YEAR ENDED SEPTEMBER 30, 2007, AND (B) QUARTERLY FINANCIAL STATEMENTS FOR THE
PERIODS ENDING DECEMBER 31, 2007 AND MARCH 31, 2008, AND THOSE STATEMENTS FAIRLY
PRESENT THE BORROWER'S AND GUARANTORS' CONSOLIDATED FINANCIAL CONDITION ON THE
DATES THEREOF AND THE RESULTS OF OPERATIONS AND CASH FLOWS FOR THE PERIODS THEN
ENDED AND WERE PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES (PROVIDED, HOWEVER, THAT THE QUARTERLY FINANCIAL STATEMENTS DESCRIBED
IN CLAUSE (B) HAVE BEEN PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES FOR INTERIM FINANCIAL INFORMATION, AND ACCORDINGLY DO NOT
INCLUDE ALL THE FINANCIAL INFORMATION AND FOOTNOTES REQUIRED BY GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES FOR COMPLETE FINANCIAL STATEMENTS AND ARE SUBJECT
TO YEAR END ADJUSTMENTS).
SINCE MARCH 31, 2008, THERE HAS BEEN NO CHANGE IN THE
BORROWER'S AND GUARANTOR'S, AS A WHOLE, BUSINESS, PROPERTIES OR CONDITION
(FINANCIAL OR OTHERWISE) WHICH HAS HAD A MATERIAL ADVERSE EFFECT.
SECTION 3.9
LITIGATION.
EXCEPT AS DISCLOSED IN THE BORROWER'S FORM 10-K FOR
THE YEAR ENDED SEPTEMBER 30, 2007, AS UPDATED BY EACH SUBSEQUENT FORM 10-Q
QUARTERLY REPORT, THERE ARE NO ACTIONS, SUITS OR PROCEEDINGS PENDING OR, TO THE
BORROWER'S KNOWLEDGE, THREATENED AGAINST OR AFFECTING THE BORROWER OR ANY
GUARANTOR OR THE PROPERTIES OF THE BORROWER OR ANY GUARANTOR BEFORE ANY COURT OR
GOVERNMENTAL DEPARTMENT, COMMISSION, BOARD, BUREAU, AGENCY OR INSTRUMENTALITY,
DOMESTIC OR FOREIGN, WHICH, IF DETERMINED ADVERSELY TO THE BORROWER OR ANY
GUARANTOR, WOULD HAVE A MATERIAL ADVERSE EFFECT.
37
SECTION 3.10
REGULATION U.
NEITHER THE BORROWER NOR ANY GUARANTOR IS ENGAGED
IN THE BUSINESS OF EXTENDING CREDIT FOR THE PURPOSE OF PURCHASING OR CARRYING
MARGIN STOCK (WITHIN THE MEANING OF REGULATION U OF THE BOARD OF GOVERNORS OF
THE FEDERAL RESERVE SYSTEM), AND NO PART OF THE PROCEEDS OF ANY ADVANCE OR
LETTER OF CREDIT WILL BE USED TO PURCHASE OR CARRY ANY MARGIN STOCK OR TO EXTEND
CREDIT TO OTHERS FOR THE PURPOSE OF PURCHASING OR CARRYING ANY MARGIN STOCK.
SECTION 3.11
TAXES.
THE BORROWER AND THE GUARANTORS HAVE PAID OR CAUSED TO BE
PAID TO THE PROPER AUTHORITIES WHEN DUE ALL FEDERAL, STATE, TRIBAL AND LOCAL
TAXES REQUIRED TO BE PAID BY EACH OF THEM.
THE BORROWER AND GUARANTORS HAVE
FILED ALL FEDERAL, STATE, TRIBAL AND LOCAL TAX RETURNS WHICH TO THE KNOWLEDGE OF
THE OFFICERS OF THE BORROWER, ARE REQUIRED TO BE FILED, AND THE BORROWER AND
GUARANTORS HAVE PAID OR CAUSED TO BE PAID TO THE RESPECTIVE TAXING AUTHORITIES
ALL TAXES AS SHOWN ON SAID RETURNS OR ON ANY ASSESSMENT RECEIVED BY ANY OF THEM
TO THE EXTENT SUCH TAXES HAVE BECOME DUE OR ARE CONTESTING SUCH TAXES IN GOOD
FAITH.
SECTION 3.12
TITLES AND LIENS.
THE BORROWER OR A GUARANTOR, AS THE CASE MAY
BE, HAS GOOD AND ABSOLUTE TITLE TO ALL COLLATERAL FREE AND CLEAR OF ALL LIENS
OTHER THAN PERMITTED LIENS.
NO FINANCING STATEMENT NAMING THE BORROWER AS
DEBTOR IS ON FILE IN ANY OFFICE EXCEPT TO PERFECT PERMITTED LIENS.
SECTION 3.13
ERISA.
EXCEPT AS DISCLOSED TO THE LENDER IN WRITING PRIOR TO THE
DATE HEREOF, NEITHER