ARE GENUINE
AND IN ALL 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. NO
BORROWER HAS ANY KNOWLEDGE OF ANY ACTUAL OR IMMINENT INSOLVENCY PROCEEDING OF
ANY ACCOUNT DEBTOR WITH AN ACCOUNT THAT IS INCLUDED AS AN ELIGIBLE ACCOUNT IN
ANY BORROWING BASE CERTIFICATE. TO THE BEST OF EACH 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. EXCEPT AS MAY BE SET FORTH ON A
SCHEDULE HERETO, THERE IS NO ACTION OR PROCEEDING (OR SERIES OF RELATED ACTIONS
OR PROCEEDINGS) PENDING OR, TO THE KNOWLEDGE OF THE RESPONSIBLE OFFICERS OF EACH
BORROWER, THREATENED IN WRITING BY OR AGAINST ANY BORROWER, PARENT OR ANY OF
PARENT'S SUBSIDIARIES INVOLVING MORE THAN $500,000.
5.5
NO MATERIAL DEVIATION IN FINANCIAL STATEMENTS.
ALL CONSOLIDATED FINANCIAL STATEMENTS FOR PARENT AND ITS SUBSIDIARIES DELIVERED
TO BANK FAIRLY PRESENT IN ALL MATERIAL RESPECTS PARENT'S CONSOLIDATED FINANCIAL
CONDITION AND PARENT'S CONSOLIDATED RESULTS OF OPERATIONS. THERE HAS NOT BEEN
ANY MATERIAL DETERIORATION IN PARENT'S CONSOLIDATED FINANCIAL CONDITION SINCE
THE DATE OF THE MOST RECENT FINANCIAL STATEMENTS SUBMITTED TO BANK.
5.6
SOLVENCY. THE FAIR SALABLE VALUE OF EACH
BORROWER'S ASSETS (INCLUDING GOODWILL MINUS DISPOSITION COSTS) EXCEEDS THE FAIR
VALUE OF ITS LIABILITIES; NO BORROWER IS LEFT WITH UNREASONABLY SMALL CAPITAL
AFTER THE TRANSACTIONS IN THIS AGREEMENT; AND EACH BORROWER IS ABLE TO PAY ITS
DEBTS (INCLUDING TRADE DEBTS) AS THEY MATURE.
5.7
REGULATORY COMPLIANCE. NO BORROWER IS AN
"INVESTMENT COMPANY" OR A COMPANY "CONTROLLED" BY AN "INVESTMENT COMPANY" UNDER
THE INVESTMENT COMPANY ACT. NO BORROWER IS ENGAGED AS ONE OF ITS IMPORTANT
8
ACTIVITIES IN EXTENDING CREDIT FOR MARGIN STOCK (UNDER REGULATIONS T AND U OF
THE FEDERAL RESERVE BOARD OF GOVERNORS). EACH BORROWER HAS COMPLIED IN ALL
MATERIAL RESPECTS WITH THE FEDERAL FAIR LABOR STANDARDS ACT. NO BORROWER HAS
VIOLATED ANY LAWS, ORDINANCES OR RULES, THE VIOLATION OF WHICH COULD REASONABLY
BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON ANY BORROWER'S OR PARENT'S
BUSINESS. NO BORROWER'S, PARENT'S OR ANY OF PARENT'S SUBSIDIARIES' PROPERTIES OR
ASSETS HAS BEEN USED BY SUCH PERSONS OR, TO THE BEST OF EACH BORROWER'S
KNOWLEDGE, BY PREVIOUS PERSONS, IN DISPOSING, PRODUCING, STORING, TREATING, OR
TRANSPORTING ANY HAZARDOUS SUBSTANCE OTHER THAN LEGALLY. BORROWERS, PARENT AND
ALL OF PARENT'S 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. NO BORROWER OWNS
ANY STOCK, PARTNERSHIP INTEREST OR OTHER EQUITY SECURITIES EXCEPT FOR PERMITTED
INVESTMENTS.
5.9
TAX RETURNS AND PAYMENTS; PENSION
CONTRIBUTION. EACH BORROWER, PARENT AND SUBSIDIARY OF PARENT HAS TIMELY FILED
ALL REQUIRED MATERIAL TAX RETURNS AND REPORTS, AND EACH BORROWER, PARENT AND
SUBSIDIARY OF PARENT