Common use of Financial Statements; Accounts Receivable; Inventory Clause in Contracts

Financial Statements; Accounts Receivable; Inventory. (a) The Debtors have previously provided to the Buyer (i) the audited consolidated balance sheets and statements of operations and changes in stockholders' equity and cash flows of the Company as of December 31, 1996 and 1997 and for the years ended December 31, 1995, 1996 and 1997 (the "Audited Company Financial Statements") and (ii) the unaudited consolidated balance sheet (which indicates separately liabilities arising on or after January 30, 1997 (the "Filing Date")) (the "June 30 Unaudited Company Balance Sheet") and the unaudited consolidated statements of operations and changes in stockholders' equity and cash flows of the Company as of and for the six-month period ended June 30, 1998 (the "Company Balance Sheet Date"). Such financial statements (collectively, the "Company Financial Statements"), (i) comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the U. S. Securities and Exchange Commission (the "SEC") with respect thereto; (ii) have been prepared in accordance with United States generally accepted accounting principles ("GAAP") applied on a consistent basis throughout the periods covered thereby (except as may be indicated therein or in the notes thereto and, in the case of interim financial statements, as permitted by Form 10-Q under the Exchange Act); (iii) fairly present the consolidated financial condition, results of operations and cash flows of the Company as of the respective dates thereof and for the periods referred to therein; and (iv) are consistent with the books and records of the Company subject, in the 6 (b) The accounts receivable of the Debtors reflected on the June 30 Unaudited Company Balance Sheet, and those arising since the date of the June 30 Unaudited Company Balance Sheet, are valid receivables subject to no set- offs or counterclaims, net of a reserve for bad debts, which reserve is reflected on the June 30 Unaudited Company Balance Sheet. The inventories of the Debtors reflected on the June 30 Unaudited Company Balance Sheet are of a quality and quantity useable and/or saleable in the Ordinary Course of Business, except as written down to net realizable value on the June 30 Unaudited Company Balance Sheet. All inventory shown on the June 30 Unaudited Company Balance Sheet has been priced at the lower of cost or net realizable value.

Financial Statements; Accounts Receivable; Inventory. (a) The Debtors have previously provided to the Buyer following financial statements are attached as Exhibit H: (i) the The audited consolidated balance sheets and statements of operations and changes in stockholders' equity and cash flows sheet of the Company as of December 31, 1996 2015 (the “Audited Balance Sheet”), and 1997 the unaudited balance sheet of the Company as of December 31, 2014 and December 31, 2013, together with the audited related statements of operations and comprehensive loss, members’ equity and cash flows for the fiscal year ended December 31, 2015 (the “Audited Financial Statements”), and the unaudited related statements of operations and comprehensive loss, members’ equity and cash flows for the fiscal years ended December 31, 19952014 and December 31, 1996 and 1997 (the "Audited Company Financial Statements") and 2013, respectively; (ii) the The unaudited consolidated balance sheet (which indicates separately liabilities arising on or after January 30, 1997 (the "Filing Date")) (the "June 30 Unaudited Company Balance Sheet") and the unaudited consolidated statements of operations and changes in stockholders' equity and cash flows of the Company as of March 31, 2016 (the “Reference Balance Sheet”), together with the related unaudited statements of operations and comprehensive loss, members’ equity and cash flows for the six-three month period then ended June 30, 1998 (the "Company Balance Sheet Date"). Such financial statements referred to in clauses (i)-(ii), collectively, the "Company “Financial Statements"”), . (b) The Financial Statements of the Company: (i) comply as to form present fairly, in all material respects with applicable accounting requirements respects, the Company’s financial condition and the published rules and regulations of the U. S. Securities and Exchange Commission (the "SEC") with respect thereto; (ii) have been prepared in accordance with United States generally accepted accounting principles ("GAAP") applied on a consistent basis throughout the periods covered thereby (except as may be indicated therein or in the notes thereto and, in the case of interim financial statements, as permitted by Form 10-Q under the Exchange Act); (iii) fairly present the consolidated financial condition, results of operations and cash flows of the Company (if provided) as of the respective dates thereof they were prepared and for the periods referred those financial statements cover; and (ii) were prepared in accordance with GAAP, except (i) as otherwise disclosed in the notes to therein; such Financial Statements, and (ii) in the case of unaudited Financial Statements, for the absence of footnote disclosures and other presentation items and are subject to normal and recurring year-end adjustments. (c) The Company’s accounts receivable reflected on the Reference Balance Sheet (the “Accounts Receivable”): (i) are valid and existing obligations of the Company, (ii) have arisen from bona fide transactions entered into by the Company involving goods sold and delivered or services rendered in the ordinary course of business, (iii) are not subject to any written or oral notices of defenses, rights of set‑off or counterclaims and (iv) are consistent with collectible within 180 days of the books and records Closing Date. (d) All items of Inventory of the Company subject, in the 6 (b) The accounts receivable of the Debtors reflected on the June 30 Unaudited Company Balance Sheet, and those arising since the date of the June 30 Unaudited Company Balance Sheet, are valid receivables subject to no set- offs or counterclaims, net of a reserve for bad debts, which reserve is reflected on the June 30 Unaudited Company Balance Sheet. The inventories of the Debtors reflected on the June 30 Unaudited Company Balance Sheet are of a quality and quantity useable and/or saleable usable and, with respect to finished goods, salable in the Ordinary Course ordinary course of Businessbusiness. The values at which such Inventories are carried have been determined in accordance with GAAP consistent with current accounting practices applied by the Company. The quantities of each item of Inventory are not excessive, except as written down to net realizable value on but are reasonable in the June 30 Unaudited Company Balance Sheetpresent circumstances of the business of the Company. All inventory shown on the June 30 Unaudited Company Balance Sheet has been priced Inventories are maintained at the lower facilities of cost the Company and no Inventory is held on a consignment or net realizable valueother title retention basis.

Financial Statements; Accounts Receivable; Inventory. (a) The Debtors have previously provided to the Buyer (i) the audited consolidated balance sheets and statements of operations and changes in stockholders' equity and cash flows of the Company as of December 31, 1996 and 1997 and for the years ended December 31, 1995, 1996 and 1997 (the "Audited Company Financial Statements") and (ii) the unaudited consolidated balance sheet (which indicates separately liabilities arising on or after January 30, 1997 (the "Filing Date")) (the "June 30 Unaudited Company Balance Sheet") and the unaudited consolidated statements of operations and changes in stockholders' equity and cash flows of the Company as of and for the six-month period ended June 30, 1998 (the "Company Balance Sheet Date"). Such financial statements (collectively, the "Company Financial Statements"), (i) comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the U. S. Securities and Exchange Commission (the "SEC") with respect thereto; (ii) have been prepared in accordance with United States generally accepted accounting principles ("GAAP") applied on a consistent basis throughout the periods covered thereby (except as may be indicated therein or in the notes thereto and, in the case of interim financial statements, as permitted by Form 10-Q under the Exchange Act); (iii) fairly present the consolidated financial condition, results of operations and cash flows of the Company as of the respective dates thereof and for the periods referred to therein; and (iv) are consistent with the books and records of the Company Company, subject, in the 6case of clauses (i), (ii) and (iii), (a) to the paragraph in the report of independent auditors on the Audited Company Financial Statements describing conditions that raise substantial doubt about the Company's ability to continue as a going concern, and (b) to the Company Financial Statements not including any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of these uncertainties. (b) The accounts receivable of the Debtors reflected on the June 30 Unaudited Company Balance Sheet, and those arising since the date of the June 30 Unaudited Company Balance Sheet, are valid receivables subject to no set- set-offs or counterclaims, net of a reserve for bad debts, which reserve is reflected on the June 30 Unaudited Company Balance Sheet. The inventories of the Debtors reflected on the June 30 Unaudited Company Balance Sheet are of a quality and quantity useable and/or saleable in the Ordinary Course of Business, except as written down to net realizable value on the June 30 Unaudited Company Balance Sheet. All inventory shown on the June 30 Unaudited Company Balance Sheet has been priced at the lower of cost or net realizable value.

Financial Statements; Accounts Receivable; Inventory. 7- (a) The Debtors have Debtor has previously provided or made available to the Buyer (i) the audited consolidated balance sheets and statements of operations and changes in stockholders' equity stockholders'equity and cash flows of the Company Debtor and its Subsidiaries as of December 31, 1996 and 1997 and for the years ended December 31, 19952000, 1996 December 31, 2001 and 1997 December 31, 2002 (the "Audited Company Debtor Financial Statements") and (ii) the unaudited consolidated balance sheet (which indicates separately liabilities arising on or after January 30, 1997 (the "Filing Date")) (the "June 30 Unaudited Company Balance Sheet") and the unaudited consolidated statements of operations and changes in stockholders' equity stockholders'equity and cash flows of the Company Debtor and its Subsidiaries as of and for the sixthree-month period ended June 30March 31, 1998 2003 (the "Company Unaudited Debtor Financial Statements"; March 31, 2003 being the "Debtor Balance Sheet Date"). Such financial statements (collectively, the "Company Debtor Financial Statements"), (i) comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the U. S. U.S. Securities and Exchange Commission (the "SEC") with respect thereto; (ii) have been prepared in accordance with United States generally accepted accounting principles ("GAAP") applied on a consistent basis throughout the periods covered thereby (except as may be indicated therein or in the notes thereto and, in the case of interim financial statements, as permitted by Form 10-Q under the Exchange Act); (iii) fairly present the consolidated financial condition, results of operations and cash flows of the Company Debtor as of the respective dates thereof and for the periods referred to therein; and (iv) are consistent with the books and records of the Company Debtor, subject, in the 6 case of clauses (i), (ii) and (iii), (a) to the paragraph in the report of independent auditors on the Audited Debtor Financial Statements describing conditions that raise substantial doubt about the Debtor's ability to continue as a going concern, and (b) to the Debtor Financial Statements not including any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of these uncertainties. The accounts receivable schedules of assets and liabilities filed with the Bankruptcy Court in the Chapter 11 Proceeding, as amended, include a list which is true and complete in all material respects of all the material creditors, indicating whether secured or unsecured, of the Debtors reflected on the June 30 Unaudited Company Balance Sheet, and those arising since the date of the June 30 Unaudited Company Balance Sheet, are valid receivables subject to no set- offs or counterclaims, net of a reserve for bad debts, which reserve is reflected on the June 30 Unaudited Company Balance Sheet. The inventories of the Debtors reflected on the June 30 Unaudited Company Balance Sheet are of a quality and quantity useable and/or saleable in the Ordinary Course of Business, except as written down to net realizable value on the June 30 Unaudited Company Balance Sheet. All inventory shown on the June 30 Unaudited Company Balance Sheet has been priced Debtor at the lower of cost or net realizable valueFiling Date.