could have a material adverse effect
on Borrower's business.
5
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 AND EXCEPT
WITH RESPECT TO MOBILE EQUIPMENT IN POSSESSION OF EMPLOYEES WITH AN AGGREGATE
VALUE NOT EXCEEDING FIFTY THOUSAND DOLLARS ($50,000.00).
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, EXCEPT FOR MOBILE EQUIPMENT IN POSSESSION OF EMPLOYEES WITH AN
AGGREGATE VALUE NOT EXCEEDING FIFTY THOUSAND DOLLARS ($50,000.00).
IN THE EVENT
THAT BORROWER, AFTER THE DATE HEREOF, INTENDS TO STORE OR OTHERWISE DELIVER ANY
PORTION OF THE COLLATERAL TO A BAILEE (EXCEPT WITH RESPECT TO MOBILE EQUIPMENT
IN POSSESSION OF EMPLOYEES WITH AN AGGREGATE VALUE NOT EXCEEDING FIFTY THOUSAND
DOLLARS ($50,000.00)), 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 REASONABLE DISCRETION.
ALL INVENTORY IS IN ALL MATERIAL RESPECTS OF GOOD AND MARKETABLE QUALITY, FREE
FROM MATERIAL DEFECTS.
EXCEPT AS NOTED ON THE PERFECTION CERTIFICATE, 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 BECOMING BOUND BY ANY SUCH LICENSE OR AGREEMENT WHICH
IS REASONABLY LIKELY TO HAVE A MATERIAL IMPACT ON BORROWER'S BUSINESS OR
FINANCIAL CONDITION (OTHER THAN OVER-THE-COUNTER SOFTWARE THAT IS COMMERCIALLY
AVAILABLE TO THE PUBLIC).
BORROWER SHALL TAKE SUCH STEPS AS BANK REQUESTS TO
OBTAIN THE CONSENT OF, OR WAIVER BY, ANY PERSON WHOSE CONSENT OR WAIVER IS
NECESSARY FOR ALL SUCH LICENSES OR CONTRACT RIGHTS TO BE DEEMED "COLLATERAL" AND
FOR BANK TO HAVE A SECURITY INTEREST IN IT THAT MIGHT OTHERWISE BE RESTRICTED OR
PROHIBITED BY LAW OR BY THE TERMS OF ANY SUCH LICENSE OR AGREEMENT (SUCH CONSENT
OR AUTHORIZATION MAY INCLUDE A LICENSOR'S AGREEMENT TO A CONTINGENT ASSIGNMENT
OF THE LICENSE TO BANK IF BANK DETERMINES THAT IS NECESSARY IN ITS REASONABLE
BUSINESS JUDGMENT), WHETHER NOW EXISTING OR ENTERED INTO IN THE