GENERAL31747

• Permit No: M1977376
• IBM Index Class Name: General Documents
• Doc Name: SECURITY AGREEMENT
• Media Type: D
• Archive: No

agency pending or threatened against Guarantors and thex•e is no
action, suit, proceeding or claim pending or threatened against
Guarantors or their assets or goodwill, or affecting an}'
transactions contemplated by this Agreement or the othex•
Financing Agreements, or any instruments or documents dellivered
in connection herewith or therewith before any court, ax-bitrator,
or governmental or administrative body or agency which i.f
adversely determined with respect to Guarantors would reesult in
any material adverse change in Guarantors' respective businesses,
properties, assets, goodwill, or condition, financial or
otherwise.
(f) The execution, delivery and performance cif this
Agreement is within the corporate powers of each of Guarantors,
has been duly authorized, is not in contravention of laid or the
terms of the Charters, By-Laws or other incorporation papers of
any of Guarantors, or of any material indenture, agreem~ant or
undertaking to which any of Guarantors are a party or by which
any of Guarantors is bound.
(g) Guarantors do not have any Subsidiaries .as of the
date hereof except as set forth on Exhibit'B hereto. Each of
Guarantors are a wholly-owned subsidiary of Borrower. Guarantors
will not form or acquire any Subsidiaries without the prior
written consent of Lender. In the event Lender so consents
promptly upon such formation or acquisition, Guarantors will
cause any such Subsidiary to execute and deliver to Lender, in
form and substance satisfactory to Lender and its counsel: (i) an
absolute and unconditional guarantee of payment of any and all
present and future obligations of Borrower to Lender, (ii) a
general security agreement granting to Lender a first and only
lien (except as otherwise consented to by Lender) upon all of
such Subsidiary's assets, (iii) related Uniform Commercial Code
Financing Statements, and (iv) such other agreements, documents
and instruments as Lender may require, including, but not limited
to, supplements and amendments hereto and other loan agreements
or instruments evidencing indebtedness of such new Subsidiary to
Lender.
(h) Guarantors will not, and will not permit any
subsidiary to, create, incur, assume or permit to exist,
contingently or otherwise, any Indebtedness, except:
(i) indebtedness to Lender;
(ii) Indebtedness consisting of unsecured
current liabilities incurred in the ordinary course of their
respective businesses (including such Indebtedness which may be
an administrative expense under the Bankruptcy Code);
(iii) Indebtedness incurred in the ordinary
course of their respective businesses secured only by liens
permitted under Sections 3(i)(ii) and 3(i)(iii) hereof;
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