upon learning thereof, report to the Lender any material loss or destruction of, or substantial damage to, any of the Collateral, and any other matters adversely affecting the value, enforceability or collectibility of any of the Collateral; (k) if any amount payable under or in connection with any Receivable is evidenced by a promissory note or other instrument, as such terms are defined in the Uniform Commercial Code, such promissory note or instrument shall be immediately pledged, endorsed, assigned and delivered to the Lender as additional collateral; (l) it shall not re-date any invoice or sale or make sales on extended dating beyond that customary in the industry; and (m) it shall not be entitled to pledge the Lender's credit on any purchases or for any purpose whatsoever.shall

Status of Receivables and Other Collateral. The Borrower Company covenants, represents and warrants that to the Lender that: (a) it is and shall be the sole owner, free and clear of all Liens except Liens in favor of the Lender or otherwise permitted under Section 8.2 hereunder, of and fully authorized to sell, transfer, pledge and/or grant a security interest in each and every item of all Collateral said collateral owned by it; (b) each Eligible Receivable is and Account shall be a good and valid account representing an undisputed bona fide indebtedness incurred or an amount indisputably owed by the account debtor Customer therein named, for a fixed sum as set forth in the invoice relating thereto with respect to an absolute sale and delivery upon the specified terms of goods sold by the BorrowerCompany, or work, labor and/or services theretofore rendered by the BorrowerCompany; (c) no Eligible Receivable Account is or shall be subject to any defensedefenses, offset, counterclaim, discount or allowance (as of the time of its creation) except as may be stated in the invoice relating thereto or discounts and allowances as may be customary in the BorrowerCompany's business; (d) none of the transactions underlying or giving rise to any Eligible Receivable Account shall violate any applicable state or federal laws or regulations, and all documents relating to any Receivable Account shall be legally sufficient under such laws or regulations and shall be legally enforceable in accordance with their terms, subject, as to enforceability, to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creators' rights generally; (e) to the best of the Borrower's its knowledge, each account debtorCustomer, guarantor or endorser with respect to any Eligible Receivable Account is solvent and will continue to be fully able to pay all Receivables on which it is obligated in full when due; (f) all documents and agreements relating to Eligible Receivables shall be true and correct and in all respects what they purport to be; (g) to the best of the Borrower's its knowledge, all signatures and endorsements that appear on all documents and agreements relating to Eligible Receivables shall be genuine and all signatories and endorsers with respect thereto shall have full capacity to contract; (h) it shall maintain books and records pertaining to the Collateral owned by it collateral in such detail, form and scope as the Lender shall reasonably require; (i) the Borrower it will immediately notify the Lender if any Receivables accounts arise out of contracts with the United States of America or any department, agency or instrumentality thereof, and willand, upon request from if required by the Lender, will execute any instruments and take any steps required by the Lender in order that all monies due or to become due under any such contract shall be assigned to the Lender and notice thereof given to the United States Government under the Federal Assignment of Claims Act; (j) it will, immediately upon learning thereof, report to the Lender any material loss or destruction of, or substantial damage to, any of the Collateralcollateral, and any other matters adversely affecting the value, enforceability or collectibility of any of the Collateralcollateral; (k) if any amount amounts payable under or in connection with any Receivable Account is evidenced by a promissory note or other instrument, as such terms are defined in the Uniform Commercial Code, such promissory note or instrument shall be immediately pledged, endorsed, assigned and delivered to the Lender as additional collateral; (l) it shall not re-date any invoice or sale or make sales on extended dating beyond that customary in the industry; and (m) all inventory to the extent produced by the Company has been or will be produced in accordance with the federal Fair Labor Standards Act of 1938, as amended, and the rules, regulations and orders thereunder; and (n) it is not nor shall not it be entitled to pledge the Lender's credit on any purchases or for any purpose whatsoever.

Status of Receivables and Other Collateral. The Borrower represents With respect to Collateral at the time the Collateral becomes subject to the Agent's security interests, the Borrowers covenant, represent and warrants that warrant: (a) it is and the Loan Parties shall be the sole ownerowners, free and clear of all Liens except in favor of the Lender Agent on behalf of the other Credit Parties or otherwise permitted under Section 8.2 hereunder, of and fully authorized to sell, transfer, pledge and/or grant a security interest in each and every item of all Collateral owned by itsaid Collateral; (b) each Eligible Receivable is and shall be a good and valid account representing an undisputed bona fide indebtedness incurred or an amount indisputably owed by the account debtor Customer therein named, for a fixed sum as set forth in the invoice relating thereto with respect to an absolute sale and delivery upon the specified terms of goods sold by the BorrowerLoan Parties, or work, labor and/or services theretofore rendered by the BorrowerLoan Parties; (c) no Eligible Receivable is or shall be subject to any defense, offset, counterclaim, discount or allowance (as of known to the time of its creation) Loan Parties except as may be stated in the invoice relating thereto or discounts and allowances as may be customary in the Borrower's Loan Parties' business; (d) none of the transactions underlying or giving rise to any Eligible Receivable shall violate any applicable state or federal laws or regulations, and all documents relating to any Receivable shall be legally sufficient under such laws or regulations and shall be legally enforceable in accordance with their terms, subject, as to enforceability, to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creators' rights generally; (e) to the best knowledge of the Borrower's knowledge, Borrowers (but without independent investigation) each account debtorCustomer, guarantor or endorser with respect to any Eligible Receivable is solvent and will continue to be fully able to pay all Receivables on which it is obligated in full when due; (f) no agreement under which any deduction or offset of any kind, other than normal trade discounts, may be granted or shall have been made by the Borrowers, at or before the time such Receivable is created; (g) all documents and agreements relating to Eligible Receivables shall be true and correct and in all respects what they purport to be; (gh) to the best knowledge of the Borrower's knowledgeBorrowers (but without independent investigation), all signatures and endorsements that appear on all documents and agreements relating to Eligible Receivables shall be genuine and all signatories and endorsers with respect thereto shall have full capacity to contract; (hi) it the Loan Parties shall maintain books and records pertaining to the Collateral owned by it in such detail, form and scope as the Lender Agent shall reasonably require; (ij) the Lead Borrower will immediately promptly notify the Lender Agent if any Receivables of the Loan Parties' accounts exceeding $100,000 in the aggregate outstanding at any time arise out of contracts with the United States or any department, agency agency, or instrumentality thereof, and will, upon request from the Lender, Loan Parties will execute any instruments and take any steps required by the Lender Agent in order that all monies due or to become due under any such contract shall be assigned to the Lender Agent and notice thereof given to the United States Government under the Federal Assignment of Claims Act; (jk) it the Borrowers will, immediately upon learning thereof, report to the Lender Agent: repossession of goods; and reclamation or return of goods in any material fiscal year in the aggregate in excess of $500,000 or claims or disputes in any fiscal year in the aggregate in excess of $500,000 asserted by Customers or other obligors, any loss or destruction of, or substantial damage to, any of the Collateral, and any other matters adversely affecting the value, enforceability or collectibility of any Collateral with a value in excess of the Collateral$500,000; (kl) if any an amount in excess of $100,000 is payable under or in connection with any Receivable and is evidenced by a promissory note or other instrument, as such terms are defined in the Uniform Commercial Code, such or if an Event of Default has occurred and is continuing, all promissory note or instrument notes and other instruments with respect to Receivables, shall be immediately pledged, endorsed, assigned and delivered to the Lender Agent as additional collateralCollateral; (lm) it the Loan Parties shall not re-date any invoice or sale or make sales on extended dating beyond that customary in the industry; (n) the Loan Parties shall conduct a physical count of their inventory at least once each Fiscal Year and upon the occurrence and during the continuance of an Event of Default, at such other intervals as the Agent may request, and in each case promptly supply the Agent with a copy of such counts accompanied by a report of the value (based on the lower of cost (on a FIFO basis) or market value) of such inventory; and (mo) it the Loan Parties are not and shall not be entitled to pledge the Agent's or any Lender's credit on any purchases or for any purpose whatsoever. Monthly Statement of Account. The Agent shall render to the Parent each month a statement of the Borrowers' account, which shall constitute an account stated and shall be deemed to be correct and accepted by and be binding upon the Borrowers (absent manifest error) unless the Agent receives a written statement of the Borrowers' exceptions within thirty (30) days after such statement was received by or posted electronically by the Agent.

Status of Receivables and Other Collateral. The Each ------------------------------------------ Borrower covenants, represents and warrants that that: (a) it is and shall be the sole owner, free and clear of all Liens except in favor of the Lender Agent or otherwise permitted under Section 8.2 hereunder, of and fully authorized to sell, transfer, pledge and/or grant a security interest in each and every item of all said Collateral owned by it; (b) each Eligible Receivable is and shall be a good and valid account representing an undisputed a bona fide indebtedness incurred or an amount indisputably owed by the account debtor Customer therein named, for a fixed sum as set forth in the invoice relating thereto with respect to an absolute sale and delivery upon the specified terms of goods sold or leased by the a Borrower, or work, labor and/or services theretofore rendered by the a Borrower; (c) no Eligible Receivable is or shall be subject to any good faith defense, offset, counterclaim, discount or allowance (as of the time of its creation) except as may be stated in the invoice relating thereto or discounts and allowances as may be customary in the such Borrower's business; (d) none of the transactions underlying or giving rise to any Eligible Receivable shall violate any applicable state or federal laws or regulations, and all documents relating to any Receivable shall be legally sufficient under such laws or regulations and shall be legally enforceable in accordance with their terms, subject, as to enforceability, to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creators' rights generally; (e) to the best of the Borrower's its knowledge, each account debtorCustomer, guarantor or endorser with respect to any Eligible Receivable is solvent and will continue to be fully able to pay all Receivables on which it is obligated in full when due; (f) to Borrower's knowledge, all documents and agreements relating to Eligible Receivables shall be true and correct and in all respects what they purport to be; (g) to the best of the Borrower's its knowledge, all signatures and endorsements that appear on all documents and agreements relating to Eligible Receivables shall be genuine and all signatories and endorsers with respect thereto shall have full capacity to contract; (h) it shall maintain books and records pertaining to the Collateral owned by it in such detail, form and scope as the Lender Agent shall reasonably requirerequire in its reasonable discretion; (i) the Borrower it will immediately notify the Lender Agent if any Receivables accounts arise out of contracts with the United States or any department, agency or instrumentality thereof, and will, upon request from the Lender, will execute any instruments and take any steps required by the Lender Agent in order that all monies due or to become due under any such contract shall be assigned to the Lender Agent and notice thereof given to the United States Government under the Federal Assignment of Claims Act; (j) it will, immediately upon learning thereof, report to the Lender Agent any material loss or destruction of, or substantial damage to, any of the Collateral, and any other matters adversely affecting the value, enforceability or collectibility collectability of any of the Collateral; (k) if any amount payable under or in connection with any Receivable is evidenced by a promissory note or other instrument, as such terms are defined in the Uniform Commercial Code, such promissory note or instrument shall be immediately promptly pledged, endorsed, assigned and delivered to the Lender Agent as additional collateral; (l) if any Receivable constitutes chattel paper under the UCC, promptly upon the request of the Agent, the Borrowers will deliver all documents evidencing such chattel paper to the Agent to be held as Collateral, together with any endorsements reasonably requested by the Agent; (m) it shall not re-date any invoice or sale or make sales on extended dating beyond that customary in the industry; and (mn) it shall conduct a physical count of its inventory at such intervals as the Agent may request (provided, however, that if no Event of Default shall be in existence -------- ------- and a perpetual inventory system reasonably satisfactory to the Agent shall be in effect, Borrowers shall be obligated to compensate the Agent for only one such physical inventory in each Fiscal Year) and promptly supply the Agent with a copy of such counts accompanied by a report of the value (based on the lower of cost (on a FIFO basis) or market value) of such inventory; and (o) it is not nor shall it be entitled to pledge the Lender's Lenders' credit on any purchases or for any purpose whatsoever.

Status of Receivables and Other Collateral. The Borrower represents and warrants that (a) it The Borrower or any Guarantor, as applicable, is and shall be the sole owner, free and clear of all Liens except in favor of the Lender Administrative Agent or otherwise permitted under Section 8.2 7.2 hereunder, of and fully authorized to sell, transfer, pledge and/or grant a security interest in each and every item of all said Collateral owned by it; the Borrower or any such Guarantor, (b) each Eligible Receivable is and shall be a good and valid account representing an undisputed bona fide indebtedness incurred or an amount indisputably owed by the account debtor therein named, for a fixed sum as set forth in the invoice relating thereto with respect to an absolute sale and delivery upon the specified terms of goods sold by the BorrowerBorrower or one or more of its Subsidiaries, or work, labor and/or services theretofore rendered by the BorrowerBorrower or the applicable Subsidiary; (c) no Eligible Receivable is or shall be subject to any defense, offset, counterclaim, discount or allowance (as of the time of its creation) except as may be stated in the invoice relating thereto or discounts and allowances as may be customary in the Borrower's or its applicable Subsidiary's business; (d) none of the transactions underlying or giving rise to any Eligible Receivable shall violate any applicable state or federal laws or regulations, and all documents relating to any Receivable shall be legally sufficient under such laws or regulations and shall be legally enforceable in accordance with their terms, subject, as to enforceability, to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creators' rights generally; (e) to the best of the Borrower's knowledge, each account debtor, guarantor or endorser with respect to any Eligible Receivable is solvent and able to pay all Receivables on which it is obligated in full when due; (f) all documents and agreements relating to Eligible Receivables shall be true and correct and in all respects what they purport to be; (g) to the best of the Borrower's knowledge, all signatures and endorsements that appear on all documents and agreements relating to Eligible Receivables shall be genuine and all signatories and endorsers with respect thereto shall have full capacity to contract; (h) it the Borrower and each its Subsidiaries shall maintain books and records pertaining to the respective Collateral owned by it each of them in detail, form and scope as the Lender Administrative Agent shall reasonably require; (i) concurrently with the delivery by the Borrower to the Administrative Agent of any accounts receivable aging or any sales report summary hereunder, the Borrower will immediately notify disclose to the Lender Administrative Agent which Receivables, if any Receivables any, arise out of contracts with the United States or any department, agency or instrumentality thereof, and will, upon request from the LenderAdministrative Agent, execute or cause to be executed any instruments and take any steps required by the Lender Administrative Agent in order that all monies due or to become due under any such contract shall be assigned to the Lender Administrative Agent and notice thereof given under the Federal Assignment of Claims Act; (j) it the Borrower will, immediately upon learning promptly after any Responsible Officer learns thereof, report to the Lender Administrative Agent any material loss or destruction of, or substantial damage to, any of the Collateral, and any other matters adversely materially affecting the value, enforceability or collectibility collectability of any of the Collateral; (k) if any amount payable under or in connection with any Receivable is evidenced by a promissory note or other instrument, as such terms are defined in the Uniform Commercial Code, such promissory note or instrument shall be immediately promptly pledged, endorsed, assigned and delivered to the Lender Administrative Agent as additional collateralCollateral; (l) it the Borrower shall not re-date redate, or allow any of its Subsidiaries to redate, any invoice or sale or make or allow to be made sales on extended dating beyond that customary in the industry; and (m) it if any Default or Event of Default shall not have occurred and be continuing, the Borrower shall promptly provide the Administrative Agent with copies of any regularly scheduled physical counts of the Borrower's and each of its Subsidiaries' inventory which are conducted by the Borrower and such Subsidiaries after the Closing Date; (n) after the occurrence and during the continuation of any Default or Event of Default, the Borrower shall conduct a physical count of its and each of its Subsidiaries' inventory at such intervals as the Administrative Agent may request and promptly supply the Administrative Agent with a copy of such counts accompanied by a report of the value (based on the lower of cost, on a weighted average basis, or market value) of such inventory; and (o) neither the Borrower, nor any of its Subsidiaries, has pledged, shall pledge or shall be entitled to pledge the Lender's Lenders' credit on any purchases or for any purpose whatsoever.

Status of Receivables and Other Collateral. The Borrower Each of the Borrowers covenants, represents and warrants that that: (a) it is and shall be the sole owner, free and clear of all Liens except in favor of the Lender Agent or otherwise permitted under Section 8.2 hereunder, of and fully authorized to sell, transfer, pledge and/or grant a security interest in each and every item of all said Collateral owned by it; (b) each it will not seek to qualify, or maintain the qualification of, a Receivable as an Eligible Receivable is and unless such Receivable shall be a good and valid account representing an undisputed bona fide indebtedness incurred or an amount indisputably owed by the account debtor Customer therein named, for a fixed sum as set forth in the invoice relating thereto with respect to an absolute sale and delivery upon the specified terms of goods sold by the a Borrower, or work, labor and/or services theretofore rendered by the a Borrower; (c) no it will not seek to qualify, or maintain the qualification of, a Receivable as an Eligible Receivable unless such Receivable or portion thereof which it seeks to so qualify is or shall be not subject to any defense, offset, counterclaim, discount or allowance (as of the time of its creation) except as may be stated in the invoice relating thereto or discounts and allowances as may be customary in the such Borrower's business; (d) none of the transactions underlying or giving rise to any Eligible Receivable shall violate any applicable state or federal Federal laws or regulationsregulations in any material respect, and all documents relating to any Eligible Receivable shall be legally sufficient under such laws or regulations and shall be legally enforceable in accordance with their terms, subject, terms (subject as to enforceability, enforcement of remedies to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or and other similar laws affecting creatorsthe enforcement of creditors' rights generallygenerally from time to time in effect and to general principles of equity); (e) it will not seek to qualify, or maintain the qualification of, a Receivable as an Eligible Receivable unless to the best of the Borrower's its knowledge, each account debtorCustomer, guarantor or endorser with respect to any Eligible such Receivable is solvent and will continue to be fully able to pay all Eligible Receivables on which it is obligated in full when due; (f) it will not seek to qualify, or maintain the qualification of, a Receivable as an Eligible Receivable unless all documents and agreements relating to Eligible Receivables such Receivable shall be true and correct and in all respects what they purport to be; (g) to the best of the Borrower's knowledge, all signatures and endorsements that appear on all documents and agreements relating to Eligible Receivables shall be genuine and all signatories and endorsers with respect thereto shall have full capacity to contract; (h) it shall maintain books and records pertaining to the Collateral owned by it in detail, form and scope as the Lender shall reasonably require; (i) the Borrower will immediately notify the Lender if any Receivables arise out of contracts with the United States or any department, agency or instrumentality thereof, and will, upon request from the Lender, execute any instruments and take any steps required by the Lender in order that all monies due or to become due under any such contract shall be assigned to the Lender and notice thereof given under the Federal Assignment of Claims Act; (j) it will, immediately upon learning thereof, report to the Lender any material loss or destruction of, or substantial damage to, any of the Collateral, and any other matters adversely affecting the value, enforceability or collectibility of any of the Collateral; (k) if any amount payable under or in connection with any Receivable is evidenced by a promissory note or other instrument, as such terms are defined in the Uniform Commercial Code, such promissory note or instrument shall be immediately pledged, endorsed, assigned and delivered to the Lender as additional collateral; (l) it shall not re-date any invoice or sale or make sales on extended dating beyond that customary in the industry; and (m) it shall not be entitled to pledge the Lender's credit on any purchases or for any purpose whatsoever.it

Status of Receivables and Other Collateral. The Borrower covenants, represents and warrants that that: (a) it is and shall be the sole owner, free and clear of all Liens except in favor of the Lender Agent or otherwise permitted under Section 8.2 hereunder, of and fully authorized to sell, transfer, pledge and/or grant a security interest in each and 88 94 every item of all said Collateral owned by it; (b) each it will not seek to qualify, or maintain the qualification of, a Receivable as an Eligible Receivable is and unless such Receivable shall be a good and valid account representing an undisputed bona fide indebtedness incurred or an amount indisputably owed by the account debtor Customer therein named, for a fixed sum as set forth in the invoice relating thereto with respect to an absolute sale and delivery upon the specified terms of goods sold by the Borrower, or work, labor and/or services theretofore rendered by the Borrower; (c) no it will not seek to qualify, or maintain the qualification of, a Receivable as an Eligible Receivable unless such Receivable is or shall be not subject to any defense, offset, counterclaim, discount or allowance (as of the time of its creation) except as may be stated in the invoice relating thereto or discounts and allowances as may be customary in the Borrower's business; (d) none of the transactions underlying or giving rise to any Eligible Receivable shall violate any applicable state or federal Federal laws or regulations, and all documents relating to any Receivable shall be legally sufficient under such laws or regulations and shall be legally enforceable in accordance with their terms, subject, as terms (subject to enforceability, to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or and other similar laws affecting creatorsthe enforcement of creditors' rights generallygenerally from time to time in effect and to general principles of equity); (e) it will not seek to qualify, or maintain the qualification of, a Receivable as an Eligible Receivable unless to the best of the Borrower's knowledgeits knowledge (without independent inquiry), each account debtorCustomer, guarantor or endorser with respect to any Eligible such Receivable is solvent and will continue to be fully able to pay all Eligible Receivables on which it is obligated in full when due; (f) it will not seek to qualify, or maintain the qualification of, a Receivable as an Eligible Receivable unless all documents and agreements relating to Eligible Receivables such Receivable shall be materially true and correct and in all material respects what they purport to be; (g) it will not seek to qualify, or maintain the qualification of, a Receivable as an Eligible Receivable unless to the best of the Borrower's knowledgeits knowledge (without independent inquiry), all signatures and endorsements that appear on all documents and agreements relating to Eligible Receivables such Receivable shall be genuine and all signatories and endorsers with respect thereto shall have full capacity to contract; (h) it shall maintain books and records pertaining to the Collateral owned by it in such detail, form and scope as the Lender shall reasonably requireare customary for businesses similarly situated; (i) it will not seek to qualify, or maintain the Borrower will qualification of, a Receivable as an Eligible Receivable unless it shall have immediately notify notified the Lender if Agent as to any Receivables arise accounts arising out of contracts with the United States or any department, agency or instrumentality thereof, and will, upon request from the Lender, execute shall have executed any instruments and take taken any steps required by the Lender Agent in order that all monies due or to become due under any such contract shall be assigned to the Lender Agent and notice thereof given to the United States Government under the Federal Assignment of Claims Act; (j) it will, immediately upon learning thereof, report to the Lender any material loss or destruction of, or substantial damage to, any of the Collateral, and any other matters adversely affecting the value, enforceability or collectibility of any of the Collateral; (k) if any amount payable under or in connection with any Receivable is evidenced by a promissory note or other instrument, as such terms are defined in the Uniform Commercial Code, such promissory note or instrument shall be immediately pledged, endorsed, assigned and delivered to the Lender Agent as additional collateral; (lk) it shall not re-date any invoice or sale or make sales on extended dating beyond that customary in the industry; and (ml) it is not nor shall not it be entitled to pledge the Lender's Lenders' credit on any purchases or for any purpose whatsoever.

Status of Receivables and Other Collateral. The Borrower represents and warrants that (a) it is and shall be the sole owner, free and clear of all Liens except in favor of the Lender Agent or otherwise permitted under Section 8.2 7.2 hereunder, of and fully authorized to sell, transfer, pledge and/or grant a security interest in each and every item of all Collateral owned by it; (b) each Eligible Receivable is and shall be a good and valid account representing an undisputed bona fide indebtedness incurred or an amount indisputably owed by the account debtor therein named, for a fixed sum as set forth in the invoice relating thereto with respect to an absolute sale and delivery upon the specified terms of goods sold by the Borrower, or work, labor and/or services theretofore rendered by the Borrower; (c) no Eligible Receivable is or shall be subject to any defense, offset, counterclaim, discount or allowance (as of the time of its creation) except as may be stated in the invoice relating thereto or discounts and allowances as may be customary in the Borrower's business; (d) none of the transactions underlying or giving rise to any Eligible Receivable shall violate any applicable state or federal laws or regulations, and all documents relating to any Receivable shall be legally sufficient under such laws or 121 regulations and shall be legally enforceable in accordance with their terms, subject, as to enforceability, to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creators' rights generally; (e) to the best of the Borrower's knowledge, each account debtor, guarantor or endorser with respect to any Eligible Receivable is solvent and able to pay all Receivables on which it is obligated in full when due; (f) all documents and agreements relating to Eligible Receivables shall be true and correct and in all respects what they purport to be; (g) to the best of the Borrower's knowledge, all signatures and endorsements that appear on all documents and agreements relating to Eligible Receivables shall be genuine and all signatories and endorsers with respect thereto shall have full capacity to contract; (h) it shall maintain books and records pertaining to the Collateral owned by it in detail, form and scope as the Lender Agent shall reasonably require; (i) the Borrower will immediately notify the Lender Agent if any Receivables arise out of contracts with the United States or any department, agency or instrumentality thereof, and will, upon request from the LenderAgent, execute any instruments and take any steps required by the Lender Agent in order that all monies due or to become due under any such contract shall be assigned to the Lender Agent and notice thereof given under the Federal Assignment of Claims Act; (j) it will, immediately upon learning thereof, report to the Lender Agent any material loss or destruction of, or substantial damage to, any of the Collateral, and any other matters 122 adversely affecting the value, enforceability or collectibility collectability of any of the Collateral; (k) if any amount payable under or in connection with any Receivable is evidenced by a promissory note or other instrument, as such terms are defined in the Uniform Commercial Code, such promissory note or instrument shall be immediately pledged, endorsed, assigned and delivered to the Lender Agent as additional collateral; (l) it shall not re-date redate any invoice or sale or make sales on extended dating beyond that customary in the industry; and (m) it shall not be entitled to pledge the Lender's Lenders' credit on any purchases or for any purpose whatsoever.

Status of Receivables and Other Collateral. The Each Borrower covenants, represents and warrants that with respect to all Collateral (but excluding Receivables of the Borrowers, other than Receivables generated from the sale of inventory), that: (a) it is and shall be the sole owner, free and clear of all Liens except in favor of the Lender Agent or otherwise permitted under Section 8.2 hereunder, of and fully authorized to sell, transfer, pledge and/or grant a security interest in each and every item of all said Collateral owned by it; (b) each Eligible Receivable is and shall be a good and valid account representing an undisputed a bona fide indebtedness incurred or an amount indisputably owed by the account debtor person therein named, named for a fixed sum as set forth in the invoice relating thereto with respect to an absolute sale and delivery upon the specified terms of goods sold by the a Borrower, or work, labor and/or services theretofore rendered by the a Borrower; (c) no Eligible Receivable is or shall be subject to any defense, offset, counterclaim, discount or allowance (known to the Borrowers as of the time of its creation) except as may be stated in the invoice relating thereto (except for off-invoice allowances in an amount estimated by Chock consistent with its past practices), or such that the amount of Receivables at any time subject to defense, offset or counterclaim is not greater than $250,000, or discounts and allowances as may be customary in the Borrowersuch Borrowers's business; (d) none of the transactions underlying or giving rise to any Eligible Receivable shall violate any applicable state or federal laws or regulations, and all documents relating to any Receivable shall be legally sufficient under such laws or regulations and shall be legally enforceable in accordance with their terms, subject, as to enforceability, to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creators' rights generally; (e) to the best of the Borrower's its knowledge, each account debtorCustomer, guarantor or endorser with respect to any Eligible Receivable is solvent as of the time of creation thereof and will continue to be fully able to pay all Receivables on which it is obligated in full when due; (f) all documents and agreements relating to Eligible Receivables shall be true and correct and in all respects what they purport to be; (g) to the best of the Borrower's its knowledge, all signatures and endorsements that appear on all documents and agreements relating to Eligible Receivables shall be genuine and all signatories and endorsers with respect thereto shall have full capacity to contract; (h) it shall maintain books and records pertaining to the Collateral owned by it in such detail, form and scope as the Lender Agent shall reasonably require; (i) the Borrower it will immediately notify the Lender Agent if any Receivables accounts arise out of contracts with the United States or any department, agency or instrumentality thereof, and will, upon request from the Lender, will execute any instruments and take any steps required by the Lender Agent in order that all monies due or to become due under any such contract shall be assigned to the Lender Agent and notice thereof given to the United States Government under the Federal Assignment of Claims Act; (j) it will, immediately upon learning thereof, report to the Lender Agent any material loss or destruction of, or substantial damage to, any of the Collateral, and any other matters adversely affecting the value, enforceability or collectibility collectability of any of the Collateral; (k) if any amount payable under or in connection with any Receivable is evidenced by a promissory note or other instrument, as such terms are defined in the Uniform Commercial Code, such promissory note or instrument shall be immediately pledged, endorsed, assigned and delivered to the Lender Agent as additional collateral; (l) it shall not re-date any invoice or sale or make sales on extended dating beyond that customary in the industry; and (m) it shall not be entitled to pledge conduct a physical count of its inventory at such intervals as the Lender's credit Agent may reasonably request and promptly supply the Agent with a copy of such counts accompanied by a report of the value (based on any purchases the lower of cost (on a FIFO basis) or for any purpose whatsoevermarket value) of such inventory.