DESIGNATION OR AS IMPOSED BY APPLICABLE SECURITIES LAWS, UPON THE
CLOSING THERE WILL BE NO RESTRICTIONS ON THE
3
TRANSFER OR VOTING OF ANY SHARES OF THE SERIES A PREFERRED STOCK OR COMMON STOCK
OTHER THAN RESTRICTIONS ON TRANSFER NECESSARY TO PRESERVE THE EXEMPTIONS
PURSUANT TO WHICH SUCH SECURITIES WERE ISSUED WITHOUT REGISTRATION UNDER
APPLICABLE SECURITIES LAWS.
OTHER THAN AS SET FORTH IN THE REGISTRATION RIGHTS
AGREEMENT, THERE ARE NO EXISTING RIGHTS WITH RESPECT TO REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT") OF ANY OF THE COMPANY'S
SECURITIES.
THE COMPANY HAS NOT VIOLATED THE 1933 ACT OR ANY STATE BLUE SKY OR
SECURITIES LAWS IN CONNECTION WITH THE ISSUANCE OF ANY OF ITS SECURITIES.
2.4.
SUBSIDIARIES.
(A)
SECTION 2.4 OF THE DISCLOSURE SCHEDULE CONTAINS A LIST OF ALL
SUBSIDIARIES OF THE COMPANY (THE "SUBSIDIARIES").
EXCEPT FOR THE SUBSIDIARIES,
THE COMPANY DOES NOT (I) OWN OF RECORD OR BENEFICIALLY, DIRECTLY OR INDIRECTLY,
(A) ANY SHARES OF CAPITAL STOCK OR SECURITIES CONVERTIBLE INTO CAPITAL STOCK OF
ANY OTHER CORPORATION OR (B) ANY PARTICIPATING INTEREST IN ANY PARTNERSHIP,
JOINT VENTURE OR OTHER NON-CORPORATE BUSINESS ENTERPRISE, OR (C) ANY ASSETS
COMPRISING THE BUSINESS OR OBLIGATIONS OF ANY OTHER CORPORATION, PARTNERSHIP,
JOINT VENTURE OR OTHER NON-CORPORATE BUSINESS ENTERPRISE OR (II) CONTROL,
DIRECTLY OR INDIRECTLY, ANY OTHER ENTITY.
(B)
EACH OF THE SUBSIDIARIES IS A CORPORATION DULY INCORPORATED,
VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF ITS RESPECTIVE
JURISDICTION OF INCORPORATION AND IS DULY LICENSED OR QUALIFIED TO TRANSACT
BUSINESS AS A FOREIGN CORPORATION AND IS IN GOOD STANDING IN EACH JURISDICTION
IN WHICH THE NATURE OF THE BUSINESS TRANSACTED BY IT OR THE CHARACTER OF THE
PROPERTIES OWNED OR LEASED BY IT REQUIRES SUCH LICENSING OR QUALIFICATION.
EACH
OF THE SUBSIDIARIES HAS THE CORPORATE POWER AND AUTHORITY TO OWN AND HOLD ITS
PROPERTIES AND TO CARRY ON ITS BUSINESS AS NOW CONDUCTED AND AS PROPOSED TO BE
CONDUCTED.
ALL OF THE OUTSTANDING SHARES OF CAPITAL STOCK OF EACH OF THE
SUBSIDIARIES ARE OWNED BENEFICIALLY AND OF RECORD BY THE COMPANY, ONE OF ITS
OTHER WHOLLY OWNED SUBSIDIARIES, OR ANY COMBINATION OF THE COMPANY AND/OR ONE OR
MORE OF ITS OTHER WHOLLY OWNED SUBSIDIARIES, ALL AS SPECIFIED IN SECTION 2.4 OF
THE DISCLOSURE SCHEDULE, IN EACH CASE FREE AND CLEAR OF ANY LIENS, CHARGES,
RESTRICTIONS, CLAIMS OR ENCUMBRANCES OF ANY NATURE WHATSOEVER, EXCEPT FOR THOSE
DISCLOSED IN SECTION 2.4 OF THE DISCLOSURE SCHEDULE; AND, EXCEPT AS DISCLOSED IN
SECTION 2.4 OF THE DISCLOSURE SCHEDULE, THERE ARE NO OUTSTANDING SUBSCRIPTIONS,
WARRANTS, OPTIONS, CONVERTIBLE SECURITIES, OR OTHER RIGHTS (CONTINGENT OR OTHER)
PURSUANT TO WHICH ANY OF THE SUBSIDIARIES IS OR MAY BECOME OBLIGATED TO ISSUE
ANY SHARES OF ITS CAPITAL STOCK TO ANY PERSON OTHER THAN THE COMPANY OR ONE OF
THE OTHER SUBSIDIARIES.
2.5.
FINANCIAL INFORMATION.
THE UNAUDITED FINANCIAL STATEMENTS OF THE
COMPANY AS OF AND FOR THE QUARTER ENDED JULY 31, 2005 AND THE UNAUDITED
CONSOLIDATED BALANCE SHEET OF THE COMPANY AT JULY 31, 2005, INCLUDED IN THE