PROCEDURES DESCRIBED IN THE ACCOUNTING
CONVENTION EXCEPT AS OTHERWISE STATED THEREIN AND, WITH RESPECT TO THE UNAUDITED
FINANCIAL STATEMENTS, FOR THE OMISSION OF FOOTNOTE DISCLOSURES AND, WITH RESPECT
TO THE UNAUDITED INTERIM FINANCIAL STATEMENTS, TO THE EXTENT CONSISTENT WITH
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, NORMALLY RECURRING YEAR-END AUDIT
ADJUSTMENTS.
3.06
ABSENCE OF CERTAIN CHANGES. SINCE THE BALANCE SHEET DATE THROUGH THE
DATE OF THIS AGREEMENT, EXCEPT AS REFLECTED IN SCHEDULE 3.06, SELLER HAS
CONDUCTED THE BUSINESS IN THE ORDINARY COURSE CONSISTENT WITH PAST PRACTICES,
AND THERE HAS NOT BEEN ANY OF THE FOLLOWING WITH RESPECT TO THE BUSINESS:
(A)
MATERIAL ADVERSE CHANGE OR ANY EVENT, OCCURRENCE, DEVELOPMENT OR
STATE OF CIRCUMSTANCES OR FACTS WHICH COULD REASONABLY BE EXPECTED TO RESULT IN
A MATERIAL ADVERSE CHANGE, OR ANY CONDITION, EVENT OR OCCURRENCE WHICH,
INDIVIDUALLY OR IN THE AGGREGATE, COULD REASONABLY BE EXPECTED TO PREVENT OR
MATERIALLY DELAY SELLER'S ABILITY TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT OR PERFORM ITS OBLIGATIONS HEREUNDER OR UNDER THE ANCILLARY
AGREEMENTS;
(B)
PAYMENT OR GRANT OF ANY RIGHT RELATING TO THE BUSINESS BY SELLER
TO ANY INTERESTED PERSON, OR ANY CHARGE BY ANY INTERESTED PERSON TO SELLER
RELATING TO THE BUSINESS, OR OTHER TRANSACTION BETWEEN SELLER RELATING TO THE
BUSINESS AND ANY INTERESTED PERSON, EXCEPT IN ANY SUCH CASE FOR EMPLOYEE
COMPENSATION PAYMENTS IN THE ORDINARY COURSE OF BUSINESS OF SELLER CONSISTENT
WITH PAST PRACTICE.
(C)
INCURRENCE, ASSUMPTION OR GUARANTEE BY SELLER OF ANY INDEBTEDNESS
FOR BORROWED MONEY WITH RESPECT TO THE BUSINESS;
(D)
CREATION OR ASSUMPTION BY SELLER OF ANY LIEN (OTHER THAN A
PERMITTED LIEN) ON ANY PURCHASED ASSET;
14
(E)
DAMAGE, DESTRUCTION OR OTHER CASUALTY LOSS (WHETHER OR NOT COVERED
BY INSURANCE) AFFECTING THE BUSINESS OR ANY PURCHASED ASSET IN AN AMOUNT GREATER
THAN $10,000;
(F)
TRANSACTION OR COMMITMENT MADE, OR ANY CONTRACT OR AGREEMENT
ENTERED INTO, BY SELLER RELATING TO THE BUSINESS OR ANY PURCHASED ASSET
(INCLUDING THE ACQUISITION OR DISPOSITION OF ANY ASSETS) OR ANY RELINQUISHMENT
BY SELLER OF ANY CONTRACT OR OTHER RIGHT, IN EITHER CASE, MATERIAL TO THE
BUSINESS, OTHER THAN TRANSACTIONS AND COMMITMENTS IN THE ORDINARY COURSE OF
BUSINESS CONSISTENT WITH PAST PRACTICES AND THOSE CONTEMPLATED BY THIS
AGREEMENT;
(G)
CHANGE IN ANY MATERIAL METHOD OF TAX OR FINANCIAL ACCOUNTING OR
ACCOUNTING PRACTICE OR ANY MAKING OF A MATERIAL TAX ELECTION OR CHANGE OF AN
EXISTING ELECTION BY SELLER WITH RESPECT TO THE BUSINESS;
(H)
(I) GRANT OF ANY SEVERANCE OR TERMINATION PAY TO ANY EMPLOYEE OF
THE BUSINESS, (II) ENTERING INTO OF ANY EMPLOYMENT, DEFERRED COMPENSATION OR
OTHER SIMILAR AGREEMENT (OR ANY AMENDMENT TO ANY SUCH EXISTING AGREEMENT) WITH
ANY EMPLOYEE OF THE BUSINESS, (III) CHANGE IN BENEFITS PAYABLE UNDER EXISTING
SEVERANCE OR TERMINATION PAY POLICIES OF SELLER RELATING TO THE BUSINESS OR
EMPLOYMENT AGREEMENTS TO WHICH ANY EMPLOYEE OF THE BUSINESS IS A PARTY OR
(IV) CHANGE IN COMPENSATION, BONUS OR OTHER BENEFITS PAYABLE TO EMPLOYEES OF THE
BUSINESS;
(I)
LABOR DISPUTE, OTHER THAN ROUTINE INDIVIDUAL GRIEVANCES, OR ANY
ACTIVITY OR PROCEEDING BY A LABOR