"SUBSIDIARY COMPANY" OF A "HOLDING
COMPANY" AS EACH TERM IS DEFINED AND USED IN THE PUBLIC UTILITY HOLDING COMPANY
ACT OF 2005.
BORROWER HAS NOT VIOLATED ANY LAWS, ORDINANCES OR RULES, THE
VIOLATION OF WHICH COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE
EFFECT ON ITS BUSINESS.
NONE OF BORROWER'S OR ANY OF ITS SUBSIDIARIES'
PROPERTIES OR ASSETS HAS BEEN USED BY BORROWER OR ANY SUBSIDIARY OR, TO THE BEST
OF BORROWER'S KNOWLEDGE, BY PREVIOUS PERSONS, IN DISPOSING, PRODUCING, STORING,
TREATING, OR TRANSPORTING ANY HAZARDOUS SUBSTANCE OTHER THAN LEGALLY OR AS WOULD
NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON BORROWER'S OR
SUCH SUBSIDIARY'S BUSINESS, RESPECTIVELY.
BORROWER AND EACH OF ITS SUBSIDIARIES
HAVE OBTAINED ALL MATERIAL CONSENTS, APPROVALS AND AUTHORIZATIONS OF, MADE ALL
DECLARATIONS OR FILINGS WITH, AND GIVEN ALL NOTICES TO, ALL GOVERNMENT
AUTHORITIES THAT ARE NECESSARY TO CONTINUE THEIR RESPECTIVE BUSINESSES AS
CURRENTLY CONDUCTED IN ALL MATERIAL RESPECTS.
5.8
SUBSIDIARIES; INVESTMENTS.
BORROWER DOES NOT
OWN ANY STOCK, PARTNERSHIP INTEREST OR OTHER EQUITY SECURITIES EXCEPT FOR
PERMITTED INVESTMENTS.
5.9
TAX RETURNS AND PAYMENTS; PENSION
CONTRIBUTIONS.
BORROWER (I) HAS TIMELY FILED ALL REQUIRED INCOME, PAYROLL AND
SALES TAX RETURNS AND REPORTS AND TIMELY PAID ALL SUCH TAXES OWED BY BORROWER;
AND (II) SUBJECT TO THE FOLLOWING PROVISO, EXCEPT AS WOULD RELATE TO TAX
OBLIGATIONS NOT IN THE AGGREGATE IN EXCESS OF $250,000 (THE
7
"EXCEPTION AMOUNT"), HAS TIMELY FILED ALL OTHER TAX RETURNS AND REPORTS AND
TIMELY PAID ALL OTHER FOREIGN, FEDERAL, STATE AND LOCAL TAXES, ASSESSMENTS,
DEPOSITS AND CONTRIBUTIONS OWED BY BORROWER, AS LONG AS THE FAILURE TO PAY THE
EXCEPTION AMOUNT OF TAXES WOULD NOT REASONABLY BE EXPECTED TO RESULT IN A
MATERIAL ADVERSE CHANGE.
BORROWER MAY DEFER PAYMENT OF ANY CONTESTED TAXES,
PROVIDED THAT BORROWER (A) IN GOOD FAITH CONTESTS ITS OBLIGATION TO PAY THE
TAXES BY APPROPRIATE PROCEEDINGS PROMPTLY AND DILIGENTLY INSTITUTED AND
CONDUCTED, (B) NOTIFIES BANK IN WRITING OF THE COMMENCEMENT OF, AND ANY MATERIAL
DEVELOPMENT IN EXCESS OF 250,000, (C) POSTS BONDS OR TAKES ANY OTHER STEPS
REQUIRED TO PREVENT THE GOVERNMENTAL AUTHORITY LEVYING SUCH CONTESTED TAXES FROM
OBTAINING A LIEN UPON ANY OF THE COLLATERAL THAT IS OTHER THAN A "PERMITTED
LIEN".
BORROWER IS UNAWARE OF ANY CLAIMS OR ADJUSTMENTS PROPOSED FOR ANY OF
BORROWER'S PRIOR TAX YEARS WHICH COULD RESULT IN ADDITIONAL TAXES OF $100,000 OR
MORE BECOMING DUE AND PAYABLE BY BORROWER OR THAT OTHERWISE WOULD REASONABLY BE
EXPECTED TO RESULT IN A MATERIAL ADVERSE CHANGE.
BORROWER HAS PAID ALL AMOUNTS
NECESSARY TO FUND ALL PRESENT PENSION, PROFIT SHARING AND DEFERRED COMPENSATION
PLANS IN ACCORDANCE WITH THEIR TERMS, AND BORROWER HAS NOT WITHDRAWN FROM
PARTICIPATION IN, AND HAS NOT PERMITTED PARTIAL OR COMPLETE TERMINATION OF, OR
PERMITTED THE OCCURRENCE OF ANY OTHER EVENT WITH RESPECT TO, ANY SUCH PLAN WHICH
COULD REASONABLY BE EXPECTED TO RESULT IN ANY LIABILITY OF BORROWER, INCLUDING
ANY LIABILITY TO THE PENSION BENEFIT GUARANTY CORPORATION OR ITS SUCCESSORS OR
ANY OTHER GOVERNMENTAL AGENCY.
5.10
USE OF PROCEEDS.
BORROWER SHALL USE THE