documents evidencing the
Eligible Accounts are and shall be true and correct and all such invoices,
instruments and other documents, and all of Borrower's Books are genuine and in
all respects what they purport to be.
Whether or not an Event of Default has
occurred and is continuing, Bank may verify the amount of any Account.
All
sales and other transactions underlying or giving rise to each Eligible Account
shall comply in all material respects with all applicable laws and governmental
rules and regulations.
Borrower has no knowledge of any actual or imminent
Insolvency Proceeding of any Account Debtor whose accounts are Eligible Accounts
in the most recent Transaction Report.
To the best of Borrower's knowledge, all
signatures and endorsements on all documents, instruments, and agreements
relating to all Eligible Accounts are genuine, and all such documents,
instruments and agreements are legally enforceable in accordance with their
terms.
5.4
LITIGATION.
EXCEPT AS PREVIOUSLY DISCLOSED TO
BANK IN WRITING, 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 INVOLVING MORE THAN $500,000.
5.5
NO MATERIAL DEVIATION IN FINANCIAL
STATEMENTS.
ALL CONSOLIDATED FINANCIAL STATEMENTS FOR BORROWER AND ANY OF 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 DATES AND FOR THE PERIODS PRESENTED THEREIN.
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 THAT IS REASONABLY EXPECTED TO RESULT IN BORROWER BREACHING ANY OF THE
FINANCIAL COVENANTS SET FORTH IN SECTION 6.9 AS OF THE END OF THE CURRENT FISCAL
QUARTER, PROVIDED, HOWEVER, IT IS THE INTENTION OF THE PARTIES HERETO THAT
NOTHING IN THE FOREGOING REPRESENTATION AS SO STATED IS INTENDED TO, NOR SHALL
THE FOREGOING IN ANY MANNER DEROGATE FROM WHATSOEVER, THE AVAILABILITY OR
ENFORCEABILITY OF AN EVENT OF DEFAULT ARISING FROM ANY OF THE COMPONENTS OF A
MATERIAL ADVERSE CHANGE EVENT OF DEFAULT UNDER SECTION 8.3 HEREOF, ALL OF WHICH
COMPONENTS ARE HEREBY SPECIFICALLY AFFIRMED BY BORROWER AS ENFORCEABLE AND
EFFECTIVE PROVISIONS.
5.6
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.
5.7
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 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