OR
PROTECT THE LIENS REFERRED TO IN THE PRECEDING TWO SENTENCES.
SECTION 5.23
ADMINISTRATION OF ACCOUNTS.
THE ADMINISTRATIVE AGENT MAY
RELY, IN DETERMINING WHICH ACCOUNTS ARE ELIGIBLE ACCOUNTS, ON ALL STATEMENTS AND
REPRESENTATIONS MADE BY THE LOAN PARTIES WITH RESPECT THERETO.
BORROWER
WARRANTS, WITH RESPECT TO EACH ACCOUNT AT THE TIME IT IS SHOWN AS AN ELIGIBLE
ACCOUNT IN A BORROWING BASE CERTIFICATE, THAT:
(A)
IT IS GENUINE AND IN ALL RESPECTS WHAT IT PURPORTS TO BE, AND IS
NOT EVIDENCED BY A JUDGMENT;
(B)
IT ARISES OUT OF A COMPLETED, BONA FIDE SALE AND DELIVERY OF GOODS
OR RENDITION OF SERVICES IN THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST
PRACTICE, AND SUBSTANTIALLY IN ACCORDANCE WITH ANY PURCHASE ORDER, CONTRACT OR
OTHER DOCUMENT RELATING THERETO;
(C)
IT IS FOR A SUM CERTAIN, MATURING AS STATED IN THE INVOICE
COVERING SUCH SALE OR RENDITION OF SERVICES, A COPY OF WHICH HAS BEEN FURNISHED
OR IS AVAILABLE TO THE ADMINISTRATIVE AGENT ON REQUEST;
67
(D)
IT IS NOT (I) SUBJECT TO ANY LIEN (OTHER THAN THE ADMINISTRATIVE
AGENT'S LIEN OR LIENS PERMITTED UNDER SECTION 7.01(L) (WHICH LIENS SHALL BE
JUNIOR TO THE ADMINISTRATIVE AGENT'S LIEN)) OR (II) SUBJECT TO ANY OFFSET,
DEDUCTION, DEFENSE, DISPUTE, COUNTERCLAIM OR OTHER ADVERSE CONDITION EXCEPT IN
THE CASE OF SUBCLAUSE (II) AS ARISING IN THE ORDINARY COURSE OF BUSINESS
CONSISTENT WITH PAST PRACTICE AND WHICH IN THE AGGREGATE ARE NOT MATERIAL;
(E)
THE APPLICABLE LOAN PARTY IS THE SOLE PAYEE OR REMITTANCE PARTY
SHOWN ON THE INVOICE AND EXCEPT WITH REGARD TO GOVERNMENTAL RECEIVABLES, NO
PURCHASE ORDER, AGREEMENT, DOCUMENT OR LAW RESTRICTS ASSIGNMENT OF THE ACCOUNT
TO THE ADMINISTRATIVE AGENT (REGARDLESS OF WHETHER, UNDER THE UCC, THE
RESTRICTION IS INEFFECTIVE);
(F)
NO EXTENSION, COMPROMISE, SETTLEMENT, MODIFICATION, CREDIT,
DEDUCTION OR RETURN HAS BEEN AUTHORIZED WITH RESPECT TO THE ACCOUNT, EXCEPT
DISCOUNTS OR ALLOWANCES GRANTED IN THE ORDINARY COURSE OF BUSINESS CONSISTENT
WITH PAST PRACTICE FOR PROMPT PAYMENT THAT ARE REFLECTED ON THE FACE OF THE
INVOICE RELATED THERETO AND IN THE REPORTS SUBMITTED TO THE ADMINISTRATIVE AGENT
HEREUNDER; AND
(G)
TO THE BORROWER'S ACTUAL KNOWLEDGE, (I) THERE ARE NO FACTS OR
CIRCUMSTANCES THAT ARE REASONABLY LIKELY TO IMPAIR THE ENFORCEABILITY OR
COLLECTIBILITY OF SUCH ACCOUNT; (II) THE ACCOUNT DEBTOR HAD THE CAPACITY TO
CONTRACT WHEN THE ACCOUNT AROSE, CONTINUES TO MEET THE APPLICABLE LOAN PARTY'S
CUSTOMARY CREDIT STANDARDS, IS SOLVENT, IS NOT CONTEMPLATING OR SUBJECT TO AN
INSOLVENCY PROCEEDING, AND HAS NOT FAILED, OR SUSPENDED OR CEASED DOING
BUSINESS; AND (III) THERE ARE NO PROCEEDINGS OR ACTIONS THREATENED OR PENDING
AGAINST ANY ACCOUNT DEBTOR THAT COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT ON THE ACCOUNT DEBTOR'S FINANCIAL CONDITION.
SECTION 5.24
PHYSICIAN NOMINEE.
BORROWER HAS VERIFIED THAT THE PHYSICIAN
NOMINEE IS A PHYSICIAN LICENSED BY THE STATE OF CALIFORNIA AND THAT HE MAINTAINS
MALPRACTICE INSURANCE.
BORROWER HAS PERFORMED A BACKGROUND CHECK ON THE
PHYSICIAN NOMINEE AND THE RESULTS OF SUCH BACKGROUND CHECK WERE SATISFACTORY TO
BORROWER. TO BORROWER'S KNOWLEDGE, THE PHYSICIAN NOMINEE HAS NO