5.3
ACCOUNTS RECEIVABLE. FOR ANY ELIGIBLE ACCOUNT
IN ANY BORROWING BASE CERTIFICATE, ALL STATEMENTS MADE AND ALL UNPAID BALANCES
APPEARING IN ALL INVOICES, INSTRUMENTS AND OTHER DOCUMENTS EVIDENCING SUCH
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 MATERIAL RESPECTS WHAT THEY PURPORT TO BE. 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 INSOLVENCY PROCEEDING OF ANY ACCOUNT
DEBTOR WHOSE ACCOUNTS ARE AN ELIGIBLE ACCOUNT IN ANY BORROWING BASE CERTIFICATE.
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. 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 WHICH WOULD BE
REASONABLY LIKELY TO RESULT IN DAMAGES OWED BY THE BORROWER OR ANY OF ITS
SUBSIDIARIES IN EXCESS OF MORE THAN TWO HUNDRED FIFTY THOUSAND DOLLARS
($250,000.00).
5.5
NO MATERIAL DETERIORATION 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. 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. BORROWER IS NOT ENGAGED AS ONE OF ITS
IMPORTANT ACTIVITIES IN EXTENDING CREDIT FOR MARGIN STOCK (UNDER REGULATIONS T
AND U OF THE FEDERAL RESERVE BOARD OF GOVERNORS). BORROWER HAS COMPLIED IN ALL
MATERIAL RESPECTS WITH THE FEDERAL FAIR LABOR STANDARDS ACT.
BORROWER
6
HAS NOT VIOLATED ANY LAWS, ORDINANCES OR RULES, THE VIOLATION OF WHICH WOULD
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 ITS BUSINESS AS CURRENTLY CONDUCTED.
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;