GOVERNMENTAL
REGULATORY AUTHORITY IS REQUIRED IN CONNECTION WITH EITHER THE EXECUTION AND
DELIVERY BY BORROWER GROUP OF THIS AGREEMENT, THE REVOLVING LINE OF CREDIT NOTE,
THE TERM NOTE, THE MERCHANT LOAN, THE GUARANTY, OR THE OTHER AGREEMENTS TO WHICH
BORROWER GROUP IS A PARTY, OR THE PERFORMANCE OF ITS OBLIGATIONS THEREUNDER;
(N)
(I) BORROWER GROUP HAS SUFFICIENT CAPITAL TO CARRY ON ALL
BUSINESSES AND TRANSACTIONS IN WHICH IT NOW ENGAGES OR IS ABOUT TO ENGAGE, IS
NOT INSOLVENT AND WILL CONTINUE TO BE SOLVENT AFTER THE EXECUTION OF THIS
AGREEMENT AND THE OTHER AGREEMENTS TO WHICH IT IS A PARTY AND THE CREATION OF
THE LIEN ON THE COLLATERAL PURSUANT TO THIS AGREEMENT AND IS ABLE TO PAY ITS
DEBTS AS THEY MATURE, AND (II) EACH SUBSIDIARY HAS SUFFICIENT CAPITAL TO CONDUCT
ITS FINANCIAL AFFAIRS AND THE TRANSACTIONS IN WHICH IT NOW ENGAGES OR IS ABOUT
TO ENGAGE, IS NOT INSOLVENT AND WILL CONTINUE TO BE SOLVENT AFTER THE EXECUTION
OF THIS AGREEMENT OR ANY OTHER AGREEMENT TO WHICH IT IS A PARTY, AND IS ABLE TO
PAY ITS DEBTS AS THEY MATURE;
17
(O)
THE FINANCIALS HAVE BEEN PREPARED IN ACCORDANCE WITH GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES APPLIED ON A CONSISTENT BASIS AND FAIRLY PRESENT
THE ASSETS, LIABILITIES AND FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF
BORROWER GROUP AT, AND AS OF, THE DATE THEREOF; THERE ARE NO MATERIAL
LIABILITIES, DIRECT OR INDIRECT, FIXED OR CONTINGENT, OF BORROWER GROUP WHICH
ARE NOT REFLECTED IN THE FINANCIALS NOR OMISSIONS OF OTHER FACTS OR
CIRCUMSTANCES WHICH ARE OR MAY BE MATERIAL, AND THERE HAS BEEN NO MATERIAL AND
ADVERSE CHANGE IN THE ASSETS, LIABILITIES OR FINANCIAL CONDITION OF BORROWER
GROUP SINCE THE DATE OF THE FINANCIALS; THERE EXISTS NO EQUITY OR LONG TERM
INVESTMENTS IN, OR OUTSTANDING ADVANCES TO, ANY PERSON NOT REFLECTED IN THE
FINANCIALS; THERE IS NO LITIGATION OR BANKRUPTCY OR GOVERNMENTAL ACTIONS OR
PROCEEDINGS WHICH ARE PENDING, OR TO THE BEST OF BORROWER GROUP'S KNOWLEDGE,
THREATENED, AGAINST BORROWER GROUP OR ANY SUBSIDIARY WHICH MIGHT RESULT IN ANY
ADVERSE CHANGE IN BORROWER GROUP'S OR A SUBSIDIARY'S FINANCIAL CONDITION OR
ADVERSELY AFFECT THEIR OPERATIONS, ASSETS OR THE COLLATERAL; EXCEPT FOR TRADE
PAYABLES ARISING IN THE ORDINARY COURSE OF BUSINESS SINCE THE DATES REFLECTED IN
THE FINANCIALS AND EXCEPT AS DISCLOSED ON SCHEDULE II
ATTACHED HERETO AND MADE
A PART HEREOF AND IN THE FINANCIALS, BORROWER GROUP HAS NO ACTIONS OR
PROCEEDINGS PENDING AND NO LIABILITIES OUTSTANDING AND HAS NOT GUARANTEED THE
OBLIGATIONS OF ANY OTHER PERSON;
(P)
BORROWER GROUP'S EXECUTION AND DELIVERY OF THIS AGREEMENT OR
ANY OF THE OTHER AGREEMENTS DOES NOT DIRECTLY OR INDIRECTLY VIOLATE OR RESULT IN
A VIOLATION OF REGULATIONS G, T, U OR X OF THE BOARD OF GOVERNORS OF THE FEDERAL
RESERVE SYSTEM AND BORROWER GROUP DOES NOT OWN OR INTEND TO PURCHASE OR CARRY
ANY "MARGIN SECURITY", AS DEFINED IN SAID REGULATIONS;
(Q)
NEITHER THIS AGREEMENT NOR THE OTHER AGREEMENTS NOR ANY OTHER
DOCUMENTS, CERTIFICATES OR STATEMENTS FURNISHED TO LENDER BY OR ON