COMPANY'S QUARTERLY REPORT ON FORM 10-Q FOR THE FISCAL QUARTER ENDED JULY 31,
2005, PRESENT FAIRLY THE FINANCIAL POSITION OF THE COMPANY AS OF THE DATES
THEREOF AND THE RESULTS OF OPERATIONS FOR THE PERIOD COVERED THEREBY (SUBJECT,
IN THE
4
CASE OF SUCH UNAUDITED FINANCIAL STATEMENTS, TO NORMAL YEAR-END AUDIT
ADJUSTMENTS) AND HAVE BEEN PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES CONSISTENTLY APPLIED, EXCEPT FOR THE ABSENCE OF NOTES NOT
CUSTOMARILY INCLUDED IN SUCH STATEMENTS (THE "FINANCIAL STATEMENTS").
THE
COMPANY DOES NOT HAVE, REASONABLE GROUNDS TO KNOW OF, ANY MATERIAL LIABILITY,
CONTINGENT OR OTHERWISE, NOT ADEQUATELY REFLECTED IN OR RESERVED AGAINST IN THE
AFORESAID FINANCIAL STATEMENTS OR IN THE NOTES THERETO.
2.6.
ABSENCE OF UNDISCLOSED LIABILITIES.
EXCEPT AS AND TO THE EXTENT
SET FORTH IN THE COMPANY'S FINANCIAL STATEMENTS CONTAINED IN ITS ANNUAL REPORT
ON FORM 10-K FOR THE FISCAL YEAR ENDED OCTOBER 31, 2004 AND ITS QUARTERLY
REPORTS ON FORM 10-Q FOR THE FISCAL QUARTERS ENDED JANUARY 31, 2005, APRIL 30,
2005 AND JULY 31, 2005 OR OCCURRING IN THE ORDINARY COURSE OF BUSINESS SINCE THE
DATE OF SUCH FINANCIAL STATEMENTS, NEITHER THE COMPANY NOR ANY OF ITS
SUBSIDIARIES HAS ANY MATERIAL ACCRUED OR CONTINGENT LIABILITY ARISING OUT OF ANY
TRANSACTION OR STATE OF FACTS EXISTING ON OR PRIOR TO THE DATE HEREOF.
2.7.
ABSENCE OF CERTAIN DEVELOPMENTS.
SINCE OCTOBER 31, 2003, THERE
HAS BEEN NO (A) DECLARATION, SETTING ASIDE OR PAYMENT OF ANY DIVIDEND OR OTHER
DISTRIBUTION WITH RESPECT TO THE CAPITAL STOCK OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (B) LOSS, DESTRUCTION OR DAMAGE TO ANY MATERIAL PROPERTY OF THE
COMPANY OR ANY OF ITS SUBSIDIARIES, WHETHER OR NOT INSURED, (C) LABOR TROUBLE
INVOLVING THE COMPANY OR ANY OF ITS SUBSIDIARIES OR ANY MATERIAL CHANGE IN ANY
OF THEIR RESPECTIVE PERSONNEL (EXCEPT FOR THE RESIGNATION OF THE COMPANY'S VICE
PRESIDENT OF SALES AND BUSINESS DEVELOPMENT EFFECTIVE ON NOVEMBER 18, 2005) OR
THE TERMS AND CONDITIONS OF EMPLOYMENT, (D) WAIVER OF ANY VALUABLE RIGHT BY THE
COMPANY OR ANY OF ITS SUBSIDIARIES (E) LOAN OR EXTENSION OF CREDIT TO ANY
OFFICER OR EMPLOYEE OF THE COMPANY OR ANY OF ITS SUBSIDIARIES OTHER THAN IN
CONNECTION WITH THE COMPANY'S NORMAL PAYROLL PRACTICES IN THE ORDINARY COURSE OF
BUSINESS, OR (F) ACQUISITION OR DISPOSITION OF ANY ASSETS BY THE COMPANY OR ANY
OF ITS SUBSIDIARIES (OR ANY CONTRACT OR ARRANGEMENT THEREFOR) IN EXCESS OF
$10,000,000 OR ANY OTHER MATERIAL TRANSACTION BY THE COMPANY OR ANY OF ITS
SUBSIDIARIES OTHERWISE THAN FOR FAIR VALUE IN THE ORDINARY COURSE OF BUSINESS.
SINCE JULY 31, 2005, THERE HAS BEEN NO MATERIAL ADVERSE CHANGE IN THE CONDITION,
FINANCIAL OR OTHERWISE, OF THE COMPANY AND ITS SUBSIDIARIES, TAKEN AS A WHOLE,
OR, TO THE COMPANY'S KNOWLEDGE, EAG OR IN THE ASSETS, LIABILITIES, PROPERTIES,
BUSINESS, OPERATIONS OR PROSPECTS OF THE COMPANY AND ITS SUBSIDIARIES, TAKEN AS
A WHOLE, OR TO THE COMPANY'S KNOWLEDGE, EAG (A "MATERIAL ADVERSE CHANGE").
2.8.
TITLE TO PROPERTIES.
OTHER THAN (A) ANY LIEN IN RESPECT OF
CURRENT TAXES