PERSON" WITHIN THE
MEANING OF SECTION 1445(F)(3) OF THE CODE.
(E)
SCHEDULE 4.26(E) SETS FORTH (I) THE TAX BASIS OF EACH ASSET OF
SIRIUS, (II) THE DEPRECIATION METHODS, CONVENTIONS AND HISTORY APPLICABLE TO
EACH ASSET OF SIRIUS, AND (III) AS TO EACH LIABILITY OF SIRIUS THAT SELLERS
PROPOSE TO TREAT AS A "QUALIFIED LIABILITY" UNDER TREAS. REG. § 1.707-5(A)(6),
INFORMATION SUFFICIENT TO ESTABLISH THAT THE LIABILITY IS A "QUALIFIED
LIABILITY." EXCEPT AS SET FORTH IN SCHEDULE 4.26(E), NONE OF THE ASSETS OF
SIRIUS IS SUBJECT TO ANY PROVISION OF APPLICABLE LAW WHICH ELIMINATES OR REDUCES
THE ALLOWANCE FOR FEDERAL TAX DEPRECIATION OR AMORTIZATION IN RESPECT OF THAT
ASSET BELOW THE ALLOWANCE GENERALLY AVAILABLE TO AN ASSET OF ITS TYPE.
(F)
SIRIUS IS NOT A PARTY TO ANY TAX SHARING AGREEMENT.
(G)
SIRIUS HAS NOT ELECTED, AND WILL NOT ELECT, TO BE TREATED AS A
CORPORATION FOR FEDERAL OR STATE TAX PURPOSES.
IN ALL STATES IMPOSING A STATE
CORPORATE INCOME TAX IN WHICH SIRIUS DOES BUSINESS, SIRIUS IS TREATED FOR STATE
CORPORATE INCOME TAX PURPOSES IN A MANNER CONSISTENT WITH ITS TREATMENT FOR
FEDERAL INCOME TAX PURPOSES.
(H)
THERE ARE NO TAXES OF ANY PERSON OTHER THAN SIRIUS FOR WHICH
SIRIUS COULD BE HELD LIABLE AFTER THE CLOSING UNDER TREAS. REG. §
1.1361-4(A)(6), TREAS. REG. § 1.1502-6, TREAS. REG. § 301.7701-2(C)(2)(III) OR
SIMILAR PRINCIPLES.
(I)
SIRIUS HAS NOT REGULARLY OR SYSTEMATICALLY SOLD TANGIBLE ASSETS,
SUCH THAT THE TRANSFER OF ALL OF THE TANGIBLE ASSETS HELD BY SIRIUS IN
CONNECTION WITH THE MERGER WILL QUALIFY FOR A "CASUAL SALE" EXEMPTION FROM
HAWAII SALES AND USE TAX UNDER HAWAII ADMINISTRATIVE RULES SECTION 18-237-1.
(J)
NONE OF THE ASSETS OF THE SIRIUS WILL BE LOCATED WITHIN THE
TAXING JURISDICTION OF ANY ALASKA LOCAL TAXING AUTHORITY AT THE EFFECTIVE TIME.
SECTION 4.27
NO MATERIAL ADVERSE CHANGE.
THERE HAS BEEN NO MATERIAL
ADVERSE CHANGE IN THE BUSINESS, PROSPECTS, RESULTS OF OPERATIONS, ASSETS OR
FINANCIAL CONDITION OF SIRIUS SINCE DECEMBER 31, 2006, AND NO EVENT HAS OCCURRED
WHICH COULD BE REASONABLY EXPECTED TO LEAD TO OR CAUSE SUCH A MATERIAL ADVERSE
CHANGE; PROVIDED, HOWEVER, THAT (A) CHANGES RESULTING FROM CONDITIONS AFFECTING
THE COASTWISE MARITIME PETROLEUM TRANSPORTATION INDUSTRY IN GENERAL AND
(B) CHANGES IN THE ECONOMY IN GENERAL SHALL, IN EACH CASE, BE EXCLUDED FROM THE
DETERMINATION TO THE EXTENT THAT THEY DO NOT HAVE A DISPROPORTIONATE EFFECT ON
SIRIUS AS COMPARED TO OTHER ENTITIES ENGAGED IN THE COASTWISE MARITIME PETROLEUM
TRANSPORTATION INDUSTRY IN HAWAII AND ALONG THE WEST COAST.
32
SECTION 4.28
BOOKS AND RECORDS.
THE BOOKS OF ACCOUNT, MINUTE BOOKS, STOCK
RECORD BOOKS, AND OTHER RECORDS OF SIRIUS, ALL OF WHICH HAVE BEEN MADE AVAILABLE
TO BUYER, ARE COMPLETE AND CORRECT AND HAVE BEEN MAINTAINED IN ACCORDANCE WITH
SOUND BUSINESS PRACTICES, IN EACH CASE FROM AND AFTER JANUARY 1, 2004.
SIRIUS
HAS DEVISED AND MAINTAINS A SYSTEM OF INTERNAL ACCOUNTING CONTROLS SUFFICIENT TO
PROVIDE REASONABLE ASSURANCES THAT (I) TRANSACTIONS ARE EXECUTED IN ACCORDANCE
WITH MANAGEMENT'S GENERAL OR SPECIFIC AUTHORIZATION, (II) TRANSACTIONS ARE
RECORDED AS NECESSARY