AND 54 CHERRY HILL DRIVE, BEVERLY, MASSACHUSETTS LOCATIONS.
IN
ADDITION, IN THE EVENT THE SALE AND LEASEBACK TRANSACTION OCCURS, BORROWER SHALL
CONCURRENTLY THEREWITH FURNISH BANK THE WAIVER AND AGREEMENT REQUIRED BY
SECTION 7.1 WHICH
7
SHALL INCLUDE, INTER ALIA, A LANDLORD'S WAIVER REASONABLY SATISFACTORY TO BANK
WITH RESPECT TO BORROWER'S 108 CHERRY HILL DRIVE, BEVERLY, MASSACHUSETTS
LOCATION.
5.4
LITIGATION.
AS OF THE EFFECTIVE DATE, EXCEPT
AS 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 ONE MILLION
DOLLARS ($1,000,000) OR THAT WOULD REASONABLY BE EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT ON BORROWER'S BUSINESS.
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.
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.
5.6
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 "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.
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 MAKE SUCH
DECLARATIONS, NOTICES OR FILINGS COULD NOT REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT ON BORROWER'S BUSINESS.
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.