CONFIDENTIALITY TO THE CORPORATIONS WITH
RESPECT TO SUCH INFORMATION.
THERE HAS BEEN NO PUBLIC DISCLOSURE OF KNOW-HOW,
TRADE SECRETS OR ANY OTHER TYPE OF PROPRIETARY INFORMATION FORMING A PART OF THE
INTELLECTUAL PROPERTY OWNED BY THE CORPORATIONS THAT WOULD ADVERSELY AFFECT THE
ABILITY OF THE CORPORATIONS TO SUSTAIN VALID RIGHTS TO SUCH INTELLECTUAL
PROPERTY.
THERE HAS BEEN NO PUBLIC DISCLOSURE, SALE OR OFFER FOR SALE OF ANY
INVENTION, FORMING A PART OF THE INTELLECTUAL PROPERTY, NOR HAS THERE BEEN ANY
DISCLOSURE, DIRECTLY OR INDIRECTLY, DERIVED FROM THE INVENTOR(S) (SUCH AS A
NON-CONFIDENTIAL PUBLICATION OR PRESENTATION BY AN INVENTOR, EMPLOYEE, OFFICER,
DIRECTOR OR OTHER REPRESENTATIVE OF EACH OF THE CORPORATIONS) THAT MAY AFFECT
THE ABILITY OF THE CORPORATIONS TO OBTAIN OR SUSTAIN VALID PATENT RIGHTS TO SUCH
INVENTION.
TO THE BEST OF THE KNOWLEDGE OF THE VENDORS, THERE IS NO
PUBLICATION, SUCH AS A PATENT, PUBLISHED OR LAID-OPEN PATENT APPLICATION,
JOURNAL ARTICLE, CATALOGUE, PROMOTION OR SPECIFICATION, OF ANOTHER PERSON WHICH
MAY PREVENT THE CORPORATIONS FROM OBTAINING OR SUSTAINING VALID PATENT RIGHTS TO
ANY OTHERWISE PATENTABLE INTELLECTUAL PROPERTY.
IN RELATION TO EACH PATENT
APPLICATION (IN PREPARATION OR FILED), OR PATENT, FOR AN INVENTION WITHIN THE
INTELLECTUAL PROPERTY, NEITHER THE CORPORATIONS NOR THE VENDORS ARE AWARE OF ANY
PROFESSIONAL OPINION, SUCH AS THE OPINION OF A PATENT AGENCY OR PATENT ATTORNEY,
WHETHER PRELIMINARY IN NATURE OR IN ANY OTHER MANNER QUALIFIED, WHICH ADVISES
THAT THE CHANCES OF OBTAINING OR SUSTAINING VALID PATENT RIGHTS TO THE INVENTION
ARE IN ANY MANNER DOUBTFUL.
(Z)
INVENTORIES.
THE INVENTORIES OF EACH OF
THE CORPORATIONS DO NOT INCLUDE ANY MATERIAL ITEMS, WHICH ARE BELOW STANDARD
QUALITY OR OF A QUALITY OR QUANTITY NOT USABLE OR SALEABLE IN THE ORDINARY
COURSE OR WHICH ARE HELD IN QUANTITIES EXCEEDING THE QUANTITIES SOLD AND
DELIVERED IN THE PRECEDING TWELVE MONTHS OTHER THAN ACCUBRACE INVENTORY OWNED BY
MGA CONSTRUCTION.
THE INVENTORY LEVELS OF EACH OF THE CORPORATIONS ARE
SUFFICIENT FOR THE CONTINUATION OF THE BUSINESS IN THE ORDINARY COURSE.
ALL
INVENTORIES OF EACH OF THE CORPORATIONS HAVE BEEN DETERMINED AND VALUED IN
ACCORDANCE WITH THE POLICIES, PRACTICES AND PROCEDURES SET FORTH ON SCHEDULE R
HERETO.
(AA)
SUBSIDIARIES.
NEITHER OF THE CORPORATIONS HAS
ANY SUBSIDIARIES OR HOLDS ANY SHARES OR OTHER OWNERSHIP, EQUITY OR PROPRIETARY
INTERESTS IN ANY OTHER PERSON.
(BB)
BOOKS AND RECORDS.
ALL ACCOUNTING AND FINANCIAL
BOOKS AND RECORDS HAVE BEEN FULLY, PROPERLY AND ACCURATELY KEPT AND COMPLETED IN
ALL MATERIAL RESPECTS.
THE BOOKS AND RECORDS AND OTHER DATA AND
22
INFORMATION ARE NOT RECORDED, STORED, MAINTAINED, OPERATED OR OTHERWISE WHOLLY
OR PARTLY DEPENDENT UPON OR HELD BY ANY MEANS (INCLUDING ANY ELECTRONIC,
MECHANICAL OR PHOTOGRAPHIC PROCESS, WHETHER COMPUTERIZED OR NOT) WHICH ARE NOT
AVAILABLE TO THE CORPORATIONS IN THE ORDINARY COURSE.
(CC)
FINANCIAL STATEMENTS.
THE MGA GROUP FINANCIAL
STATEMENTS HAVE BEEN PREPARED IN ACCORDANCE WITH GAAP APPLIED ON A BASIS
CONSISTENT WITH THOSE OF PREVIOUS FISCAL YEARS AND PRESENT FAIRLY:
(I) THE
ASSETS, LIABILITIES (WHETHER ACCRUED, ABSOLUTE, CONTINGENT OR OTHERWISE) AND
FINANCIAL POSITION OF THE CORPORATIONS AS DECEMBER 31,