INCOME STATEMENT FOR EACH TRANSFERRED BUSINESS AS
OF JUNE 30, 2008 (COLLECTIVELY, THE "FINANCIAL STATEMENTS").
THE FINANCIAL
STATEMENTS WERE DERIVED FROM THE ACCOUNTING BOOKS AND RECORDS OF SELLER.
THE
FINANCIAL STATEMENTS HAVE BEEN PREPARED IN ACCORDANCE WITH GAAP APPLIED ON A
CONSISTENT BASIS THROUGHOUT THE PERIODS INDICATED, AND FAIRLY PRESENT THE
FINANCIAL CONDITION AND THE RESULTS OF OPERATIONS OF SELLER AS OF THE RELEVANT
DATES AND FOR THE RELEVANT PERIODS IN ALL MATERIAL RESPECTS, IN ACCORDANCE WITH
GAAP.
3.8
BOOKS AND RECORDS.
SELLER MAINTAINS ACCURATE BOOKS OF ACCOUNT,
MINUTE BOOKS, STOCK RECORD BOOKS, AND OTHER RECORDS (ALL OF WHICH HAVE BEEN MADE
AVAILABLE TO PURCHASER) REFLECTING ITS RESPECTIVE ASSETS AND LIABILITIES AND
MAINTAINS PROPER AND ADEQUATE INTERNAL ACCOUNTING CONTROLS, WHICH PROVIDE
ASSURANCE THAT (A) TRANSACTIONS ARE EXECUTED WITH MANAGEMENT'S AUTHORIZATION,
(B) TRANSACTIONS ARE RECORDED AS NECESSARY TO PERMIT PREPARATION OF THE
FINANCIAL STATEMENTS OF SELLER AND TO MAINTAIN ACCOUNTABILITY FOR SELLER'S
ASSETS, (C) ACCESS TO SELLER'S ASSETS IS PERMITTED ONLY IN ACCORDANCE WITH
MANAGEMENT'S AUTHORIZATION, (D) THE REPORTING OF SELLER'S ASSETS IS COMPARED
WITH EXISTING ASSETS AT REGULAR INTERVALS, AND (E) ACCOUNTS,
10
NOTES AND OTHER RECEIVABLES AND INVENTORY ARE RECORDED ACCURATELY, AND PROPER
AND ADEQUATE PROCEDURES ARE IMPLEMENTED TO EFFECT THE COLLECTION THEREOF ON A
CURRENT AND TIMELY BASIS.
3.9
LITIGATION.
THERE ARE NO CIVIL, CRIMINAL OR ADMINISTRATIVE
ACTIONS, SUITS, CLAIMS, HEARINGS, ARBITRATIONS, PROCEEDINGS OR INVESTIGATIONS
PENDING OR, TO THE KNOWLEDGE OF SELLER, THREATENED, AGAINST OR RELATING TO
SELLER OR THE TRANSFERRED ASSETS, AT LAW OR IN EQUITY, OR BEFORE ANY
GOVERNMENTAL AUTHORITY, WHICH, IF DETERMINED OR RESOLVED ADVERSELY TO SELLER OR
THE TRANSFERRED ASSETS IN ACCORDANCE WITH THE PLAINTIFFS' DEMANDS, HAVE A
MATERIAL ADVERSE EFFECT.
NEITHER THE TRANSFERRED BUSINESS NOR THE TRANSFERRED
ASSETS ARE SUBJECT TO ANY AWARD, DECISION, INJUNCTION, JUDGMENT, ORDER, RULING,
SUBPOENA, OR VERDICT ENTERED, ISSUED, MADE, OR RENDERED BY ANY COURT,
ADMINISTRATIVE AGENCY, OR OTHER GOVERNMENTAL AUTHORITY OR BY ANY ARBITRATOR.
3.10
TAX MATTERS.
EXCEPT AS SET FORTH ON SCHEDULE 3.10, (A) ALL INCOME
TAX AND OTHER MATERIAL TAX RETURNS OTHER THAN THE FEDERAL AND STATE CORPORATE
INCOME TAX RETURNS FOR DECEMBER 31, 2007 WHICH WILL BE FILED BY THE EXTENDED DUE
DATE OF SEPTEMBER 15, 2008, STATEMENTS, REPORTS AND FORMS (COLLECTIVELY, THE
"RETURNS") THAT ARE REQUIRED TO BE FILED WITH ANY TAXING AUTHORITY ON OR BEFORE
THE CLOSING DATE WITH RESPECT TO ANY TAX PERIOD ENDING ON OR BEFORE THE CLOSING
DATE ("PRE-CLOSING TAX PERIOD") BY SELLER HAS BEEN, OR WILL BE, TIMELY FILED ON
OR BEFORE THE CLOSING DATE; (B) SELLER HAS TIMELY PAID ALL TAXES SHOWN AS DUE
AND PAYABLE ON THE RETURNS THAT HAVE BEEN FILED; (C) THE RETURNS THAT HAVE BEEN
FILED ARE TRUE, CORRECT AND COMPLETE; (D) NO TAX SHARING AGREEMENT, TAX SHARING
ARRANGEMENT OR TAX INDEMNIFICATION AGREEMENT EXISTS BETWEEN SELLER AND ANY OTHER
PERSON; (E) THERE IS NO ACTION, SUIT, PROCEEDING, INVESTIGATION, AUDIT OR CLAIM
NOW PROPOSED OR PENDING AGAINST OR WITH RESPECT TO SELLER IN RESPECT OF ANY TAX;
AND (F) SELLER HAS NOT WAIVED ANY