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, 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
LITIGATION.
THERE ARE NO ACTIONS OR PROCEEDINGS PENDING OR, TO THE
KNOWLEDGE OF THE RESPONSIBLE OFFICERS, THREATENED IN WRITING BY OR AGAINST
BORROWER OR ANY OF ITS SUBSIDIARIES WHICH, IF ADVERSELY DETERMINED, COULD
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON BORROWER'S BUSINESS.
5.4
NO MATERIAL DETERIORATION IN FINANCIAL STATEMENTS.
ALL
CONSOLIDATED FINANCIAL STATEMENTS FOR BORROWER AND ITS SUBSIDIARIES DELIVERED TO
BANK FAIRLY PRESENT IN ALL MATERIAL RESPECTS BORROWER'S CONSOLIDATED FINANCIAL
CONDITION AND BORROWER'S CONSOLIDATED RESULTS OF OPERATIONS AS OF THE DATE
THEREOF.
THERE HAS NOT BEEN ANY MATERIAL DETERIORATION IN BORROWER'S
CONSOLIDATED FINANCIAL CONDITION SINCE THE DATE OF THE MOST RECENT FINANCIAL
STATEMENTS OF BORROWER SUBMITTED TO BANK.
5.5
SOLVENCY.
THE FAIR SALABLE VALUE OF BORROWER'S ASSETS (INCLUDING
GOODWILL MINUS DISPOSITION COSTS) EXCEEDS THE FAIR VALUE OF ITS LIABILITIES;
BORROWER IS NOT LEFT WITH UNREASONABLY SMALL CAPITAL AFTER THE TRANSACTIONS IN
THIS AGREEMENT; AND 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 OF 1940, AS AMENDED.
BORROWER IS NOT ENGAGED AS ONE OF ITS IMPORTANT
ACTIVITIES IN EXTENDING CREDIT FOR MARGIN STOCK (UNDER REGULATIONS X, T AND U OF
THE FEDERAL
11
RESERVE BOARD OF GOVERNORS).
BORROWER HAS COMPLIED IN ALL MATERIAL RESPECTS
WITH THE FEDERAL FAIR LABOR STANDARDS ACT.
NEITHER BORROWER NOR ANY OF ITS
SUBSIDIARIES IS A "HOLDING COMPANY" OR AN "AFFILIATE" OF A "HOLDING COMPANY" OR
A "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 BORROWER'S KNOWLEDGE, BY PREVIOUS PERSONS, IN DISPOSING,
PRODUCING, STORING, TREATING, OR TRANSPORTING ANY HAZARDOUS SUBSTANCE OTHER THAN
LEGALLY.
BORROWER AND EACH OF ITS SUBSIDIARIES HAVE OBTAINED ALL 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 EXCEPT WHERE THE FAILURE TO
DO SO COULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON
BORROWER'S BUSINESS.
5.7
SUBSIDIARIES; INVESTMENTS.
BORROWER DOES NOT OWN ANY STOCK,
PARTNERSHIP INTEREST OR OTHER EQUITY SECURITIES EXCEPT FOR PERMITTED
INVESTMENTS.
5.8
TAX RETURNS AND PAYMENTS;