OPERATIONS OF THE BUSINESS AS CERTAIN EXPENSES, INCLUDING BUT NOT LIMITED TO,
ACCOUNTING, INFORMATION SYSTEMS, INVESTOR RELATIONS, HUMAN RESOURCES AND OTHER
CORPORATE SERVICES HAVE NOT BEEN INCLUDED IN THE STATEMENT OF INCOME, (II) THE
STATEMENT OF INCOME DOES NOT INCLUDE CERTAIN EXPENSES THAT WOULD LIKELY BE
INCURRED ON A STAND-ALONE OPERATION, (III) THE ASSET AND LIABILITY SCHEDULE
EXCLUDES ANY LIABILITY THAT MAY RESULT FROM THE DECOMMISSIONING OF THE MOUNTAIN
VIEW FACILITIES AS REQUIRED UNDER THE MOUNTAIN VIEW LEASE AND (IV) THE FINANCIAL
STATEMENTS DO NOT INCLUDE ANY OF THE FOOTNOTES REQUIRED BY GAAP FOR ANNUAL
FINANCIAL STATEMENTS.
(B)
ON THE CLOSING DATE, AFTER GIVING EFFECT TO THE CONSUMMATION OF
THIS AGREEMENT (I) THE FAIR MARKET VALUE OF THE ASSETS OF SELLER WILL AS OF SUCH
DATE EXCEED THE FAIR MARKET VALUE OF THE LIABILITIES OF SELLER, (II) SELLER WILL
NOT HAVE AN UNREASONABLY SMALL AMOUNT OF CAPITAL WITH WHICH TO CONDUCT ITS
RESPECTIVE BUSINESSES, AND (III) SELLER WILL BE ABLE TO PAY ITS RESPECTIVE DEBTS
AS THEY MATURE.
5.6
CHANGES IN CONDITION.
(A)
SINCE DECEMBER 31, 2005, AND EXCEPT AS SET FORTH ON SCHEDULE 5.6
OF THE DISCLOSURE LETTER, SELLER HAS OPERATED THE BUSINESS ONLY IN THE ORDINARY
COURSE AND, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SINCE THAT DATE,
IN CONNECTION WITH THE BUSINESS:
(I)
SELLER HAS NOT SOLD, LEASED, TRANSFERRED OR ASSIGNED ANY OF THE
ACQUIRED INTELLECTUAL PROPERTY OR OTHER INTANGIBLE ASSETS RELATED TO THE
BUSINESS;
(II)
SELLER HAS NOT ENTERED INTO ANY CONTRACT WITH RESPECT TO THE
BUSINESS OUTSIDE THE ORDINARY COURSE;
(III)
NO PERSON (INCLUDING SELLER) HAS ACCELERATED, TERMINATED,
MODIFIED OR CANCELLED ANY CONTRACT WITH RESPECT TO THE BUSINESS AND WHICH SELLER
IS PARTY;
(IV)
SELLER HAS NOT INCURRED ANY INDEBTEDNESS (EXCEPT FOR INDEBTEDNESS
THAT HAS BEEN INDEFEASIBLY SATISFIED AS OF THE CLOSING) OR IMPOSED ANY LIEN
(OTHER THAN MECHANICS,' WORKMEN'S, MATERIALMEN'S, LANDLORDS,' CARRIERS' OR OTHER
SIMILAR LIENS ARISING IN THE ORDINARY COURSE WITH RESPECT TO LIABILITIES THAT
ARE NOT YET DUE AND PAYABLE OR THAT ARE BEING CONTESTED IN GOOD FAITH) ON ANY
ACQUIRED ASSET;
8
(V)
SELLER HAS NOT MADE OR COMMITTED TO MAKE ANY CAPITAL EXPENDITURES
THAT, INDIVIDUALLY OR IN THE AGGREGATE, EXCEED $25,000 WITH RESPECT TO THE
BUSINESS WHICH ARE INCLUDED IN THE ASSUMED LIABILITIES;
(VI)
SELLER HAS NOT DELAYED OR POSTPONED THE PAYMENT OF ACCOUNTS
PAYABLE OR OTHER LIABILITIES RELATED TO THE BUSINESS;
(VII)
SELLER HAS NOT INCURRED ANY MATERIAL DAMAGE TO, DESTRUCTION OR
LOSS OF ANY ACQUIRED ASSETS;
(VIII)
OTHER THAN NORMAL MERIT SALARY INCREASES CONSISTENT WITH THE PAST
PRACTICE OF THE BUSINESS, SELLER HAS NOT INCREASED THE SALARIES OR OTHER
COMPENSATION OF, GRANTED ANY RIGHTS TO SEVERANCE BENEFITS, STAY PAY, OR
TERMINATION PAY TO ANY BUSINESS EMPLOYEE OR MADE ANY ADVANCE OR LOAN TO, OR MADE
ANY CHANGES IN THE TERMS OF EMPLOYMENT OF ANY BUSINESS EMPLOYEES OR DISCUSSED
TERMINATION OF EMPLOYMENT WITH ANY BUSINESS EMPLOYEES; AND
(IX)
SELLER HAS NOT ENTERED INTO ANY CONTRACT WITH RESPECT TO OR
COMMITTED TO ENGAGE IN ANY OF THE FOREGOING WITH