REASONABLY REQUEST, IN FORM REASONABLY SATISFACTORY TO BANK, TO PERFECT AND
CONTINUE THE PERFECTION OF BANK'S SECURITY INTERESTS IN THE COLLATERAL AND IN
ORDER TO FULLY CONSUMMATE ALL OF THE TRANSACTIONS CONTEMPLATED UNDER THE LOAN
DOCUMENTS.
4.3
RIGHT TO INSPECT.
BANK (THROUGH ANY OF ITS OFFICERS, EMPLOYEES,
OR AGENTS) SHALL HAVE THE RIGHT, UPON REASONABLE PRIOR NOTICE, FROM TIME TO TIME
DURING BORROWER'S USUAL BUSINESS HOURS BUT NO MORE THAN TWICE A YEAR (UNLESS AN
EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING), TO INSPECT BORROWER'S BOOKS
AND TO MAKE COPIES THEREOF AND TO CHECK, TEST, AND APPRAISE THE COLLATERAL IN
ORDER TO VERIFY BORROWER'S FINANCIAL CONDITION OR THE AMOUNT, CONDITION OF, OR
ANY OTHER MATTER RELATING TO, THE COLLATERAL.
5.
REPRESENTATIONS AND WARRANTIES.
Borrower represents and warrants as follows except as otherwise set forth on the
Schedule:
9
5.1
DUE ORGANIZATION AND QUALIFICATION.
BORROWER AND EACH SUBSIDIARY
IS A CORPORATION DULY EXISTING UNDER THE LAWS OF ITS STATE OF INCORPORATION AND
QUALIFIED AND LICENSED TO DO BUSINESS IN ANY STATE IN WHICH THE CONDUCT OF ITS
BUSINESS OR ITS OWNERSHIP OF PROPERTY REQUIRES THAT IT BE SO QUALIFIED.
5.2
DUE AUTHORIZATION; NO CONFLICT.
THE EXECUTION, DELIVERY, AND
PERFORMANCE OF THE LOAN DOCUMENTS ARE WITHIN BORROWER'S POWERS, HAVE BEEN DULY
AUTHORIZED, AND ARE NOT IN CONFLICT WITH NOR CONSTITUTE A BREACH OF ANY
PROVISION CONTAINED IN BORROWER'S CERTIFICATE OF INCORPORATION OR BYLAWS, NOR
WILL THEY CONSTITUTE AN EVENT OF DEFAULT UNDER ANY MATERIAL AGREEMENT TO WHICH
BORROWER IS A PARTY OR BY WHICH BORROWER IS BOUND.
BORROWER IS NOT IN DEFAULT
UNDER ANY MATERIAL AGREEMENT TO WHICH IT IS A PARTY OR BY WHICH IT IS BOUND,
WHICH DEFAULT REASONABLY COULD BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT;
5.3
NO PRIOR ENCUMBRANCES.
BORROWER HAS GOOD AND MARKETABLE TITLE TO
ITS PROPERTY, FREE AND CLEAR OF LIENS, EXCEPT FOR PERMITTED LIENS.
5.4
BONA FIDE ELIGIBLE ACCOUNTS.
THE ELIGIBLE ACCOUNTS ARE BONA FIDE
EXISTING OBLIGATIONS.
THE PROPERTY AND SERVICES GIVING RISE TO SUCH ELIGIBLE
ACCOUNTS HAS BEEN DELIVERED OR RENDERED TO THE ACCOUNT DEBTOR OR TO THE ACCOUNT
DEBTOR'S AGENT FOR IMMEDIATE AND UNCONDITIONAL ACCEPTANCE BY THE ACCOUNT
DEBTOR.
BORROWER HAS NOT RECEIVED NOTICE OF ACTUAL OR IMMINENT INSOLVENCY
PROCEEDING OF ANY ACCOUNT DEBTOR THAT IS INCLUDED IN ANY BORROWING BASE
CERTIFICATE AS AN ELIGIBLE ACCOUNT.
5.5
MERCHANTABLE INVENTORY.
ALL INVENTORY IS IN ALL MATERIAL RESPECTS
OF GOOD AND MARKETABLE QUALITY, FREE FROM ALL MATERIAL DEFECTS, EXCEPT FOR
INVENTORY FOR WHICH ADEQUATE RESERVES HAVE BEEN MADE, PROVIDED, HOWEVER, THAT
WORK-IN-PROCESS IS NOT OF MARKETABLE QUALITY.
5.6
INTELLECTUAL PROPERTY.
BORROWER IS THE SOLE OWNER OF ITS PATENTS,
TRADEMARKS, COPYRIGHTS, AND OTHER INTELLECTUAL PROPERTY, EXCEPT FOR LICENSES
GRANTED BY BORROWER TO ITS CUSTOMERS IN THE ORDINARY COURSE OF BUSINESS.
TO
BORROWER'S KNOWLEDGE, EACH OF BORROWER'S PATENTS IS VALID AND ENFORCEABLE, AND
NO PART OF ITS INTELLECTUAL PROPERTY HAS BEEN JUDGED INVALID OR UNENFORCEABLE,
IN WHOLE OR IN PART, AND NO CLAIM HAS BEEN MADE TO BORROWER THAT ANY PART OF ITS
INTELLECTUAL