Common use of Financial Statements and Business Condition Clause in Contracts

Financial Statements and Business Condition. The Financial Statements are true, correct, and complete in all material respects as of the dates specified therein and the balance sheets, profit and loss statements and statements of cash flow present fairly, the financial condition and results of operations of Borrower and Guarantor as of the dates and for the periods specified. There were no material liabilities, direct or indirect, fixed or contingent, of Borrower or Guarantor as of the dates of such Financial Statements which were not reflected therein or in the notes thereto, which have not otherwise been disclosed to Lender in writing. Except for any such changes heretofore expressly disclosed in writing to Lender, there has been no material adverse change in the respective financial conditions of Borrower or Guarantor from the financial conditions shown in their respective Financial Statements, nor has Borrower or Guarantor incurred any material liabilities, direct or indirect, fixed or contingent, which are not shown in its Financial Statements. All Financial Statements were and will be prepared in accordance with GAAP. No Material Adverse Effect has resulted or occurred in the financial condition of Borrower or Guarantor since the dates of the Financial Statements. At all times prior to, as of, and after the date hereof, and after giving effect to the transactions contemplated under the Loan Documents, including without limitation, the borrowing of the Loan to the full extent provided in the Loan Documents, and the granting of Liens to Lender in all of the Collateral, and the incurring of all of the Obligations, the total fair value of the Borrower's and Guarantor's assets and properties exceeds the total amount of their debts and other liabilities. Borrower and Guarantor are able to pay all of their debts as they become due, and they shall maintain such solvent financial condition, giving effect to all obligations, absolute and contingent, of Borrower, Guarantor. Borrower's and Guarantor's obligations under this Agreement and under the Loan Documents will not render them unable to pay their respective debts as they become due.

Financial Statements and Business Condition. The Financial Statements are true, correct, and complete in all material respects as of financial statements fairly present the dates specified therein and the balance sheets, profit and loss statements and statements of cash flow present fairly, the respective financial condition conditions and results of operations of Borrower and Guarantor as of the date or dates thereof and for the periods specifiedcovered thereby. The Financial Statements delivered to Lender are true and correct. There were no material liabilities, direct or indirect, fixed or contingent, of Borrower or Guarantor as of the dates of such Financial Statements which were not reflected therein or in the notes thereto, which have not otherwise been disclosed to Lender in writing. Except for any such changes heretofore expressly disclosed in writing to Lender, there has been no material adverse change in the respective financial conditions of Borrower or Guarantor from the financial conditions shown in their respective Financial Statements, nor has have Borrower or Guarantor incurred any material liabilities, direct or indirect, fixed or contingent, which are not shown in its their respective Financial Statements. All Financial Statements were and will be prepared in accordance with GAAP. No Material Adverse Effect has resulted or occurred in the financial condition of Borrower or Guarantor since the dates of the Financial Statements. At all times prior to, as of, and after the date hereof, and after giving effect to the transactions contemplated under the Loan Documents, including without limitation, the borrowing of the Loan to the full extent provided in the Loan Documents, and the granting of Liens to Lender in all of the Collateral, and the incurring of all of the Obligations, the total fair value of the Borrower's and Guarantor's assets and properties exceeds the total amount of their debts and other liabilities. Borrower and Guarantor are , respectively, is able to pay all of its or their respective debts as they become due, Borrower and they Guarantor, as the case may be, shall maintain such solvent financial condition, giving effect to all obligationsthe Obligations, absolute and contingentas long as the Borrower or Guarantor, of Borroweris obligated to Lender under the Agreement, or with respect to the Guarantor, the Guaranty, or in any other manner whatsoever. Borrower's and Guarantor's obligations under this Agreement and under the Loan Documents will not render them Borrower or Guarantor unable to pay its or their respective debts as they become due. The present fair market value of Borrower's and Guarantor' assets is greater than the amount required to pay its or their respective total liabilities.

Financial Statements and Business Condition. (a) The Financial Statements are true, correct, and complete in all material respects as of Current Financials fairly present the dates specified therein and the balance sheets, profit and loss statements and statements of cash flow present fairly, the consolidated financial condition and the results of operations of Borrower Parent and Guarantor its Subsidiaries as of the dates of, and for the periods specifiedportion of the fiscal year ending on, the dates thereof, all in accordance with GAAP. There were no material liabilities, direct or indirect, fixed or contingent, of Borrower or Guarantor the Obligated Parties as of the dates of such Financial Statements the Current Financials which were are not reflected therein or in the notes thereto, which have not otherwise been disclosed were required to Lender in writingbe shown by GAAP. Except for any such changes transactions directly related to, or specifically contemplated by, the Loan Documents and transactions heretofore expressly disclosed in writing to LenderAgent, there has have been no material adverse change in the respective financial conditions of Borrower or Guarantor from the financial conditions shown in their respective Financial Statements, nor has Borrower or Guarantor incurred any material liabilities, direct or indirect, fixed or contingent, which are not shown in its Financial Statements. All Financial Statements were and will be prepared in accordance with GAAP. No Material Adverse Effect has resulted or occurred changes in the financial condition of Borrower Borrower, Parent or Guarantor since any of their respective Subsidiaries from that shown in the Current Financials between such dates and the date hereof which could be expected to have a Material Adverse Effect. (b) As of the Financial Statements. At all times prior to, as of, and after the date hereofDate of this Agreement, and after giving effect to the transactions contemplated under the Loan Documents, including without limitationby this Agreement, the borrowing making of the Loan to Loans by the full extent provided in the Loan Documents, Banks and the granting of Liens to Lender in all execution and delivery of the CollateralGuaranty Agreements by the Guarantors (i) none of the Obligated Parties or, except as disclosed in writing to Agent before the execution of this Agreement, any of their Subsidiaries will be insolvent and the incurring of all of the Obligations, the total aggregate fair market value of the assets of the Obligated Parties (including the fair market value of their equity interest in their respective Subsidiaries) will exceed Borrower's liabilities (including without limitation contingent liabilities) by at least $10,000,000 and Guarantor's assets and properties exceeds (ii) each of the total amount of their debts and other liabilities. Borrower and Guarantor are Obligated Parties will be able to pay all of their debts its Debts as they become duemature. None of the Obligated Parties intends to incur, and they shall maintain such solvent financial conditionor believes that it will incur, giving effect to all obligations, absolute and contingent, of Borrower, Guarantor. Borrower's and Guarantor's obligations under this Agreement and under the Loan Documents Debt that will not render them unable be beyond its ability to pay their respective debts as they become due.such Debt matures. None of the Obligated Parties is engaged in any business or transaction, or is about to engage in any business or transaction, for which such Obligated Party, after consummation of the above described transactions, has (a) an unreasonably small capital or (b) remaining assets that are unreasonably small in relation to the business transaction. CREDIT AGREEMENT PAGE 35 ----------------

Financial Statements and Business Condition. The Financial Statements are true, correct, Preferred Equities -------------------------------------------- Corporation's and complete Guarantor's annual financial statements were prepared in all material respects as of accordance with GAAP and fairly present the dates specified therein and the balance sheets, profit and loss statements and statements of cash flow present fairly, the respective financial condition conditions and results of operations of Borrower Preferred Equities Corporation and Guarantor as of the date or dates thereof and for the periods specifiedcovered thereby. There were no material liabilities, direct or indirect, fixed or contingent, of Borrower Preferred Equities Corporation or Guarantor as of the dates of such Financial Statements annual financial statements which were not reflected therein or in the notes thereto, which have not otherwise been disclosed to Lender in writing. Preferred Equities Corporation's and Guarantor's quarterly interim financial statements fairly present the respective financial conditions and results of operation of Preferred Equities Corporation and Guarantor as of the dates thereof and for the periods covered thereby, subject to any changes required as a result of year end adjustments. Except for any such changes heretofore expressly disclosed in writing to Lender, there has been no material adverse change in the respective financial conditions of Borrower Preferred Equities Corporation or Guarantor from the financial conditions shown in their respective Financial Statementsfinancial statements, nor has Borrower have Preferred Equities Corporation or Guarantor incurred any material liabilities, direct or indirect, fixed or contingent, which are not shown in its Financial Statementstheir respective financial statements. All Financial Statements were and will be prepared in accordance with GAAP. No Material Adverse Effect has resulted or occurred in the financial condition of Borrower or Guarantor since the dates of the Financial Statements. At all times prior to, as of, and after the date hereof, and after giving effect to the transactions contemplated under the Loan Documents, including without limitation, the borrowing of the Loan to the full extent provided in the Loan Documents, and the granting of Liens to Lender in all of the Collateral, and the incurring of all of the Obligations, the total fair value of the Borrower's and Guarantor's assets and properties exceeds the total amount of their debts and other liabilities. Borrower and Guarantor are Preferred Equities Corporation is able to pay all of their its debts as they become due, and they Preferred Equities Corporation shall maintain such solvent financial condition, giving effect to all obligationsthe Indebtedness, absolute and contingent, of Borrower, Guarantoras long as Preferred Equities Corporation is obligated to Lender under this Agreement or in any other manner whatsoever. Borrower's and GuarantorPreferred Equities Corporation's obligations under this Agreement and under the Loan Documents will not render them Preferred Equities Corporation unable to pay their respective its debts as they become due. The present fair market value of its assets is greater than the amount required to pay its total liabilities.

Financial Statements and Business Condition. The Financial Statements are truesubmitted by Borrower and Guarantor pursuant to the requirements set forth herein, correct, and complete in all material respects as of fairly present the dates specified therein and the balance sheets, profit and loss statements and statements of cash flow present fairly, the respective financial condition conditions and results of operations of Borrower and the Guarantor as of the date or dates thereof and for the periods specifiedcovered thereby. There were are no material liabilities, direct or indirect, fixed or contingent, of Borrower or the Guarantor as of the dates of such Financial Statements which were are not reflected therein or in the notes thereto, which have not otherwise been disclosed to Lender in writing. Except for any such changes heretofore expressly disclosed in writing to Lender, there has been no material adverse change in the respective financial conditions of Borrower or the Guarantor from the financial conditions shown in its or their respective Financial Statements, nor has have Borrower or the Guarantor incurred any material liabilities, direct or indirect, fixed or contingent, which are not shown in its their respective Financial Statements. All Financial Statements were and will be prepared in accordance with GAAP. No Material Adverse Effect has resulted or occurred in the financial condition of Borrower or Guarantor since the dates of the Financial Statements. At all times prior to, as of, and after the date hereof, and after giving effect to the transactions contemplated under the Loan Documents, including without limitation, the borrowing of the Loan to the full extent provided in the Loan Documents, and the granting of Liens to Lender in all of the CollateralGuarantor, and the incurring of all of the Obligationsrespectively, the total fair value of the Borrower's and Guarantor's assets and properties exceeds the total amount of their debts and other liabilities. Borrower and Guarantor are able to pay all of their respective debts as they become due, and they Borrower and the Guarantor, as the case may be, shall maintain such solvent financial condition, giving effect to all obligationsthe Obligations, absolute and contingentas long as Borrower or the Guarantor are obligated to Lender under the Agreement, of Borroweror with respect to the Guarantor, Guarantorthe Guaranty, or in any other manner whatsoever. Borrower's and or the Guarantor's obligations Obligations under this Agreement and under the Loan Documents will not render them Borrower or the Guarantor unable to pay its or their respective debts as they become due. The present fair market value of Borrower's or the Guarantor's assets are greater than the amount required to pay its or their respective total liabilities.