AND EACH OF ITS SUBSIDIARIES IS ACCURATE AND
COMPLETE.
THE EXECUTION, DELIVERY AND PERFORMANCE OF THE LOAN DOCUMENTS TO WHICH BORROWER
IS A PARTY HAVE BEEN DULY AUTHORIZED, AND DO NOT CONFLICT WITH BORROWER'S
ORGANIZATIONAL DOCUMENTS, NOR CONSTITUTE AN EVENT OF DEFAULT UNDER ANY MATERIAL
AGREEMENT BY WHICH BORROWER IS BOUND.
BORROWER IS NOT IN DEFAULT UNDER ANY
AGREEMENT TO WHICH IT IS A PARTY OR BY WHICH IT IS BOUND IN WHICH THE DEFAULT
COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON BORROWER'S
BUSINESS.
5.2
COLLATERAL.
BORROWER HAS GOOD TITLE TO, HAS RIGHTS IN, AND THE
POWER TO TRANSFER EACH ITEM OF THE COLLATERAL UPON WHICH IT PURPORTS TO GRANT A
LIEN HEREUNDER, FREE AND CLEAR OF ANY AND ALL LIENS EXCEPT PERMITTED LIENS.
BORROWER HAS NO DEPOSIT ACCOUNTS OTHER THAN THE DEPOSIT ACCOUNTS WITH BANK, THE
DEPOSIT ACCOUNTS, IF ANY, DESCRIBED IN THE PERFECTION CERTIFICATE DELIVERED TO
BANK IN CONNECTION HEREWITH, OR OF WHICH BORROWER HAS GIVEN BANK NOTICE AND
TAKEN SUCH ACTIONS AS ARE NECESSARY TO GIVE BANK A PERFECTED SECURITY INTEREST
THEREIN.
THE ACCOUNTS ARE BONA FIDE, EXISTING OBLIGATIONS OF THE ACCOUNT
DEBTORS.
THE COLLATERAL IS NOT IN THE POSSESSION OF ANY THIRD PARTY BAILEE (SUCH AS A
WAREHOUSE) EXCEPT AS OTHERWISE PROVIDED IN THE PERFECTION CERTIFICATE.
NONE OF
THE COMPONENTS OF THE COLLATERAL SHALL BE MAINTAINED AT LOCATIONS OTHER THAN AS
PROVIDED IN THE PERFECTION CERTIFICATE OR AS BORROWER HAS GIVEN BANK NOTICE
PURSUANT TO SECTION 7.2.
IN THE EVENT THAT BORROWER, AFTER THE DATE HEREOF,
INTENDS TO STORE OR OTHERWISE DELIVER ANY PORTION OF THE COLLATERAL, IN EXCESS
OF $100,000 IN THE AGGREGATE, TO A BAILEE, THEN BORROWER WILL FIRST RECEIVE THE
WRITTEN CONSENT OF BANK AND SUCH BAILEE MUST EXECUTE AND DELIVER A BAILEE
AGREEMENT IN FORM AND SUBSTANCE SATISFACTORY TO BANK IN ITS SOLE DISCRETION.
BORROWER IS THE SOLE OWNER OF ITS INTELLECTUAL PROPERTY, EXCEPT FOR
NON-EXCLUSIVE LICENSES GRANTED TO ITS CUSTOMERS IN THE ORDINARY COURSE OF
BUSINESS.
EXCEPT AS DISCLOSED BY BORROWER TO BANK IN THE PERFECTION
CERTIFICATE, (I) EACH PATENT OWNED BY BORROWER IS VALID AND ENFORCEABLE, (II) NO
PART OF BORROWER'S INTELLECTUAL PROPERTY HAS BEEN JUDGED INVALID OR
UNENFORCEABLE, IN WHOLE OR IN PART, AND (III) TO THE BEST OF BORROWER'S
KNOWLEDGE, NO WRITTEN CLAIM HAS BEEN MADE THAT ANY PART OF ITS INTELLECTUAL
PROPERTY VIOLATES THE RIGHTS OF ANY THIRD PARTY EXCEPT TO THE EXTENT SUCH CLAIM
COULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON BORROWER'S
BUSINESS. EXCEPT: (I)
AS NOTED ON THE PERFECTION CERTIFICATE, AND (II)
OVER-THE-COUNTER SOFTWARE THAT IS COMMERCIALLY AVAILABLE TO THE PUBLIC OR
PUBLICLY AVAILABLE SOFTWARE, BORROWER IS NOT A PARTY TO, NOR IS BOUND BY, ANY
MATERIAL LICENSE OR OTHER AGREEMENT WITH RESPECT TO WHICH BORROWER IS THE
LICENSEE THAT PROHIBITS OR OTHERWISE RESTRICTS BORROWER FROM GRANTING A SECURITY
INTEREST IN BORROWER'S INTEREST IN SUCH LICENSE OR AGREEMENT OR ANY OTHER
PROPERTY.
BORROWER SHALL PROVIDE WRITTEN NOTICE TO BANK WITHIN TEN (10) DAYS OF
ENTERING OR