ALL INTELLECTUAL PROPERTY
AS ARE MATERIALLY NECESSARY FOR THE CONDUCT OF THE BUSINESSES OF THE BORROWER,
WITHOUT ANY INFRINGEMENT UPON RIGHTS OF OTHERS WHICH COULD REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT UPON THE BORROWER, AND NO MATERIAL
CLAIM HAS BEEN ASSERTED AND IS PENDING CHALLENGING OR QUESTIONING THE USE OF ANY
INTELLECTUAL PROPERTY OR THE VALIDITY OR EFFECTIVENESS OF ANY INTELLECTUAL
PROPERTY NOR DOES THE BORROWER KNOW OF ANY VALID BASIS FOR ANY SUCH CLAIM.
5.7
FINANCIAL STATEMENTS.
ALL FINANCIAL
STATEMENTS SUBMITTED TO THE BANK BY THE BORROWER HAVE BEEN PREPARED IN
ACCORDANCE WITH SOUND ACCOUNTING PRACTICES AND GAAP ON A BASIS, EXCEPT AS
OTHERWISE NOTED THEREIN, CONSISTENT WITH THE PREVIOUS FISCAL YEAR AND PRESENT
FAIRLY THE FINANCIAL CONDITION OF THE BORROWER AND THE RESULTS OF THE OPERATIONS
FOR THE BORROWER AS OF SUCH DATE AND FOR THE PERIODS INDICATED.
SINCE THE DATE
OF THE MOST RECENT FINANCIAL STATEMENT SUBMITTED BY THE BORROWER TO THE BANK,
THERE HAS BEEN NO CHANGE IN THE FINANCIAL CONDITION OR IN THE ASSETS OR
LIABILITIES OF THE BORROWER HAVING A MATERIAL ADVERSE EFFECT ON THE BORROWER.
5.8
LITIGATION AND CONTINGENT LIABILITIES.
THERE IS NO LITIGATION, ARBITRATION PROCEEDING, DEMAND, CHARGE, CLAIM, PETITION
OR GOVERNMENTAL INVESTIGATION OR PROCEEDING
21
PENDING, OR TO THE KNOWLEDGE OF THE BORROWER, THREATENED, AGAINST THE BORROWER,
WHICH, IF ADVERSELY DETERMINED, MIGHT REASONABLY BE EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT UPON THE BORROWER.
OTHER THAN ANY LIABILITY INCIDENT TO SUCH
LITIGATION OR PROCEEDINGS, THE BORROWER HAS NO MATERIAL GUARANTEE OBLIGATIONS,
CONTINGENT LIABILITIES, LIABILITIES FOR TAXES, OR ANY LONG-TERM LEASES OR
UNUSUAL FORWARD OR LONG-TERM COMMITMENTS, INCLUDING ANY INTEREST RATE OR FOREIGN
CURRENCY SWAP OR EXCHANGE TRANSACTION OR OTHER OBLIGATION IN RESPECT OF
DERIVATIVES, THAT ARE NOT FULLY-REFLECTED OR FULLY RESERVED FOR IN THE MOST
RECENT FINANCIAL STATEMENTS DELIVERED TO THE BANK OR OTHERWISE DISCLOSED IN
WRITING TO THE BANK.
5.9
EVENT OF DEFAULT.
NO EVENT OF DEFAULT OR
UNMATURED EVENT OF DEFAULT EXISTS OR WOULD RESULT FROM THE INCURRENCE BY THE
BORROWER OF ANY OF THE OBLIGATIONS HEREUNDER OR UNDER ANY OF THE OTHER LOAN
DOCUMENT, AND THE BORROWER IS NOT IN DEFAULT (WITHOUT REGARD TO GRACE OR CURE
PERIODS) UNDER ANY OTHER CONTRACT OR AGREEMENT TO WHICH IT IS A PARTY THAT WOULD
HAVE A MATERIAL ADVERSE EFFECT.
5.10
ADVERSE CIRCUMSTANCES.
NO CONDITION,
CIRCUMSTANCE, EVENT, AGREEMENT, DOCUMENT, INSTRUMENT, RESTRICTION, LITIGATION OR
PROCEEDING (OR THREATENED LITIGATION OR PROCEEDING OR BASIS THEREFOR) EXISTS
WHICH (A) WOULD HAVE A MATERIAL ADVERSE EFFECT UPON THE BORROWER, OR (B) WOULD
CONSTITUTE AN EVENT OF DEFAULT OR AN UNMATURED EVENT OF DEFAULT.
5.11
ENVIRONMENTAL LAWS AND HAZARDOUS SUBSTANCES.
THE
BORROWER HAS NOT GENERATED, USED, STORED, TREATED, TRANSPORTED, MANUFACTURED,
HANDLED, PRODUCED OR DISPOSED OF ANY HAZARDOUS SUBSTANCES, ON OR OFF ANY OF THE
PREMISES OF THE BORROWER (WHETHER OR NOT OWNED BY IT) IN ANY MANNER WHICH AT ANY
TIME VIOLATES ANY ENVIRONMENTAL LAW OR ANY LICENSE, PERMIT, CERTIFICATE,
APPROVAL OR SIMILAR AUTHORIZATION THEREUNDER. THERE HAS BEEN NO INVESTIGATION,
PROCEEDING, COMPLAINT, ORDER, DIRECTIVE,