SUCH
ORGANIZATIONAL IDENTIFICATION NUMBER.
The execution, delivery and performance of the Loan Documents 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 or by which it
is bound in which the default could reasonably be expected to cause a Material
Adverse Change.
5.2
­COLLATERAL.
BORROWER HAS GOOD TITLE TO THE COLLATERAL, FREE OF
LIENS EXCEPT PERMITTED LIENS.
BORROWER HAS NO OTHER DEPOSIT ACCOUNT, OTHER THAN
THE DEPOSIT ACCOUNTS WITH BANK AND DEPOSIT ACCOUNTS DESCRIBED IN THE PERFECTION
CERTIFICATE DELIVERED TO THE BANK IN CONNECTION HEREWITH.
THE ACCOUNTS ARE BONA
FIDE, EXISTING OBLIGATIONS, AND THE SERVICE OR PROPERTY HAS BEEN PERFORMED OR
DELIVERED TO THE ACCOUNT DEBTOR OR ITS AGENT FOR IMMEDIATE SHIPMENT TO AND
UNCONDITIONAL ACCEPTANCE BY THE ACCOUNT DEBTOR. THE COLLATERAL IS NOT IN THE
POSSESSION OF ANY THIRD PARTY BAILEE (SUCH AS A WAREHOUSE).
IN THE EVENT THAT
BORROWER, AFTER THE DATE HEREOF, INTENDS TO STORE OR OTHERWISE DELIVER ANY
PORTION OF THE COLLATERAL TO A BAILEE, THEN BORROWER WILL FIRST RECEIVE THE
WRITTEN CONSENT OF BANK AND SUCH BAILEE MUST ACKNOWLEDGE IN WRITING THAT THE
BAILEE IS HOLDING SUCH COLLATERAL FOR THE BENEFIT OF BANK.
BORROWER HAS NO
KNOWLEDGE OF ANY ACTUAL OR IMMINENT INSOLVENCY PROCEEDING OF ANY ACCOUNT DEBTOR
WHOSE ACCOUNTS ARE AN ELIGIBLE ACCOUNT IN ANY BORROWING BASE CERTIFICATE.
ALL
INVENTORY IS IN ALL MATERIAL RESPECTS OF GOOD AND MARKETABLE QUALITY, FREE FROM
OBVIOUS DEFECTS.
BORROWER IS THE SOLE OWNER OF THE INTELLECTUAL PROPERTY,
EXCEPT FOR NON-EXCLUSIVE LICENSES GRANTED TO ITS CUSTOMERS IN THE ORDINARY
COURSE OF BUSINESS.
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 NO CLAIM HAS BEEN MADE THAT ANY PART OF THE INTELLECTUAL PROPERTY
VIOLATES THE RIGHTS OF ANY THIRD PARTY EXCEPT TO THE EXTENT SUCH CLAIM COULD NOT
REASONABLY BE EXPECTED TO CAUSE A MATERIAL ADVERSE CHANGE.
5.3
­LITIGATION.
EXCEPT AS SHOWN IN THE SCHEDULE, AS OF THE DATE OF
THIS AGREEMENT THERE ARE NO ACTIONS OR PROCEEDINGS PENDING OR, TO THE KNOWLEDGE
OF BORROWER'S RESPONSIBLE OFFICERS, THREATENED BY OR AGAINST BORROWER OR ANY
SUBSIDIARY IN WHICH AN ADVERSE DECISION COULD REASONABLY BE EXPECTED TO CAUSE A
MATERIAL ADVERSE CHANGE.
5.4
­NO MATERIAL DEVIATION
IN FINANCIAL STATEMENTS.
ALL CONSOLIDATED
FINANCIAL STATEMENTS FOR BORROWER AND ANY SUBSIDIARY DELIVERED TO BANK FAIRLY
PRESENT IN ALL MATERIAL RESPECTS BORROWER'S CONSOLIDATED FINANCIAL CONDITION AND
BORROWER'S CONSOLIDATED RESULTS OF OPERATIONS.
THERE HAS NOT BEEN ANY MATERIAL
DETERIORATION IN BORROWER'S CONSOLIDATED FINANCIAL CONDITION SINCE THE DATE OF
THE MOST RECENT FINANCIAL STATEMENTS SUBMITTED TO BANK.
5.5
­SOLVENCY.
BORROWER IS ABLE TO PAY ITS DEBTS (INCLUDING TRADE
DEBTS) AS THEY MATURE.
5.6
­REGULATORY COMPLIANCE.
BORROWER IS NOT AN "INVESTMENT COMPANY"
OR A COMPANY "CONTROLLED" BY AN "INVESTMENT COMPANY" UNDER THE INVESTMENT
COMPANY ACT.
BORROWER IS NOT ENGAGED AS ONE OF ITS IMPORTANT