on which the shareholders or
members are eligible or required to vote.
There are no other outstanding
securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind (contingent or otherwise) to which
ValidClick or Second Bite is a party or bound obligating ValidClick or
16
Second Bite to issue, grant, extend or enter into any agreement to issue, grant
or extend any security, option, warrant, call, right, commitment, agreement,
arrangement or undertaking that will survive the Closing.
There are no
outstanding contractual obligations of ValidClick or Second Bite to repurchase,
redeem or otherwise acquire any capital stock (or options to acquire any such
capital stock) or other security or equity interest of ValidClick or Second Bite
which will survive the Closing.
All of the ValidClick Stock and Second Bite LLC
Interests were issued in compliance with all applicable federal and state
securities laws and are owned by Litmus.
4.8
FINANCIAL STATEMENTS.
SCHEDULE 4.8 SETS FORTH THE AUDITED
CONSOLIDATED ANNUAL BALANCE SHEETS OF LITMUS AND ITS SUBSIDIARIES AS OF DECEMBER
31, 2003, AND DECEMBER 31, 2004, RESPECTIVELY, AND THE RELATED AUDITED
CONSOLIDATED ANNUAL INCOME STATEMENT AND STATEMENT OF CASH FLOWS FOR THE PERIODS
ENDED DECEMBER 31, 2003 AND DECEMBER 31, 2004 ACCOMPANIED BY THE AUDITOR'S
REPORT THEREON, AND (2) THE AUDITED CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER
30, 2005 AND THE SCHEDULES THERETO AND THE RELATED UNAUDITED CONSOLIDATED INCOME
STATEMENT AND STATEMENT OF CASH FLOWS FOR THE NINE MONTH PERIOD THEN ENDED
SEPTEMBER 30, 2005 (THE "AUDITED FINANCIALS" OR THE "COMPANY FINANCIALS").
THE
COMPANY FINANCIALS (I) HAVE BEEN PREPARED IN ACCORDANCE WITH THE BOOKS AND
RECORDS OF THE PERSON TO WHICH THEY RELATE AND (II) ARE COMPLETE AND CORRECT
HAVE BEEN PREPARED IN ACCORDANCE WITH GAAP CONSISTENTLY APPLIED FOR THE PERIODS
PRESENTED, EXCEPT, AS MAY BE DISCLOSED IN THE NOTES THERETO AND NORMAL YEAR-END
ADJUSTMENTS, WHICH WILL NOT BE MATERIAL INDIVIDUALLY OR IN THE AGGREGATE.
THE
COMPANY FINANCIALS PRESENT FAIRLY THE FINANCIAL CONDITION AND OPERATING RESULTS
OF LITMUS AND ITS SUBSIDIARIES AS OF THE DATES AND DURING THE PERIODS INDICATED
THEREIN, SUBJECT TO NORMAL YEAR-END ADJUSTMENTS, WHICH WILL NOT BE MATERIAL IN
AMOUNT OR SIGNIFICANCE IN THE AGGREGATE.
4.9
CONDUCT IN THE ORDINARY COURSE; ABSENCE OF CHANGES.
SINCE OCTOBER
31, 2005, LITMUS HAS CONDUCTED THE BUSINESS IN THE ORDINARY COURSE, CONSISTENT
WITH PAST PRACTICE, AND TO THE KNOWLEDGE OF LITMUS AND THE SHAREHOLDERS, THERE
HAS BEEN NO CHANGE IN THE BUSINESS WHICH HAS HAD, OR COULD REASONABLY BE
ANTICIPATED TO RESULT IN, A MATERIAL ADVERSE EFFECT ON LITMUS AND ITS
SUBSIDIARIES TAKEN AS A WHOLE.
4.10
REAL PROPERTY.
(a)
Litmus and its Subsidiaries do not own and have never owned any
real property.
(b)
Schedule 4.10(b) lists (1) the street address of each parcel of
Leased Property, (2) the identity of the lessor, lessee and current occupant (if
different from lessee) of each such parcel of Leased Property, and (3) the term
and rental payment terms of the leases (and any subleases) pertaining to each
such parcel