ARIZONA LNG (THE "ARIZONA LNG FINANCIAL
STATEMENTS") AS OF SEPTEMBER 30, 2005 (THE "BALANCE SHEET DATE").
(THE HLDM
TRIAL
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BALANCE AND THE ARIZONA LNG FINANCIAL STATEMENTS ARE COLLECTIVELY REFERRED TO
HEREIN AS THE "FINANCIAL REPORTS").
The Arizona LNG Financial Statements have been prepared in material accordance
with and are consistent with the books and records of Arizona LNG, fairly
present the financial positions and results of operations of Arizona LNG as of
the dates and for the periods indicated, are stated in material conformity with
GAAP, consistently applied, except as otherwise clearly and conspicuously
stated, and except that they do not contain a full set of footnotes, and can be
legitimately reconciled with the financial statements and with the financial
records maintained and the accounting methods applied by Arizona LNG for federal
income tax purposes.
Except as set forth on Schedule 6.1(e), the statements of income included in the
Arizona LNG Financial Statements do not contain any material items of special or
non-recurring income except as expressly specified therein, and the balance
sheet included in the Arizona LNG Financial Statements does not reflect any
write-up or revaluation increasing the book value of any assets except as
otherwise clearly and conspicuously stated therein.
The HLDM Trial Balance is a materially accurate reflection of the assets,
liabilities, and equity accounts of HLDM as of the Balance Sheet Date.
(F)
ABSENCE OF UNDISCLOSED TAX LIABILITIES.
TO THE SELLING STOCKHOLDER'S KNOWLEDGE, NEITHER OF THE COMPANIES HAS ANY
LIABILITY FOR TAXES (AS DEFINED IN SECTION 6.1(I)) (WHETHER DUE OR TO BECOME
DUE, ACCRUED, ABSOLUTE, OR CONTINGENT), EXCEPT FOR (I) LIABILITIES REFLECTED OR
RESERVED AGAINST IN THE MOST RECENT FINANCIAL STATEMENTS PROVIDED TO APOLLO BY
SELLING STOCKHOLDER; (II) TAX LIABILITIES WHICH, INDIVIDUALLY AND IN THE
AGGREGATE, DO NOT HAVE AND CANNOT REASONABLY BE EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT; OR (III) TAX LIABILITIES DISCLOSED IN SCHEDULE 6.1(F) OR
SCHEDULE 6.1(I) HERETO.
(G)
PROJECTIONS.
THE COMPANIES HAVE PREVIOUSLY
SUPPLIED TO APOLLO IN CONJUNCTION WITH APOLLO'S INVESTIGATION OF THE COMPANIES
CERTAIN FORWARD-LOOKING FINANCIAL ESTIMATES WITH RESPECT TO ARIZONA LNG (THE
"PROJECTIONS"), A DESCRIPTION OF WHICH IS ATTACHED HERE AS SCHEDULE 6.1(G).
THE
PROJECTIONS (AND ACCOMPANYING SUPPORTING INFORMATION), WERE PREDICATED UPON
ASSUMPTIONS AND SUBJECTIVE JUDGMENTS (INCLUDING THOSE PROVIDED WITH THE
PROJECTIONS) BELIEVED BY SELLING STOCKHOLDER TO BE REASONABLE AT THE TIME THE
PROJECTIONS WERE PREPARED, BUT WHICH MAY OR MAY NOT, IN FACT, PROVE TO BE
CORRECT.
NO REPRESENTATIONS OR WARRANTIES ARE MADE AS TO THE ACCURACY OF SUCH
PROJECTIONS.
THE PROJECTIONS AND SUPPORTING DATA DID NOT, TO SELLING
STOCKHOLDER'S KNOWLEDGE, CONTAIN ANY MATERIAL COMPUTATIONAL ERRORS.
THE
PROJECTIONS MAY IN CERTAIN INSTANCES ALSO CONTAIN INFORMATION REGARDING THE
PROJECTED POTENTIAL FINANCIAL PERFORMANCE OF ASSETS AND BUSINESS ACTIVITIES IN
ADDITION TO THOSE OF ARIZONA LNG.
THE PROJECTIONS ARE SUBJECT TO VARIOUS RISKS,
UNCERTAINTIES, AND OTHER VARIABLE AND UNPREDICTABLE FACTORS AND ACCORDINGLY,
THEY ARE NOT INTENDED TO BE CONSTRUED AS AN ASSURANCE OR GUARANTEE THAT ACTUAL
FINANCIAL PERFORMANCE WILL, IN ANY RESPECT, BE AS INDICATED THEREIN.
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(H)