Covenants, Agreements, Representations and Warranties. Each Debtor hereby covenants and agrees with, and represents and warrants to the Agent and the Lenders that: (a) Such Debtor is duly organized and existing under the laws of the state of its organization, is the sole and lawful owner of its Collateral and has full right, power and authority to enter into this Agreement and to perform each and all of the matters and things herein provided for; and the execution and delivery of this Agreement, and the observance and performance of any of the matters and things herein set forth, will not violate or contravene any provision of law or of the articles of incorporation, by-laws or operating agreement of such Debtor, as applicable, or of any indenture where such violation or contravention would have a Material Adverse Effect, loan agreement or other agreement of or affecting such Debtor or any of its properties, or result in the creation or imposition of any liens or encumbrance on any property of such Debtor. (b) The Collateral is in each Debtor's possession at the locations listed under Column 1 on Schedule A attached hereto. Each Debtor's respective chief executive office and chief place of business is listed opposite its name on Schedule A attached hereto and the Debtors have no other places of business other than those listed under Column 4 on Schedule A attached hereto. No Debtor will, without the Agent's prior written consent, remove its Collateral from the locations specified in the first sentence of this Section 3(b) other than temporarily in the normal course of business or to deliver the Collateral to any purchaser thereof in connection with any sale or other disposition of such Collateral expressly permitted by the Credit Agreement (provided that if for any reason Collateral is at any time kept or located at locations other than its present location or locations hereafter consented to by the Agent shall nevertheless have and retain a security interest therein). The aggregate value of all Debtors' Collateral located in the State of Tennessee shall not at any time exceed $5,000. (c) The Collateral and every part thereof is and will be free and clear of all security interests, liens (including, without limitation, mechanic's, laborer's and statutory liens), attachments, levies and encumbrances of every kind, nature and description and whether voluntary or involuntary except for the security interest of the Agent, the Agent therein and as otherwise provided in the Credit Agreement (including without limitation, Permitted Liens), and each Debtor will warrant and defend its Collateral against any claims and demands of all persons at any time claiming the same or any interest therein adverse to the Agent or any Lender. (d) Each Debtor will pay promptly when due all taxes, assessments, and governmental charges and levies upon or against its Collateral in each case before the same become delinquent and before penalties accrue thereon, unless and to the extent that the same are being contested in good faith by appropriate proceedings. (e) Each Debtor at its own cost and expense will maintain, keep and preserve its Collateral in good repair and condition and will not waste or destroy such Collateral or any part thereof except as expressly permitted by the Credit Agreement and will not be negligent in the care and use of any Collateral and will not use or permit to be used any Collateral in violation of any statute, ordinance or other governmental requirement. Each Debtor will perform its obligations under any contract or other agreement constituting part of the Collateral, it being understood and agreed that the Agent and the Lenders have no responsibility to perform such obligations. (f) Except for Permitted Liens or as expressly permitted by the Credit Agreement, and subject to Sections 5(a), 7(b) and 7(c) hereof, no Debtor will, without the Agent's prior written consent, sell, assign, mortgage, lease or otherwise dispose of its Collateral or any interest therein. (g) Each Debtor will insure its Collateral which is insurable against such risks and hazards as other companies similarly situated insure against, and including in any event loss or damage by fire, theft, burglary, pilferage, loss in transit and such other hazards as the Agent may specify, in amounts and under policies containing loss payable clauses to the Agent as its interest may appear (and, if the Agent requests, naming the Agent and the Lenders as additional insureds therein) by insurers acceptable to the Agent. In case of any material loss, damage to or destruction of its Collateral or any part thereof, the appropriate Debtor shall promptly give written notice thereof to the Agent generally describing the nature and extent of such damage or destruction. In the event any Debtor shall receive any proceeds of such insurance, such Debtor will immediately pay over such proceeds to the Agent. Net insurance proceeds received by the Agent under the provisions hereof or under any policy or policies of insurance covering the Collateral or any part thereof shall be applied to the reduction of the Obligations (whether or not then due); as and to the extent provided in the Credit Agreement. All insurance proceeds shall be subject to the lien and security interest of the Agent hereunder. UNLESS THE DEBTORS PROVIDE THE AGENT WITH EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY THIS AGREEMENT, THE AGENT MAY PURCHASE INSURANCE AT THE DEBTORS' EXPENSE TO PROTECT THE AGENT'S INTERESTS IN THE COLLATERAL. THIS INSURANCE MAY, BUT NEED NOT, PROTECT ANY DEBTOR'S INTERESTS IN THE COLLATERAL. THE COVERAGE PURCHASED BY THE AGENT MAY NOT PAY ANY CLAIMS THAT ANY DEBTOR MAKES OR ANY CLAIM THAT IS MADE AGAINST SUCH DEBTOR IN CONNECTION WITH THE COLLATERAL. THE DEBTORS MAY LATER CANCEL ANY SUCH INSURANCE PURCHASED BY THE AGENT, BUT ONLY AFTER PROVIDING THE AGENT WITH EVIDENCE THAT THE DEBTORS HAVE OBTAINED INSURANCE AS REQUIRED BY THIS AGREEMENT. IF THE AGENT PURCHASES INSURANCE FOR THE COLLATERAL, THE DEBTORS WILL BE RESPONSIBLE FOR THE COSTS OF THAT INSURANCE, INCLUDING INTEREST AND ANY OTHER CHARGES THAT THE AGENT MAY IMPOSE IN CONNECTION WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE INSURANCE. THE COSTS OF THE INSURANCE MAY BE ADDED TO THE OBLIGATIONS SECURED HEREBY. THE COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF INSURANCE THE DEBTORS MAY BE ABLE TO OBTAIN ON THEIR OWN. (h) Each Debtor will at all times allow the Agent, any Lender or their respective representatives free access to and right of inspection of the Collateral. Each Debtor will, to the extent it is within its power so to do, authorize and instruct all bailees and other parties at any time holding, storing, shipping or transferring all or any part of such Debtor's Collateral to permit the Agent, any Lender or their respective or its designees to examine and inspect any of such Collateral then in such party's possession and to verify from such party's own books and records any information concerning such Collateral or any part thereof which the Agent or such Lender may seek to verify. As to any premises not owned by any of the Debtors wherein any of the Collateral is located, if any, the appropriate Debtor shall, unless the Agent requests otherwise, cause each Person having any right, title or interest in, or lien on, any of such premises to enter into an agreement (any such agreement to contain a legal description of such premises) whereby such party disclaims any right, title and interest in, and lien on, the Collateral, allowing the removal of such Collateral by the Agent or its designee and otherwise in form and substance acceptable to the Agent; PROVIDED, HOWEVER, that if and so long as no Event of Default has occurred and is continuing, no such agreement need be obtained for (i) locations owned or leased by Polygram or (ii) leased locations where inventory for all the Debtors aggregating at all such locations (all such locations taken together) of not more than $500,000 in value is located in the ordinary course of a Borrower's business for delivery to purchasers thereof. (i) Each Debtor agrees from time to time to deliver to the Agent and any Lender such evidence of the existence and identity of such Debtor's Collateral and of its availability as collateral security pursuant hereto (including, without limitation, schedules describing all Receivables created or acquired by such Debtor, copies of customer invoices or the equivalent and original shipping or delivery receipts for all merchandise and other goods sold or leased or services rendered, together with such Debtor's warranty of the genuineness thereof, and reports stating the book value of Inventory and Equipment by major category and location), as the Agent or such Lender may request. Each Debtor will promptly notify the Agent and each Lender of any Collateral which such Debtor has determined to have been rendered obsolete, stating the prior book value of such Collateral, its type and location. (j) Each Debtor will comply with the terms and conditions of any leases, easements, right-of-way agreements or other agreements covering the premises wherein its Collateral is located and any orders, ordinances, laws or statutes of any city, state or other governmental entity, department or agency having jurisdiction with respect to such premises or the conduct of business thereon for which any such non-compliance would have a Material Adverse Effect. (k) On failure of any Debtor to perform any of the covenants and agreements herein contained, the Agent may, at its option, perform the same and in so doing may expend such sums as the Agent may deem advisable in the performance thereof, including without limitation the payment of any insurance premiums, the payment of any taxes, liens and encumbrances, expenditures made in defending against any adverse claim and all other expenditures which the Agent may be compelled to make by operation of law or which the Agent may make by agreement or otherwise for the protection of the security hereof. All such sums and amounts so expended shall be repayable by the Debtors immediately without notice or demand, shall constitute so much additional Obligations hereby secured and shall bear interest from the date said amounts are expended at the rate per annum (computed on the basis of a 360-day year for the actual number of days elapsed) determined by adding 3% to the Domestic Rate (such rate per annum as so determined being hereinafter referred to as the "DEFAULT RATE"). No such performance of any covenant or agreement by the Agent on behalf of any Debtor and no such advancement or expenditure therefor, shall relieve any Debtor of any default under the terms of this Agreement or in any way obligate the Agent or any Lender to take any further or future action with respect thereto. The Agent, in making any payment hereby authorized, may do so according to any ▇▇▇▇, statement or estimate procured from the appropriate public office or holder of the claim to be discharged without inquiry into the accuracy of such ▇▇▇▇, statement or estimate or into the validity of any tax assessment, sale, forfeiture, tax lien or title or claim. The Agent, in performing any act hereunder, shall be the sole judge of whether the relevant Debtor is required to perform same under the terms of this Agreement. The Agent is authorized to charge any depository account of any Debtor maintained with the Agent for the amount of such sums and amounts so expended. (l) Each Debtor warrants that such Debtor has not transacted business, and does not transact business, under any trade names except as set forth on Schedule B. Each Debtor agrees that it will not change its name or transact business under any trade names without first giving the Agent 30 days' prior written notice of its intent to do so. (m) Each Debtor agrees to execute and deliver to the Agent such further agreements and assignments or other instruments and to do all such other things as the Agent may deem necessary or appropriate to assure the Agent its security interest hereunder, including such financing statement or statements or amendments thereof or supplements thereto or other instruments as the Agent or the Required Lenders may from time to time require in order to comply with the Uniform Commercial Code as enacted in the State of Illinois and any successor statute(s) thereto (the "CODE"). Each Debtor hereby agrees that a carbon, photographic or other reproduction of this Agreement or any such financing statement is sufficient for filing as a financing statement by the Agent without notice thereof to any Debtor wherever the Agent in its sole discretion desires to file the same. In the event for any reason the law of any other jurisdiction than Illinois becomes or is applicable to the Collateral or any part thereof, or to any of the Obligations, each Debtor agrees to execute and deliver all such instruments and to do all such other things as the Agent in its sole discretion deems necessary or appropriate to preserve, protect and enforce the security interests of the Agent under the law of such other jurisdiction to at least the same extent as such security interests would be protected under the Code. If any Collateral is in the possession or control of any Debtor's agents or processors and unless the Agent requests otherwise, such Debtor agrees to notify such agents or processors in writing of the Agent's security interests therein, and upon the Agent's request instruct them to hold all such Collateral for the Agent's account and subject to the Agent's instructions. The Debtors agree to ▇▇▇▇ their books and records to reflect the security interests of the Agent in the Collateral.
Appears in 1 contract
Covenants, Agreements, Representations and Warranties. Each Debtor hereby covenants and agrees with, and represents and warrants to the Agent and the Lenders that:
(a) Such Debtor is duly organized and existing under the laws of the state of its organization, is the sole and lawful owner of its Collateral and has full right, power and authority to enter into this Agreement and to perform each and all of the matters and things herein provided for; and the execution and delivery of this Agreement, and the observance and performance of any of the matters and things herein set forth, will not violate or contravene any provision of law or of the articles of incorporation, by-laws or operating agreement of such Debtor, as applicable, or of any indenture where such violation or contravention would have a Material Adverse Effectindenture, loan agreement or other agreement of or affecting such Debtor or any of its properties, or result in the creation or imposition of any liens or encumbrance on any property of such Debtor.
(b) The Collateral is in each Debtor's possession at the locations listed under Column 1 Column_1 on Schedule A Schedule_A attached hereto. Each Debtor's respective chief executive office and chief place of business is listed opposite its name on Schedule A Schedule_A attached hereto and the Debtors have no other places of business other than those listed under Column 4 Column_4 on Schedule A Schedule_A attached hereto. No Debtor will, without the Agent's prior written consent, will remove its Collateral from the locations specified in the first sentence of this Section 3(bSection_3(b) other than temporarily in without prior written notice to the normal course of business or to deliver the Collateral to any purchaser thereof in connection with any sale or other disposition of Agent, unless such Collateral expressly permitted by will be moved to a location outside the Credit Agreement United States, in which event, the Agent's prior written consent shall be required, which consent shall not be unreasonably withheld (provided that if for any reason Collateral is at any time kept or located at locations other than its present location or locations hereafter consented to by the Agent shall nevertheless have and retain a security interest therein). The aggregate value of all Debtors' Collateral located in the State of Tennessee shall not at any time exceed $5,000.
(c) The Collateral and every part thereof is and will be free and clear of all security interests, liens (including, without limitation, mechanic's, laborer's and statutory liens), attachments, levies and encumbrances of every kind, nature and description and whether voluntary or involuntary except for the security interest of the Agent, the Agent therein and as otherwise provided in the Credit Agreement (including without limitation, Permitted Liens)Agreement, and each Debtor will warrant and defend its Collateral against any claims and demands of all persons at any time claiming the same or any interest therein adverse to the Agent or any Lender.
(d) Each Debtor will pay promptly when due all taxes, assessments, and governmental charges and levies upon or against its Collateral in each case before the same become delinquent and before penalties accrue thereon, unless and to the extent that the same are being contested in good faith by appropriate proceedings.
(e) Each Debtor at its own cost and expense will maintain, keep and preserve its Collateral in good repair and condition and will not waste or destroy such Collateral or any part thereof except as expressly permitted by the Credit Agreement and will not be negligent in the care and use of any Collateral and will not use or permit to be used any Collateral in violation of any statute, ordinance or other governmental requirement. Each Debtor will perform its obligations under any contract or other agreement constituting part of the Collateral, it being understood and agreed that the Agent and the Lenders have no responsibility to perform such obligations.
(f) Except for Permitted Liens or as liens expressly permitted by the Credit Agreement, and subject to Sections 5(aSections_5(a), 7(b) and 7(c) hereof, no Debtor will, without the Agent's prior written consent, sell, assign, mortgage, lease or otherwise dispose of its Collateral or any interest therein.
(g) Each Debtor will insure its Collateral which is insurable against such risks and hazards as other companies similarly situated insure against, and including in any event loss or damage by fire, theft, burglary, pilferage, loss in transit and such other hazards as the Agent may specify, in amounts and under policies containing loss payable clauses to the Agent as its interest may appear (and, if the Agent requests, naming the Agent and the Lenders as additional insureds therein) by insurers acceptable to the Agent. In case of any material loss, damage to or destruction of its Collateral or any part thereof, the appropriate Debtor shall promptly give written notice thereof to the Agent generally describing the nature and extent of such damage or destruction. In the event any Debtor shall receive any proceeds of such insurance, such Debtor will immediately pay over such proceeds to the Agent. Net insurance proceeds received by the Agent under the provisions hereof or under any policy or policies of insurance covering the Collateral or any part thereof shall be applied to the reduction of the Obligations (whether or not then due); as and provided, however, that the Agent may in its sole discretion release any or all such insurance proceeds to the extent provided in the Credit Agreementappropriate Debtor. All insurance proceeds shall be subject to the lien and security interest of the Agent hereunder. UNLESS THE DEBTORS PROVIDE THE AGENT WITH EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY THIS AGREEMENT, THE AGENT MAY PURCHASE INSURANCE AT THE DEBTORS' EXPENSE TO PROTECT THE AGENT'S INTERESTS IN THE COLLATERAL. THIS INSURANCE MAY, BUT NEED NOT, PROTECT ANY DEBTOR'S INTERESTS IN THE COLLATERAL. THE COVERAGE PURCHASED BY THE AGENT MAY NOT PAY ANY CLAIMS THAT ANY DEBTOR MAKES OR ANY CLAIM THAT IS MADE AGAINST SUCH DEBTOR IN CONNECTION WITH THE COLLATERAL. THE DEBTORS MAY LATER CANCEL ANY SUCH INSURANCE PURCHASED BY THE AGENT, BUT ONLY AFTER PROVIDING THE AGENT WITH EVIDENCE THAT THE DEBTORS HAVE OBTAINED INSURANCE AS REQUIRED BY THIS AGREEMENT. IF THE AGENT PURCHASES INSURANCE FOR THE COLLATERAL, THE DEBTORS WILL BE RESPONSIBLE FOR THE COSTS OF THAT INSURANCE, INCLUDING INTEREST AND ANY OTHER CHARGES THAT THE AGENT MAY IMPOSE IN CONNECTION WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE INSURANCE. THE COSTS OF THE INSURANCE MAY BE ADDED TO THE OBLIGATIONS SECURED HEREBY. THE COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF INSURANCE THE DEBTORS MAY BE ABLE TO OBTAIN ON THEIR OWN.
(h) Each Debtor will at all times allow the Agent, any Lender or their respective representatives free access to and right of inspection of the Collateral. Each Debtor will, to the extent it is within its power so to do, authorize and instruct all bailees and other parties at any time holding, storing, shipping or transferring all or any part of such Debtor's Collateral to permit the Agent, any Lender or their respective or its designees to examine and inspect any of such Collateral then in such party's possession and to verify from such party's own books and records any information concerning such Collateral or any part thereof which the Agent or such Lender may seek to verify. As to any premises not owned by any of the Debtors wherein any of the Collateral is located, if any, the appropriate Debtor shall, unless the Agent requests otherwise, cause each Person having any right, title or interest in, or lien on, any of such premises to enter into an agreement (any such agreement to contain a legal description of such premises) whereby such party disclaims any right, title and interest in, and lien on, the Collateral, allowing the removal of such Collateral by the Agent or its designee and otherwise in form and substance acceptable to the Agent; PROVIDED, HOWEVER, that if and so long as no Event of Default has occurred and is continuing, no such agreement need be obtained for (i) locations owned or leased by Polygram or (ii) leased locations where inventory for all the Debtors aggregating at all such locations (all such locations taken together) of not more than $500,000 in value is located in the ordinary course of a Borrower's business for delivery to purchasers thereof.
(i) Each Debtor agrees from time to time to deliver to the Agent and any Lender such evidence of the existence and identity of such Debtor's Collateral and of its availability as collateral security pursuant hereto (including, without limitation, schedules describing all Receivables created or acquired by such Debtor, copies of customer invoices or the equivalent and original shipping or delivery receipts for all merchandise and other goods sold or leased or services rendered, together with such Debtor's warranty of the genuineness thereof, and reports stating the book value of Inventory and Equipment by major category and location), as the Agent or such Lender may request. Each Debtor will promptly notify the Agent and each Lender of any Collateral which such Debtor has determined to have been rendered obsolete, stating the prior book value of such Collateral, its type and location.
(j) Each Debtor will comply with the terms and conditions of any leases, easements, right-of-way agreements or other agreements covering the premises wherein its Collateral is located and any orders, ordinances, laws or statutes of any city, state or other governmental entity, department or agency having jurisdiction with respect to such premises or the conduct of business thereon for which any such non-compliance would have a Material Adverse Effectthereon.
(k) On failure of any Debtor to perform any of the covenants and agreements herein contained, the Agent may, at its option, perform the same and in so doing may expend such sums as the Agent may deem advisable in the performance thereof, including without limitation the payment of any insurance premiums, the payment of any taxes, liens and encumbrances, expenditures made in defending against any adverse claim and all other expenditures which the Agent may be compelled to make by operation of law or which the Agent may make by agreement or otherwise for the protection of the security hereof. All such sums and amounts so expended shall be repayable by the Debtors immediately without notice or demand, shall constitute so much additional Obligations hereby secured and shall bear interest from the date said amounts are expended at the rate per annum (computed on the basis of a 360365-day year or 366 day year, as the case may be, for the actual number of days elapsed) determined by adding 32% to the Domestic Base Rate (such rate per annum as so determined being hereinafter referred to as the "DEFAULT RATEDefault Rate"). No such performance of any covenant or agreement by the Agent on behalf of any Debtor and no such advancement or expenditure therefor, shall relieve any Debtor of any default under the terms of this Agreement or in any way obligate the Agent or any Lender to take any further or future action with respect thereto. The Agent, in making any payment hereby authorized, may do so according to any bill, ▇▇▇▇, statement atement or estimate procured from the appropriate public office or holder of the claim to be discharged without inquiry into the accuracy of such ▇▇▇▇bill, statement or estimate or into the validity of any tax assessment, sale, forfeiture, tax lien or title or claim. The Agent, in performing any act hereunder, shall be the sole judge of whether the relevant Debtor is required to perform same under the terms of this Agreement. The Agent is authorized to charge any depository account of any Debtor maintained with the Agent for the amount of such sums and amounts so expended.
(l) Each Debtor warrants that such Debtor has not transacted business, and does not transact business, under any trade names except as set forth on Schedule B. Schedule_B. Each Debtor agrees that it will not change its name or transact business under any trade names without first giving the Agent 30 days' prior written notice of its intent to do so.
(m) Each Debtor agrees to execute and deliver to the Agent such further agreements and assignments or other instruments and to do all such other things as the Agent may deem necessary or appropriate to assure the Agent its security interest hereunder, including such financing statement or statements or amendments thereof or supplements thereto or other instruments as the Agent or the Required Lenders may from time to time require in order to comply with the Uniform Commercial Code as enacted in the State of Illinois and any successor statute(s) thereto (the "CODECode"). Each Debtor hereby agrees that a carbon, photographic or other reproduction of this Agreement or any such financing statement is sufficient for filing as a financing statement by the Agent without notice thereof to any Debtor wherever the Agent in its sole discretion desires to file the same. In the event for any reason the law of any other jurisdiction than Illinois becomes or is applicable to the Collateral or any part thereof, or to any of the Obligations, each Debtor agrees to execute and deliver all such instruments and to do all such other things as the Agent in its sole discretion deems necessary or appropriate to preserve, protect and enforce the security interests of the Agent under the law of such other jurisdiction to at least the same extent as such security interests would be protected under the Code. If any Collateral is in the possession or control of any Debtor's agents or processors and unless the Agent requests otherwise, such Debtor agrees to notify such agents or processors in writing of the Agent's security interests therein, and upon the Agent's request instruct them to hold all such Collateral for the Agent's account and subject to the Agent's instructions. The Debtors agree to mark ▇▇▇▇ their ir books and records to reflect the security interests of the Agent in the Collateral.
Appears in 1 contract
Covenants, Agreements, Representations and Warranties. Each Debtor hereby covenants and agrees with, and represents and warrants to the Agent and the Lenders Banks that:
(a) Such Debtor is duly organized and existing under the laws of the state of its organization, is the sole and lawful owner of its Collateral and has full right, power and authority to enter into this Agreement and to perform each and all of the matters and things herein provided for; and the execution and delivery of this Agreement, and the observance and performance of any of the matters and things herein set forth, will not violate or contravene any provision of law or of the articles of incorporation, by-laws or operating agreement of such Debtor, as applicable, or of any indenture where such violation or contravention would have a Material Adverse Effectindenture, loan agreement or other agreement of or affecting such Debtor or any of its properties, or result in the creation or imposition of any liens or encumbrance on any property of such Debtor.
(b) The Collateral is in each Debtor's possession at the locations listed under Column 1 on Schedule A attached hereto. Each Debtor's respective chief executive office and chief place of business is listed opposite its name on Schedule A attached hereto and the Debtors have no other places of business other than those listed under Column 4 on Schedule A attached hereto. No Debtor will, without the Agent's prior written consent, will remove its Collateral from the locations specified in the first sentence of this Section 3(b) other than temporarily in without the normal course of business or to deliver the Collateral to any purchaser thereof in connection with any sale or other disposition of such Collateral expressly permitted by the Credit Agreement Agent's prior written consent (provided that if for any reason Collateral is at any time kept or located at locations other than its present location or locations hereafter consented to by the Agent shall nevertheless have and retain a security interest therein). The aggregate value of all Debtors' Collateral located in the State of Tennessee shall not at any time exceed $5,000.
(c) The Collateral and every part thereof is and will be free and clear of all security interests, liens (including, without limitation, mechanic's, laborer's and statutory liens), attachments, levies and encumbrances of every kind, nature and description and whether voluntary or involuntary except for the security interest of the Agent, the Agent therein and as otherwise provided in the Credit Agreement (including without limitation, Permitted Liens)Agreement, and each Debtor will warrant and defend its Collateral against any claims and demands of all persons at any time claiming the same or any interest therein adverse to the Agent or any LenderBank.
(d) Each Debtor will pay promptly when due all taxes, assessments, and governmental charges and levies upon or against its Collateral in each case before the same become delinquent and before penalties accrue thereon, unless and to the extent that the same are being contested in good faith by appropriate proceedings.
(e) Each Debtor at its own cost and expense will maintain, keep and preserve its Collateral in good repair and condition and will not waste or destroy such Collateral or any part thereof except as expressly permitted by the Credit Agreement and will not be negligent in the care and use of any Collateral and will not use or permit to be used any Collateral in violation of any statute, ordinance or other governmental requirement. Each Debtor will perform its obligations under any contract or other agreement constituting part of the Collateral, it being understood and agreed that the Agent and the Lenders Banks have no responsibility to perform such obligations.
(f) Except for Permitted Liens or as liens expressly permitted by the Credit Agreement, and subject to Sections 5(a), 7(b) and 7(c) hereof, no Debtor will, without the Agent's prior written consent, sell, assign, mortgage, lease or otherwise dispose of its Collateral or any interest therein.
(g) Each Debtor will insure its Collateral which is insurable against such risks and hazards as other companies similarly situated insure against, and including in any event loss or damage by fire, theft, burglary, pilferage, loss in transit and such other hazards as the Agent may specify, in amounts and under policies containing loss payable clauses to the Agent as its interest may appear (and, if the Agent requests, naming the Agent and the Lenders Banks as additional insureds therein) by insurers acceptable to the Agent. In case of any material loss, damage to or destruction of its Collateral or any part thereof, the appropriate Debtor shall promptly give written notice thereof to the Agent generally describing the nature and extent of such damage or destruction. In the event any Debtor shall receive any proceeds of such insurance, such Debtor will immediately pay over such proceeds to the Agent. Net insurance proceeds received by the Agent under the provisions hereof or under any policy or policies of insurance covering the Collateral or any part thereof shall be applied to the reduction of the Obligations (whether or not then due); as and PROVIDED, HOWEVER, that the Agent may in its sole discretion release any or all such insurance proceeds to the extent provided in the Credit Agreementappropriate Debtor. All insurance proceeds shall be subject to the lien and security interest of the Agent hereunder. UNLESS THE DEBTORS PROVIDE THE AGENT WITH EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY THIS AGREEMENT, THE AGENT MAY PURCHASE INSURANCE AT THE DEBTORS' EXPENSE TO PROTECT THE AGENT'S INTERESTS IN THE COLLATERAL. THIS INSURANCE MAY, BUT NEED NOT, PROTECT ANY DEBTOR'S INTERESTS IN THE COLLATERAL. THE COVERAGE PURCHASED BY THE AGENT MAY NOT PAY ANY CLAIMS THAT ANY DEBTOR MAKES OR ANY CLAIM THAT IS MADE AGAINST SUCH DEBTOR IN CONNECTION WITH THE COLLATERAL. THE DEBTORS MAY LATER CANCEL ANY SUCH INSURANCE PURCHASED BY THE AGENT, BUT ONLY AFTER PROVIDING THE AGENT WITH EVIDENCE THAT THE DEBTORS HAVE OBTAINED INSURANCE AS REQUIRED BY THIS AGREEMENT. IF THE AGENT PURCHASES INSURANCE FOR THE COLLATERAL, THE DEBTORS WILL BE RESPONSIBLE FOR THE COSTS OF THAT INSURANCE, INCLUDING INTEREST AND ANY OTHER CHARGES THAT THE AGENT MAY IMPOSE IN CONNECTION WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE INSURANCE. THE COSTS OF THE INSURANCE MAY BE ADDED TO THE OBLIGATIONS SECURED HEREBY. THE COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF INSURANCE THE DEBTORS MAY BE ABLE TO OBTAIN ON THEIR OWN.
(h) Each Debtor will at all times allow the Agent, any Lender Bank or their respective representatives free access to and right of inspection of the Collateral. Each Debtor will, to the extent it is within its power so to do, authorize and instruct all bailees and other parties at any time holding, storing, shipping or transferring all or any part of such Debtor's Collateral to permit the Agent, any Lender Bank or their respective or its designees to examine and inspect any of such Collateral then in such party's possession and to verify from such party's own books and records any information concerning such Collateral or any part thereof which the Agent or such Lender Bank may seek to verify. As to any premises not owned by any of the Debtors wherein any of the Collateral is located, if any, the appropriate Debtor shall, unless the Agent requests otherwise, cause each Person having any right, title or interest in, or lien on, any of such premises to enter into an agreement (any such agreement to contain a legal description of such premises) whereby such party disclaims any right, title and interest in, and lien on, the Collateral, allowing the removal of such Collateral by the Agent or its designee and otherwise in form and substance acceptable to the Agent; PROVIDED, HOWEVER, that if and so long as no Event of Default has occurred and is continuing, no such agreement need be obtained for (i) locations owned or leased by Polygram or (ii) leased locations where inventory for all the Debtors aggregating at all such locations (all such locations taken together) of not more than $500,000 in value is located in the ordinary course of a Borrower's business for delivery to purchasers thereof.
(i) Each Debtor agrees from time to time to deliver to the Agent and any Lender Bank such evidence of the existence and identity of such Debtor's Collateral and of its availability as collateral security pursuant hereto (including, without limitation, schedules describing all Receivables created or acquired by such Debtor, copies of customer invoices or the equivalent and original shipping or delivery receipts for all merchandise and other goods sold or leased or services rendered, together with such Debtor's warranty of the genuineness thereof, and reports stating the book value of Inventory and Equipment by major category and location), as the Agent or such Lender Bank may request. Each Debtor will promptly notify the Agent and each Lender Bank of any Collateral which such Debtor has determined to have been rendered obsolete, stating the prior book value of such Collateral, its type and location.
(j) Each Debtor will comply with the terms and conditions of any leases, easements, right-of-way agreements or other agreements covering the premises wherein its Collateral is located and any orders, ordinances, laws or statutes of any city, state or other governmental entity, department or agency having jurisdiction with respect to such premises or the conduct of business thereon for which any such non-compliance would have a Material Adverse Effectthereon.
(k) On failure of any Debtor to perform any of the covenants and agreements herein contained, the Agent may, at its option, perform the same and in so doing may expend such sums as the Agent may deem advisable in the performance thereof, including without limitation the payment of any insurance premiums, the payment of any taxes, liens and encumbrances, expenditures made in defending against any adverse claim and all other expenditures which the Agent may be compelled to make by operation of law or which the Agent may make by agreement or otherwise for the protection of the security hereof. All such sums and amounts so expended shall be repayable by the Debtors immediately without notice or demand, shall constitute so much additional Obligations hereby secured and shall bear interest from the date said amounts are expended at the rate per annum (computed on the basis of a 360-day year for the actual number of days elapsed) determined by adding 3% to the Domestic Base Rate (such rate per annum as so determined being hereinafter referred to as the "DEFAULT RATE"). No such performance of any covenant or agreement by the Agent on behalf of any Debtor and no such advancement or expenditure therefor, shall relieve any Debtor of any default under the terms of this Agreement or in any way obligate the Agent or any Lender Bank to take any further or future action with respect thereto. The Agent, in making any payment hereby authorized, may do so according to any ▇▇▇▇, statement or estimate procured from the appropriate public office or holder of the claim to be discharged without inquiry into the accuracy of such ▇▇▇▇, statement or estimate or into the validity of any tax assessment, sale, forfeiture, tax lien or title or claim. The Agent, in performing any act hereunder, shall be the sole judge of whether the relevant Debtor is required to perform same under the terms of this Agreement. The Agent is authorized to charge any depository account of any Debtor maintained with the Agent for the amount of such sums and amounts so expended.
(l) Each Debtor warrants that such Debtor has not transacted business, and does not transact business, under any trade names except as set forth on Schedule B. Each Debtor agrees that it will not change its name or transact business under any trade names without first giving the Agent 30 days' prior written notice of its intent to do so.
(m) Each Debtor agrees to execute and deliver to the Agent such further agreements and assignments or other instruments and to do all such other things as the Agent may deem necessary or appropriate to assure the Agent its security interest hereunder, including such financing statement or statements or amendments thereof or supplements thereto or other instruments as the Agent or the Required Lenders Banks may from time to time require in order to comply with the Uniform Commercial Code as enacted in the State of Illinois and any successor statute(s) thereto (the "CODE"). Each Debtor hereby agrees that a carbon, photographic or other reproduction of this Agreement or any such financing statement is sufficient for filing as a financing statement by the Agent without notice thereof to any Debtor wherever the Agent in its sole discretion desires to file the same. In the event for any reason the law of any other jurisdiction than Illinois becomes or is applicable to the Collateral or any part thereof, or to any of the Obligations, each Debtor agrees to execute and deliver all such instruments and to do all such other things as the Agent in its sole discretion deems necessary or appropriate to preserve, protect and enforce the security interests of the Agent under the law of such other jurisdiction to at least the same extent as such security interests would be protected under the Code. If any Collateral is in the possession or control of any Debtor's agents or processors and unless the Agent requests otherwise, such Debtor agrees to notify such agents or processors in writing of the Agent's security interests therein, and upon the Agent's request instruct them to hold all such Collateral for the Agent's account and subject to the Agent's instructions. The Debtors agree to ▇▇▇▇ their books and records to reflect the security interests of the Agent in the Collateral.
Appears in 1 contract
Covenants, Agreements, Representations and Warranties. Each Debtor hereby covenants and agrees with, and represents and warrants to the Agent and the Lenders Secured Creditors that:
(a) Such Debtor is duly organized and existing under the laws of the state of its organization, is the sole and lawful owner of its Collateral and has full right, power and authority to enter into this Agreement and to perform each and all of the matters and things herein provided for; and the execution and delivery of this Agreement, and the observance and performance of any of the matters and things herein set forth, will not violate or contravene any provision of law or of the articles of incorporation, by-laws or operating agreement of such Debtor, as applicable, or of any indenture where such violation or contravention would have a Material Adverse Effectindenture, loan agreement or other agreement of or affecting such Debtor or any of its properties, or result in the creation or imposition of any liens or encumbrance on any property of such Debtor.
(b) The Collateral is in each Debtor's possession at the locations listed under Column 1 on Schedule A attached hereto. Each Debtor's respective chief executive office and chief place of business is listed opposite its name on Schedule A attached hereto and the Debtors have no other places of business other than those listed under Column 4 on Schedule A attached hereto. No Debtor will, without the Agent's prior written consent, will remove its Collateral from the locations specified in the first sentence of this Section 3(b) other than temporarily in without prior written notice to the normal course of business or to deliver the Collateral to any purchaser thereof in connection with any sale or other disposition of Agent, unless such Collateral expressly permitted by will be moved to a location outside the Credit Agreement United States, in which event, the Agent's prior written consent shall be required, which consent shall not be unreasonably withheld (provided that if for any reason Collateral is at any time kept or located at locations other than its present location or locations hereafter consented to by the Agent shall nevertheless have and retain a security interest therein). The aggregate value of all Debtors' Collateral located in the State of Tennessee shall not at any time exceed $5,000.
(c) The Collateral and every part thereof is and will be free and clear of all security interests, liens (including, without limitation, mechanic's, laborer's and statutory liens), attachments, levies and encumbrances of every kind, nature and description and whether voluntary or involuntary except for the security interest of the Agent, the Agent therein and as otherwise provided in the Credit Agreement (including without limitation, Permitted Liens)Agreement, and each Debtor will warrant and defend its Collateral against any claims and demands of all persons at any time claiming the same or any interest therein adverse to the Agent or any LenderSecured Creditor.
(d) Each Debtor will pay promptly when due all taxes, assessments, and governmental charges and levies upon or against its Collateral in each case before the same become delinquent and before penalties accrue thereon, unless and to the extent that the same are being contested in good faith by appropriate proceedings.
(e) Each Debtor at its own cost and expense will maintain, keep and preserve its Collateral in good repair and condition and will not waste or destroy such Collateral or any part thereof except as expressly permitted by the Credit Agreement and will not be negligent in the care and use of any Collateral and will not use or permit to be used any Collateral in violation of any statute, ordinance or other governmental requirement. Each Debtor will perform its obligations under any contract or other agreement constituting part of the Collateral, it being understood and agreed that the Agent and the Lenders Secured Creditors have no responsibility to perform such obligations.
(f) Except for Permitted Liens or as liens expressly permitted by the Credit Agreement, and subject to Sections 5(a), 7(b) and 7(c) hereof, no Debtor will, without the Agent's prior written consent, sell, assign, mortgage, lease or otherwise dispose of its Collateral or any interest therein.
(g) Each Debtor will insure its Collateral which is insurable against such risks and hazards as other companies similarly situated insure against, and including in any event loss or damage by fire, theft, burglary, pilferage, loss in transit and such other hazards as the Agent may specify, in amounts and under policies containing loss payable clauses to the Agent as its interest may appear (and, if the Agent requests, naming the Agent and the Lenders Secured Creditors as additional insureds therein) by insurers acceptable to the Agent. In case of any material loss, damage to or destruction of its Collateral or any part thereof, the appropriate Debtor shall promptly give written notice thereof to the Agent generally describing the nature and extent of such damage or destruction. In the event any Debtor shall receive any proceeds of such insurance, such Debtor will immediately pay over such proceeds to the Agent. Net insurance proceeds received by the Agent under the provisions hereof or under any policy or policies of insurance covering the Collateral or any part thereof shall be applied to the reduction of the Obligations (whether or not then due); as and provided, however, that the Agent may in its sole discretion release any or all such insurance proceeds to the extent provided in the Credit Agreementappropriate Debtor. All insurance proceeds shall be subject to the lien and security interest of the Agent hereunder. UNLESS THE DEBTORS PROVIDE THE AGENT WITH EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY THIS AGREEMENT, THE AGENT MAY PURCHASE INSURANCE AT THE DEBTORS' EXPENSE TO PROTECT THE AGENT'S INTERESTS IN THE COLLATERAL. THIS INSURANCE MAY, BUT NEED NOT, PROTECT ANY DEBTOR'S INTERESTS IN THE COLLATERAL. THE COVERAGE PURCHASED BY THE AGENT MAY NOT PAY ANY CLAIMS THAT ANY DEBTOR MAKES OR ANY CLAIM THAT IS MADE AGAINST SUCH DEBTOR IN CONNECTION WITH THE COLLATERAL. THE DEBTORS MAY LATER CANCEL ANY SUCH INSURANCE PURCHASED BY THE AGENT, BUT ONLY AFTER PROVIDING THE AGENT WITH EVIDENCE THAT THE DEBTORS HAVE OBTAINED INSURANCE AS REQUIRED BY THIS AGREEMENT. IF THE AGENT PURCHASES INSURANCE FOR THE COLLATERAL, THE DEBTORS WILL BE RESPONSIBLE FOR THE COSTS OF THAT INSURANCE, INCLUDING INTEREST AND ANY OTHER CHARGES THAT THE AGENT MAY IMPOSE IN CONNECTION WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE INSURANCE. THE COSTS OF THE INSURANCE MAY BE ADDED TO THE OBLIGATIONS SECURED HEREBY. THE COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF INSURANCE THE DEBTORS MAY BE ABLE TO OBTAIN ON THEIR OWN.
(h) Each Debtor will at all times allow the Agent, any Lender Secured Creditor or their respective representatives free access to and right of inspection of the Collateral. Each Debtor will, to the extent it is within its power so to do, authorize and instruct all bailees and other parties at any time holding, storing, shipping or transferring all or any part of such Debtor's Collateral to permit the Agent, any Lender Secured Creditor or their respective or its designees to examine and inspect any of such Collateral then in such party's possession and to verify from such party's own books and records any information concerning such Collateral or any part thereof which the Agent or such Lender Secured Creditor may seek to verify. As to any premises not owned by any of the Debtors wherein any of the Collateral is located, if any, the appropriate Debtor shall, unless the Agent requests otherwise, cause each Person having any right, title or interest in, or lien on, any of such premises to enter into an agreement (any such agreement to contain a legal description of such premises) whereby such party disclaims any right, title and interest in, and lien on, the Collateral, allowing the removal of such Collateral by the Agent or its designee and otherwise in form and substance acceptable to the Agent; PROVIDED, HOWEVER, that if and so long as no Event of Default has occurred and is continuing, no such agreement need be obtained for (i) locations owned or leased by Polygram or (ii) leased locations where inventory for all the Debtors aggregating at all such locations (all such locations taken together) of not more than $500,000 in value is located in the ordinary course of a Borrower's business for delivery to purchasers thereof.
(i) Each Debtor agrees from time to time to deliver to the Agent and any Lender Secured Creditor such evidence of the existence and identity of such Debtor's Collateral and of its availability as collateral security pursuant hereto (including, without limitation, schedules describing all Receivables created or acquired by such Debtor, copies of customer invoices or the equivalent and original shipping or delivery receipts for all merchandise and other goods sold or leased or services rendered, together with such Debtor's warranty of the genuineness thereof, and reports stating the book value of Inventory and Equipment by major category and location), as the Agent or such Lender Secured Creditor may request. Each Debtor will promptly notify the Agent and each Lender Secured Creditor of any Collateral which such Debtor has determined to have been rendered obsolete, stating the prior book value of such Collateral, its type and location.
(j) Each Debtor will comply with the terms and conditions of any leases, easements, right-of-way agreements or other agreements covering the premises wherein its Collateral is located and any orders, ordinances, laws or statutes of any city, state or other governmental entity, department or agency having jurisdiction with respect to such premises or the conduct of business thereon for which any such non-compliance would have a Material Adverse Effectthereon.
(k) On failure of any Debtor to perform any of the covenants and agreements herein contained, the Agent may, at its option, perform the same and in so doing may expend such sums as the Agent may deem advisable in the performance thereof, including without limitation the payment of any insurance premiums, the payment of any taxes, liens and encumbrances, expenditures made in defending against any adverse claim and all other expenditures which the Agent may be compelled to make by operation of law or which the Agent may make by agreement or otherwise for the protection of the security hereof. All such sums and amounts so expended shall be repayable by the Debtors immediately without notice or demand, shall constitute so much additional Obligations hereby secured and shall bear interest from the date said amounts are expended at the rate per annum (computed on the basis of a 360365-day year or 366 day year, as the case may be, for the actual number of days elapsed) determined by adding 32% to the Domestic Base Rate (such rate per annum as so determined being hereinafter referred to as the "DEFAULT RATEDefault Rate"). No such performance of any covenant or agreement by the Agent on behalf of any Debtor and no such advancement or expenditure therefor, shall relieve any Debtor of any default under the terms of this Agreement or in any way obligate the Agent or any Lender Secured Creditor to take any further or future action with respect thereto. The Agent, in making any payment hereby authorized, may do so according to any bill, ▇▇▇▇, statement atement or estimate procured from the appropriate public office or holder of the claim to be discharged without inquiry into the accuracy of such bill, ▇▇▇▇, statement atement or estimate or into the validity of any tax assessment, sale, forfeiture, tax lien or title or claim. The Agent, in performing any act hereunder, shall be the sole judge of whether the relevant Debtor is required to perform same under the terms of this Agreement. The Agent is authorized to charge any depository account of any Debtor maintained with the Agent for the amount of such sums and amounts so expended.
(l) Each Debtor warrants that such Debtor has not transacted business, and does not transact business, under any trade names except as set forth on Schedule B. Each Debtor agrees that it will not change its name or transact business under any trade names without first giving the Agent 30 days' prior written notice of its intent to do so.
(m) Each Debtor agrees to execute and deliver to the Agent such further agreements and assignments or other instruments and to do all such other things as the Agent may deem necessary or appropriate to assure the Agent its security interest hereunder, including such financing statement or statements or amendments thereof or supplements thereto or other instruments as the Agent or the Required Lenders may from time to time require in order to comply with the Uniform Commercial Code as enacted in the State of Illinois and any successor statute(s) thereto (the "CODECode"). Each Debtor hereby agrees that a carbon, photographic or other reproduction of this Agreement or any such financing statement is sufficient for filing as a financing statement by the Agent without notice thereof to any Debtor wherever the Agent in its sole discretion desires to file the same. In the event for any reason the law of any other jurisdiction than Illinois becomes or is applicable to the Collateral or any part thereof, or to any of the Obligations, each Debtor agrees to execute and deliver all such instruments and to do all such other things as the Agent in its sole discretion deems necessary or appropriate to preserve, protect and enforce the security interests of the Agent under the law of such other jurisdiction to at least the same extent as such security interests would be protected under the Code. If any Collateral is in the possession or control of any Debtor's agents or processors and unless the Agent requests otherwise, such Debtor agrees to notify such agents or processors in writing of the Agent's security interests therein, and upon the Agent's request instruct them to hold all such Collateral for the Agent's account and subject to the Agent's instructions. The Debtors agree to mark ▇▇▇▇ their ir books and records to reflect the security interests of the Agent in the Collateral.
Appears in 1 contract