MATERIAL RESPECTS THE FINANCIAL
CONDITION AND OPERATING RESULTS OF THE COMPANY AND ITS SUBSIDIARIES AS OF THE
DATES, AND FOR THE PERIODS, INDICATED THEREIN, SUBJECT TO NORMAL YEAR-END AUDIT
ADJUSTMENTS.
THE COMPANY MAINTAINS A STANDARD SYSTEM OF ACCOUNTING ESTABLISHED
AND ADMINISTERED IN ACCORDANCE WITH GAAP.
THE COMPANY'S UNAUDITED BALANCE SHEET
AS OF JULY 31, 2004 IS REFERRED TO IN THIS AGREEMENT AS THE "COMPANY BALANCE
SHEET."
(B)
ALL ACCOUNTS AND NOTES RECEIVABLE OF THE
COMPANY AND THE SUBSIDIARIES REFLECTED IN THE COMPANY BALANCE SHEET HAVE ARISEN
IN THE ORDINARY COURSE OF BUSINESS FROM BONA FIDE TRANSACTIONS, REPRESENT VALID
OBLIGATIONS DUE TO THE OPERATIONS OF THE COMPANY OR THE SUBSIDIARIES IN
ACCORDANCE WITH THEIR TERMS AND HAVE BEEN PROPERLY ACCOUNTED FOR IN ACCORDANCE
WITH GAAP (SUBJECT TO NORMAL YEAR-END ADJUSTMENTS AND THE ABSENCE OF NOTES
THERETO).
(C)
NEITHER THE COMPANY NOR ANY SUBSIDIARY HAS
ANY LIABILITY OR ANY OBLIGATIONS OF ANY NATURE, WHETHER OR NOT ACCRUED,
CONTINGENT OR OTHERWISE, AND WHETHER DUE OR TO BECOME DUE OR ASSERTED OR
UNASSERTED, EXCEPT FOR (A) LIABILITIES SHOWN ON THE COMPANY BALANCE SHEET, (B)
LIABILITIES AND OBLIGATIONS INCURRED PRIOR TO THE DATE OF THE COMPANY BALANCE
SHEET IN THE ORDINARY COURSE OF BUSINESS WHICH WILL NOT BE REQUIRED BY GAAP TO
BE REFLECTED IN, RESERVED AGAINST OR OTHERWISE DESCRIBED IN THE COMPANY BALANCE
SHEET AND THAT WOULD NOT, INDIVIDUALLY OR IN THE AGGREGATE, HAVE A MATERIAL
ADVERSE EFFECT AND (C) LIABILITIES AND OBLIGATIONS INCURRED SINCE THE DATE OF
THE COMPANY BALANCE SHEET IN THE ORDINARY COURSE OF BUSINESS AND WHICH HAVE NOT
AND WOULD NOT REASONABLY BE EXPECTED TO HAVE, INDIVIDUALLY OR IN THE AGGREGATE,
A MATERIAL ADVERSE EFFECT ON THE COMPANY.
2.5
Absence of Certain Changes or Events.
Since
January 31, 2004, (a) the Company and its Subsidiaries have conducted their
businesses in the ordinary course of business in all material respects, (b)
there has not been (i) any Material Adverse Effect on the Company or any events,
circumstances or conditions that, individually or in the aggregate, would
reasonably be expected to result in a Material Adverse Effect on the Company,
(ii) any declaration, setting aside or payment of any dividend on, or other
distribution (whether in cash, stock or property) in respect of, any of the
Company's or any of its Subsidiaries' capital stock, other than any
distributions of cash from the Company to Seller in accordance with Seller's
cash management policies, (iii) any purchase, redemption or other acquisition by
the Company or any of its Subsidiaries of any of the Company's capital stock or
any other securities of the Company or its Subsidiaries or any options,
warrants, calls or rights to acquire any such shares or other securities,
(iv) any split, combination or reclassification of any of the Company's or any
of its Subsidiaries' capital stock, (v) any material change by the Company in
its accounting methods, principles or practices, except as required by
concurrent changes in GAAP, (vi) any material revaluation by the Company of any
of its assets other