Common use of Challenge to Validity Clause in Contracts

Challenge to Validity. (i) other than as set forth in sub-clause (ii) hereof, any Liens purported to be created under any Loan Document shall cease to be, or shall be asserted by any Loan Party not to be, valid and perfected Liens on Collateral (other than pursuant to the terms hereof or thereof or as a result of acts or omissions of the Agent or any Lender) having a value in excess of $7,500,000, with the priority required by the applicable Loan Documents, except as a result of the sale or other disposition of the applicable Collateral in a transaction permitted under the Loan Documents and in accordance with the terms of the Intercreditor Agreement, or (ii) any Liens purported to be created under any Loan Document shall cease to be, or shall be asserted by any Loan Party not to be, valid and perfected Liens on Inventory or Receivables included in the calculation of Borrowing Capacity (other than pursuant to the terms hereof or thereof or as a result of acts or omissions of the Agent or any Lender) having a value in excess of $750,000, with the priority required by the applicable Loan Documents, except as a result of the sale or other disposition of the applicable Inventory or Receivables in a transaction permitted under the Loan Documents and in accordance with the terms of the Intercreditor Agreement, or (iii) the Indebtedness of the Borrower or the obligations of the Parent or any other Loan Party pursuant to the Guarantee Agreement shall cease to be, or shall be asserted by any Loan Party not to be, legal, valid and binding obligations enforceable in accordance with terms.