CONTAIN ALL FOOTNOTES REQUIRED BY GAAP, AND FAIRLY PRESENT IN
ALL MATERIAL RESPECTS THE FINANCIAL POSITION OF THE COMPANY AND ITS CONSOLIDATED
SUBSIDIARIES AS OF AND FOR THE DATES THEREOF AND THE
10
RESULTS OF OPERATIONS AND CASH FLOWS FOR THE PERIODS THEN ENDED, SUBJECT, IN THE
CASE OF UNAUDITED STATEMENTS, TO NORMAL, IMMATERIAL, YEAR-END AUDIT
ADJUSTMENTS.
ALL MATERIAL AGREEMENTS TO WHICH THE COMPANY OR ANY SUBSIDIARY IS
A PARTY OR TO WHICH THE PROPERTY OR ASSETS OF THE COMPANY OR ANY SUBSIDIARY ARE
SUBJECT ARE INCLUDED AS PART OF OR SPECIFICALLY IDENTIFIED IN THE SEC REPORTS.
(I)
MATERIAL CHANGES.
SINCE THE DATE OF THE LATEST AUDITED FINANCIAL
STATEMENTS, (I) THERE HAS BEEN NO EVENT, OCCURRENCE OR DEVELOPMENT THAT HAS HAD
OR THAT COULD REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT,
(II) EACH OF THE COMPANY AND ITS SUBSIDIARIES HAS NOT INCURRED ANY LIABILITIES
(CONTINGENT OR OTHERWISE) OTHER THAN (A) TRADE PAYABLES AND ACCRUED EXPENSES
INCURRED IN THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST PRACTICE;
(B)
LIABILITIES FOR PAYMENT OF ACQUISITION CONSIDERATION TO RIPTIDE AND BRAVERA; (C)
LIABILITIES TO BE ASSUMED AS A RESULT OF THE ACQUISITIONS OF RIPTIDE AND
BRAVERA; (D) COMMITMENTS TO PAY TRANSACTION COSTS TO BROKERS, BANKERS,
ACCOUNTANTS, LAWYERS AND OTHER PROFESSIONALS ADVISING THE COMPANY TO ALL THE
TRANSACTIONS CONTEMPLATED UNDER THIS AGREEMENT, AND (E) LIABILITIES NOT REQUIRED
TO BE REFLECTED IN THE COMPANY'S FINANCIAL STATEMENTS PURSUANT TO GAAP OR
REQUIRED TO BE DISCLOSED IN FILINGS MADE WITH THE COMMISSION, (III) EACH OF THE
COMPANY AND ITS SUBSIDIARIES HAS NOT ALTERED ITS METHOD OF ACCOUNTING, (IV)
EXCEPT FOR TRANSACTIONS EXECUTED UNDER THE SERIES B PREFERRED STOCK PURCHASE
AGREEMENT AND DIVIDENDS ACCRUED AND PAYABLE PURSUANT TO OUTSTANDING SERIES A
PREFERRED STOCK, EACH OF THE COMPANY AND ITS SUBSIDIARIES HAS NOT DECLARED OR
MADE ANY DIVIDEND OR DISTRIBUTION OF CASH OR OTHER PROPERTY TO ITS STOCKHOLDERS
OR PURCHASED, REDEEMED OR MADE ANY AGREEMENTS TO PURCHASE OR REDEEM ANY SHARES
OF ITS CAPITAL STOCK AND (V) OTHER THAN AS SET FORTH ON SCHEDULE 3.1(I), EACH OF
THE COMPANY AND ITS SUBSIDIARIES HAS NOT ISSUED ANY EQUITY SECURITIES TO ANY
OFFICER, DIRECTOR OR AFFILIATE, EXCEPT PURSUANT TO EXISTING COMPANY STOCK OPTION
PLANS. NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES HAS PENDING BEFORE THE
COMMISSION ANY REQUEST FOR CONFIDENTIAL TREATMENT OF INFORMATION.
(J)
LITIGATION.
OTHER THAN AS SET FORTH IN THE DISCLOSURE SCHEDULE
UNDER THE CAPTION "LEGAL PROCEEDINGS," THERE IS NO ACTION, SUIT, INQUIRY, NOTICE
OF VIOLATION, PROCEEDING OR INVESTIGATION PENDING OR, TO THE BEST KNOWLEDGE OF
THE COMPANY, THREATENED AGAINST OR AFFECTING THE COMPANY, ANY SUBSIDIARY OR ANY
OF THEIR RESPECTIVE PROPERTIES BEFORE OR BY ANY COURT, ARBITRATOR, GOVERNMENTAL
OR ADMINISTRATIVE AGENCY OR REGULATORY AUTHORITY (FEDERAL, STATE, COUNTY, LOCAL
OR FOREIGN) (COLLECTIVELY, AN "ACTION") WHICH (I) ADVERSELY AFFECTS OR
CHALLENGES THE LEGALITY, VALIDITY OR ENFORCEABILITY OF ANY OF THE TRANSACTION
DOCUMENTS OR THE SECURITIES OR (II) COULD, IF THERE WERE AN UNFAVORABLE
DECISION, HAVE OR REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE
EFFECT.