(II) THE EXCLUDED
ASSETS; AND (III) THOSE ASSETS SOLD OR CONSUMED IN THE ORDINARY COURSE OF THE
OPERATIONS OF THE COMPANY, HAVE BEEN DISTRIBUTED OR OTHERWISE DISPOSED OF
9
DURING THE SIX (6) MONTHS PRECEDING THE AGREEMENT DATE AND NO ASSETS OF THE
COMPANY WILL BE DISTRIBUTED FROM THE AGREEMENT DATE TO THE CLOSING DATE EXCEPT
THOSE IDENTIFIED ABOVE.
3.3
NO INDEBTEDNESS.
NEITHER THE COMPANY NOR ANY OF THE ACQUIRED
ASSETS SHALL HAVE ANY INDEBTEDNESS OR LIENS AT THE TIME OF THE TRANSFER OF THE
SHARES HEREUNDER EXCEPT NORMAL REOCCURRING TRADE PAYABLES.
3.4
NO ADVERSE CHANGE.
FROM JANUARY 1, 2005 TO AND THROUGH THE
CLOSING DATE, SAVE AND EXCEPT FOR THE ADVERSE EFFECTS OF HURRICANE RITA, THERE
HAS NOT BEEN NOR SHALL THERE BE ANY ADVERSE CHANGE IN THE OPERATING RESULTS,
OPERATIONS, CONDITION (FINANCIAL OR OTHERWISE), PROSPECTS, EMPLOYEE RELATIONS OR
CUSTOMER OR SUPPLIER RELATIONS OF THE COMPANY OR THE ACQUIRED ASSETS.
3.5
PERMITS.
SCHEDULE 3.5 HERETO LISTS ALL OF THE PERMITS, RIGHTS,
PRIVILEGES AND FRANCHISES IN THE NAME OF OR HELD BY THE COMPANY (HEREAFTER
SOMETIME REFERRED TO COLLECTIVE AS THE "PERMITS").
EXCEPT AS SET FORTH ON
SCHEDULE 3.5, THOSE ARE ALL OF THE PERMITS REQUIRED BY THE COMPANY FOR THE
OWNERSHIP OF ITS PROPERTIES AND FOR THE CONDUCT OF ITS BUSINESS; ALL OF THE
PERMITS ARE VALIDLY ISSUED AND IN EFFECT; AND THE EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE PERFORMANCE OF SELLERS OF SELLERS' OBLIGATION UNDER THIS
AGREEMENT, AND CONSUMMATION BY SELLERS OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT SHALL NOT TERMINATE, RESCIND OR REVOKE THE PERMITS OR GIVE ANY THIRD
PARTY A RIGHT TO TERMINATE, REVOKE OR RESCIND THE SAME.
3.6
COMPANY AGREEMENTS.
THE COMPANY IS NOT A PARTY TO ANY CONTRACT,
LEASE, EMPLOYMENT AGREEMENT (OTHER THAN UNWRITTEN EMPLOYMENT AT-WILL AGREEMENTS
WHICH THE COMPANY CAN TERMINATE AT CLOSING WITHOUT ANY LIABILITY), MORTGAGE,
SECURITY AGREEMENT, NOTE, OTHER EVIDENCE OF INDEBTEDNESS OR ANY OTHER AGREEMENT
OF ANY NATURE, TYPE, KIND OR DURATION (HEREAFTER SOMETIMES REFERRED TO
INDIVIDUALLY AS A "COMPANY AGREEMENT") FOR WHICH THE COMPANY WILL HAVE
CONTINUING LIABILITY FOLLOWING THE CLOSING.
SCHEDULE 1.14 REFLECTS ALL EXCLUDED
LIABILITIES WHICH WILL BE ASSIGNED AND/OR TRANSFERRED TO THE SELLERS, PURSUANT
TO INSTRUMENTS APPROVED OF BY THE PURCHASER, PRIOR TO THE CLOSING DATE.
EACH
OF THE SELLERS DOES HEREBY, INDIVIDUALLY, INDEMNIFY, DEFEND AND HOLD THE
PURCHASER AND THE COMPANY HARMLESS FROM ANY CLAIMS, LOSS, FEES, EXPENSES OR
CHARGE, INCLUDING REASONABLE ATTORNEY'S FEES, ARISING FROM OR RELATED TO THE
EXCLUDED LIABILITIES.
SELLERS, AS PART OF THE CLOSING, SHALL DELIVER SUCH
RELEASE OR OTHER DOCUMENTS OR INSTRUMENTS, REASONABLY ACCEPTABLE TO THE
PURCHASER, EVIDENCING THE RELEASE OF THE COMPANY AND THE ACQUIRED ASSETS FROM
THE EXCLUDED LIABILITIES.
3.7
FINANCIAL STATEMENTS.
SCHEDULE 3.7 CONTAINS (A) THE UNAUDITED
FINANCIAL STATEMENTS FOR THE COMPANY FOR THE CALENDAR YEARS OF 2001 THROUGH 2004
AND (B) THE COMPANY'S 2005 FINANCIAL STATEMENTS FOR THE MONTHS ENDED SEPTEMBER
30, 2005, PREPARED BY THE COMPANY'S ACCOUNTANT (COLLECTIVELY, "FINANCIAL
STATEMENTS") EACH IN ACCORD WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.
(A)
THE FINANCIAL STATEMENTS ARE: