Common use of Financial Statements; Liabilities Clause in Contracts

Financial Statements; Liabilities. (a) Sovereign has delivered to the Company (i) unaudited consolidated balance sheets and statements of income and expense for Sovereign for the years ended December 31, 2002 and 2003 (the "Year End Financials"), and (ii) unaudited consolidated balance sheet for Sovereign as of September 30, 2004, and related unaudited statements of income and expense for the nine-month period then ended (the "Interim Financials"). The Year End Financials and the Interim Financials are together referred to as the "Financial Statements." The Financial Statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods indicated (except that the Interim Financials do not contain all footnotes and other presentation items). The Financial Statements were prepared from the books and records of Sovereign, consistent with past practice, and fairly present in all material respects the financial position and results of operations of Sovereign as of the dates and for the periods indicated. Sovereign maintains systems of accounting that are adequate for the preparation of the Financial Statements. (b) As of the Closing Date, Sovereign does not have any liabilities of any nature (including, without limitation, liabilities as guarantor or otherwise with respect to obligations of others, or liabilities for taxes due or then accrued or to become due) (collectively "Liabilities"), except: (i) Liabilities reflected in the Financial Statements, (ii) Liabilities incurred in the ordinary course of business of Sovereign which individually or in the aggregate do not have a Material Adverse Effect on Sovereign since its formation, or (iii) Liabilities for taxes incurred in the ordinary course of business of Sovereign and not yet due.

Financial Statements; Liabilities. (a) Sovereign has delivered to Schedule 3.6(a) of the Company Parent Disclosure Schedules contains a true and complete copy of (i) unaudited consolidated the audited balance sheets and statements of income operations, equity and expense for Sovereign cash flows of Tinet S.p.A. (“Tinet”), a corporation organized under the laws of Italy and an indirect, wholly-owned subsidiary of Parent, as of and for the years fiscal year ended December 31, 2002 and 2003 2012 (the "Year End Financials"), “Financial Statements”) and (ii) the unaudited consolidated balance sheet for Sovereign as of September 30the Company at December 31, 2004, and related unaudited statements of income and expense for the nine-month period then ended 2012 (the "Interim Financials"“Unaudited Financial Statements”). The Year End Financials and the Interim Financials are together referred to as the "Financial Statements." The Financial Statements have been prepared in conformity accordance with generally accepted accounting principles applied on a consistent basis throughout GAAP, as at the dates and for the periods indicated presented (except that as may be stated therein or in the Interim Financials do not contain notes thereto), consistently applied by Tinet, and except as set forth on the Financial Statements fairly present, in all footnotes material respects, the financial condition and other presentation items)results of operations of Tinet as of the date thereof. The Unaudited Financial Statements were prepared from the books and records of Sovereign, consistent with past practice, and fairly present represent in all material respects the financial position and results condition of operations of Sovereign the Company as of December 31, 2012 (subject to the dates absence of footnote disclosures and for other presentation items) and have been prepared from and are in accordance with the periods indicated. Sovereign maintains systems of accounting that are adequate for the preparation books and records of the Financial StatementsCompany and U.S. GAAP. (b) As None of the Closing DateAcquired Companies has any Liabilities of a type required by GAAP to be set forth on a balance sheet, Sovereign does not have any liabilities of any nature (including, without limitation, liabilities as guarantor or otherwise with respect to obligations of others, or liabilities for taxes due or then accrued or to become due) (collectively "Liabilities"), except: other than Liabilities (i) Liabilities reflected disclosed in the balance sheet included in the Unaudited Financial Statements, (ii) Liabilities set forth in Schedule 3.6(b) of the Parent Disclosure Schedules, (iii) incurred since December 31, 2012 in the ordinary course of business of Sovereign which business, (iv) incurred in connection with this Agreement or the transactions contemplated hereby or (v) that would not, individually or in the aggregate do not aggregate, be reasonably likely to have a Material Adverse Effect on Sovereign since its formation, or (iii) Liabilities for taxes incurred in the ordinary course of business of Sovereign and not yet dueEffect.

Financial Statements; Liabilities. (a) Sovereign The Cooperative has delivered the Financial Statements to the Company (i) unaudited consolidated balance sheets and statements of income and expense for Sovereign for the years ended December 31, 2002 and 2003 (the "Year End Financials"), and (ii) unaudited consolidated balance sheet for Sovereign as of September 30, 2004, and related unaudited statements of income and expense for the nine-month period then ended (the "Interim Financials"). The Year End Financials and the Interim Financials are together referred to as the "Financial Statements." The Financial Statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods indicated (except that the Interim Financials do not contain all footnotes and other presentation items). The Financial Statements were prepared from the books and records of Sovereign, consistent with past practice, and fairly present in all material respects the financial position and results of operations of Sovereign as of the dates and for the periods indicated. Sovereign maintains systems of accounting that are adequate for the preparation of the Financial StatementsInvestors. (b) As The Financial Statements fairly and accurately present the Cooperative’s financial position as of those dates and the Closing Dateresults of operations, Sovereign does not cash flows, and changes in shareholders’ equity for such periods then ended, and have any liabilities been prepared in accordance with GAAP applied on a consistent basis, subject in the case of any nature interim statements to normal year-end audit, none of which are material. (includingc) There are no debts, without limitation, liabilities as guarantor or otherwise with respect to obligations of othersliabilities, or liabilities for taxes due or then accrued or to become due) (collectively "Liabilities"), except: (i) Liabilities claims against the Cooperative that are not currently reflected in the Financial Statements, contingent or otherwise, and that are or would be of a nature required to be reflected in a balance sheet prepared in accordance with GAAP, other than (iii) Liabilities liabilities incurred in the ordinary course of business of Sovereign which which, individually or in the aggregate aggregate, do not have constitute a Material Adverse Effect Event; and (ii) liabilities set forth on Sovereign since its formation, or the balance sheet included in the Financial Statements. The Cooperative has no material liabilities other than those set forth in the Financial Statements and the Schedule of Exceptions. The Cooperative’s revenue recognition policies are in accordance with GAAP. The Cooperative maintains a standard system of accounting in accordance with GAAP. The Cooperative’s financial reserves are adequate to cover claims incurred. (iiid) Liabilities for taxes incurred All of the accounts receivable and notes receivable owing to the Cooperative as of the date of this Agreement constitute valid and enforceable claims arising from bona fide transactions in the ordinary course of business business, subject to the effect of Sovereign applicable bankruptcy, insolvency, reorganization, moratorium, or other laws of general application relating to or affecting enforcement of creditors’ rights and not yet duelaws concerning equitable remedies, and there are no known, contingent, or asserted claims, refusals to pay, or other rights of set-off known to the Cooperative against any of such accounts receivable and notes receivable.

Financial Statements; Liabilities. (a) Sovereign has delivered to Included in the Company (i) unaudited consolidated balance sheets and statements of income and expense for Sovereign Form 10-Q for the years three months ended December 31April 30, 2002 and 2003 ("Form 10-Q") are the Company's consolidated unaudited balance sheet (the "Balance Sheet") as of April 30, 2003 (the "Year End FinancialsBalance Sheet Date"), and (ii) the consolidated unaudited consolidated balance sheet for Sovereign as statement of September 30, 2004, and related unaudited statements of income and expense operations for the ninethree-month period then ended ("Operating Statement"). Included in its annual report on Form 10-K for the year ended October 31, 2002 ("Annual Report") are the Company's consolidated audited balance sheets as of October 31, 2002 and the consolidated audited statements of operations, cash flow and changes of stockholders' equity for the period then ended, together with the related report of Kostin, Ruffkess & Company, LLC, independent certified public accoun▇▇▇▇▇ such year-end balance sheet, statement of operations, cash flow and changes of stockholders' equity and report, together with the Balance Sheet and Operating Statement, the "Interim FinancialsFinancial Statements"). The Year End Financials Financial Statements (including any notes thereto): (i) are complete and correct in all material respects and are in accordance with the books and records of the Company; (ii) present fairly the consolidated financial condition, results of operations and cash flows of the Company and its subsidiaries at the respective dates therein specified and the Interim Financials are together referred to as results of operations and changes in financial position of the "Financial Statements." The Financial Statements have been Company and its subsidiaries for the respective periods therein specified; and (iii) were prepared in conformity accordance with generally accepted accounting principles applied on a basis consistent basis throughout the with prior accounting periods indicated (except that the Interim Financials unaudited financial statements are subject to year-end audit adjustments which will not be material in amount and do not contain all footnotes and other presentation itemscomplete footnotes). The Financial Statements were prepared from the books and records of Sovereign, consistent with past practice, and fairly present in all material respects the financial position and results of operations of Sovereign as of the dates and for the periods indicated. Sovereign maintains systems of accounting that are adequate for the preparation of the Financial Statements. (b) As of the Closing Date, Sovereign does not have any The Company has no liabilities or obligations of any nature (includingnature, without limitationeither actual or absolute, liabilities as guarantor contingent or otherwise with respect to obligations of othersotherwise, which are not reflected or liabilities provided for taxes due or then accrued or to become due) (collectively "Liabilities"), except: (i) Liabilities reflected in the Financial Statements, (ii) Liabilities incurred in the ordinary course of business of Sovereign which individually Statements or in the aggregate do not have a Material Adverse Effect on Sovereign since its formation, or (iii) Liabilities for taxes incurred in the ordinary course of business of Sovereign and not yet duerelated notes.

Financial Statements; Liabilities. (a) Sovereign The Seller has delivered previously furnished to the Company Buyer a copy of the following financial statements of the Seller (collectively the "Financial Statements"): (i) unaudited consolidated audited balance sheets and the related statements of income and expense for Sovereign cash flow as of and for the years ended December 31, 2002 1995, December 31, 1996 and 2003 December 31, 1997 (collectively, the "Year End FinancialsAudited Financial Statements"), and ; (ii) unaudited consolidated balance sheet for Sovereign as of September 30, 2004, sheets and the related unaudited statements of income and expense cash flow as of and for the nine-month period then nine months ended September 30, 1998 (collectively, the "Interim FinancialsFinancial Statements"); and (iii) unaudited balance sheets and related statements of income and cash flows prepared on a pro forma basis for the workwear lines of business for the years ended December 31, 1996, December 31, 1997, and December 31, 1998 (collectively, the "Pro Forma Financial Statements"). The Year End Financials and the Interim Financials are together referred to as the "Financial Statements." The Financial Statements (including the notes thereto) have been prepared in conformity accordance with generally accepted accounting principles GAAP applied on a consistent basis throughout the periods indicated (except that covered thereby and present fairly the financial position of the Seller as of such dates and the results of operations of the Seller for such periods, subject, in the case of the Interim Financials do not contain all Financial Statements, to year-end audit adjustments; provided, however, that both the Interim Financial Statements and Pro Forma Financial Statements may lack footnotes and other presentation items). The Financial Statements were prepared from the books and records of Sovereign, consistent with past practice, and fairly present in all material respects the financial position and results of operations of Sovereign as of the dates and for the periods indicated. Sovereign maintains systems of accounting that are adequate for the preparation of the Financial Statements. (b) As of Except as set forth on Schedule 4.5(b), the Closing Date, Sovereign Seller does not have any liabilities material indebtedness, liability or obligation, absolute or contingent, of any a nature (includingrequired to be reflected on a balance sheet prepared in accordance with GAAP, without limitation, liabilities as guarantor or otherwise with respect to obligations of others, or liabilities for taxes due or then accrued or to become due) (collectively "Liabilities"), exceptother than: (i) Liabilities liabilities fully and adequately reflected or reserved against in the Interim Financial Statements, ; and (ii) Liabilities liabilities incurred after September 30, 1998 in the ordinary course of business consistent with the past practices of Sovereign which individually or in the aggregate do not have a Material Adverse Effect on Sovereign since its formation, or (iii) Liabilities for taxes incurred in the ordinary course of business of Sovereign and not yet dueSeller.

Financial Statements; Liabilities. (a) Sovereign has delivered to Included in the Company (i) unaudited consolidated balance sheets and statements of income and expense for Sovereign Form 10-Q for the years three months ended December March 31, 2002 and 2003 ("Form 10-Q") are the Company's consolidated unaudited balance sheet (the "Balance Sheet") as of March 31, 2003 (the "Year End FinancialsBalance Sheet Date"), and (ii) the consolidated unaudited consolidated balance sheet for Sovereign as statement of September 30, 2004, and related unaudited statements of income and expense operations for the ninethree-month period then ended ("Operating Statement"). Included in its annual report on Form 10-K for the year ended December 31, 2002 ("Annual Report") are the Company's consolidated audited balance sheets as of December 31, 2002 and the consolidated audited statements of operations, cash flow and changes of stockholders' equity for the period then ended, together with the related report of Marcum & Kliegman LLP, independent certified public accountants (▇▇▇▇ ye▇▇-▇▇▇ ▇alance sheet, statement of operations, cash flow and changes of stockholders' equity and report, together with the Balance Sheet and Operating Statement, the "Interim FinancialsFinancial Statements"). The Year End Financials Financial Statements (including any notes thereto): (i) are complete and correct in all material respects and are in accordance with the books and records of the Company; (ii) present fairly the consolidated financial condition, results of operations and cash flows of the Company and its subsidiaries at the respective dates therein specified and the Interim Financials are together referred to as results of operations and changes in financial position of the "Financial Statements." The Financial Statements have been Company and its subsidiaries for the respective periods therein specified; and (iii) were prepared in conformity accordance with generally accepted accounting principles applied on a basis consistent basis throughout the with prior accounting periods indicated (except that the Interim Financials unaudited financial statements are subject to year-end audit adjustments which will not be material in amount and do not contain all footnotes and other presentation itemscomplete footnotes). The Financial Statements were prepared from the books and records of Sovereign, consistent with past practice, and fairly present in all material respects the financial position and results of operations of Sovereign as of the dates and for the periods indicated. Sovereign maintains systems of accounting that are adequate for the preparation of the Financial Statements. (b) As of the Closing Date, Sovereign does not The Company and its subsidiaries have any no liabilities or obligations of any nature (includingnature, without limitationeither actual or absolute, liabilities as guarantor contingent or otherwise with respect to obligations of othersotherwise, which are not reflected or liabilities provided for taxes due or then accrued or to become due) (collectively "Liabilities"), except: (i) Liabilities reflected in the Financial Statements, (ii) Liabilities incurred Statements or related notes except liabilities included in the ordinary course estimated loss from operations set forth in Section 3.9(b) of business the Disclosure Schedule. (c) The Company anticipates a loss from operations, during the quarter ended June 30, 2003, as set forth in Section 3.9(c) of Sovereign which individually or in the aggregate do not have a Material Adverse Effect on Sovereign since its formation, or (iii) Liabilities for taxes incurred in the ordinary course of business of Sovereign and not yet dueDisclosure Schedule.

Financial Statements; Liabilities. (a) Sovereign has delivered The Sellers have provided to Purchaser copies of the Company (i) unaudited audited non-consolidated balance sheets and statements of income operations and expense for Sovereign cash flows of the Company and the Subsidiaries for the fiscal years ended December March 31, 2002 2003, 2004 and 2003 (2005, together with the "Year End Financials"), and (ii) unaudited consolidated balance sheet for Sovereign as of September 30, 2004, and related unaudited statements of income and expense for the nine-month period then ended (the "Interim Financials"). The Year End Financials notes thereto and the Interim Financials are together referred to as opinions of Deloitte & Touche LLP thereon (collectively, the "Financial Statements." "). The Financial Statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods indicated (except that the Interim Financials do not contain all footnotes and other presentation items). The Financial Statements were prepared from the books and records of Sovereign, consistent with past practicethe Company and its Subsidiaries, and fairly present fairly, in all material respects conformity with GAAP, the assets, liabilities, income, losses, retained earnings, financial position and condition, results of operations of Sovereign as and cash flows of the dates Company and its Subsidiaries for the periods indicated. Sovereign maintains systems of accounting that are adequate for the preparation of the Financial Statementsand dates covered thereby. (b) As of Except as set forth in the Closing DateSeller Disclosure Schedule, Sovereign does not have neither the Company nor any Subsidiary has any liabilities or obligations of any nature (includingkind, without limitationwhether absolute, liabilities as guarantor accrued, asserted or otherwise with respect to unasserted, except liabilities, obligations of othersand contingencies, or liabilities for taxes due or then accrued or to become due) (collectively "Liabilities"), except: that (i) Liabilities are reflected on or accrued or reserved against in the Financial StatementsStatements for the fiscal year ended March 31, 2005, or reflected in any notes thereto, (ii) Liabilities were incurred since March 31, 2005 in the ordinary course of business or (iii) with respect to liabilities and obligations of Sovereign which individually a type not required to be disclosed by GAAP in a consolidated balance sheet of the Company and its Subsidiaries, or in the aggregate do a balance sheet of Grand River, would not reasonably be expected to have a Material Adverse Effect on Sovereign since its formation, or (iii) Liabilities for taxes incurred in the ordinary course of business of Sovereign and not yet dueEffect.