ORIGIN,
SEXUAL PREFERENCE, HANDICAP OR VETERAN STATUS) PENDING OR, TO THE STOCKHOLDER'S
KNOWLEDGE, THREATENED BEFORE THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION OR ANY
FEDERAL,
35
STATE OR LOCAL AGENCY OR COURT AGAINST THE COMPANY OR ANY SUBSIDIARY OF THE
COMPANY PERTAINING TO ANY EMPLOYEE OF THE COMPANY OR ANY OF ITS SUBSIDIARIES.
TO THE STOCKHOLDER'S KNOWLEDGE, THERE IS NO BASIS FOR ANY SUCH CHARGE,
INVESTIGATION, ADMINISTRATIVE PROCEEDING OR COMPLAINT.
NONE OF THE PERSONS
PERFORMING SERVICES FOR THE COMPANY OR ANY SUBSIDIARY OF THE COMPANY HAS BEEN
IMPROPERLY CLASSIFIED PRIOR TO THE CLOSING DATE AS BEING INDEPENDENT CONTRACTORS
OR LEASED EMPLOYEES RATHER THAN EMPLOYEES, EXCEPT TO THE EXTENT THAT SUCH
MISCLASSIFICATION WILL NOT RESULT IN A MATERIAL LIABILITY OF THE COMPANY OR ANY
SUBSIDIARY OF THE COMPANY.
(B)
EXCEPT AS DISCLOSED ON SCHEDULE 5.19(B), NO EMPLOYEE OF THE
COMPANY WILL BE ENTITLED TO ANY SEVERANCE PAY, BONUS COMPENSATION OR OTHER
PAYMENT AS A RESULT OF OR IN CONNECTION WITH THE MERGER AND THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT.
THE COMPANY WILL PROVIDE UPON REQUEST, COPIES
OF ITS SEVERANCE POLICY TO PARENT.
5.20
CUSTOMERS AND SUPPLIERS.
SCHEDULE 5.20 IS A TRUE AND COMPLETE LIST
OF THE TWENTY (20) LARGEST CUSTOMERS AND TEN (10) LARGEST SUPPLIERS OF THE
COMPANY DURING THE LAST FISCAL YEAR OF THE COMPANY (COLLECTIVELY, "MATERIAL
CUSTOMERS OR SUPPLIERS"), SHOWING, WITH RESPECT TO EACH THE NAME AND ADDRESS,
DOLLAR VOLUME INVOLVED AND NATURE OF THE RELATIONSHIP (INCLUDING THE PRINCIPAL
CATEGORIES OF PRODUCTS BOUGHT AND SOLD).
TO THE STOCKHOLDER'S KNOWLEDGE, NO
MATERIAL CUSTOMER OR SUPPLIER HAS NOTIFIED THE COMPANY IN WRITING THAT SUCH
MATERIAL CUSTOMER OR SUPPLIER INTENDS TO CANCEL, REDUCE OR OTHERWISE TERMINATE
ITS RELATIONSHIP WITH THE COMPANY OR THE USAGE OR PURCHASE OF THE PRODUCTS OF
THE COMPANY.
EXCEPT AS SET FORTH ON SCHEDULE 5.20, TO THE STOCKHOLDER'S
KNOWLEDGE THERE ARE NO MATERIAL DISPUTES WITH ANY MATERIAL CUSTOMER OR SUPPLIER
THAT IF RESOLVED AGAINST THE COMPANY WOULD HAVE A MATERIAL ADVERSE EFFECT.
EXCEPT AS SET FORTH ON SCHEDULE 5.20 (WHICH SETS FORTH THE AGGREGATE AMOUNT OF
ALL SUCH BONDING OR OTHER FINANCIAL ARRANGEMENTS AS OF OCTOBER 31, 2006), THE
COMPANY IS NOT REQUIRED TO PROVIDE ANY BONDING OR OTHER FINANCIAL SECURITY
ARRANGEMENTS IN CONNECTION WITH ANY TRANSACTIONS WITH ANY OF ITS CUSTOMERS OR
SUPPLIERS IN THE ORDINARY COURSE OF ITS BUSINESS.
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5.21
INVENTORIES.
THE VALUES AT WHICH THE INVENTORY IS CARRIED ON THE
BOOKS AND RECORDS OF THE COMPANY REFLECT THE COMPANY'S HISTORICAL INVENTORY
POLICY OF STATING SUCH INVENTORY AT THE LOWER OF COST OR MARKET (DETERMINED
USING THE LAST-IN, FIRST-OUT METHOD).
5.22
PRODUCT WARRANTIES.
THE COMPANY HAS NOT PAID ANY CLAIMS WITH
RESPECT TO FULFILLMENT OF PRODUCT WARRANTY CLAIMS FOR THE CALENDAR YEAR ENDING
DECEMBER 31, 2004 IN THE AGGREGATE IN EXCESS OF $525,000 (WHICH INCLUDES A
DISCONTINUED PRODUCT LINE) OR FOR THE CALENDAR YEAR ENDING DECEMBER 31, 2005 IN
THE AGGREGATE IN EXCESS OF $250,000.
SET FORTH AS ANNEX C OF SCHEDULE 5.15 IS A
LIST OF ALL CUSTOMER AGREEMENTS WITH OPEN WARRANTY TERMS AS