Common use of WARRANTIES AND REPRESENTATIONS OF BORROWER Clause in Contracts

WARRANTIES AND REPRESENTATIONS OF BORROWER. Each Borrower hereby warrants and represents to the Lender that: (a) the persons executing this Second Amendment on behalf of Borrower have full authority to execute this Second Amendment on behalf of Borrower and to bind Borrower thereby; (b) the execution and delivery by Borrower of this Second Amendment and the performance thereunder by Borrower has not and will not result in a breach of, or constitute a default under, any mortgage, lease, bank loan, credit arrangement, or other instrument or agreement to which either Borrower is a party or by which either Borrower or the property security the Loan may be bound or affected; (c) all covenants and representations made by the Borrower in the Loan Documents and all recitals and representations made in this Second Amendment and other Loan Documents evidencing or securing this Second Amendment are true and accurate as of the date hereof; (d) Borrower is a corporation duly organized and validly existing under the laws of the State of Florida, (e) there exists no action, suit, proceeding or investigation at law or in equity before any court, public board or body pending or threatened against or affect Borrower or the property securing the Loan wherein an unfavorable decision, ruling or finding would materially adversely affect the business, operations, properties or financial condition of Borrower or the property securing the Loan; (f) since the date of the Loan, there has been no material adverse change in the condition, financial or otherwise, of the Borrower, except as has been disclosed to Lender by the Borrower; Borrower has filed all tax returns which are required by federal or state law to be filed and has paid all of the Borrower's taxes that have become due, no material adverse change has occurred in connection with the property securing the Loan, except as has been disclosed to Lender by the Borrower; the Borrower has not been involved as a debtor in any bankruptcy, reorganization or insolvency proceeding, or in any proceeding seeking the appointment of receiver, conservator, liquidating agent or similar person for all or a substantial portion of the properly owned by Borrower has not made an assignment for the benefit of creditors or taken any other similar action for the protection or benefit of creditors. As used herein, the term "material adverse change" shall mean a severe financial reversal which could be reasonably expected to create the possibility that the Borrower would become insolvent within a period of two (2) years from the date hereof, (g) all financial statements delivered to the Lender were true and accurate as of the date of delivery to Lender; (h) the execution, delivery and performance by the Borrower of this Second Amendment, the Note and other Loan Documents, as amended as of the date hereof, have been duly and validly authorized and all consents and approvals which are necessary for authorization, binding effect, performance, and enforceability of this Second Amendment, the Note and the remaining Loan Documents have been received.

WARRANTIES AND REPRESENTATIONS OF BORROWER. Each 3.1 To induce Lender to enter into this Agreement and to make the Loans, Borrower hereby warrants and represents in favor of Lender (which representations and warranties will survive the delivery of each of the Revolving Note, each Equipment Term Note and the making of any advances under the Revolving Loan and the Equipment Loan and shall be deemed to be continuing as of each Advance until each of the Loans have been repaid in full (other than contingent obligations not yet due and owing) and Lender no longer has any obligation to make any advances under any of the Loans pursuant to Section 1 herein) that, as of the Effective Date: (a) the persons executing this Second Amendment on behalf of Borrower have full authority to execute this Second Amendment on behalf of Borrower and to bind Borrower thereby; (b) the execution and delivery by Borrower of this Second Amendment and the performance thereunder by Borrower has not and will not result in a breach of, or constitute a default under, any mortgage, lease, bank loan, credit arrangement, or other instrument or agreement to which either Borrower is a party or by which either Borrower or the property security the Loan may be bound or affected; (c) all covenants and representations made by the Borrower in the Loan Documents and all recitals and representations made in this Second Amendment and other Loan Documents evidencing or securing this Second Amendment are true and accurate as of the date hereof; (d) Borrower is a corporation duly organized and validly existing corporation under the laws of the State of Florida,Delaware and is in good standing under the laws of the State of Delaware. (b) Borrower is duly qualified to do business and in good standing as a foreign corporation in each state or other jurisdiction where the nature of the business conducted by it or the property owned by it requires such qualification, including, without limitation, the Commonwealth of Massachusetts, other than any qualification the lack thereof would not reasonably be expected to result in a material adverse effect. (c) Borrower has good and marketable title to all properties and assets which it purports to own, free and clear of all mortgages, liens, pledges, charges, security interests and encumbrances, other than liens filed in connection with any capital leases as may be permitted hereunder, if any, and those being granted to Lender and any other of the following liens or encumbrances which, together with the foregoing, shall constitute “Permitted Liens”: (i) liens for taxes not yet due or which are being contested in good faith by appropriate proceedings if adequate reserves with respect thereto are maintained on the books of Borrower, (ii) any non-consensual liens arising by operation of law, arising in the ordinary course of business, and for amounts which are not overdue for a period of more than thirty (30) days or that are being contested in good faith by appropriate proceedings; provided, however, that the foregoing shall not be deemed in any manner to exempt Borrower from any obligation contained herein requiring Borrower to remove or bond over any mechanic’s and materialmen’s lien filed against any Collateral and/or to exercise commercially reasonable efforts to deliver to Lender any applicable landlord consent and waiver of lien, (iii) easements, rights of way, restrictions, minor defects or irregularities in title and other similar liens not interfering in any material respect with the ordinary conduct of the business of Borrower and/or the perfection or enforcement of Lender’s lien and security interest in the Collateral granted pursuant to the terms hereof, (iv) normal and customary rights of setoff upon deposits in favor of depository institutions and liens of a collecting bank on payment items in the course of collection, and (v) non-exclusive licenses of Intellectual Property granted to third parties in the ordinary course of business. (d) As of the Effective Date, Borrower owns and holds or leases all real and personal property necessary or incidental to the present and reasonably expected planned future conduct of its business, including, without limitation, patents, trademarks, service marks, trade names, copyrights and licenses and other rights with respect to the foregoing, and all such tangible assets and properties of Borrower, whether real or personal, owned or leased, have been well maintained and are in good operating condition and repair (with the exception of normal wear and tear), and are free from defects other than such minor defects as do not interfere with the intended use thereof in the conduct of normal operations or adversely affect the resale value thereof. (e) there exists no actionAll books and records of Borrower, suitincluding, proceeding or investigation at law or in equity before any courtbut not limited to, public board or body pending or threatened against or affect Borrower or the property securing the Loan wherein an unfavorable decisionminute books, ruling or finding would materially adversely affect the business, operations, properties or financial condition by-laws and books of Borrower or the property securing the Loan;account are accurate and reflect all matters and transactions which should currently be reflected therein. (f) since The general business of Borrower is the date manufacturing and sale of the Loan, there has been no material adverse change in the condition, financial or otherwise, of the Borrower, except as has been disclosed to Lender by the Borrower; Borrower has filed all tax returns which are required by federal or state law to be filed non-lethal weapons and has paid all of the Borrower's taxes that have become due, no material adverse change has occurred in connection with the property securing the Loan, except as has been disclosed to Lender by the Borrower; the Borrower has not been involved as a debtor in any bankruptcy, reorganization or insolvency proceeding, or in any proceeding seeking the appointment of receiver, conservator, liquidating agent or similar person for all or a substantial portion of the properly owned by Borrower has not made an assignment for the benefit of creditors or taken any munitions and other similar action for the protection or benefit of creditors. As used herein, the term "material adverse change" shall mean a severe financial reversal which could be reasonably expected to create the possibility that the Borrower would become insolvent within a period of two (2) years from the date hereof,services and products related thereto. (g) all financial statements delivered to As of the Lender were true Effective Date, other than the equity interests of Byrna South Africa, a South African company (formerly known as Roboro Industries Ptd Ltd), Borrower does not have any subsidiaries and/or investments in the stock or securities of any other corporation, firm, trust or other entity and accurate as has not otherwise invested in the stock, common or preferred, or invested in any other ownership interest of any corporation or other entity, other than Cash Equivalents. “Cash Equivalents” means (a) any evidence of debt, maturing not more than one year from date of acquisition, issued or guaranteed by the United States Government or any agency thereof, (b) commercial paper, maturing not more than 270 days from the date of delivery to Lender; issue, or corporate demand notes, in each case (hunless issued by Lender or its holding company) the executionrated at least A-l by Standard & Poor’s Ratings Services, delivery and performance a division of The M▇▇▇▇▇-▇▇▇▇ Companies, Inc. or P-l by the Borrower M▇▇▇▇’▇ Investors Service, Inc., (c) any certificate of this Second Amendmentdeposit, the Note and other Loan Documentstime deposit or banker’s acceptance, as amended as maturing not more than 180 days after such time, or any overnight Federal Funds transaction that is issued or sold by Lender or its holding company (or by a commercial banking institution that is a member of the date hereofFederal Reserve System and has a combined capital and surplus and undivided profits of not less than $500,000,000), have been duly (d) any repurchase agreement entered into with Lender (or commercial banking institution of the nature referred to in clause (c)) which (i) is secured by a fully perfected security interest in any obligation of the type described in any of clauses (a) through (c) above and validly authorized (ii) has a market value at the time such repurchase agreement is entered into of not less than 100% of the repurchase obligation of Lender (or other commercial banking institution) thereunder and all consents and approvals (e) money market accounts or mutual funds which are necessary for authorization, binding effect, performanceinvest exclusively in assets satisfying the foregoing requirements, and enforceability of this Second Amendment, the Note and the remaining Loan Documents have been received(f) other short term liquid investments approved in writing by Lender.