Common use of Representations and Warranties Regarding Collateral Clause in Contracts

Representations and Warranties Regarding Collateral. Debtor represents and warrants, as of the date of this Agreement and as of each date hereafter (except for changes permitted or contemplated by this Agreement) until termination of this Agreement: (i) The correct name of Debtor is set forth in the first paragraph of this Agreement. The chief place of business, chief executive office of Debtor and all Inventory and Equipment of Debtor is located at the address specified as the notice address for Debtor (the "Premises") and Debtor has exclusive possession and control of the Equipment and Inventory. All records concerning any Accounts and all originals of all chattel paper which evidence any Account are located at the Premises and none of the Accounts is evidenced by a promissory note or other instrument except for such notes and other instruments delivered to Secured Party. (ii) Debtor is the legal and beneficial owner of the Collateral free and clear of all liens except for liens of Secured Party. Debtor currently conducts business under the name: KIDSPEACE CORPORATION. 11/1/95 4 (iii) This Agreement creates in favor of Secured Party a legal, valid and enforceable security interest in the Collateral. When financing statements have been filed in the office of the Secretary of States of Massachusetts and Nevada or delivery of Collateral made to Secured Party, Secured Party will have a fully perfected first priority lien on, and security interest in, the Collateral in which a security interest may be perfected by filing or delivery. (iv) No authorization, approval or other action by, and no notice to or filing with, any governmental authority that have not already been taken or made and which are in full force and effect, is required (A) for the grant by Debtor of the security interest in the Collateral granted hereby; (B) for performance of this Agreement by Debtor; or (C) for the exercise by Secured Party of any of its other rights or remedies hereunder.

Representations and Warranties Regarding Collateral. Debtor represents (a) Appropriate financing statements having been filed in the jurisdictions listed on Schedule I hereto, all certificates representing investment property that consists of certificated securities having been delivered to the Secured Party, the Secured Party having obtained control over all investment property and warrantsall appropriate filings having been made, this Agreement is effective to create a valid and continuing first priority Lien on the Collateral, to the extent contemplated by the Securities Purchase Agreement, prior to all other Liens except Permitted Liens entitled to priority under Applicable Laws. All actions necessary or desirable to protect and perfect such security interest in each item of the Collateral has been duly taken. (b) The Company is the owner of the Collateral free from any adverse lien, security interest or other encumbrance, except for the security interest created by this Agreement and other Permitted Liens. (c) No effective security agreement, financing statement, equivalent security or lien instrument or continuation statement covering all or any part of the Collateral is on file or of record in any public office, except such as may have been filed by the Company in favor of the Secured Party pursuant to this Agreements or such as related to other Permitted Liens. (d) None of the Collateral constitutes, or is the proceeds of, “farm products” as defined in Section 9102(a)(34) or “consumer goods” as defined in Section 9102(a)(23), of the UCC. None of the account debtors in respect of any accounts, chattel paper or general intangibles and none of the obligors in respect of any instruments included in the Collateral is a governmental authority subject to the Federal Assignment of Claims Act. the amounts reflected on all records, invoices, statements, and schedules of Accounts with respect thereto (i) to the knowledge of the Company, are actually and absolutely owing to the Company as indicated thereon and (ii) are not in any way contingent; (e) Except as specifically disclosed to the Secured Party in writing, (i) there are no known setoffs, claims, or disputes existing or asserted with respect to any of the Collateral and the Company has not agreed and will not agree with any applicable account debtor to (A) any deduction therefrom, (B) any extension of time for the payment thereof, (C) any compromise or settlement for less than the full amount thereof, or (D) any release, in whole or in part, of any Person liable therefor, except as to all of the foregoing deductions, extensions, compromises, settlements, or releases allowed by the Company in the ordinary course of its business and disclosed to Secured Party. No payments have been made by account debtors obligated on any Collateral, except ordinary-course payments that have reduced the balance thereof as reported by the Company to Secured Party. To the best of the Company’s knowledge, each account debtor obligated on the Collateral has the capacity to contract and is solvent. (f) Schedule I hereto reflects as of the date of this Agreement and as of each date hereafter (except for changes permitted or contemplated by this Agreement) until termination of this Agreementhereof: (i) The correct the Company’s exact corporate name as it appears in its articles of Debtor is set forth in the first paragraph of this Agreement. The chief place of business, chief executive office of Debtor and all Inventory and Equipment of Debtor is located at the address specified as the notice address for Debtor (the "Premises") and Debtor has exclusive possession and control of the Equipment and Inventory. All records concerning any Accounts and all originals of all chattel paper which evidence any Account are located at the Premises and none of the Accounts is evidenced by a promissory note or other instrument except for such notes and other instruments delivered to Secured Party.incorporation; (ii) Debtor is the legal and beneficial owner state of incorporation of the Collateral free and clear of all liens except for liens of Secured Party. Debtor currently conducts business under the name: KIDSPEACE CORPORATION. 11/1/95 4Company; (iii) This Agreement creates in favor of Secured Party a legaleach other corporate name the Company has had since its organization, valid and enforceable security interest in together with the Collateral. When financing statements have been filed in the office date of the Secretary of States of Massachusetts and Nevada or delivery of Collateral made to Secured Party, Secured Party will have a fully perfected first priority lien on, and security interest in, the Collateral in which a security interest may be perfected by filing or delivery.relevant change; and (iv) No authorization, approval or other action by, and no notice all appropriate jurisdictions for filing financing statements to or filing with, any governmental authority that have not already been taken or made and which are in full force and effect, is required (A) for the grant by Debtor of perfect the security interest in the Collateral granted hereby; hereunder. (Bg) for performance The Company does not maintain and has not maintained within the past year any books or records concerning the Collateral except at the locations specified on Schedule I hereto. (h) The Company has identified clearly and accurately in its records the chattel paper that has been transferred pursuant to Securitization Transactions and otherwise. (i) Schedule II hereto sets forth a true and complete list of this Agreement all Securitization Transaction Collateral Release Agreements enter into by Debtor; or (C) for the exercise by Secured Party from March 8, 2002, through the date hereof. (j) Schedule III hereto sets forth a true and complete list of all Class B Certificates and Residual Interest Certificates pledged to the Secured Party through the date hereof. Other than the Class B Certificates and Residual Interest Certificates listed on such Schedule, the Company does not own or hold any of its other rights or remedies hereunderClass B Certificates and Residual Interest Certificates.