IS BOUND, OR (C) VIOLATE OR
CONFLICT WITH ANY PROVISION OF MATERIAL LAW OR ORDER OF ANY GOVERNMENTAL
AUTHORITY TO WHICH EITHER THE COMPANY OR THE SUBSIDIARY IS SUBJECT.
3.5
FINANCIAL STATEMENTS.
ATTACHED HERETO AS SCHEDULE 3.5 ARE
TRUE, CORRECT AND COMPLETE COPIES OF THE FOLLOWING FINANCIAL STATEMENTS OF THE
COMPANY AND THE SUBSIDIARY (COLLECTIVELY, THE "FINANCIAL STATEMENTS"):
(A)
AUDITED CONSOLIDATED BALANCE SHEETS, STATEMENTS OF INCOME AND RETAINED EARNINGS,
STATEMENTS OF CASH FLOWS, AND CHANGES IN STOCKHOLDERS' EQUITY,
AS OF AND FOR
THE FISCAL YEARS ENDED DECEMBER
31, 2009 AND DECEMBER 31, 2010 (INCLUDING
RELATED NOTES, AND SCHEDULES IF ANY); AND (B) UNAUDITED CONSOLIDATED BALANCE
SHEET OF THE COMPANY AS OF AUGUST 31, 2011 (THE "RECENT BALANCE SHEET"), AND
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME, CHANGES IN STOCKHOLDERS' EQUITY,
CASH FLOWS
AND RETAINED EARNINGS (INCLUDING RELATED NOTES AND
SCHEDULES, IF
ANY) FOR THE PERIOD BEGINNING
JANUARY 1, 2011 AND ENDING AUGUST 31, 2011 (THE
"INTERIM BALANCE SHEET DATE").
THE FINANCIAL STATEMENTS WERE (I) PREPARED IN
THE ORDINARY COURSE OF BUSINESS FROM THE REGULAR FINANCIAL BOOKS AND RECORDS OF
THE COMPANY IN ACCORDANCE WITH GAAP CONSISTENTLY FOLLOWED THROUGHOUT THE PERIODS
INDICATED (PROVIDED
THAT THE UNAUDITED STATEMENTS ARE SUBJECT TO NORMAL YEAR
END ADJUSTMENTS AND FOOTNOTES AND OTHER PRESENTATION ITEMS WHICH ARE NOT
MATERIAL), AND (II) FAIRLY REPRESENT, IN ALL MATERIAL RESPECTS, THE CONSOLIDATED
FINANCIAL CONDITION OF THE COMPANY AND THE CONSOLIDATED RESULTS OF OPERATIONS,
CHANGES IN STOCKHOLDERS' EQUITY, CASH FLOWS TRANSACTIONS, ASSETS, LIABILITIES,
AND EARNINGS OF THE COMPANY FOR THE PERIODS OR AS OF THE DATES SET FORTH IN THE
FINANCIAL STATEMENTS.
SUBJECT TO THE RESERVES AND ALLOWANCES THEREFOR, ALL OF
THE ACCOUNTS RECEIVABLE OF THE COMPANY SET FORTH ON THE RECENT BALANCE SHEET
REPRESENT VALID OBLIGATIONS ARISING FROM SALES ACTUALLY MADE IN THE ORDINARY
COURSE OF BUSINESS, AND TO THE SHAREHOLDERS' KNOWLEDGE, NO PERSON HAS ANY
INTENTION NOT TO PAY OR INABILITY TO PAY ANY SUCH ACCOUNT RECEIVABLE WHEN DUE.
NEITHER THE COMPANY NOR THE SUBSIDIARY HAS RECEIVED ANY ADVICE OR NOTIFICATION
FROM ITS INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS THAT IT HAS USED ANY IMPROPER
ACCOUNTING PRACTICE THAT WOULD HAVE THE EFFECT OF NOT REFLECTING OR INCORRECTLY
REFLECTING IN THE FINANCIAL STATEMENTS OR ITS BOOKS AND RECORDS, ANY PROPERTIES,
ASSETS, LIABILITIES, REVENUES OR EXPENSES.
3.6
ABSENCE OF CERTAIN CHANGES.
SINCE DECEMBER 31, 2010:
(A)
THERE HAVE NOT BEEN ANY MATERIAL ADVERSE EFFECTS IN REGARD TO
THE COMPANY OR THE SUBSIDIARY AND TO THE SHAREHOLDERS' KNOWLEDGE THERE HAVE BEEN
NO EVENTS, CHANGES OR OCCURRENCES WHICH WOULD REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT IN REGARD TO THE COMPANY OR THE SUBSIDIARY;
16
(B)
WITH RESPECT TO THE BUSINESS, THE COMPANY AND THE SUBSIDIARY
HAVE OPERATED THE BUSINESS IN THE ORDINARY COURSE CONSISTENT WITH PAST PRACTICE
AND PRESERVED THEIR BUSINESS ORGANIZATIONS INTACT AND HAVE USED COMMERCIALLY
REASONABLE EFFORTS TO KEEP AVAILABLE THE SERVICES OF THEIR EMPLOYEES AND TO
PRESERVE THEIR RELATIONSHIPS WITH THEIR CUSTOMERS AND OTHERS WITH WHOM THEY DO
BUSINESS;
(C)
WITH RESPECT TO THE BUSINESS, NEITHER THE COMPANY, NOR