consummation of the transactions contemplated by such
Loan Documents; each Borrower's performance under those of the Loan Documents to
which it is a party:
(I)
HAS BEEN DULY AUTHORIZED BY ALL
NECESSARY ACTION.
(II)
DOES NOT, AND WILL NOT, CONTRAVENE IN ANY
MATERIAL RESPECT ANY PROVISION OF ANY REQUIREMENT OF LAW OR OBLIGATION OF THAT
BORROWER.
(III)
WILL NOT RESULT IN THE CREATION OR
IMPOSITION OF, OR THE OBLIGATION TO CREATE OR IMPOSE, ANY LIEN UPON ANY ASSETS
OF THAT BORROWER PURSUANT TO ANY REQUIREMENT OF LAW OR OBLIGATION, EXCEPT
PURSUANT TO THE LOAN DOCUMENTS.
(B)
THE LOAN DOCUMENTS HAVE BEEN DULY EXECUTED
AND DELIVERED BY EACH BORROWER AND ARE THE LEGAL, VALID AND BINDING OBLIGATIONS
OF EACH BORROWER, ENFORCEABLE AGAINST EACH BORROWER IN ACCORDANCE WITH THEIR
RESPECTIVE TERMS.
5.7
Litigation.
Except as set forth on Schedule
5.7, there are no actions or proceedings pending by or against Borrowers before
any court or administrative agency and Borrowers do not have knowledge or belief
of any pending, threatened, or imminent litigation, governmental investigations,
or claims, complaints, actions, or prosecutions involving Borrowers or any
guarantor of the Obligations, except for: (a) ongoing collection matters in
which Borrowers are the plaintiff; and (b) current matters that, if decided
adversely to Borrowers, would not materially impair the prospect of repayment of
the Obligations or materially impair the value or priority of the Lender Group's
security interests in the Collateral.
26
5.8
NO MATERIAL ADVERSE CHANGE.
ALL FINANCIAL
STATEMENTS RELATING TO BORROWERS OR ANY GUARANTOR OF THE OBLIGATIONS THAT HAVE
BEEN DELIVERED BY BORROWERS TO THE LENDER GROUP HAVE BEEN PREPARED IN ACCORDANCE
WITH GAAP (EXCEPT AS MAY BE DIRECTLY IMPACTED BY THE STOCK OPTION ISSUE AND, IN
THE CASE OF UNAUDITED FINANCIAL STATEMENTS, FOR THE LACK OF FOOTNOTES AND BEING
SUBJECT TO YEAR-END AUDIT ADJUSTMENTS) AND FAIRLY PRESENT BORROWERS' (OR SUCH
GUARANTOR'S, AS APPLICABLE) FINANCIAL CONDITION AS OF THE DATE THEREOF AND
BORROWERS' RESULTS OF OPERATIONS FOR THE PERIOD THEN ENDED.
THERE HAS NOT BEEN
A MATERIAL ADVERSE CHANGE WITH RESPECT TO BORROWERS (OR SUCH GUARANTOR, AS
APPLICABLE) SINCE THE DATE OF THE LATEST FINANCIAL STATEMENTS SUBMITTED TO THE
LENDER GROUP ON OR BEFORE THE CLOSING DATE.
5.9
Fraudulent Transfer.
(A)
EACH BORROWER AND EACH SUBSIDIARY OF A
BORROWER IS SOLVENT.
(B)
NO TRANSFER OF PROPERTY IS BEING MADE BY ANY
BORROWER OR ANY SUBSIDIARY OF A BORROWER AND NO OBLIGATION IS BEING INCURRED BY
ANY BORROWER OR ANY SUBSIDIARY OF A BORROWER IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS WITH THE INTENT TO
HINDER, DELAY, OR DEFRAUD EITHER PRESENT OR FUTURE CREDITORS OF BORROWERS OR
THEIR SUBSIDIARIES.
6.
AFFIRMATIVE COVENANTS.
EACH BORROWER
COVENANTS AND AGREES THAT, SO LONG AS ANY CREDIT HEREUNDER SHALL BE AVAILABLE
AND UNTIL FULL AND FINAL PAYMENT OF THE OBLIGATIONS,
BORROWERS SHALL COMPLY
WITH EACH AND EVERY AFFIRMATIVE COVENANT SET FORTH IN THE REVOLVING CREDIT
AGREEMENT, EACH OF WHICH IS HEREBY INCORPORATED BY REFERENCE.
DELIVERY BY THE
BORROWERS TO THE REVOLVING