PREDECESSOR THEREOF) IS A POTENTIALLY RESPONSIBLE PARTY FOR
A FEDERAL, STATE, MUNICIPAL OR LOCAL CLEANUP SITE OR CORRECTIVE ACTION UNDER ANY
ENVIRONMENTAL LAW.
5.3.7
THERE IS NO PENDING OR, TO THE CORPORATION'S KNOWLEDGE, THREATENED
OR PROPOSED, PROCEEDING OR GOVERNMENTAL ACTION TO MODIFY THE ZONING
CLASSIFICATION OF, OR TO CONDEMN OR TAKE BY THE POWER OF EMINENT DOMAIN (OR TO
PURCHASE IN LIEU THEREOF), OR TO CLASSIFY AS A LANDMARK, OR TO OTHERWISE
RESTRICT THE USE OF ANY OF THE PROPERTIES WHERE ANY STORE OR WAREHOUSE IS
LOCATED.
5.3.8
CORPORATION HAS PROVIDED TO THE PURCHASER ACCESS TO TRUE AND
COMPLETE COPIES OF ALL ENVIRONMENTAL SITE ASSESSMENTS, AUDITS, TEST RESULTS,
ANALYTICAL DATA, BORING LOGS, AND OTHER ENVIRONMENTAL REPORTS, INVESTIGATIONS
AND STUDIES IN THE POSSESSION, CUSTODY OR CONTROL OF THE CORPORATION RELATING TO
LOCATIONS OR ASSETS CURRENTLY OR FORMERLY OWNED, LEASED, OPERATED OR USED BY THE
CORPORATION.
5.4
Financial Statements.
5.4.1
THE CORPORATION HAS DELIVERED TO THE PURCHASER COMPLETE COPIES OF
THE FINANCIAL STATEMENTS, WHICH ARE ATTACHED TO SCHEDULE 5.4.
EXCEPT AS SET
FORTH ON SCHEDULE 5.4, THE FINANCIAL STATEMENTS HAVE BEEN PREPARED IN ACCORDANCE
WITH GAAP AND THE BOOKS AND RECORDS OF THE CORPORATION, AND PRESENT FAIRLY IN
ALL MATERIAL RESPECTS THE FINANCIAL POSITION, RESULTS OF OPERATIONS AND CASH
FLOWS OF THE CORPORATION AT AND FOR THE RESPECTIVE PERIODS INDICATED (SUBJECT,
IN THE CASE OF THE UNAUDITED FINANCIAL STATEMENTS, TO NORMAL YEAR-END
ADJUSTMENTS, WHICH WILL NOT BE MATERIAL TO THE CORPORATION, INDIVIDUALLY OR IN
THE AGGREGATE, THE ABSENCE OF A STATEMENT OF CASH FLOWS AND THE ABSENCE OF
FOOTNOTE DISCLOSURE).
22
5.4.2
THE CORPORATION HAS NO LIABILITIES EXCEPT:
(I) AS SET FORTH ON
SCHEDULE 5.4.2; (II) LIABILITIES DISCLOSED OR RESERVED AGAINST IN THE FINANCIAL
STATEMENTS OR SPECIFICALLY DISCLOSED IN THE NOTES THERETO; (III) LIABILITIES
INCURRED AFTER THE DATE OF THE UNAUDITED FINANCIAL STATEMENTS IN THE ORDINARY
COURSE OF BUSINESS CONSISTENT WITH PAST PRACTICE; AND (IV) FUTURE PERFORMANCE
OBLIGATIONS UNDER CONTRACTS.
5.5
Absence Of Certain Changes.
Since August 31, 2009, except as set
forth on Schedule 5.5, the Schoeneman Beauty Supply Business has been conducted
in the ordinary course consistent with past practice and there has not been:
5.5.1
ANY MATERIAL ADVERSE EFFECT;
5.5.2
ANY DECLARATION OR PAYMENT OF ANY DIVIDEND OR OTHER DISTRIBUTION
WITH RESPECT TO ANY SHARES, EXCEPT WITH RESPECT TO CASH AND THE EXCLUDED ASSETS,
OR ANY REDEMPTION OR OTHER ACQUISITION BY THE CORPORATION OF ANY CORPORATION
SECURITIES;
5.5.3
ANY AMENDMENT OR MODIFICATION OF THE ORGANIZATIONAL DOCUMENTS OF
THE CORPORATION OR OF THE TERMS OF ANY CORPORATION SECURITIES;
5.5.4
ANY INCURRENCE OF ANY INDEBTEDNESS BY THE CORPORATION;
5.5.5
ANY CREATION OR OTHER INCURRENCE OF ANY LIEN ON ANY MATERIAL ASSET
OF THE CORPORATION OTHER THAN PERMITTED LIENS;
5.5.6
ANY LOAN OR ADVANCE, EXCEPT THE EXTENSION BY THE CORPORATION OF
TRADE CREDIT TO ITS CUSTOMERS IN THE ORDINARY COURSE OF BUSINESS, OR CAPITAL
CONTRIBUTION TO OR INVESTMENT IN ANY PERSON BY THE CORPORATION;
5.5.7
ANY MATERIAL DAMAGE, DESTRUCTION OR OTHER CASUALTY LOSS (WHETHER OR
NOT COVERED BY INSURANCE) AFFECTING THE