ABSENCE OF MATERIAL ADVERSE EFFECT; CONDUCT
OF BUSINESS.
(I)
SINCE THE BALANCE SHEET DATE, EXCEPT AS
SET FORTH ON SCHEDULE 6.1(H)(I) HERETO, THE COMPANIES HAVE OPERATED IN THE
ORDINARY COURSE OF BUSINESS AND THERE HAS NOT BEEN:
(1)
ANY MATERIAL ADVERSE CHANGE IN THE ASSETS,
PROPERTIES, BUSINESS, OPERATIONS, PROSPECTS, NET INCOME OR FINANCIAL CONDITION
OF EITHER OF THE COMPANIES AND, TO THE KNOWLEDGE OF SELLING STOCKHOLDER, NO
FACTOR, EVENT, CONDITION, CIRCUMSTANCE OR PROSPECTIVE DEVELOPMENT EXISTS WHICH
COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT;
(2)
ANY MATERIAL LOSS, DAMAGE, DESTRUCTION OR
OTHER CASUALTY TO THE PROPERTY OR OTHER ASSETS OF EITHER OF THE COMPANIES,
WHETHER OR NOT COVERED BY INSURANCE; OR
(3)
ANY CHANGE IN ANY METHOD OF ACCOUNTING OR
ACCOUNTING PRACTICE.
(II)
SINCE THE BALANCE SHEET DATE , EXCEPT AS
SET FORTH IN SCHEDULE 6.1(H)(II) HERETO, NEITHER OF THE COMPANIES HAS:
(1)
INCURRED ANY MATERIAL OBLIGATION OR
LIABILITY (WHETHER ABSOLUTE, ACCRUED, CONTINGENT OR OTHERWISE), EXCEPT IN THE
ORDINARY COURSE OF BUSINESS;
(2)
MORTGAGED, PLEDGED OR SUBJECTED TO ANY LIEN
ANY OF ITS PROPERTY OR OTHER ASSETS EXCEPT IN THE ORDINARY COURSE OF BUSINESS,
AND EXCEPT FOR MECHANICS AND MATERIALMEN'S LIENS AND LIENS FOR TAXES NOT YET DUE
AND PAYABLE;
(3)
SOLD OR TRANSFERRED ANY MATERIAL ASSETS OR
CANCELLED ANY DEBTS OR CLAIMS OR WAIVED ANY RIGHTS OF MATERIAL VALUE, EXCEPT IN
THE ORDINARY COURSE OF BUSINESS ;
(4)
DEFAULTED ON ANY MATERIAL OBLIGATION;
(5)
ENTERED INTO ANY MATERIAL TRANSACTION,
EXCEPT IN THE ORDINARY COURSE OF BUSINESS ;
(6)
WRITTEN DOWN THE VALUE OF ANY INVENTORY OR
WRITTEN OFF AS UNCOLLECTIBLE ANY ACCOUNTS RECEIVABLE OR ANY PORTION THEREOF NOT
REFLECTED IN THE COMPANIES' FINANCIAL STATEMENTS EXCEPT IN THE ORDINARY COURSE
OF BUSINESS; OR
(7)
ENTERED INTO ANY AGREEMENT OR MADE ANY
COMMITMENT TO DO ANY OF THE FOREGOING.
19
(I)
TAXES.
EXCEPT AS SET FORTH ON
SCHEDULE 6.1(F) OR SCHEDULE 6.1(I), THE COMPANIES AND, FOR ANY PERIOD DURING
ALL, OR PART OF WHICH, THE TAX LIABILITY OF ANY OTHER CORPORATION OR ENTITY WAS
DETERMINED ON A COMBINED OR CONSOLIDATED BASIS WITH EITHER OF THE COMPANIES ANY
SUCH OTHER CORPORATION OR ENTITY, HAVE FILED TIMELY ALL FEDERAL, STATE, LOCAL
AND FOREIGN TAX RETURNS, REPORTS AND DECLARATIONS REQUIRED TO BE FILED (OR HAVE
OBTAINED OR TIMELY APPLIED FOR AN EXTENSION WITH RESPECT TO SUCH FILING)
CURRENTLY REFLECTING THE TAXES (AS DEFINED BELOW) AND ALL OTHER INFORMATION
REQUIRED TO BE REPORTED THEREON, AND HAVE PAID, OR MADE ADEQUATE PROVISION FOR
THE PAYMENT OF, ALL MATERIAL TAXES WHICH ARE DUE PURSUANT TO SUCH RETURNS OR
PURSUANT TO ANY ASSESSMENTS RECEIVED BY EITHER OF THE COMPANIES OR ANY SUCH
OTHER CORPORATION OR ENTITY. AS USED HEREIN, "TAX" OR "TAXES" SHALL MEAN ALL
TAXES, FEES, LEVIES OR OTHER ASSESSMENTS, INCLUDING BUT NOT LIMITED TO INCOME,
EXCISE, PROPERTY (INCLUDING PROPERTY TAXES PAID BY EITHER OF THE COMPANIES
PURSUANT TO ANY LEASE), SALES, FRANCHISE, WITHHOLDING, SOCIAL SECURITY AND
UNEMPLOYMENT TAXES IMPOSED BY THE UNITED STATES, OR ANY STATE, COUNTY, LOCAL OR
FOREIGN GOVERNMENT, OR ANY