THE ORDINARY COURSE OF
BUSINESS), SUBJECT TO NO LIENS EXCEPT PERMITTED ENCUMBRANCES AND OTHER LIENS
PERMITTED HEREBY.
(B)
EACH LOAN PARTY AND EACH OF ITS SUBSIDIARIES OWNS, OR IS LICENSED TO USE,
ALL TRADEMARKS, TRADE NAMES, COPYRIGHTS, PATENTS AND OTHER INTELLECTUAL PROPERTY
REASONABLY NECESSARY FOR THE OPERATION OF THEIR RESPECTIVE BUSINESSES, AND THE
USE THEREOF BY SUCH LOAN PARTY OR SUBSIDIARY DOES NOT INFRINGE UPON THE RIGHTS
OF ANY OTHER PERSON, EXCEPT FOR ANY SUCH INFRINGEMENTS THAT, INDIVIDUALLY OR IN
THE AGGREGATE, WOULD NOT REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE
EFFECT.
(C)
SCHEDULE 5.05(C) HERETO SETS FORTH ALL REAL PROPERTY OWNED OR LEASED BY ANY
LOAN PARTY OR ANY OF ITS SUBSIDIARIES.
(D)
SCHEDULE 5.05(D) HERETO SETS FORTH, AS OF MARCH 31, 2010, A REASONABLY
DETAILED DESCRIPTION OF ALL INVENTORY HELD BY THE BORROWER AND ITS SUBSIDIARIES
ON CONSIGNMENT FROM TRADE VENDORS SECURING OBLIGATIONS TO RETURN OR PAY THE
PURCHASE PRICE OF SUCH INVENTORY, AND ALL INVENTORY OTHERWISE SUBJECT TO ANY
LIEN SECURING INDEBTEDNESS NOT CREATED UNDER THE LOAN DOCUMENTS OR PURSUANT TO
THE EXISTING REVOLVING CREDIT FACILITY.
(E)
THE GUAM SUBSIDIARY HAS NO ASSETS OR OPERATIONS.
SECTION 5.06.
LITIGATION AND ENVIRONMENTAL MATTERS.
(A)
THERE ARE NO ACTIONS,
SUITS OR PROCEEDINGS BY OR BEFORE ANY ARBITRATOR OR GOVERNMENTAL AUTHORITY
PENDING AGAINST OR, TO THE KNOWLEDGE OF ANY LOAN PARTY OR ANY OF ITS
SUBSIDIARIES, THREATENED AGAINST OR AFFECTING ANY SUCH PERSON (I) AS TO WHICH
THERE IS A REASONABLE POSSIBILITY OF AN ADVERSE DETERMINATION AND THAT, IF
ADVERSELY DETERMINED, WOULD REASONABLY BE EXPECTED, INDIVIDUALLY OR IN THE
AGGREGATE, TO RESULT IN A MATERIAL ADVERSE EFFECT (OTHER THAN THOSE SET FORTH ON
SCHEDULE 5.06); OR (II) THAT INVOLVE ANY OF THE LOAN DOCUMENTS.
(B)
EXCEPT FOR THE MATTERS SET FORTH ON SCHEDULE 5.06, AND EXCEPT AS WOULD NOT
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT, NO LOAN PARTY (I) HAS
FAILED TO COMPLY WITH ANY ENVIRONMENTAL LAW OR TO OBTAIN, MAINTAIN OR COMPLY
WITH ANY PERMIT, LICENSE OR OTHER
37
APPROVAL REQUIRED UNDER ANY ENVIRONMENTAL LAW; (II) HAS BECOME SUBJECT TO ANY
ENVIRONMENTAL LIABILITY; (III) HAS RECEIVED NOTICE OF ANY CLAIM WITH RESPECT TO
ANY ENVIRONMENTAL LIABILITY; OR (IV) KNOWS OF ANY BASIS FOR ANY ENVIRONMENTAL
LIABILITY.
SECTION 5.07.
COMPLIANCE WITH LAWS AND AGREEMENTS.
EACH OF THE LOAN PARTIES
AND EACH OF THEIR SUBSIDIARIES IS IN COMPLIANCE WITH ALL LAWS, REGULATIONS AND
ORDERS OF ANY GOVERNMENTAL AUTHORITY APPLICABLE TO IT OR ITS PROPERTY AND ALL
INDENTURES, MATERIAL AGREEMENTS AND OTHER INSTRUMENTS BINDING UPON IT OR ITS
PROPERTY, EXCEPT WHERE THE FAILURE TO DO SO, INDIVIDUALLY OR IN THE AGGREGATE,
WOULD NOT REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.
SECTION 5.08.
INVESTMENT COMPANY STATUS.
NONE OF THE LOAN PARTIES NOR ANY OF
THEIR SUBSIDIARIES IS AN "INVESTMENT COMPANY" AS DEFINED IN, OR SUBJECT TO
REGULATION UNDER, THE INVESTMENT COMPANY ACT OF 1940.
SECTION 5.09.
TAXES.
EACH LOAN PARTY AND EACH OF THEIR SUBSIDIARIES HAS TIMELY
FILED OR CAUSED TO BE FILED ALL TAX