GENERALLY ACCEPTED ACCOUNTING PRINCIPLES APPLIED
ON A CONSISTENT BASIS DURING THE PERIODS INVOLVED ("GAAP"), EXCEPT AS MAY BE
OTHERWISE SPECIFIED IN SUCH FINANCIAL STATEMENTS OR THE NOTES THERETO AND EXCEPT
THAT UNAUDITED FINANCIAL STATEMENTS MAY NOT CONTAIN ALL FOOTNOTES REQUIRED BY
GAAP, AND FAIRLY PRESENT IN ALL MATERIAL RESPECTS THE FINANCIAL POSITION OF THE
COMPANY AND ITS CONSOLIDATED SUBSIDIARIES AS OF AND FOR THE DATES THEREOF AND
THE CONSOLIDATED RESULTS OF THEIR OPERATIONS AND CASH FLOWS FOR THE PERIODS THEN
ENDED, SUBJECT, IN THE CASE OF UNAUDITED STATEMENTS, TO NORMAL, IMMATERIAL,
YEAR-END AUDIT ADJUSTMENTS.
(I)
MATERIAL CHANGES; UNDISCLOSED EVENTS, LIABILITIES OR
DEVELOPMENTS.
(I)
SINCE JUNE 30, 2007, THERE HAS BEEN NO EVENT, OCCURRENCE OR
DEVELOPMENT THAT COULD, INDIVIDUALLY OR IN THE AGGREGATE, HAVE OR REASONABLY BE
EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.
(II)
EXCEPT AS SET FORTH IN THE LATEST AUDITED CONSOLIDATED BALANCE
SHEET INCLUDED WITHIN THE SEC REPORTS FILED PRIOR TO THE DATE OF THIS AGREEMENT
OR ON SCHEDULE 3.1(I)(II), THE COMPANY AND THE SUBSIDIARIES DO NOT HAVE ANY
OBLIGATIONS OR LIABILITIES (WHETHER ABSOLUTE, CONTINGENT, ACCRUED OR OTHERWISE)
OTHER THAN TRADE PAYABLES AND ACCRUED EXPENSES INCURRED IN THE ORDINARY COURSE
OF BUSINESS CONSISTENT WITH PAST PRACTICE SINCE THE DATE OF THE LATEST AUDITED
CONSOLIDATED BALANCE SHEET INCLUDED WITHIN THE SEC REPORTS FILED PRIOR TO THE
DATE OF THIS AGREEMENT, THAT ARE MATERIAL TO THE COMPANY AND ITS SUBSIDIARIES
TAKEN AS A WHOLE.
(III)
SINCE THE DATE OF THE LATEST AUDITED CONSOLIDATED BALANCE SHEET
INCLUDED WITHIN THE SEC REPORTS FILED PRIOR TO THE DATE OF THIS AGREEMENT,
(A) THE COMPANY HAS NOT ALTERED ITS METHOD OF ACCOUNTING IN ANY MATERIAL
RESPECT, (B) THE COMPANY HAS NOT DECLARED OR MADE ANY DIVIDEND OR DISTRIBUTION
OF CASH OR OTHER PROPERTY TO ITS STOCKHOLDERS OR PURCHASED, REDEEMED OR MADE ANY
AGREEMENTS TO PURCHASE OR REDEEM ANY SHARES OF ITS CAPITAL STOCK AND (C) THE
COMPANY HAS NOT ISSUED ANY COMMON STOCK OR COMMON STOCK EQUIVALENTS TO ANY
OFFICER, DIRECTOR OR ANY AFFILIATE OF THE COMPANY, EXCEPT PURSUANT TO EXISTING
COMPANY STOCK INCENTIVE PLANS.
(IV)
EXCEPT FOR THE ISSUANCE OF THE SHARES CONTEMPLATED BY THIS
AGREEMENT, NO EVENT, LIABILITY OR DEVELOPMENT HAS OCCURRED OR EXISTS WITH
RESPECT TO THE COMPANY OR ITS SUBSIDIARIES OR THEIR RESPECTIVE BUSINESS,
PROPERTIES, OPERATIONS OR FINANCIAL CONDITION, THAT WOULD BE REQUIRED TO BE
DISCLOSED BY THE COMPANY UNDER APPLICABLE SECURITIES LAWS AND THAT HAS NOT BEEN
SO DISCLOSED.
(J)
LITIGATION.
THERE IS NO ACTION, SUIT, INQUIRY, NOTICE OF
VIOLATION, PROCEEDING OR INVESTIGATION PENDING OR, TO THE KNOWLEDGE OF THE
COMPANY, THREATENED AGAINST OR AFFECTING THE COMPANY, ANY SUBSIDIARY OR ANY OF
THEIR RESPECTIVE PROPERTIES BEFORE OR BY ANY COURT, ARBITRATOR, GOVERNMENTAL OR
ADMINISTRATIVE AGENCY OR REGULATORY AUTHORITY (FEDERAL, STATE, COUNTY, LOCAL OR
FOREIGN) (COLLECTIVELY, AN "ACTION") WHICH (I) ADVERSELY AFFECTS OR CHALLENGES
THE LEGALITY, VALIDITY OR ENFORCEABILITY OF ANY OF THE TRANSACTION
10
DOCUMENTS OR THE SHARES OR (II) COULD, INDIVIDUALLY OR IN THE AGGREGATE, IF
THERE WERE AN UNFAVORABLE DECISION, HAVE OR REASONABLY BE EXPECTED