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 AN AMOUNT IN EXCESS OF TWO HUNDRED FIFTY THOUSAND
DOLLARS ($250,000) IN THE AGGREGATE AT ANY TIME, TO A BAILEE, THEN BORROWER WILL
FIRST RECEIVE THE WRITTEN CONSENT OF BANK, SUCH CONSENT NOT TO BE UNREASONABLY
WITHHELD, AND SUCH BAILEE MUST EXECUTE AND DELIVER A BAILEE AGREEMENT IN FORM
AND SUBSTANCE SATISFACTORY TO BANK IN ITS SOLE DISCRETION.
ALL INVENTORY IS IN ALL MATERIAL RESPECTS OF GOOD AND MARKETABLE QUALITY, FREE
FROM MATERIAL DEFECTS.
BORROWER IS THE SOLE OWNER OF ITS INTELLECTUAL PROPERTY, EXCEPT FOR (I) LICENSES
GRANTED TO ITS CUSTOMERS AND/OR LICENSEES IN THE ORDINARY COURSE OF BUSINESS,
AND (II) CERTAIN PATENTS THAT ARE JOINTLY OWNED BY THE BORROWER AND OTHER THIRD
PARTIES WHO HAVE COLLABORATED WITH THE BORROWER ON TECHNICAL DEVELOPMENT
PROJECTS.
AS OF THE DATE HEREOF, EACH PATENT IS VALID AND ENFORCEABLE AND NO
PART OF THE INTELLECTUAL PROPERTY HAS BEEN JUDGED INVALID OR UNENFORCEABLE, IN
WHOLE OR IN PART, AND TO THE BEST OF BORROWER'S KNOWLEDGE, NO CLAIM HAS BEEN
MADE THAT ANY PART OF THE INTELLECTUAL PROPERTY VIOLATES THE RIGHTS OF ANY THIRD
PARTY.
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 (A) THAT PROHIBITS OR OTHERWISE RESTRICTS BORROWER FROM
GRANTING A SECURITY INTEREST IN BORROWER'S INTEREST IN SUCH LICENSE OR AGREEMENT
OR ANY OTHER PROPERTY, OR (B) FOR WHICH A DEFAULT UNDER OR TERMINATION OF COULD
INTERFERE WITH THE BANK'S RIGHT TO SELL ANY COLLATERAL.
BORROWER SHALL PROVIDE
WRITTEN NOTICE TO BANK WITHIN TEN (10) DAYS OF ENTERING OR BECOMING BOUND BY ANY
SUCH MATERIAL LICENSE OR AGREEMENT (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 (X) 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 GOOD FAITH JUDGMENT), WHETHER NOW EXISTING OR ENTERED INTO IN
THE FUTURE, AND (Y) BANK TO HAVE THE ABILITY IN THE EVENT OF A LIQUIDATION OF
ANY COLLATERAL TO DISPOSE OF SUCH COLLATERAL IN ACCORDANCE WITH BANK'S RIGHTS
AND REMEDIES UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
5.3
ACCOUNTS RECEIVABLE.
(a)
For each Account with respect to which
Advances are requested, on the date each Advance is requested and made, such
Account shall meet the Minimum Eligibility Requirements set forth in Section 13
below.
(b)
All statements made and all unpaid balances