Common use of Business Financial Statements Clause in Contracts

Business Financial Statements. The Company has delivered to the Purchaser complete and correct copies of (a) the audited balance sheets of the Company and its Subsidiaries as of December 31, 1993, 1994 and 1995, and the audited statements of earnings, shareholders' equity and cash flows of the Company and its Subsidiaries for the fiscal years then ended, together with the opinion thereof of Faulkner Mackie & Cochran, P.C., independent accountants, in the case xx xxx xxxxxx xearx xxxxx December 31, 1993 and 1994, and Ernst & Young, LLP, independent accountants, in the case of the fiscal year ended December 31, 1995, (b) the unaudited balance sheet of the Company and its Subsidiaries as of June 30, 1996, and the related unaudited statement of earnings and shareholders' equity of the Company for the six months then ended, (c) the audited balance sheet of Direct as of December 31, 1995, and the audited statements of earnings, shareholders' equity and cash flows of Direct for the fiscal year then ended, together with the opinion thereon of Ernst & Young, LLP, independent accountants, and (d) the unaudited balance sheet of Direct as of June 30, 1996, and the audited statements of earnings and shareholders' equity of Direct for the six months then ended (together with the financial statements described in clauses (a), (b) and (c), the "Financial Statements"). The Financial Statements have been prepared in accordance with generally accepted accounting principles (or, in the case of the Financial Statements of Direct, Statutory Accounting Principles) applied on a consistent basis throughout the periods specified (except such changes as are therein specified and except, in the case of such unaudited financial statements, for the absence of the statement of cash flows and footnotes), and present fairly the financial position of the Company and its consolidated Subsidiaries as of the respective dates specified and the consolidated results of their operations and changes in financial position for the respective periods specified, subject, in the case of such unaudited financial statements, to year-end adjustments.

Business Financial Statements. The Company has delivered to the Purchaser complete and correct copies of (a) the audited balance sheets of the Company and its Subsidiaries as of December 31, 1993, 1994 and 1995, and - the audited statements of earnings, shareholders' equity and cash flows of the Company and its Subsidiaries for the fiscal years then ended, together with the opinion thereof of Faulkner Mackie & Cochran, P.C., independent accountants, in the case xx xxx xxxxxx xearx xxxxx December 31, 1993 and 1994, and Ernst & Young, LLP, independent accountants, in the case of the fiscal year ended December 31, 1995, (b) the unaudited balance sheet of the Company and its Subsidiaries as of June 30, 1996, and the related unaudited statement of earnings and shareholders' equity of the Company for the six months then ended, (c) the audited balance sheet of Direct as of December 31, 1995, and the audited statements of earnings, shareholders' equity and cash flows of Direct for the fiscal year then ended, together with the opinion thereon of Ernst & Young, LLP, independent accountants, and (d) the unaudited balance sheet of Direct as of June 30, 1996, and the audited statements of earnings and shareholders' equity of Direct for the six months then ended (together with the financial statements described in clauses (a), (b) and (c), the "Financial Statements"). The Financial Statements have been prepared in accordance with generally accepted accounting principles (or, in the case of the Financial Statements of Direct, Statutory Accounting Principles) applied on a consistent basis throughout the periods specified (except such changes as are therein specified and except, in the case of such unaudited financial statements, for the absence of the statement of cash flows and footnotes), and present fairly the financial position of the Company and its consolidated Subsidiaries as of the respective dates specified and the consolidated results of their operations and changes in financial position for the respective periods specified, subject, in the case of such unaudited financial statements, to year-end adjustments.

Business Financial Statements. The Company has delivered to the Purchaser you complete and correct copies of (a) the audited balance sheets of the Company and its Subsidiaries as of December 31, 1993, 1994 and 1995, and the audited statements of earnings, shareholders' equity and cash flows of the Company and its Subsidiaries annual report to stockholders for the fiscal years then ended, together with the opinion thereof of Faulkner Mackie & Cochran, P.C., independent accountants, in the case xx xxx xxxxxx xearx xxxxx December 31, 1993 and 1994, and Ernst & Young, LLP, independent accountants, in the case of the fiscal year ended December 31, 19952005 (the “Annual Report”), (b) its annual report on Form 10-K for such fiscal year (the unaudited balance sheet “Form 10-K”) as filed with the Securities and Exchange Commission (the “Commission”), (c) its quarterly report on Form 10-Q for the quarter ended March 31, 2006 (the “Quarterly Report”) as filed with the Commission, (d) its Current Reports on Form 8-K dated June 22, 2006, June 19, 2006, May 25, 2006, May 3, 2006, April 5, 2006, March 7, 2006, March 2, 2006, March 1, 2006 and January 4, 2006 (collectively, the “8K Reports”) as filed in the Commission, and (e) a memorandum dated July 5, 2006 prepared by Sovereign Securities Corporation, LLC (the "Placement Agent") for use in connection with the Company’s private placement of the Bonds (such memorandum, including appendices thereto, is herein called the “Memorandum”). The Annual Report, the Form 10-K, the Quarterly Report, the 8-K Reports and the Memorandum are collectively called the "GMP Disclosure Documents”. The Memorandum correctly describes, as of its date, the business then conducted and proposed to be conducted by the Company. There are included in the Form 10-K consolidated financial statements of the Company and its consolidated Subsidiaries as of June 30, 1996, and the related unaudited statement of earnings and shareholders' equity for each of the Company for the six months then ended, (c) the audited balance sheet of Direct as of fiscal years ended December 31, 19952005 and 2004, and the audited statements of earnings, shareholders' equity and cash flows of Direct for the fiscal year then ended, together with accompanied in each case by the opinion thereon of Ernst Deloitte & Young, Touché LLP, independent public accountants, and (d) the unaudited balance sheet of Direct as of June 30, 1996, and the audited statements of earnings and shareholders' equity of Direct for the six months then ended (together with the . All financial statements described included in clauses the foregoing materials delivered to you (a), (bexcept as otherwise specified therein) and (c), the "Financial Statements"). The Financial Statements have been prepared in accordance with generally accepted accounting principles (or, in the case of the Financial Statements of Direct, Statutory Accounting Principles) applied on a consistent basis throughout the periods specified (except such changes as are therein specified and except, in the case of such unaudited financial statements, for the absence of the statement of cash flows and footnotes), and present fairly the financial position of the Company and its consolidated Subsidiaries as of the respective dates specified and the consolidated results of their operations and changes in financial position cash flow for the respective periods specified, specified (subject, in the case of such the unaudited financial statementsstatements included in the Quarterly Report, to year-normal year end and audit adjustments).

Business Financial Statements. The Company has delivered to the each Purchaser complete and correct copies of a memorandum, dated May 13, 1991, supplied by Prudential Assets Sales & Syndication (athe "MEMORANDUM") for use in connection with the Company's private placement of the Notes, which includes, among other things, (i) the audited Form S-1 Registration Statement with respect to the Initial Public Offering filed by the Company with the Securities and Exchange Commission on April 24, 1991, which has been subsequently amended by Amendment No. 1 thereto, filed with such Commission on June 3, 1991, and Amendment No. 2 thereto, filed with such Commission on June 20, 1991, complete and correct copies of which amendments (without exhibits) have been delivered to each Purchaser by the Company (such Registration Statement, as so amended, being herein called the "REGISTRATION STATEMENT"), (ii) the historical consolidated statements of operations of the Company and its consolidated subsidiaries for the fiscal years ended June 30, 1986 to June 30, 1990, inclusive, adjusted to eliminate Essanelle Salon Co., including discussion and analysis of historical financials (the "HISTORICAL FINANCIAL DATA AND ANALYSIS"), and (iii) the financial projections for years through the fiscal year ending June 30, 1999, including explanation and assumptions to such projections, which have been subsequently revised and restated by revised projections dated June 7, 1991, which have been delivered to each Purchaser (such projections, as so revised and restated, including the original explanations and assumptions, being herein called the "FINANCIAL PROJECTIONS"). The Registration Statement includes (iv) the consolidated balance sheets of the Company and its Subsidiaries as of December 31June 30, 1993, 1994 1989 and 19951990, and the audited related consolidated statements of earningsoperations, changes in shareholders' equity deficit and cash flows for the years ended June 30, 1988, 1989 and 1990, audited by Coopers & Xxxxxxx (the "AUDITED FINANCIAL STATEMENTS"), and (v) the consolidated balance sheet of the Company as of March 31, 1991 (unaudited), and the consolidated statements of operations and cash flows of the Company and its Subsidiaries for the fiscal years then endednine months ended March 31, 1990 and 1991 (unaudited) (the "INTERIM FINANCIAL STATEMENTS", and, together with the opinion thereof of Faulkner Mackie & CochranAudited Financial Statements, P.C.the "FINANCIAL STATEMENTS"). The Memorandum correctly describes, independent accountants, in the case xx xxx xxxxxx xearx xxxxx December 31, 1993 and 1994, and Ernst & Young, LLP, independent accountants, in the case as of the fiscal year ended December 31date prepared and as of the Closing Date, 1995, (b) the unaudited balance sheet of business conducted by and proposed to be conducted by the Company and its Subsidiaries as of June 30, 1996, Subsidiaries. The His- torical Financial Data and Analysis and the related unaudited statement of earnings and shareholders' equity of the Company for the six months then ended, (c) the audited balance sheet of Direct as of December 31, 1995, and the audited statements of earnings, shareholders' equity and cash flows of Direct for the fiscal year then ended, together with the opinion thereon of Ernst & Young, LLP, independent accountants, and (d) the unaudited balance sheet of Direct as of June 30, 1996, and the audited statements of earnings and shareholders' equity of Direct for the six months then ended (together with the financial statements described in clauses (a), (b) and (c), the "Financial Statements"). The Financial Statements have been prepared in accordance with generally accepted accounting principles (or, in the case of the Financial Statements of Direct, Statutory Accounting Principles) applied on a consistent basis throughout the periods specified and present fairly in all material respects the consolidated financial position of the Company as of the respective dates of the consolidated balance sheets included in the Financial Statements, the consolidated results of its operations and cash flows for the respective periods covered by the Financial Statements (except such changes as are therein specified and exceptsubject to normal year-end adjustments, in the case of such unaudited financial statements, for the absence of the statement of cash flows and footnotesInterim Financial Statements), and present fairly the financial position of the Company and its consolidated Subsidiaries as of the respective dates specified and the consolidated results of their its operations and changes in financial position (giving effect on a pro forma basis to the adjustments described therein) for the respective periods specifiedfiscal years covered by the Historical Financial Data and Analysis. The Financial Projections have been prepared in good faith by the Company and, subjectexcept as disclosed therein, on a basis consistent in all material respects with the Company's past practices, and the assumptions made in preparing the Financial Projections are reasonable as of the date thereof and as of the Closing Date. The Financial Projections provide, as of the date of such projections and as of the Closing Date, reasonable estimations of future performance, subject to the uncertainty and approximation inherent in any projections. Except as disclosed in the case Registration Statement, there has been no material adverse change in the business, condition (financial or other), assets, properties, operations or prospects of such unaudited financial statementsthe Company or the Company and its Restricted Subsidiaries taken as a whole since March 31, to year-end adjustments1991.