ENDED, AND HAVE BEEN PREPARED IN
ACCORDANCE WITH GAAP.
EXCEPT AS SET FORTH ON SCHEDULE 3.10, THE BORROWER HAS NO
MATERIAL OBLIGATIONS, LIABILITIES OR COMMITMENTS, DIRECT OR CONTINGENT, WHICH
ARE NOT REFLECTED IN THE FINANCIAL STATEMENTS, INCLUDING THE ACCOMPANYING
FOOTNOTES.
THERE HAS BEEN NO MATERIAL ADVERSE CHANGE IN REGARD TO THE BORROWER
AND ITS SUBSIDIARIES SINCE DECEMBER 31, 2005.
THE FISCAL YEAR OF THE BORROWER
IS THE TWELVE-MONTH PERIOD ENDING ON DECEMBER 31 OF EACH YEAR.
SECTION 3.11.
TAX RETURNS.
THE BORROWER AND EACH OF ITS SUBSIDIARIES
HAS FILED ON A TIMELY BASIS ALL FEDERAL, STATE AND LOCAL TAX RETURNS REQUIRED TO
BE FILED BY IT AND HAS NOT FAILED TO PAY ANY TAXES, OR INTEREST OR PENALTIES
RELATING THERETO, ON OR BEFORE THE DUE DATES THEREOF (AS SUCH DUE DATES MAY HAVE
BEEN EXTENDED BY VALID EXTENSIONS OBTAINED BY THE BORROWER OR ITS SUBSIDIARIES)
EXCEPT TO THE EXTENT THAT ANY TAXES, INTEREST OR PENALTIES BEING CONTESTED IN
GOOD FAITH BY APPROPRIATE PROCEEDINGS FOR WHICH ADEQUATE RESERVES HAVE BEEN SET
ASIDE ON THE BOOKS OF THE BORROWER OR ITS SUBSIDIARIES IN ACCORDANCE WITH GAAP
AND WHICH ARE DISCLOSED IN ANY EVENT ON SCHEDULE 3.11. EXCEPT AS SET FORTH ON
SCHEDULE 3.11, THERE ARE NO WAIVERS IN EFFECT OR AGREEMENTS BY THE BORROWER FOR
THE EXTENSION OF TIME FOR THE ASSESSMENT OF ANY TAX.
THERE ARE NO FOREIGN,
FEDERAL, STATE, PROVINCIAL OR LOCAL TAX LIABILITIES OF THE BORROWER OR ITS
SUBSIDIARIES DUE OR TO BECOME DUE FOR ANY TAX YEAR ENDED ON OR PRIOR TO THE DATE
OF THE FINANCIAL STATEMENTS, WHETHER INCURRED IN RESPECT OF OR MEASURED BY
INCOME, WHICH ARE NOT PROPERLY REFLECTED IN THE FINANCIAL STATEMENTS, AND THERE
ARE NO CLAIMS PENDING OR, TO THE BEST OF THE BORROWER'S KNOWLEDGE, PROPOSED OR
THREATENED AGAINST THE BORROWER OR ITS SUBSIDIARIES FOR PAST FOREIGN, FEDERAL,
STATE, PROVINCIAL OR LOCAL TAXES, EXCEPT THOSE, IF ANY, AS TO WHICH PROPER
RESERVES ARE REFLECTED IN THE FINANCIAL STATEMENTS.
THE BORROWER SHALL PROVIDE
PROMPT WRITTEN NOTICE OF ANY MATERIAL TAX ASSESSMENTS BEING CONTESTED BY IT.
SECTION 3.12.
INTELLECTUAL PROPERTY.
THE BORROWER AND EACH SUBSIDIARY
HAS THE RIGHT TO USE OR POSSESSES ALL NECESSARY PATENTS, TRADEMARKS, TRADEMARK
RIGHTS, TRADE NAMES, TRADE NAME RIGHTS, SERVICE MARKS, SERVICE MARK RIGHTS, AND
COPYRIGHTS TO CONDUCT ITS BUSINESS AS NOW CONDUCTED AND AS PROPOSED TO BE
CONDUCTED, AND, TO THE BEST OF ITS KNOWLEDGE, SUCH INTELLECTUAL PROPERTY IS
WITHOUT ANY CONFLICT WITH THE PATENTS, TRADEMARKS, TRADEMARK RIGHTS, TRADE
NAMES, TRADE NAME RIGHTS, SERVICE MARKS, SERVICE MARK RIGHTS
43
AND COPYRIGHTS OF OTHERS.
EXCEPT AS SET FORTH ON SCHEDULE 3.12, NONE OF THE
FOREGOING RIGHTS OF THE BORROWER OR ANY SUBSIDIARY HAVE BEEN REGISTERED WITH ANY
GOVERNMENTAL AUTHORITY.
SECTION 3.13.
USE OF PROCEEDS.
THE BORROWER'S USES OF THE PROCEEDS OF
ANY LOANS MADE BY THE BANKS TO THE BORROWER PURSUANT TO THIS AGREEMENT ARE, AND
WILL CONTINUE TO BE, LEGAL AND PROPER CORPORATE USES (DULY AUTHORIZED BY THE
BORROWER'S BOARD OF DIRECTORS) AND SUCH USES ARE AND WILL BE