Common use of Absence of Certain Developments Clause in Contracts

Absence of Certain Developments. Except as set forth on §3(h) of the Disclosure Schedule or otherwise contemplated by this Agreement, since the Most Recent Fiscal Month End, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h) of the Disclosure Schedule, the Company and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries has: (i) borrowed any amount or incurred any material liabilities, except amounts borrowed or liabilities incurred in the Ordinary Course of Business or under contracts entered into in the Ordinary Course of Business; (ii) mortgaged, pledged or subjected to any material lien, charge or other encumbrance, any material portion of its assets, except for Permitted Liens arising in the Ordinary Course of Business; (iii) sold, assigned, licensed or transferred any Owned Real Property, Leased Real Property or any material portion of its other tangible assets, except in the Ordinary Course of Business; (iv) sold, assigned or transferred any material patents, trademarks, trade names, copyrights, trade secrets or other intangible assets; (v) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (vii) issued, sold or transferred any of its equity securities, securities convertible into its equity securities or warrants, options or other rights to acquire its equity securities, or any notes, bonds or debt securities; (viii) declared or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregate, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Business; or (xvii) committed to do any of the foregoing.

Absence of Certain Developments. i. Except as expressly contemplated by this Agreement or as set forth on §3(h) in Section 4J of the Disclosure Schedule or otherwise contemplated by this AgreementLetter, since the Most Recent Fiscal Month End, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h) of the Disclosure ScheduleLatest Balance Sheet, the Company and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries Subsidiary has: (ia) issued any notes, bonds or other debt securities or any equity securities or any securities convertible, exchangeable or exercisable into any equity securities; (b) borrowed any amount or incurred or become subject to any material liabilities, except amounts borrowed or current liabilities incurred in the Ordinary Course ordinary course of Business or business and liabilities under contracts entered into in the Ordinary Course ordinary course of Businessbusiness; (iic) mortgageddischarged or satisfied any lien or encumbrance or paid any obligation or liability, pledged or subjected to any material lien, charge or other encumbrance, any material portion of its assets, except for Permitted Liens arising than current liabilities paid in the Ordinary Course ordinary course of Businessbusiness; (iiid) sold, assigned, licensed declared or transferred made any Owned Real Property, Leased Real Property payment or distribution of cash or other property to its stockholders with respect to its stock or purchased or redeemed any shares of its stock or any material portion of its other tangible assets, except in the Ordinary Course of Business; (iv) sold, assigned or transferred any material patents, trademarks, trade names, copyrights, trade secrets or other intangible assets; (v) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (vii) issued, sold or transferred any of its equity securities, securities convertible into its equity securities or warrants, options or other rights to acquire its equity securities, or any notes, bonds or debt securitiesstock; (viiie) declared mortgaged or paid pledged any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock properties or equity interestsassets or subjected them to any lien, security interest, charge or other encumbrance, except liens for current property taxes not yet due and payable; (f) sold, assigned or transferred any of its tangible assets, except in the ordinary course of business, or paid canceled any management debts or claims, except in the ordinary course of business; (g) sold, assigned or transferred any patents or patent applications, trademarks, service marks, trade names, corporate names, copyrights or copyright registrations, trade secrets or other fees intangible assets, or disclosed any proprietary confidential information to any Shareholder Person, other than pursuant to a license arrangement or any Affiliates agreement made in the ordinary course of any Shareholder; provided, that business or pursuant to a non-disclosure arrangement or agreement made in the Company may pay a cash dividend to the Shareholders as long as the amount ordinary course of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration business or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing)negotiations under this Agreement, the Related Contribution Agreements, and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligationother agreements entered into pursuant hereto and thereto; (ixh) increased the compensation of any officer or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation extraordinary losses or waived any rights of material amendment thereofvalue, other than cost of living whether or merit increases granted not in the Ordinary Course ordinary course of Businessbusiness or consistent with past practice; (xi) waivedmade any loans or advances to, releasedguarantees for the benefit of, cancelled or forgiven any debtsInvestments in, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration any Persons in excess of $500,000100,000 in the aggregate; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (Bj) made a any capital investment in, (C) made a loan advance expenditures or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct commitments therefor that aggregate in excess of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person$5,000,000; (xiik) made any charitable contributions or pledges in excess of $100,000 in the aggregate; (l) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 exceeding in the aggregate, whether or aggregate $100,000 not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Business; or (xviim) committed to do entered into any other transaction other than in the ordinary course of business. ii. No officer, director, employee or agent of the Company or any of its Subsidiaries has been or is authorized to make or receive, and the foregoingCompany does not know of any such person making or receiving, any bribe, kickback or other illegal payment related to the Company or its Subsidiaries or the conduct of their business.

Absence of Certain Developments. Except as set forth on §3(h) Since the date of the Disclosure Schedule or otherwise contemplated by this Agreement, since the Most Recent Fiscal Month EndLatest Year-End Balance Sheet, there has not been any Material Adverse EffectEffect that is continuing. In addition to the foregoing, since that date and except Except as set forth on §3(h) Schedule 4.07 and as expressly contemplated by this Agreement, since the date of the Disclosure ScheduleLatest Balance Sheet (or such other date as is specified below), none of the Company and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor Company, Newco or any of its the Sold Subsidiaries has: (ia) borrowed any amount under existing credit lines or otherwise incurred any material liabilitiesIndebtedness, except amounts borrowed or liabilities incurred borrowings under such credit lines in the Ordinary Course ordinary course of Business or under contracts entered into in the Ordinary Course of Businessbusiness; (iib) mortgaged, pledged or subjected to any Lien any of its material lienassets, charge except Permitted Liens; (c) sold, leased, licensed, assigned or other encumbrance, transferred any material portion of its assets, except for Permitted Liens arising sale of inventory in the Ordinary Course ordinary course of Businessbusiness, or acquired any material assets outside the ordinary course of business; (iii) sold, assigned, licensed or transferred any Owned Real Property, Leased Real Property or any material portion of its other tangible assets, except in the Ordinary Course of Business; (ivd) sold, assigned or transferred any material patentsCompany Intellectual Property, trademarks, trade names, copyrights, trade secrets or other intangible assetsexcept for non-exclusive licenses granted in the ordinary course of business; (v) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (viie) issued, sold sold, transferred or transferred otherwise subjected to a Lien any of its capital stock or other equity securities, securities convertible into its capital stock or other equity securities or warrants, options or other rights to acquire its capital stock or other equity securities, or any notes, bonds or debt securities, nor has it taken any such action since the date of the Latest Year-End Balance Sheet; (viiif) declared or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, or any material loan to, any other Person (Cother than the Company, Newco and the Sold Subsidiaries); (g) established or adopted any new Benefit Plan or compensation plans (including but not limited to bonus or extraordinary compensation), terminated or made any material changes in its Benefit Plans or made any material changes in wages, salary or other compensation with respect to its officers, directors, employees or consultants, in each case other than changes made in the ordinary course of business or pursuant to existing agreements or arrangements or as required to comply with applicable Law; (h) planned, announced, implemented or effected any reduction in force, lay-off, early retirement program, severance program or other program concerning the termination of employment of the Business Employees, nor has it taken any such action since the date of the Latest Year-End Balance Sheet; (i) made a loan advance material change in its accounting or agreement Tax methods, practices or policies, settled or compromised a material Tax assessment or deficiency, amended in any material respect a Tax Return (other than a Seller Group Tax Return), waived a statute of limitations in respect of Taxes or agreed to loan any extension of time with respect to a Tax assessment or advance todeficiency, (D) entered into nor has it taken any joint venture, partnership or other similar arrangement for such action since the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion date of the assets of any Person that constitutes a division or operating unit of such PersonLatest Year-End Balance Sheet; (xii) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregate, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xivj) commenced or settled any material legallitigation, administrative or arbitral proceedingnor has it taken any such action since the date of the Latest Year-End Balance Sheet; (xvk) made acquired any new facility, whether for distribution, manufacturing or changed any material Tax electionother purposes, filed any amended material Tax Returnand whether by purchase of real property, entered into any material closing agreement lease or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessmentotherwise; (xvil) between November 30adopted a plan of complete or partial liquidation, 2003 and January 3dissolution, 2004merger, either failed to manage its working consolidation, restructuring, recapitalization or other reorganization, nor has it taken any such action since the date of the Latest Year-End Balance Sheet; (m) acquired by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof; (n) made aggregate capital expenditures other than those set forth in the Ordinary Course of Business or suffered any material reduction capital expenditure budgets set forth on Schedule 4.07(n) (collectively, the "Capital Expenditure Budget"), other than capital expenditures in working capital an aggregate amount not in excess of $100,000; (o) amended, supplemented or modified its certificate of incorporation, bylaws, limited liability company agreement, certificate of formation or other applicable organizational documents, nor has it taken any such action since the Ordinary Course date of Businessthe Latest Year-End Balance Sheet; (p) entered into, modified, amended, supplemented or terminated any Material Contract, other than termination by expiration of the term of such Material Contract; or (xviiq) committed to do any of the foregoing.

Absence of Certain Developments. Except as set forth on §3(h) in SECTION 4E of the Seller Disclosure Schedule Letter or as otherwise contemplated by this Agreement, since the Most Recent Fiscal Month End, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h) of the Disclosure ScheduleAcquisition Date, the Company and its Subsidiaries Target Companies have operated the Timberlands Business in the Ordinary Course of Business and neither none of the Company nor any of its Subsidiaries Target Companies has: (i) borrowed issued or sold any amount of its membership interests or incurred any material liabilitiesequity securities, except amounts borrowed securities convertible into its membership interests or liabilities incurred in the Ordinary Course of Business equity securities or under contracts entered into in the Ordinary Course of Businesswarrants, options or other rights to acquire its membership interests or equity securities; (ii) mortgaged, pledged or subjected to any material lien, charge or other encumbrance, Lien any material portion of its assetsthe Timberlands Assets (including the Additional Timberlands Assets), except for Permitted Liens arising in the Ordinary Course of BusinessEncumbrances; (iii) sold, assigned, licensed assigned or transferred any Owned Real Property, Leased Real Property or any material portion of its the Timberlands Properties or other tangible assetsTimberlands Assets (including the Additional Timberlands Assets), except in the Ordinary Course of Business; (iv) solddisturbed, assigned cut or transferred removed any timber, pulpwood or trees from the Timberlands Properties, except in a manner that is consistent in all material patents, trademarks, trade names, copyrights, trade secrets or other intangible assetsrespects with the Harvest Plan; (v) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make comply in all material respects with any law, rule, regulation or Governmental Authorization to which the Timberlands Properties are subject, except where failures to comply do not have a material capital expenditures that otherwise would have been made in adverse effect on the Ordinary Course of BusinessTimberlands Business acquired hereunder; (vi) entered into, materially amended or modified, or waived suffered any material rights Casualty Loss with respect to, to property owned by any material agreement, contract, lease or license outside of the Ordinary Course of Business;Target Companies that is not covered by insurance; or (vii) issuedtaken any other action or failed to take any action which, sold if taken or transferred any failed to be taken after the date of its equity securities, securities convertible into its equity securities or warrants, options or other rights to acquire its equity securities, or any notes, bonds or debt securities; (viii) declared or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 this Agreement and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to Closing, would require the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment consent of such cash dividend does not subject the Company Purchaser pursuant to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregate, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Business; or (xvii) committed to do any of the foregoing.SECTION 3B.

Absence of Certain Developments. Except as set forth on §3(hSchedule 5.4 or pursuant to the transactions contemplated hereunder or as disclosed in reports filed with the SEC or otherwise in writing to the Agent and the Lenders during or prior to the Fiscal Quarter ending December 31, 2011, since December 31, 2010: (a) To the Knowledge of the Disclosure Principal Companies, there has not occurred any event, change or condition, or combination thereof, that has had, has, or could reasonably be expected to have a Material Adverse Effect; (b) except as set forth on Schedule or otherwise 5.4(b), other than the transactions contemplated by this Agreement, since hereunder and under the Most Recent Fiscal Month EndRelated Agreements, there has not been any declaration, setting a record date, setting aside or authorizing the payment of, any dividend or other distribution in respect of any shares of Capital Stock or any repurchase, redemption or other acquisition by the Company, of any of the outstanding shares of Capital Stock or other equity securities of, or other ownership interest in, the Company; (c) there has not been any payment of interest or principal with respect to any debt owed to an Affiliate of the Principal Companies, other than a Wholly-Owned Subsidiary; (d) except as contemplated in the Related Agreements or as set forth on Schedule 5.4(d) with respect to the Parent, no Principal Company or any of its Subsidiaries has transferred, issued, sold or disposed of any shares of their Capital Stock, or granted any options, warrants, calls or other rights to purchase or otherwise acquire shares of their Capital Stock which are not reflected on the current capitalization table, warrant table and stock option table set forth on Schedule 5.1. (e) except (i) in connection with the Related Agreements, (ii) in the ordinary course of business and consistent with past practice, (iii) as set forth on Schedule 5.4(e) or (iv) as required by Applicable Law, no Principal Company or any of its Subsidiaries has (A) awarded or paid any bonuses to any Employees or former Employees; or (B) entered into any Employee Program, employment deferred compensation, severance or similar agreement (nor amended or terminated any such agreement) or agreed to increase the compensation payable or to become payable to any current or former Employees or agreed to increase the coverage or benefits available under any severance pay, deferred compensation, bonus or other incentive compensation, pension or other employee benefit plan, payment or arrangement made to, for or with such current or former Employees; (f) no Principal Company or any of its Subsidiaries has made, or agreed to, make any material acquisition of any business or assets outside the ordinary course of business or inconsistent with past practice; (g) no Principal Company or any of its Subsidiaries has made, or agreed to make, any loans or investments in any business of any Affiliate of any Principal Company or any of its Subsidiaries; (h) other than in the ordinary course of business and consistent with past practice, no Principal Company or any of its Subsidiaries has transferred or granted any rights under any Contractual Obligations, leases, licenses or agreements used by any Principal Company or any of its Subsidiaries in their business, or allowed any such rights to lapse or expire, which has had, has or could result in a Material Adverse Effect. In addition to the foregoing, since that date and ; (i) except as set forth on §3(h) of the Disclosure Schedule, the Company and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries has: (i) borrowed any amount or incurred any material liabilities, except amounts borrowed or liabilities incurred in the Ordinary Course of Business or under contracts entered into in the Ordinary Course of Business; (ii) mortgaged, pledged or subjected to any material lien, charge or other encumbrance, any material portion of its assets, except for Permitted Liens arising in the Ordinary Course of Business; (iii) sold, assigned, licensed or transferred any Owned Real Property, Leased Real Property or any material portion of its other tangible assets, except in the Ordinary Course of Business; (iv) sold, assigned or transferred any material patents, trademarks, trade names, copyrights, trade secrets or other intangible assets; (v) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (vii) issued, sold or transferred any of its equity securities, securities convertible into its equity securities or warrants, options or other rights to acquire its equity securities, or any notes, bonds or debt securities; (viii) declared or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowingSchedule 5.4(i), and the payment of such cash dividend does there has not subject the Company to been any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregateloss, whether or not covered by insurance, with respect to the property of any Principal Company or any of its Subsidiaries having a replacement cost of more than $50,000 for any single loss or $150,000 for all such losses; (xiiij) paid, discharged, cancelled, compromised or satisfied any material liability other than in connection with the Loans and the Working Capital Facility or as permitted hereunder or thereunder, no Principal Company or any such paymentof its Subsidiaries has mortgaged, dischargehypothecated, cancellation, compromise pledged or satisfaction made subjected to any Lien (other than in the Ordinary Course ordinary course of Businessbusiness and other than Permitted Encumbrances) any of its assets, or acquired any assets or sold, assigned, transferred, conveyed, leased or otherwise disposed of any assets of such Principal Company or any of its Subsidiaries, except for assets acquired or sold, assigned, transferred, conveyed, leased or otherwise disposed of in the ordinary course of business and consistent with past practice; (xivk) commenced no Principal Company or settled any material legalof its Subsidiaries has canceled or compromised any debt or claim with a value exceeding $25,000 or canceled, administrative terminated, compromised, relinquished, or arbitral proceedingreleased any claim or right under any Material Contract with a value exceeding $25,000; (xvl) no Principal Company or any of its Subsidiaries has made any binding commitment to make any capital expenditures or capital additions or betterments in any such case obligating such Principal Company or any of its Subsidiaries to pay an amount not in the ordinary course of business consistent with past practice; (m) to the Principal Companies’ Knowledge, there has not been any material default under any Material Contract or the occurrence of any event, which with notice or lapse of time or both, would result in a material default under any such Material Contract; (n) no Principal Company or any of its Subsidiaries has created, incurred, assumed or guaranteed any debts, obligations or liabilities (including, without limitation, obligations in respect of capital leases), whether due or to become due, except current liabilities incurred in the ordinary course of business and consistent with past practice; (o) other than the Loan Documents and the Related Agreements, no Principal Company or any of its Subsidiaries has entered into any material transaction other in the ordinary course of business consistent with past practice; (p) no Principal Company or any of its Subsidiaries has encountered any labor difficulties or labor union organizing activities which could reasonably be expected to result in a Material Adverse Effect; (q) no Principal Company or any of its Subsidiaries has made any change in the accounting principles, methods or practices followed by it, other than changes adopted in accordance with changes to GAAP; (r) no Principal Company or any of its Subsidiaries has encountered any disagreements, that have not been resolved, with its independent public accountants regarding any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure; (s) except as set forth on Schedule 5.4(s), no Principal Company or any of its Subsidiaries has allowed any rights to lapse with respect to, any Intellectual Property Rights material to the business of such Principal Company or any of its Subsidiaries, and except in the ordinary course of business and consistent with past practice, no Principal Company or any of its Subsidiaries has sold or transferred any Intellectual Property Rights; (t) except as set forth on Schedule 5.4(t), no Principal Company or any of its Subsidiaries has suffered or experienced a material adverse change in the relationship or course of dealings between (i) on the one hand, any Principal Company or any of its Subsidiaries and (ii) on the other hand, either (A) any of the four (4) largest (by cost of goods) suppliers of such Principal Company and its Suppliers or (B) any of the ten (10) largest (by revenue) customers of such Principal Company and its Subsidiaries; (u) no Principal Company or any of its Subsidiaries has entered into, modified, amended or terminated any Real Property Lease, except modifications or amendments in connection with renewals of leases, terminations of leases or entering into new Real Property Leases, in each case in the ordinary course of business consistent with past practice; (v) no Principal Company or any of its Subsidiaries has (i) been denied insurance coverage; or (ii) cancelled or terminated any insurance policy naming it as a beneficiary or a loss payable payee without obtaining comparable substitute insurance coverage; (w) no Principal Company or any of its Subsidiaries has amended its Articles of Incorporation or Bylaws, or in the case of the Irish Loan Parties and the Israeli Loan Party, their memorandum and Articles of Association, or in the case of the Brazilian Loan Party, its Organizational Documents, except as contemplated by the Loan Documents or the Related Agreements; (x) except as set forth on Schedule 5.4(x) and as contemplated by the Loan Documents or the Related Agreements, no Principal Company or any of its Subsidiaries has made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xviy) between November 30no Principal Company or any of its Subsidiaries has agreed, 2003 and January 3whether in writing or otherwise, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Business; or (xvii) committed to do any of the foregoing; and (z) except as contemplated by the Related Agreements, no Principal Company or any of its Subsidiaries has directly or indirectly declared, ordered, paid or made, or set apart any sum or property for, any Restricted Junior Payment or agreed to do so except as permitted by Section 10.5.

Absence of Certain Developments. Except as set forth on §3(h) of the Disclosure Schedule or otherwise contemplated by this Agreement, since Between the Most Recent Fiscal Month End, there has not been any Material Adverse Effect. In addition to Balance Sheet Date and the foregoing, since that date and except as set forth on §3(h) of the Disclosure ScheduleOriginal Agreement, except contemplated by the Company Reorg Plan, Real Estate Plan and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries hasCap Ex Plan: (ia) borrowed any amount or incurred any material liabilities, except amounts borrowed or liabilities incurred in the Ordinary Course of Acquired Companies have conducted the Business or under contracts entered into in the Ordinary Course of Business; (b) there has not been any change, development, condition or event that constitutes a Material Adverse Effect of the Company; and (c) no Acquired Company has: (i) amended its Organizational Documents, effected any split, combination, exchange, reclassification, recapitalization, stock dividend or similar action with respect to its capital stock or other Equity Interests or adopted or carried out any plan of complete or partial liquidation or dissolution; (ii) mortgagedexcept for the issuance of shares of Common Stock pursuant to the conversion of any Convertible Debenture or the exercise of the Option, pledged authorized, transferred, issued, sold or subjected to disposed of any material lien, charge shares of capital stock or other encumbrance, securities of the Company or any material portion of its assetsother Acquired Company or, except for Permitted Liens arising in pursuant to this Agreement or an Option Agreement, granted options, warrants, calls or other rights to purchase or otherwise acquire shares of the Ordinary Course capital stock or other securities of Businessthe Company or any other Acquired Company; (iii) solddeclared or paid a dividend on, assignedor made any other distribution in respect of, licensed its capital stock or transferred other Equity Interests (except for cash dividends or distributions by Subsidiaries of the Company to the Company) or repurchased, redeemed or otherwise acquired or cancelled any Owned Real Property, Leased Real Property or any material portion of its other tangible assets, capital stock; (iv) except in the Ordinary Course of Business; (iv) , acquired any real property or sold, assigned assigned, licensed, transferred, conveyed, leased or transferred otherwise disposed of any material patentsreal property or amended, trademarksmodified, trade namesextended, copyrights, trade secrets renewed or other intangible assetsterminated any Lease or entered into any new Lease; (v) made incurred, assumed or otherwise become liable in respect of any material capital expenditures Indebtedness or commitments therefor outside the Ordinary Course incurred or suffered any Encumbrance, other than Permitted Encumbrances, on any of Business its Assets or failed incurred or become subject to make any material capital expenditures that otherwise would have been made Liability, except Indebtedness or Liabilities incurred in the Ordinary Course of Business; (vi) entered intointo any transaction with any Affiliate of any Acquired Company, materially amended including the Core Securityholders and their Related Parties, other than loans or modifiedadvances among the Acquired Companies and other than transactions on arms’-length commercial terms that are terminable on 90-days’ notice without premium or penalty; (vii) (A) merged or consolidated with any Person; (B) acquired any Assets, except for acquisitions of Assets in the Ordinary Course of Business; or (C) made any loan, advance or capital contribution to, or waived acquired any material rights with respect toEquity Interests in, any Person (other than loans and advances to Company Associates in the Ordinary Course of Business and other than loans or advances to another Acquired Company, all of which are identified in Section 4.7(c)(vii) of the Company Disclosure Letter); (viii) sold, exclusively licensed or otherwise disposed of any of its material agreementAssets or any Company Intellectual Property, contract, lease or license outside except in the Ordinary Course of Business; (vii) issued, sold or transferred any of its equity securities, securities convertible into its equity securities or warrants, options or other rights to acquire its equity securities, or any notes, bonds or debt securities; (viii) declared or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation made or committed to make any capital expenditure in excess of any officer or other key management employee$250,000 individually, or entered into any material employmentexcept maintenance, severanceconstruction, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereofpackaging, other than cost of living or merit increases granted equipment and build- out capital expenditures incurred in the Ordinary Course of Business; (x) waived, released, cancelled delayed or forgiven any debts, claims postponed the payment of accounts payable and other Liabilities or rights (accelerated accounts receivable and invoicing or series product delivery outside the Ordinary Course of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000Business; (xi) (A) acquired (by mergermaterially increased any Compensation or employee benefits, consolidationwhether conditionally or otherwise, acquisition of stockprovided to any Company Associate, other securities than in the Ordinary Course of Business or assets as required by applicable Law, or otherwise), (B) made a capital investment inadopted, amended or terminated any Company Plan, except to the extent required to comply with applicable Law, other than in the Ordinary Course of Business or as requested by Parent or as contemplated by this Agreement, or (C) made a loan advance or agreement to loan or advance to, (D) entered into terminated any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person Key Executive or any portion of the assets other officer of any Person that constitutes a division Acquired Company or operating unit hired any new executive officers of such Person; (xii) suffered any theftAcquired Company, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregate, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xii) implemented or adopted any change in its accounting methods, policies, principles or procedures, except as required by Law or by IFRS; (xiii) cancelled, settled, discharged or compromised any material debt to or claim of any Acquired Company; (xiv) commenced settled, agreed to settle or settled waived any material legal, administrative pending Actions (A) involving potential payments to any Acquired Company or arbitral proceedingby any Acquired Company in excess of $250,000 individually or $1,000,000 in the aggregate or (B) so as to admit liability or consent to non-monetary relief; (xv) made filed any amended Tax Return; changed or changed revoked any material Tax election, filed ; changed any amended method of accounting for material Tax Return, purposes other than in the Ordinary Course of Business; settled any Action in respect of Taxes; or entered into any Contract in respect of material closing agreement or settled Taxes with any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessmentGovernmental Authority; (xvi) between November 30entered into any new line of business that is different from the Business or discontinued any line of business or any business operations; (xvii) (A) terminated any Company Material Contract, 2003 and January 3, 2004, either failed to manage its working capital (B) materially amended or waived any material rights under any Company Material Contract other than in the Ordinary Course of Business or suffered (C) entered into any material reduction in working capital not Contract that would be a Company Material Contract if entered into prior to the date of the Original Agreement, other than Contracts with customers or suppliers entered into in the Ordinary Course of Business; (xviii) withdrawn any submitted application for, or terminated or allowed to lapse, any Cannabis License; or (xviixix) committed agreed to do take any action prohibited by clauses (i) through (xviii) of the foregoingthis Section 4.7.

Absence of Certain Developments. Except as set forth on §3(h) of the Disclosure attached Schedule or otherwise 3.06 and except as contemplated by this AgreementAgreement or otherwise in the ordinary course of business, since the Most Recent Fiscal Month Enddate of the Latest Balance Sheet, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except Except as set forth on §3(h) the attached Schedule 3.06 and except as contemplated by this Agreement or otherwise in the ordinary course of business, since the date of the Disclosure ScheduleLatest Balance Sheet, the Company and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries has: (ia) borrowed any amount or incurred or become subject to any material liabilities, except amounts borrowed or liabilities (other than liabilities incurred in the Ordinary Course ordinary course of Business or business, liabilities under contracts entered into in the Ordinary Course ordinary course of Businessbusiness or disclosed on the Disclosure Schedules and borrowings from banks (or similar financial institutions) necessary to meet ordinary course working capital requirements); (iib) mortgaged, pledged or subjected to any material lien, charge or other encumbrance, any material portion of its assets, except for Permitted Liens arising in the Ordinary Course of BusinessLiens; (iii) sold, assigned, licensed or transferred any Owned Real Property, Leased Real Property or any material portion of its other tangible assets, except in the Ordinary Course of Business; (ivc) sold, assigned or transferred any material patentsportion of its tangible assets, trademarks, trade names, copyrights, trade secrets or other intangible assetsexcept in the ordinary course of business; (vd) made sold, assigned or transferred any material capital expenditures Intellectual Property owned by the Company or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made its Subsidiaries, except in the Ordinary Course ordinary course of Businessbusiness; (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (viie) issued, sold or transferred any of its capital stock or other equity securities, securities convertible into its capital stock or other equity securities or warrants, options or other rights to acquire its capital stock or other equity securities, or any notes, bonds or debt securities; (viiif) declared made any material capital investment in, or any material loan to, any other Person (other than a Subsidiary of the Company), except in the ordinary course of business; (g) declared, set aside, or paid any dividend, dividend or made any non-cash distribution on with respect to its capital stock or equity interestsredeemed, redeemed purchased, or purchased otherwise acquired any shares of its capital stock stock, except for dividends or equity interests, or paid any management or other fees distributions made by the Company’s Subsidiaries to any Shareholder or any Affiliates their respective parents in the ordinary course of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligationbusiness; (ixh) increased made any material capital expenditures or commitments therefor, except (i) in the compensation ordinary course of business or (ii) for such capital expenditures or commitments therefor that are reflected in the Company’s budget for the fiscal year ending December 31, 2015; (i) made any officer or other key management employeematerial loan to, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business transaction with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess its directors, officers, and employees outside the ordinary course of $250,000 in any single instance or $500,000 in the aggregate, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Businessbusiness; or (xviij) committed to do taken any of the foregoingactions that would, after the date hereof, be prohibited by Section 5.01.

Absence of Certain Developments. Except as set forth on §3(h) Since the date of the Disclosure Schedule or otherwise contemplated by this Agreement, since the Most Recent Fiscal Month EndLatest Balance Sheet, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except Except as set forth on §3(h) the attached Developments Schedule and except as expressly contemplated by this Agreement, since the date of the Disclosure ScheduleLatest Balance Sheet, the Company and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries has: (ia) borrowed any amount or incurred any material liabilities, except amounts borrowed Indebtedness in excess of $2,000,000 (other than borrowings from banks or liabilities incurred similar financial institutions under credit lines in the Ordinary Course ordinary course of Business or under contracts entered into in the Ordinary Course of Businessbusiness); (iib) mortgaged, pledged amended or modified its certificate of incorporation or by-laws (or equivalent governing documents); (c) subjected to any material lien, charge or other encumbrance, any material portion of its assetsproperties or assets to any Lien with respect to any Indebtedness or any other material Lien, except for Permitted Liens arising in the Ordinary Course of BusinessLiens; (iii) sold, assigned, licensed or transferred any Owned Real Property, Leased Real Property or any material portion of its other tangible assets, except in the Ordinary Course of Business; (ivd) sold, assigned or transferred any material patentsportion of its tangible assets, trademarks, trade names, copyrights, trade secrets or other intangible assetsexcept in the ordinary course of business; (ve) made sold, assigned or transferred any material capital expenditures Intellectual Property owned by the Company or commitments therefor outside the Ordinary Course any of Business or failed to make any material capital expenditures that otherwise would have been made its Subsidiaries, except in the Ordinary Course ordinary course of Businessbusiness (which includes licensing the use of any such Intellectual Property in connection with sale of goods or services in the ordinary course of business); (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (viif) issued, sold or transferred any of its capital stock or other equity securities, securities convertible into its capital stock or other equity securities or warrants, options or other rights to acquire its capital stock or other equity securities, or any notes, bonds or debt securities; (viiig) declared made any material capital investment in, or any material loan to, any other Person (other than a Subsidiary of the Company), except in the ordinary course of business; (h) declared, set aside or paid any dividend, dividend or made any distribution on with respect to its capital stock (whether in cash or equity interestsin kind) or redeemed, redeemed purchased, or purchased otherwise acquired any shares of its capital stock stock, except for dividends or equity interestsdistributions made by the Subsidiaries to their respective parents in the ordinary course of business; (i) made any material capital expenditures or commitments therefor, except (i) in the ordinary course of business and (ii) for such capital expenditures or paid any management commitments therefor that are reflected in the Company’s budget for the current fiscal year; (j) paid, loaned or advanced (other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and than the payment of such cash dividend does not subject salary and benefits in the Company to ordinary course of business or the payment, advance or reimbursement of expenses in the ordinary course of business) any adverse Tax consequencesamounts to, including or sold, transferred or leased any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employeeits assets to, or entered into any material employmentother transactions with, severanceany of its Affiliates, or made any loan to, or entered into any other transaction with, any of its directors, officers or employees; (k) hired or terminated the employment of any officer or any Person whose annual compensation from the Company and its Subsidiaries exceeds, or is reasonably expected to exceed, $200,000; (l) made or granted any bonus or consulting any compensation or salary increase to any current (or former) employee whose annual base salary is (or was at the time of his or her termination) in excess of $200,000 (except in the ordinary course of business in accordance with past practice), or made or granted any material increase in any employee benefit plan or arrangement, or materially amended or terminated any existing employee benefit plan or arrangement or severance agreement or other material compensation employment contract or adopted any new employee benefit plan or arrangement or severance agreement or caused employment contract (except as required under applicable law or suffered any cancellation in the ordinary course of business where such adoption or material amendment thereofdoes not materially increase the cost to the Company of providing such benefits); (m) intentionally delayed or postponed the payment of accounts payable or other Liabilities beyond the original due date so that such payments are made in a post-Closing period, other than cost of living for such payment delayed or merit increases granted postponed in the Ordinary Course ordinary course of Businessbusiness; (xn) waivedcanceled, releasedcompromised, cancelled waived or forgiven released any debts, claims material right or rights claim (or series of debtsrelated rights or claims that, claims together, are material) or rightsany Indebtedness (or series of related Indebtedness) involvingowed to it, individually or in each case, other than in the aggregate, consideration in excess ordinary course of $500,000business; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (Bo) made a capital investment inmaterial change in its accounting or Tax methods, practices or policies or prepared or filed any Tax Return inconsistent with past practice (C) made a loan advance or agreement to loan or advance to, (D) entered into including by taking any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money ofposition, any Person election or adopting any portion of method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods), and the assets of Company has not settled any Person that constitutes a division material federal, state, local or operating unit of such Personforeign Tax Liability; (xiip) suffered commenced or settled any theft, damage, destruction or casualty loss affecting its business or any of their respective assets Proceeding involving an amount in excess of $250,000 in for any single instance or $500,000 in the aggregate, whether or not covered by insuranceone case; (xiiiq) paidmade any loans or advances to, dischargedor guarantees for the benefit of, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made Persons (except to employees in the Ordinary Course ordinary course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Businessbusiness); or (xviir) committed to do any of the foregoing.

Absence of Certain Developments. Except as set forth on §3(h) of the Disclosure Schedule or otherwise contemplated by this Agreement5.6 hereto, since September 30, 2007, the Most Recent Fiscal Month End, there Company has not been any conducted its business only in the ordinary course of business consistent with past custom and practice and has not: (a) Suffered a Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h) of the Disclosure Schedule, the Company and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries has: (i) borrowed any amount or incurred any material liabilities, except amounts borrowed or liabilities incurred in the Ordinary Course of Business or under contracts entered into in the Ordinary Course of Business; (iib) mortgagedSold, pledged or subjected to any material lien, charge or other encumbrance, any material portion of its assets, except for Permitted Liens arising in the Ordinary Course of Business; (iii) soldleased, assigned, licensed or transferred any Owned Real Property, Leased Real Property or any material portion of its Assets (other tangible assetsthan non-exclusive licenses of Assets in the ordinary course of business and sales of obsolete or worn out assets in the ordinary course of business) or mortgaged, pledged or subjected them to any Lien, except in the Ordinary Course of Businessfor Permitted Liens; (ivc) sold, assigned or transferred any material patents, trademarks, trade names, copyrights, trade secrets or other intangible assets; (v) made Made any material capital expenditures or commitments therefor outside in excess of $2,000,000 in excess of the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made 2008 budgeted amounts disclosed in the Ordinary Course of BusinessCompany’s business plans provided to the Parent and attached as Schedule 5.6(c) hereto; (vid) entered intoCreated, materially amended incurred or modifiedassumed any Indebtedness or guaranteed any Indebtedness of any Person, other than capital leases or waived any material rights with respect to, any material agreement, contract, lease or license outside pursuant to the Ordinary Course of Businesscredit facilities described in the Financial Statements; (viie) issuedDeclared, sold set aside or transferred paid any dividend or distribution of cash or other property to any stockholder of Holdings with respect to its equity or purchased, or redeemed or otherwise acquired any of its equity securities, securities convertible into its equity securities or warrants, options or other rights to acquire its equity securities, or any notesOptions, bonds or debt securitiesother than dividends paid to Holdings by its Subsidiaries, net of any withholding Taxes required to be withheld with respect to such dividends; (viiif) declared Declared, set aside or paid any dividendsalary or compensation to any director or executive employee outside the ordinary course of business consistent with past custom and practice; (g) Declared, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, set aside or paid any management or other fees amounts to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from Company’s Affiliates outside the definition ordinary course of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection business consistent with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligationpast practice; (ixh) increased Amended or authorized the compensation amendment of any officer its certificate of incorporation or by-laws or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Businessconstituent documents; (xi) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or Entered into a Material Contract other than in the aggregateordinary course of business consistent with past practice, consideration in excess of $500,000; (xi) (A) acquired (by mergeror received any notice from a material customer, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership supplier or other similar arrangement for Person having a material relationship with the conduct of business withCompany indicating that such customer, supplier or (E) guaranteed any indebtedness for borrowed money of, any other Person intends to terminate or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting materially change its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 relationship in the aggregate, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in aggregate with the Ordinary Course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of BusinessCompany; or (xviij) committed Committed or agreed to do any of the foregoing.

Absence of Certain Developments. Except as set forth on §3(h) of the Disclosure attached Schedule 3.06 or otherwise for the transactions contemplated by this Agreement, since the Most Recent Fiscal Month End, Audited Balance Sheet: (a) there has not been any a Company Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h; and (b) of the Disclosure Schedule, the Company and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries has: (i) borrowed incurred or become subject to any amount Indebtedness, other than borrowings from banks (or incurred any material liabilities, except amounts borrowed or liabilities incurred in the Ordinary Course of Business or similar financial institutions) under contracts entered into in the Ordinary Course of Businessexisting Indebtedness listed on Schedule 3.09(a) necessary to meet ordinary course working capital requirements; (ii) mortgaged, pledged or subjected to any material lien, charge or other encumbranceLien, any material portion of its assets, except for Permitted Liens arising in the Ordinary Course of BusinessLiens; (iii) sold, assigned, licensed assigned or transferred any Owned Real Property, Leased Real Property or any material portion of its other tangible assets, except immaterial assets in the Ordinary Course ordinary course of Businessbusiness; (iv) sold, assigned or transferred any material patents, trademarks, trade names, copyrights, trade secrets or other intangible assetsIntellectual Property; (v) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (vii) issued, sold sold, transferred or transferred redeemed any of its equity securitiesEquity Interests, securities convertible into its equity securities Equity Interests or warrants, options or other rights to acquire its equity securitiesEquity Interests, or any notes, bonds or debt securities; (viiivi) declared or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interestsinvestment in, or paid any management loan to or guaranty for the benefit of, any other fees to Person (other than a Subsidiary of the Company); (vii) made any Shareholder material capital expenditures or any Affiliates of any Shareholder; providedcommitments therefor, except for such capital expenditures or commitments therefor that are set forth in the Company may pay a cash dividend Company’s and its Subsidiaries’ budget for the fiscal year ending December 31, 2015 as provided to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or Purchaser prior to the Closing date of this Agreement (including the “CapEx Budget”); (viii) made any interestloan to, expenses or fees incurred in connection with entered into any other transaction with, any Seller or any Seller’s managing member or managing partner, or any of the borrowingTrilogy Parties or their respective Subsidiaries or any of the respective directors, officers, or employees of any of the foregoing (other than Employment Agreements), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employee, or entered into any material employmentEmployment Agreement with maximum payments exceeding $100,000 per year or any collective bargaining agreement, severanceor amended, bonus modified or consulting agreement or other material compensation agreement or caused or suffered terminated the terms of any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Businesssuch existing agreements; (x) waived, released, cancelled or forgiven made any debts, claims or rights other material change (or series of debts, claims or rights) involving, individually or other than those changes set forth in the aggregateOperating Budget) in employment terms (including compensation) for (i) any of its managers, consideration directors or officers or (ii) for any other employee outside the ordinary course of business; (xi) amended its Organizational Documents; (xii) instituted any claim or lawsuit for an amount involving in excess of $1,000,000 in the aggregate or involving equitable or injunctive relief; (xiii) purchased or otherwise acquired any assets of any Person that are material to the Company and the Subsidiaries, taken as a whole, or involving payment by the Company or any Subsidiary of more than $500,000; (xixiv) (A) acquired (by mergertaken or authorized any action which, consolidationif taken or authorized on or after the date hereof, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for would require the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion consent of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregate, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding;Purchaser pursuant to Section 6.01; or (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Business; or (xvii) committed an enforceable Contract to do any of the foregoingforegoing actions.

Absence of Certain Developments. Except as set forth on §3(h(a) Since the date of the Disclosure Schedule or otherwise contemplated by this Agreement, since the Most Recent Fiscal Month EndLatest Balance Sheet, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except . (b) Except as set forth on §3(h) the Developments Schedule or except as expressly contemplated by this Agreement, from the date of the Disclosure ScheduleLatest Balance Sheet to the date hereof, the Company and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries has: (i) borrowed any amount or incurred or become subject to any material liabilities, except amounts borrowed or liabilities (other than liabilities incurred in the Ordinary Course of Business or Business, liabilities under contracts entered into in the Ordinary Course of BusinessBusiness and borrowings from banks (or similar financial institutions) incurred to meet Ordinary Course of Business working capital requirements and liabilities under this Agreement); (ii) mortgaged, mortgaged or pledged any Key Entertainment Property (or subjected to any portion thereof or rights thereto) or any other material lien, charge asset or other encumbrance, any material portion of its assets, except for Permitted Liens arising in the Ordinary Course of BusinessLiens; (iii) sold, assigned, licensed assigned or transferred any Owned Real Property, Leased Real Property or any material portion of its other tangible assets, except in the Ordinary Course of Business; (iv) sold, assigned assigned, transferred or transferred licensed any material patentsIntellectual Property, trademarks, trade names, copyrights, trade secrets or other intangible assets; (v) made any material capital expenditures or commitments therefor outside except for licenses of Intellectual Property in the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made in as set forth on the Ordinary Course of BusinessIntellectual Property Schedule; (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (viiv) issued, sold or transferred any of its equity securities, securities convertible into its equity securities or warrants, options or other rights to acquire its equity securities, or any notes, bonds or debt securities; (viiivi) declared or paid any dividend, made any distribution on investment in excess of $250,000 in, or any loan in excess of $250,000 to, any other Person (other than its capital stock or equity interestsSubsidiaries); (vii) declared, redeemed or purchased any shares of its capital stock or equity interestsset aside, or paid any management distribution with respect to its equity securities (other than cash distributions) or other fees to repurchased any Shareholder of its equity securities; (viii) made any capital expenditures in excess of $250,000 individually or any Affiliates of any Shareholder; provided$500,000 in the aggregate or commitments therefor, except for such capital expenditures or commitments that are reflected in the Company may pay a cash dividend current budget as provided to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or Purchaser prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligationdate hereof; (ix) increased the compensation of made any officer or other key management employeeloan to, or entered into any material employmentother transaction with, severanceany of its directors or officers, bonus except for employment contracts with any such director or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Businessofficer; (x) waived, released, cancelled or forgiven entered into any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration employment contract that would reasonably be expected to provide for total annual compensation in excess of $500,000;150,000 during the twelve (12)-month period commencing on the date hereof (other than any “at will” employment contract that may be terminated by the Company or a Subsidiary of the Company, without any payment or penalty, upon thirty (30) days or less advance notice or upon the minimum advance notice required by applicable Law) or any Collective Bargaining Agreement, or modified the terms of any such existing contract or agreement; or (xi) (Ataken any action that if taken after the date of this Agreement would constitute a breach of Section 7.01(b)(xiii) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise7.01(b)(xiv), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregate, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Business; or (xvii) committed to do any of the foregoing.

Absence of Certain Developments. Except as set forth on §3(h) Schedule 2.8 of the Target Disclosure Schedule or otherwise contemplated by Schedules, from the date of the Latest Balance Sheet to the date of this Agreement, since Target and each Subsidiary (a) has conducted its respective businesses only in the Most Recent Fiscal Month Endordinary course of business consistent with past practice, (b) used all commercially reasonable efforts to preserve their respective businesses and customers, (c) extended credit to customers, collected accounts receivable and paid accounts payable and similar obligations in the ordinary course of business consistent with its past practice and (d) not engaged in any new line of business or entered into any agreement, transaction or activity or made any commitment except those in the ordinary course of business. Without limiting the generality of the foregoing, from the date of the Latest Balance Sheet: (a) There has not been a Material Adverse Effect on Target and the Subsidiaries, taken as a whole, and there has not been any change, event, development or condition (whether or not covered by insurance) that has resulted in, or would be reasonably expected to result in, a Material Adverse Effect. In addition Effect on Target and the Subsidiaries, taken as a whole; (b) there has not been any damage, destruction or loss to the foregoingproperty or assets of Target or any Subsidiary, since that date and except as set forth on §3(h) of the Disclosure Schedulewhether or not covered by insurance, the Company and its Subsidiaries have operated exceeding in the Ordinary Course aggregate One Hundred Thousand Dollars ($100,000); (c) there has not been any declaration, setting aside or payment of Business and any dividend or other distribution of cash or other property in respect of any shares of capital stock or other equity securities of Target or the Subsidiaries or any repurchase, redemption, or other acquisition by Target or the Subsidiaries of any outstanding shares of capital stock or other equity securities of, or other ownership interest in, Target or the Subsidiaries other than distributions from a Subsidiary to Target or another Subsidiary; (d) neither Target nor any Subsidiary has entered into any employment or severance agreement (nor amended any such agreement) or agreed to increase the Company compensation payable or to become payable by it to any of Target’s or the Subsidiaries’ officers or employees other than in the ordinary course of business, or as required by applicable Law; (e) there has not been any change by Target or the Subsidiaries in accounting or Tax reporting principles, methods or policies; (f) neither Target nor any of its the Subsidiaries has:has made or rescinded any election relating to Taxes or settled or compromised any claim relating to Taxes; (g) neither Target nor any of the Subsidiaries has entered into any transaction or contract other than in the ordinary course of business and as provided to Parent, or amended, terminated or is in default under, any Target Material Contract; (h) neither Target nor any of the Subsidiaries has failed to promptly pay and discharge current liabilities, except for amounts not in excess of Fifty Thousand Dollars ($50,000) or where disputed in good faith by appropriate proceedings; (i) borrowed neither Target nor any amount of the Subsidiaries has made any loans, advances or incurred capital contributions to, or investments in, any material liabilitiesPerson or paid any fees or expenses to any holder of Target Common Stock or Target Preferred Stock or any director, except amounts borrowed officer, partner, stockholder, or liabilities incurred in the Ordinary Course affiliate of Business any holder of Target Common Stock or under contracts entered into in the Ordinary Course of BusinessTarget Preferred Stock; (iij) neither Target nor any Subsidiary has (i) mortgaged, pledged or subjected to any material lien, charge or Encumbrance (other encumbrance, than licenses to Intellectual Property granted in the ordinary course of business) any material portion of its assets, except for Permitted Liens arising in the Ordinary Course of Business; assets or (iiiii) acquired any assets or sold, assigned, licensed transferred, conveyed, leased or transferred otherwise disposed of any Owned Real Property, Leased Real Property assets of Target or any material portion of its other tangible assetsSubsidiary, except in the Ordinary Course case of Businessclause (ii), for assets acquired, sold, assigned, transferred, conveyed, leased or otherwise disposed of in the ordinary course of business; (ivk) sold, assigned neither Target nor any Subsidiary has discharged or transferred satisfied any material patents, trademarks, trade names, copyrights, trade secrets Encumbrance (or other intangible assetspaid any liability) except in the ordinary course of business; (vl) neither Target nor any Subsidiary has cancelled or compromised any debt or claim or amended, canceled, terminated, relinquished, waived or released any contract or right except in the ordinary course of business and which, in the aggregate, would not be material to Target or any Subsidiary taken as a whole; (m) neither Target nor any Subsidiary has made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed committed to make any material capital expenditures that otherwise would have been made in excess of Thirty Five Thousand Dollars ($35,000) individually or One Hundred Thousand Dollars ($100,000) in the Ordinary Course of Businessaggregate, other than capital expenditures permitted by Section 4.1(k); (vin) entered intoneither Target nor any Subsidiary has issued, materially amended created, incurred, assumed, guaranteed, endorsed or modified, otherwise become liable or waived any material rights responsible with respect toto (whether directly, contingently or otherwise) any material agreement, contract, lease or license outside Indebtedness of Target in an amount in excess of Fifty Thousand Dollars ($50,000) in the Ordinary Course of Businessaggregate; (viio) issued, sold neither Target nor any Subsidiary has granted any license or transferred sublicense of any of its equity securities, securities convertible into its equity securities rights under or warrants, options or other with respect to any Intellectual Property rights to acquire its equity securities, owned by Target or any notes, bonds or debt securitiesSubsidiary except in the ordinary course of business; (viiip) declared neither Target nor any Subsidiary has instituted or paid settled any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares legal proceeding resulting in a loss of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates revenue in excess of any Shareholder; provided, that Fifty Thousand Dollars ($50,000) in the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligationaggregate; (ixq) increased the compensation there has been no amendment to any organizational document of any officer of Target or other key management employeethe Subsidiaries or any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction involving Target or any Subsidiary, and no creation of any new subsidiary by Target or any Subsidiary; (r) to Target’s and it Subsidiaries’ Knowledge, there has been no material adverse change in Target’s or any of the Subsidiaries’ relations with any customer, distributor, supplier or agent; (s) there are no accrued but unpaid dividends on shares of Target Common Stock or Target Preferred Stock; (t) there has been no grant of credit to any customer, distributor or supplier of Target or any Subsidiary on terms or in amounts materially more favorable than had been extended to such customers, distributors or suppliers in the past; and (u) none of Target or any Subsidiary has agreed, committed, arranged or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregate, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Business; or (xvii) committed understanding to do any of the foregoinganything set forth in this Section 2.8.

Absence of Certain Developments. Except (i) as set forth on §3(h) of the Disclosure Schedule or otherwise expressly contemplated by this Agreement, since (ii) as specifically disclosed in the Most Recent Fiscal Month EndCompany Filings filed with respect to periods ended on or after December 28, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except 2012 or (iii) as set forth on §3(h) of the Disclosure attached Developments Schedule, the Company and its Subsidiaries have operated in the Ordinary Course of Business and since December 28, 2012, neither the Company nor any of its Subsidiaries Subsidiary has: : (i) issued any notes, bonds or other debt securities or any Capital Stock or other equity securities or any securities convertible, exchangeable or exercisable into any Capital Stock or other equity securities; (ii) borrowed any amount or incurred or become subject to any material liabilities, except amounts borrowed or current liabilities incurred in the Ordinary Course ordinary course of Business or business and liabilities under contracts entered into in the Ordinary Course ordinary course of Business; (ii) mortgaged, pledged or subjected to any material lien, charge or other encumbrance, any material portion of its assets, except for Permitted Liens arising in the Ordinary Course of Business; business; (iii) sold, assigned, licensed discharged or transferred any Owned Real Property, Leased Real Property or satisfied any material portion of its Lien or paid any material obligation or liability, other tangible assets, except than current liabilities paid in the Ordinary Course ordinary course of Business; business; (iv) sold, assigned declared or transferred made any material patents, trademarks, trade names, copyrights, trade secrets payment or distribution of cash (other than a distribution from a Subsidiary of the Company to the Company) or other intangible assets; (v) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed property to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights its equityholders with respect to, any material agreement, contract, lease to its Capital Stock or license outside the Ordinary Course of Business; (vii) issued, sold or transferred any of its equity securities, securities convertible into its other equity securities or purchased or redeemed any shares of its Capital Stock or other equity securities (including, without limitation, any warrants, options or other rights to acquire its Capital Stock or other equity securities), other than repurchases of Common Stock pursuant to Qualified Incentive Plans or employment agreements existing on the date of this Agreement and disclosed in the Disclosure Schedules hereto or any employment or consulting agreements entered into in the ordinary course of business thereafter and approved by the Board; (v) mortgaged or pledged any of its properties or assets or subjected them to any Lien, except for Permitted Liens; (vi) sold, assigned or transferred any of its tangible assets, except in the ordinary course of business, or canceled any material debts or claims; (vii) suffered any extraordinary losses or waived any rights of material value, whether or not in the ordinary course of business or consistent with past practice; (vii) made any loans or advances to, guarantees for the benefit of, or any notesInvestments in, bonds or debt securities; (viii) declared or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration Persons in excess of $500,000; 50,000 in the aggregate; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (Bix) made a capital investment in, any charitable contributions or pledges in excess of $50,000 in the aggregate; (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xiix) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 exceeding in the aggregateaggregate $50,000, whether or not covered by insurance; ; (xiiixi) paidterminated, dischargedamended or modified any agreement or other contract which would be required to be set forth on the Contracts Schedule if it were in effect on the date of this Agreement (ignoring, cancelledif applicable, compromised any such termination, amendment or satisfied modification); (xii) made any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made change in the Ordinary Course accounting principles utilized by the Company in connection with the business of Business; the Company and its Subsidiaries, made any change in the Company’s independent public accounting firm, had any disagreement with its independent public accounting firm over the Company’s and its Subsidiaries’ application of accounting principles or with the preparation of any of their financial statements that was required to be disclosed in such Company Filings, or, given notification to the Company’s audit committee of any facts with respect to the Company’s or its Subsidiaries’ financial statements or methods of accounting that could reasonably be expected to result in a restatement of or amendment to the Company’s or its Subsidiaries’ financial statements; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xvxii) made or changed any material Tax election, changed an annual accounting period for Tax, adopted or changed any Tax accounting method, filed any amended material Tax Return, entered into any material closing agreement or agreement, settled any material Tax claim or assessmentassessment relating to the Company or any of its Subsidiaries, surrendered any right to claim a refund of Taxes or Taxes, consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; assessment relating to the Company or any of its Subsidiaries, or took any other similar action relating to the filing of any Tax Return or the payment of any Tax; (xvixiii) between November 30received any written notice from the Securities and Exchange Commission in connection with any investigation or action by the Securities and Exchange Commission; (xiv) experienced any resignation or termination of employment of any of the Company’s executive officers or (xv) entered into any other material transaction, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business whether or suffered any material reduction in working capital not in the Ordinary Course ordinary course of Business; or (xvii) committed to do any of the foregoingbusiness.

Absence of Certain Developments. Except as set forth disclosed, as required herein, on §3(hthe attached Developments Schedule, since June 1, 2006, Seller has not with respect to Seller’s Table Games Business or the Purchased Assets: (a) mortgaged, pledged or subjected to any Lien, any of the Disclosure Schedule Purchased Assets, or otherwise contemplated by this Agreementthe Licensed Patents, since other than the Most Recent Fiscal Month EndPermitted Liens; (b) made any final sale, there fully paid lease, one-off sale or similar transaction in which a Table Game has not been provided to any Material Adverse Effect. In addition Person for a term greater than one year without any contractual obligation on such Person to the foregoing, since that date and except as set forth on §3(hpay a recurring fair market lease consideration; (c) of the Disclosure Schedule, the Company and its Subsidiaries have operated discharged or satisfied any material lien or paid any material obligation or liability related to Seller’s Table Games Business (other than in the Ordinary Course of Business and neither the Company nor Business); (d) sold, leased, assigned, licensed or transferred any of its Subsidiaries has:tangible assets (including the Purchased Assets), used in Seller’s Table Games Business except in the Ordinary Course of Business, or canceled without fair consideration any debts or claims owing to or held by it arising out of its operation of Seller’s Table Games Business; (ie) borrowed sold, assigned, licensed, sublicensed, transferred or Liened any amount Seller’s Table Games Intellectual Property or other intangible assets, disclosed any Confidential Information to any Person other than its employees (and other than Buyer and Buyer’s representatives, agents, attorneys and accountants), or abandoned or permitted to lapse any Seller’s Table Games Intellectual Property; (f) incurred any Indebtedness with respect to Seller’s Table Games Business or incurred or become subject to any material liabilitiesliability with respect to Seller’s Table Games Business, except amounts borrowed or current liabilities incurred in the Ordinary Course of Business or and liabilities under contracts entered into in the Ordinary Course of Business; (iig) mortgagedmade any loans or advances to, pledged investments in, or subjected to any material lien, charge or other encumbranceguarantees for the benefit of, any material portion of its assetsPerson in connection with Seller’s Table Games Business, except for Permitted Liens arising other than in the Ordinary Course of Business; (iiih) soldsuffered any extraordinary losses or waived any rights of material value with respect to Seller’s Table Games Business, assigned, licensed whether or transferred any Owned Real Property, Leased Real Property or any material portion of its other tangible assets, except not in the Ordinary Course of Business; (iv) sold, assigned or transferred any material patents, trademarks, trade names, copyrights, trade secrets or other intangible assets; (v) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (vii) issued, sold or transferred any of its equity securities, securities convertible into its equity securities or warrants, options or other rights to acquire its equity securities, or any notes, bonds or debt securities; (viii) declared or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xiii) suffered any theft, damage, destruction or casualty loss affecting its business or to any of their respective assets the Purchased Assets or the Licensed Patents in excess of $250,000 in any single instance or $500,000 in the aggregate25,000, whether or not covered by insurance; (xiiij) paidexcept for any Pending Orders, dischargedmade any capital expenditures commitments with respect to Seller’s Table Games Business that aggregate in excess of $50,000; (k) made any change in any method of accounting or accounting policies with respect to Seller’s Table Games Business, cancelledother than those required by GAAP which have been disclosed in writing to Buyer; (l) other than in the Ordinary Course of Business, compromised engaged in any promotional sales, discount or satisfied price reduction or other activity with respect to Seller’s Table Games Business that has or would reasonably be expected to have the effect of accelerating to pre-Closing periods sales that otherwise would be expected to occur in post-Closing periods; (m) instituted or permitted any material liability change in the conduct of Seller’s Table Games Business, or any change in its method of purchase, sale, lease, management, marketing, promotion or operation; (n) entered into, amended or terminated any material contract or any government license or permit or taken any other action or entered into any other transaction other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xivo) commenced declared, set aside or settled made any material legalpayment or distribution of cash or other property (including so-called “tax distributions”) to any of its equityholders with respect to such equity interests or otherwise, administrative or arbitral proceedingpurchased, redeemed or otherwise acquired any of its equity securities (including any warrants, options or other rights to acquire its equity); (xvp) made incurred intercompany charges or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 conducted its cash management customs and January 3, 2004, either failed to manage its working capital practices other than in the Ordinary Course of Business or suffered any material reduction in (including, without limitation, with respect to maintenance of working capital balances and inventory levels, collection of accounts receivable and payment of accounts payable); (q) entered into any other material transaction, whether or not in the Ordinary Course of Business, or materially changed any business practice; (r) made or entered into any agreement relating to any refund or rebate or provided any credit to a customer relating to Seller’s Table Games Business, any Purchased Assets, or the Licensed Patents; (s) except as disclosed on the Developments Schedule, sold, leased, assigned, Liened or transferred (whether in or out of the Ordinary Course of Business), any Purchased Asset or Licensed Patent; or (xviit) committed to do any of the foregoing.

Absence of Certain Developments. Except Since the Balance Sheet Date, the Company and its Subsidiaries (i) have not suffered any event, change, occurrence, facts or circumstances that has resulted in a Company Material Adverse Effect and (ii) have conducted their business in all material respects in the ordinary course of such business consistent with past practice, except in connection with this Agreement and the transactions contemplated herein. In addition, without limiting the generality of the forgoing, except as set forth on §3(h) in Section 4.07 of the Company Disclosure Schedule or otherwise Schedules and except as expressly contemplated by this Agreement, since the Most Recent Fiscal Month EndBalance Sheet Date, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h) of the Disclosure Schedule, the Company and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries has: (ia) amended or authorized the amendment of its certificate or articles of incorporation, bylaws or similar organizational or constituent documents; (b) borrowed any amount or incurred any material liabilities, Indebtedness except amounts borrowed or liabilities incurred in for the Ordinary Course incurrence of Business or Indebtedness under contracts entered into in the Ordinary Course of Businessits existing revolving credit facility to meet ordinary working capital requirements; (iic) mortgaged, pledged or subjected any portion of its properties or assets to any material lien, charge or other encumbrance, any material portion of its assetsLiens, except Liens for Permitted Liens arising current property taxes not yet due and payable and for which adequate reserves have been established in the Ordinary Course of BusinessFinancial Statements to the extent required by GAAP; (iiid) sold, leased, assigned, licensed or transferred any of its tangible properties, assets or any portion thereof, except sales of inventory in the ordinary course of business consistent with past practice; (e) sold, assigned, licensed or transferred any Owned Real Property, Leased Real material Company Intellectual Property or any material portion of its other tangible assets, except in the Ordinary Course of Business; (iv) sold, assigned or transferred any material patents, trademarks, trade names, copyrights, trade secrets or other intangible assets; (v) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (viif) issued, sold or transferred any of its equity interests or other equity securities, securities convertible into its equity interests or other equity securities or warrants, options or other rights to acquire its equity interests or other equity securities, or any notes, bonds or debt securities; (viiig) declared or paid any dividend, dividends or made any distribution distributions on its capital stock the Company’s equity interests or other equity interests, securities or redeemed or purchased any shares of its capital stock or the Company’s equity interests, or paid any management interests or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligationequity securities; (ix) increased the compensation of any officer or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (Bh) made a any capital investment in, (C) made a loan advance expenditures or agreement to loan commitments exceeding $225,000 per expenditure or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance commitment or $500,000 in the aggregateaggregate for all capital expenditures or commitments, or failed to make any capital expenditure in the ordinary course of business consistent with past practice or otherwise consistent with the most recent budget and forecasts provided to Buyer prior to the date hereof; (i) changed any of its accounting methods, principles or practices, except as required by GAAP, or changed any of the assumptions underlying, or methods of calculating, any bad debt, contingency or other reserve; (j) made any change in its trade payables and trade receivables and other credit collection and payment policies, including (i) acceleration of collections or receivables (including through the use of discounts for early payment, request for early payment or otherwise) and (ii) failure to pay payables when due or delay in payment of payables compared to past practices; (k) suffered any material damage, destruction or other casualty loss with respect to any properties or assets leased or owned by the Company or any of its Subsidiaries (whether or not covered by insurance); (xiiil) paid, discharged, cancelled, compromised waived any rights of material value or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessmenttransaction, surrendered any right to claim a refund except in the ordinary course of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessmentbusiness consistent with past practice; (xvim) between November 30amended or modified any employment contract, 2003 and January 3arrangement or severance entitlement to increase the compensation, 2004severance or other benefits of any Employee whose annual base compensation is in excess of $100,000 other than as may be required under a pre-existing Contract or as may be required by applicable Law; (n) entered into any employment agreement whose annual base compensation is in excess of $100,000, either failed to manage its working capital stay bonus, change in control payment or other retention agreement or any collective bargaining agreement; (o) increased the compensation, including without limitation any severance benefits, of any present or former director, officer or Employee, except as may be required by any Contract as in effect on the date thereof (except, in the Ordinary Course case of Business Employees who are neither directors nor officers of the Company or suffered any of its Subsidiaries, in the ordinary course of business consistent with past practice); (p) established, entered into, adopted or amended any material reduction in working capital not in the Ordinary Course of BusinessEmployee Benefit Plan, except as may be required by any then existing Employee Benefit Plan or Contract; orand (xviiq) committed or agreed to do any of the foregoing.

Absence of Certain Developments. Except as set forth on §3(h) of the Disclosure Schedule or otherwise contemplated by this AgreementSince January 1, since the Most Recent Fiscal Month End2013, there has not been any Material Adverse Effect. In addition Effect with respect to the foregoingCompany or any of its Subsidiaries, since and no event has occurred and no circumstances exist that date and except would reasonably be expected to result in a Material Adverse Effect with respect to the Company or any of its Subsidiaries. Except as set forth on §3(hSchedule 3.2(g) of the Disclosure Scheduleand except as expressly contemplated by this Agreement, the Company and its Subsidiaries have operated in the Ordinary Course of Business and since January 1, 2013, neither the Company nor any of its Subsidiaries has: (i) borrowed amended any amount or incurred any material liabilities, except amounts borrowed or liabilities incurred in the Ordinary Course of Business or under contracts entered into in the Ordinary Course of Businessits Organizational Documents; (ii) incurred any Indebtedness, except working capital credit line borrowings in the ordinary course of business consistent with past practices, or guaranteed any such Indebtedness, or issued or sold any Indebtedness or warrants or rights to acquire any Indebtedness, or guaranteed any Indebtedness of others, in each case, other than accruals for mechanical royalty and label payments (including, without limitation, payments to foreign country artists and record labels); (iii) mortgaged, pledged or subjected to any material lien, charge or other encumbrance, Lien any material portion of its assets, except for assets (other than Permitted Liens arising in the Ordinary Course of BusinessLiens); (iiiiv) (A) sold, leased, licensed, assigned, licensed pledged or granted any security interest in, transferred or otherwise disposed of, or agreed to sell, lease, license, assign, pledge or grant any Owned Real Propertysecurity interest in, Leased Real Property transfer or otherwise dispose of, any material portion of its other tangible assets, except in the Ordinary Course ordinary course of Businessbusiness, or (B) acquired by merger or consolidation with, or merged or consolidated with, or purchased substantially all of the assets of, any corporation, partnership, association, joint venture or other business organization or division thereof; (ivv) sold, licensed, assigned or transferred any material patentsCompany Intellectual Property, trademarks, trade names, copyrights, trade secrets or other intangible assets; (v) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made except in the Ordinary Course ordinary course of Businessbusiness; (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (vii) issued, sold or transferred transferred, or agreed to the issuance, delivery or sale of: (A) any of its equity securities, ; (B) any securities convertible or exchangeable into its equity; or (C) other equity securities or warrants, options or other rights to acquire its equity securities, or any notes, bonds or debt securities; (vii) made any material capital investment in, or any material loan to, any other Person; (viii) declared or paid any dividend, made any distribution on its material capital stock expenditures or equity interestscommitments, redeemed or purchased any shares except in the ordinary course of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligationbusiness; (ix) increased adopted any new or made any changes in its existing employee benefit plans or made any changes in wages, salary or other compensation with respect to its officers, directors or employees, except, in each case, (A) to the compensation extent required to comply with applicable Law or the terms of any officer Plan or (B) for any such action or change that is not material and that was taken in the ordinary course of business consistent with past practice, and to the Company’s Knowledge no communication or announcement has been made indicating any intention of the Company or any Subsidiary to take any of the foregoing actions; (x) paid, loaned or advanced (other key management employeethan the payment of salary and benefits in the ordinary course of business or the payment, advance or reimbursement of expenses in the ordinary course of business) any amounts to, or sold, transferred or leased any of its assets to, or entered into or modified any other transactions with, any of its Affiliates, or made any loan to, or entered into any material employmentother transaction with, severance, bonus any of its directors or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost officers outside the ordinary course of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000business; (xi) (A) acquired (by mergermade or rescinded any Tax election, consolidationchanged any annual accounting period, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregate, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made adopted or changed any material Tax electionmethod of accounting or reversed any accruals (except as required by a change in Law or GAAP), filed any amended material Tax ReturnReturns, signed or entered into any material closing agreement or settlement, settled or compromised any material Tax claim or assessmentassessment of Tax liability, surrendered any right to claim a refund of Taxes refund, offset or other reduction in liability, consented to any extension or waiver of the limitation limitations period applicable to any material Tax claim or assessment, in each case with respect to Taxes, or acted or omitted to act where such action or omission to act would reasonably be expected to have the effect of materially increasing any present or future Tax liability or materially decreasing any present or future Tax benefit for the Company or any of its Subsidiaries or the Buyer or its Affiliates; (xvixii) between November 30modified in a material manner its existing cash management, 2003 credit collection or payment policies, procedures and January 3practices (including, 2004without limitation, either failed to manage its any acceleration in the collection of accounts receivable, delay in the payment of accounts payable or change in the maintenance of working capital balances); (xiii) commenced or settled any litigation, arbitration or proceeding involving (i) an amount in excess of Fifty Thousand Dollars ($50,000) in the Ordinary Course of Business aggregate or suffered any material reduction in working capital not in the Ordinary Course of Business; or(ii) involving equitable relief; (xviixiv) committed entered into or materially modified any Material Contract or material Licenses and Permits, or otherwise become obligated to do any of the foregoing, except in each case in the ordinary course of business consistent with past practice; or (xv) experienced any incidents of damage, destruction or loss of any property owned by the Company or its Subsidiaries, whether or not covered by insurance, having a replacement cost or fair market value in excess of Fifty Thousand Dollars ($50,000).

Absence of Certain Developments. Except as set forth on §3(h) in Section 4G of the Seller Disclosure Schedule Letter or as otherwise contemplated by this Agreement and/or the Paper Contribution Agreement, since from the Most Recent Fiscal Month End, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h) of the Disclosure ScheduleLatest Balance Sheet until the date of this Agreement, the Company and its Subsidiaries members of the Paper Group have operated the Business in the Ordinary Course ordinary course of Business business in all material respects and neither no member of the Company Paper Group nor any of its Subsidiaries has, and Seller has not solely with respect to the Business: (i) borrowed any amount or incurred operated in any material liabilities, except amounts borrowed or liabilities incurred respect other than in the Ordinary Course ordinary course of Business or under contracts entered into in the Ordinary Course of Businessbusiness consistent with past practice; (ii) mortgagedissued or sold any of its capital stock or equity securities, pledged securities convertible into its capital stock or subjected to any material lienequity securities, charge or warrants, options or other encumbrance, any material portion of rights to purchase its assets, except for Permitted Liens arising in the Ordinary Course of Businesscapital stock or equity securities; (iii) sold, assigned, licensed or transferred any Owned Real Property, Leased Real Property or subjected to any material Lien any portion of its other tangible assetsassets or properties, except in the Ordinary Course of BusinessPermitted Encumbrances; (iv) incurred any indebtedness for borrowed money, or guaranteed any such indebtedness, or issued or sold any debt securities or warrants or rights to acquire any debt securities of any member of the Paper Group, or guarantee any debt securities of others for which Buyer and/or any of its post-Closing Subsidiaries shall be liable following the Closing, other than (a) in the ordinary course of business consistent with past practice, (b) pursuant to and/or permitted under the Senior Credit Facility, Security Agreement and/or the Indenture, (c) indebtedness and guarantees that will be released in connection with or prior to the Closing, (d) any indebtedness or other obligations of a nature described in clause (ii)(a), (b), (c), (d) and/or (g) of the definition of Company Net Working Capital and/or (e) for the avoidance of doubt, the Debt Financing; (v) sold, assigned or transferred any material patentsportion of its tangible assets, trademarks, trade names, copyrights, trade secrets or other intangible assets; (v) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made except in the Ordinary Course ordinary course of Businessbusiness; (vi) entered intosold, materially amended assigned or modifiedtransferred any registered Company Intellectual Property, or waived any material rights with respect to, any material agreement, contract, lease or license outside except in the Ordinary Course ordinary course of Businessbusiness; (vii) issued, sold made or transferred granted any material bonus or any material compensation or salary increase to any Transferred Employee or any Subsidiary Employee (except in the ordinary course of its equity securities, securities convertible into its equity securities business consistent with past practice or warrants, options as required by law or contractual obligations or other rights to acquire its equity securitiesagreement existing on the date of this Agreement), or made or granted any notesmaterial increase in any employee benefit plan or arrangement, bonds or debt securitiesamended or terminated any existing employee benefit plan or arrangement or severance agreement or employment contract or adopted any new employee benefit plan or arrangement or severance agreement or employment contract for any Transferred Employee or any Subsidiary Employee; (viii) declared or paid any dividend, made any distribution on its capital stock loans or equity interests, redeemed or purchased any shares of its capital stock or equity interestsadvances to, or paid guarantees for the benefit of, any management Persons, other than (x) in the ordinary course of business consistent with past practices, (y) intercompany loans and advances among or other fees to any Shareholder or any Affiliates between the members of any Shareholder; provided, that the Company may pay a cash dividend Paper Group and their Subsidiaries and (z) pursuant to the Shareholders as long as Senior Credit Facility or the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation;Indenture; or (ix) increased the compensation of any officer or other key management employee, or entered into suffered any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or other casualty loss affecting its business or with respect to the material property owned by any member of the Paper Group and/or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregate, whether or its Subsidiaries that is not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Business; or (xvii) committed to do any of the foregoing.

Absence of Certain Developments. Except as set forth on §3(h) of the Disclosure Schedule or otherwise 6.8 and except as expressly contemplated by this Agreement, since the Most Recent Fiscal Month EndJanuary 31, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h) of the Disclosure Schedule2005, the Company Sellers have not and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries no Subsidiary has: (ia) borrowed suffered any amount change that has had or incurred could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Business or the Purchased Assets, or suffered any theft, damage, destruction, or casualty loss in excess of $250,000, to the Purchased Assets, whether or not covered by insurance, or suffered any substantial destruction of books and records included within the Purchased Assets; (b) subjected any of the Purchased Assets to any Lien, other than Permitted Liens; (c) sold, leased, assigned, or transferred (including, without limitation, transfers to any Insider) a material portion of any tangible Purchased Assets, or canceled without fair consideration any material liabilities, except amounts borrowed debts or liabilities incurred in claims owing to or held by it relating to the Ordinary Course of Business or under contracts Purchased Assets; (d) entered into any material transaction with an Insider or an Affiliate not in the Ordinary Course of Business; (iie) mortgagedsold, pledged assigned, licensed, or subjected transferred (including, without limitation, transfers to any Insider) any material lienProprietary Rights included within the Purchased Assets or disclosed any material confidential information relating to the Purchased Assets (other than pursuant to agreements requiring the disclosee to maintain the confidentiality of, charge and preserving all rights of the Sellers and the Subsidiaries in, such confidential information) or to its knowledge received any material confidential information of any third party in violation of any obligation of confidentiality; (f) suffered any extraordinary losses or waived any rights of material value in each case relating to the Purchased Assets; (g) entered into, amended, or terminated any material lease, contract, agreement, or commitment included within the Purchased Assets; (h) paid or increased any bonuses, salaries, or other encumbrance, compensation to any material portion of its assets, employee or consultant who principally works on the Business except for Permitted Liens arising in the Ordinary Course of Business; (iii) soldBusiness or entered into any employment, assignedseverance, licensed or transferred similar contract or agreement with any Owned Real Property, Leased Real Property or any material portion of its other tangible assets, such person except in the Ordinary Course of Business; (ivi) soldadopted, assigned or transferred materially increased the payments to or benefits under, any material patentsprofit sharing, trademarksbonus, trade namesdeferred compensation, copyrightssavings, trade secrets insurance, pension, retirement, or other intangible assetsemployee benefit plan for or with any employees of the Sellers or any Subsidiary who principally work on the Business; (vj) made any material capital expenditures loans or commitments therefor outside advances to, guarantees for the benefit of, or any investments in any Person in excess of $100,000 in the aggregate, which loans, advances, guarantees or investments relate to the Purchased Assets; (k) conducted its cash management customs and practices with respect to the Purchased Assets other than in the Ordinary Course of Business or failed (including, without limitation, with respect to make any material collection of accounts receivable, purchases of supplies, repairs and maintenance, payment of accounts payable and accrued expenses, levels of capital expenditures that otherwise would have been and operation of cash management practices generally); (l) made any capital expenditures or commitments for capital expenditures relating to the Purchased Assets except in the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (vii) issued, sold or transferred any of its equity securities, securities convertible into its equity securities or warrants, options or other rights to acquire its equity securities, or any notes, bonds or debt securities; (viii) declared or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (Bm) made a capital investment in, (C) made a loan advance or agreement material change in its accounting methods with respect to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregate, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Business; or (xviin) made or committed to do make any of payments or other transfers in connection with, or in contemplation of, the foregoingTransactions, except as set forth on Schedule 6.8(n).

Absence of Certain Developments. Except as set forth on §3(h) of the Disclosure Schedule or otherwise contemplated by this AgreementSince December 31, since the Most Recent Fiscal Month End, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h) of the Disclosure Schedule, the Company and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries has1999: (ia) borrowed any amount or incurred any the business of Company and each Company Subsidiary has been conducted in all material liabilities, except amounts borrowed or liabilities incurred in the Ordinary Course of Business or under contracts entered into respects only in the Ordinary Course of Business; (iib) neither Company nor any Company Subsidiary has become liable in respect of any guarantee or has incurred or otherwise become liable in respect of any debt, except for borrowings, letters of credit and bankers' acceptances in the Ordinary Course of Business under credit facilities in existence on December 31, 1999; (c) neither Company nor any Company Subsidiary has mortgaged, pledged or subjected to any material lienlien any of their respective property, charge business or other encumbrance, any material portion of its assets, except for Permitted Liens arising Encumbrances or purchase money or similar security interests granted in connection with the purchase of equipment or supplies in the Ordinary Course of Business in an amount not exceeding $100,000 in the aggregate; (d) neither Company nor any Company Subsidiary has made any declaration, setting aside or payment of any dividend or other distribution with respect to, or repurchase of, any of their respective capital stock or other equity interests; (e) neither Company nor any Company Subsidiary has (i) acquired or leased from any other Person any material assets, or sold or leased to any other Person or otherwise disposed of any material assets (in each case except for assets acquired or sold in the Ordinary Course of Business in connection with goods and services provided to customers); (ii) entered into any contractual obligation relating to (A) the purchase or sale of any capital stock, partnership interest or other equity interest in any Person, (B) the purchase of assets constituting a business or (C) any merger, consolidation or other business combination; (iii) entered into or amended any lease of real property or material personal property (whether as lessor or lessee); (iv) canceled or compromised any debt or claim other than accounts receivable in the Ordinary Course of Business; (v) sold, transferred, licensed or otherwise disposed of any material intangible assets other than in the Ordinary Course of Business; (vi) waived or released any right of substantial value; (vii) instituted, settled or agreed to settle any material action; or (viii) entered into or consummated any transaction with any Affiliate; (f) there has been no loss, destruction or damage to any material item of property of Company or any Company Subsidiary, whether or not insured, which has had or could reasonably be expected to have a Company Material Adverse Effect; (g) other than in the Ordinary Course of Business and consistent with past practices, neither Company nor any Company Subsidiary has made any changes in the rate of compensation payable or paid, or agreed or orally promised to pay, conditionally or otherwise, any extra compensation, or severance or vacation pay, to any director, officer, employee, consultant or agent of Company or any Company Subsidiary; (h) neither Company nor any Company Subsidiary has made any change in (x) its methods of accounting or accounting practices, except as required by GAAP, or (y) its pricing policies or payment or credit practices or failed to pay any creditor any amount owed to such creditor when due or granted any extensions or credit other than in the Ordinary Course of Business; (iiii) soldneither Company nor any Company Subsidiary has terminated or closed any facility, assignedbusiness or operation which is material to the Company and the Company Subsidiaries, licensed taken as a whole; (j) neither Company nor any Company Subsidiary has made any loan, advance or transferred any Owned Real Propertycapital contributions to, Leased Real Property or any material portion of its other tangible assetsinvestment in, except any Person other than loans in the Ordinary Course of Business; (ivk) sold, assigned neither Company nor any Company Subsidiary has adopted or transferred increased any benefits under any Plan in any material patents, trademarks, trade names, copyrights, trade secrets or other intangible assetsmanner; (vl) made neither Company nor any material capital expenditures Company Subsidiary has written up or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (vii) issued, sold or transferred written down any of its equity securities, securities convertible into its equity securities or warrants, options or other rights to acquire its equity securities, or any notes, bonds or debt securities;respective material assets; and (viiim) declared or paid neither Company nor any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employee, or Subsidiary has entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregate, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Business; or (xvii) committed contractual obligation to do any of the foregoingthings referred to elsewhere in this Section 3.09.

Absence of Certain Developments. Since the date of the Latest Balance Sheet, no Material Adverse Effect has occurred. Except as set forth on §3(h) of the Disclosure attached Developments Schedule or otherwise and except as expressly contemplated by this Agreement, since the Most Recent Fiscal Month End, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h) of the Disclosure ScheduleLatest Balance Sheet, the Company and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries the ContentGuard Subsidiary has: (ia) borrowed any amount funds or incurred or become subject to any material liabilities, except amounts borrowed or (i) liabilities incurred in the Ordinary Course ordinary course of Business or business, and (ii) liabilities under contracts entered into in the Ordinary Course ordinary course of Businessbusiness; (iib) mortgaged, pledged or subjected to any material lien, charge or other encumbrance, Encumbrance any material portion of its assets, except for Permitted Liens arising in the Ordinary Course of BusinessEncumbrances; (iiic) sold, assigned, licensed transferred or transferred any Owned Real Property, Leased Real Property or leased any material portion of its other tangible assets, except in the Ordinary Course of Business; (iv) sold, assigned or transferred any material patents, trademarks, trade names, copyrights, trade secrets or other intangible assets; (vd) made sold, assigned, transferred or licensed any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made in the Ordinary Course of BusinessIntellectual Property; (vie) entered into, materially amended or modified, suffered any extraordinary losses or waived any rights of material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Businessvalue; (viif) issued, sold or transferred any of its equity securitiescapital stock, securities convertible into its equity securities capital stock, or warrants, options or other rights to acquire its equity securitiescapital stock, or any notes, bonds or debt securities; (viiig) declared or paid any dividend, dividends or made any distribution distributions on its the Company’s capital stock or equity interests, redeemed or purchased any shares of its the Company’s capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligationstock; (ixh) increased the compensation of granted, agreed to grant or amended or modified any grant or agreement to grant, any severance, termination or retention payment to any director, officer or other key management employee, except pursuant to an agreement with any director, officer or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost employee in effect as of living or merit increases granted in the Ordinary Course of Businessdate hereof; (xi) waived, released, cancelled made any capital expenditures or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000;commitments therefor; or (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (Dj) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person transaction that constitutes would reasonably be expected to have a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregate, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Business; or (xvii) committed to do any of the foregoingMaterial Adverse Effect.

Absence of Certain Developments. (a) Since the Balance Sheet Date, there has not been any Company Material Adverse Effect. (b) Except as set forth on §3(h) of the Disclosure Schedule or otherwise expressly contemplated by this Agreement, since the Most Recent Fiscal Month EndBalance Sheet Date, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h) each of the Disclosure Schedule, the Company and its Subsidiaries have has carried on and operated its business in all material respects in the Ordinary Course ordinary course of Business business, consistent with past practice, and neither the Company nor any none of its Subsidiaries them has: (i) borrowed any amount amended or incurred any material liabilities, except amounts borrowed or liabilities incurred in the Ordinary Course of Business or under contracts entered into in the Ordinary Course of Businessmodified its Organizational Documents; (ii) mortgagedsold, pledged leased, assigned, transferred or subjected to purchased any material lien, charge or other encumbrance, any material portion of its tangible assets, in each case in a single or related series of transactions, except for Permitted Liens arising in the Ordinary Course ordinary course of Businessbusiness consistent with past practice; (iii) issued, sold, assigned, licensed or transferred any Owned Real Property, Leased Real Property or any material portion of its other tangible assets, except in the Ordinary Course of Business; (iv) sold, assigned or transferred any material patents, trademarks, trade names, copyrights, trade secrets or other intangible assets; (v) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (vii) issued, sold redeemed or transferred any of its capital stock or other equity securities, securities convertible into its capital stock or other equity securities or warrants, options or other rights to acquire its capital stock or other equity securities, or any notes, bonds or debt securities; (viiiiv) prior to the date hereof, declared or paid any dividend, dividend or other distribution of the assets of the Company; (v) made or approved any material changes in its Plans or made any distribution on its capital stock or equity interestsmaterial changes in wages, redeemed or purchased any shares of its capital stock or equity interestssalary, or paid any management other compensation, including severance, with respect to its current or former officers, directors or executive employees other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either than (A) Cash increases in base salaries and wages that are consistent with past practices, (B) the items referenced on Section 3.09(b)(v) of the Company existing on January 3Disclosure Letter, 2004 and deducted from the definition of Closing Cash Consideration or (BC) Funded Indebtedness as required by applicable Law, ordinary course welfare benefit plan changes at the end of the plan year or as required under any Company that is repaid at Plan; (vi) paid, loaned or prior to the Closing advanced (including any interest, expenses or fees incurred in connection with the borrowing), and other than the payment of such cash dividend does compensation and benefits in the ordinary course of business consistent with past practice or the payment, advance or reimbursement of business expenses in the ordinary course of business consistent with past practice or loans under a Company 401(k) Plan) any amounts to, or sold, transferred or leased any of its assets to, or entered into any other transactions with, any of its Affiliates, or made any loan to, or entered into any other transaction with, any of its directors or officers outside the ordinary course of business or other than at arm’s length; (vii) hired or terminated any of its officers or employees with fixed annual compensation in excess of fifty thousand dollars ($50,000) and whose employment is not subject terminable without penalty or financial obligation on notice of thirty (30) days or less, other than in the Company to ordinary course of business consistent with past practice; (viii) commenced or settled any adverse Tax consequences, including any withholding Tax obligationAction in which the amount in dispute is in excess of fifty thousand dollars ($50,000); (ix) increased the compensation of any officer or other key management employee, or entered into made any material employmentchange in accounting principles, severancemethods, bonus procedures or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereofpolicies, other than cost of living or merit increases granted in the Ordinary Course of Businessexcept as required by GAAP; (x) waivedmade, releasedchanged or revoked any material Tax election, cancelled or forgiven settled or compromised any debtsmaterial Tax claim or liabilities, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000filed any substantially amended material Tax Return; (xi) (A) acquired (by mergerauthorized, consolidationproposed, acquisition entered into or agreed to enter into any plan of stockliquidation, dissolution or other securities reorganization or assets or otherwise), (B) made a capital investment inauthorized, (C) made a loan advance or agreement to loan or advance toproposed, (D) entered into or agreed to enter into any joint venturemerger, partnership consolidation or other similar arrangement for the conduct of business with, or (E) guaranteed combination with any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) except in the ordinary course of business consistent with past practice, incurred or discharged any Indebtedness; (xiii) made any capital expenditures; (xiv) suffered any theft, material damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregateloss, whether or not covered by insurance; (xiiixv) paidsold, dischargedassigned, cancelledtransferred, compromised abandoned or satisfied allowed to lapse or expire any material liability Intellectual Property rights or other than intangible assets owned, used or licensed by the Company or any such payment, discharge, cancellation, compromise or satisfaction made of its Subsidiaries in the Ordinary Course of Business; (xiv) commenced or settled connection with any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver product of the limitation period applicable to Company or any material Tax claim of its Subsidiaries or assessmentthe operation of any of their businesses; (xvi) between November 30been subject to any written claim or written threat of infringement, 2003 and January 3, 2004, either failed to manage misappropriation or other violation by or against the Company or any of its working capital in Subsidiaries of Intellectual Property rights of the Ordinary Course Company or any of Business its Subsidiaries or suffered a third party; (xvii) materially reduced the amount of any material reduction in working capital not in the Ordinary Course of Businessinsurance coverage provided by existing insurance policies; or (xviixviii) committed to do or take any of the foregoingactions described in the foregoing clauses (i) through (xvii).

Absence of Certain Developments. (a) Except as set forth on §3(h) of the Disclosure Schedule or otherwise expressly contemplated by this Agreement, since the Most Recent Fiscal Month EndTransaction Agreements, there has not been any Material Adverse Effect. In addition to the foregoingor as disclosed in Schedule 2.25, since that date and except as set forth on §3(h) of the Disclosure ScheduleDecember 31, ------------- 1999, the Company and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries hashas not: (i) suffered, or taken any action or affirmatively failed to take any action which action or failure could reasonably be expected to result (either individually or in the aggregate) in, a Company Material Adverse Effect; (ii) issued any notes, bonds or other debt securities or any capital stock or other equity securities or any securities convertible, exchangeable or exercisable into any capital stock or other equity securities (other than upon the exercise of outstanding employee options in the ordinary course of business); (iii) borrowed any amount or incurred or become subject to any material liabilities, except amounts borrowed or current liabilities incurred in the Ordinary Course ordinary course of Business or business, and liabilities under contracts entered into in the Ordinary Course ordinary course of Business; (ii) mortgaged, pledged or subjected to any material lien, charge or other encumbrance, any material portion of its assets, except for Permitted Liens arising in the Ordinary Course of Business; (iii) sold, assigned, licensed or transferred any Owned Real Property, Leased Real Property or any material portion of its other tangible assets, except in the Ordinary Course of Businessbusiness; (iv) sold, assigned discharged or transferred satisfied any material patentslien or paid any material obligation or liability, trademarks, trade names, copyrights, trade secrets or other intangible assetsthan current liabilities paid in the ordinary course of business; (v) declared, set aside or made any material capital expenditures payment or commitments therefor outside the Ordinary Course distribution of Business cash or failed other property to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights its stockholders with respect to, any material agreement, contract, lease to its capital stock or license outside the Ordinary Course of Business; (vii) issued, sold or transferred any of its equity securities, securities convertible into its other equity securities or purchased or redeemed any shares of its capital stock or other equity securities (including, without limitation, any warrants, options or other rights to acquire its capital stock or other equity securities), or directly or indirectly redeemed, purchased or made any notespayments with respect to any stock appreciation rights, bonds phantom stock plans or debt securitiessimilar rights or plans; (vi) mortgaged or pledged any of its material properties or assets or subjected them to any lien; (vii) sold, leased, assigned or transferred any material portion of its tangible assets or intellectual property rights, except in the ordinary course of business, or canceled without fair consideration any debts or claims owing to or held by it, or disclosed any confidential information other than pursuant to agreements preserving all rights of the Company in such confidential information, or received any confidential information of any third party in violation of any obligation or confidentiality; (viii) declared suffered any material extraordinary losses or paid waived any dividendrights of material value, made any distribution on its capital stock whether or equity interests, redeemed not in the ordinary course of business or purchased any shares of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection consistent with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligationpast practice; (ix) increased entered into, amended or terminated any material lease, contract, agreement, commitment or any other material transaction, whether or not in the compensation ordinary course of any officer or other key management employeebusiness, or entered into materially changed any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business;business practice; or (x) waived, released, cancelled or forgiven taken any debts, claims or rights action that would alter the Company's status as a corporation taxable under Section 11 and Subchapter C of the Code (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000;a "C Corporation"). (xib) (A) acquired (by mergerThe Company has not at any time made any payments for political contributions or made or received any bribes, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership kickback payments or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregate, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Business; or (xvii) committed to do any of the foregoingillegal payments.

Absence of Certain Developments. Except as contemplated or permitted by this Agreement or as set forth on §3(h) Section 5.8 of the Disclosure Schedule Schedule, since December 31, 2016: (a) the business of the Company has been conducted in all material respects in the ordinary course of business consistent with past practice; (b) a Material Adverse Effect has not occurred; (c) the Company has not sold, transferred, leased, mortgaged, pledged or otherwise contemplated subjected to any Lien (other than Permitted Liens) any material portion of its assets or property (tangible or intangible), taken as a whole; (d) the Company has not entered into any contract or other enforceable obligation to make an acquisition or disposition (whether by this Agreementmerger, since the Most Recent Fiscal Month Endacquisition of stock or assets, or otherwise) of any business or line of business; (e) there has not been any Material Adverse Effect. In addition to change in the foregoing, since that date and except as set forth on §3(h) Governing Documents of the Disclosure Schedule, the Company and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries has: (i) borrowed any amount or incurred any material liabilities, except amounts borrowed or liabilities incurred in the Ordinary Course of Business or under contracts entered into in the Ordinary Course of BusinessCompany; (iif) mortgagedthe Company has not amended, pledged terminated, cancelled or subjected to renewed any material lien, charge or other encumbrance, any material portion of its assets, except for Permitted Liens arising in the Ordinary Course of BusinessMaterial Contract; (iiig) soldthe Company has not made, assigned, licensed revoked or transferred changed any Owned Real Property, Leased Real Property Tax election or any material portion method of its other tangible assets, except in the Ordinary Course of Business; Tax reporting or accounting (iv) sold, assigned or transferred any material patents, trademarks, trade names, copyrights, trade secrets or other intangible assets; (v) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have and no election has been made in or action taken to change the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (vii) issued, sold or transferred any of its equity securities, securities convertible into its equity securities or warrants, options or other rights to acquire its equity securities, or any notes, bonds or debt securities; (viii) declared or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash status of the Company existing on January 3as a corporation for federal, 2004 and deducted from the definition of Closing Cash Consideration state or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowinglocal income Tax purposes), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregate, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessmentagreement, surrendered any right to claim a refund of Taxes or consented to any extension of or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, or settled or compromised, or consented to, any claim or assessment relating to a material Tax claim or assessmentliability; (xvih) between November 30there has not been any damage, 2003 destruction or loss, whether or not covered by insurance, with respect to the property and January 3assets of the Company having a replacement cost of more than $25,000; (i) the Company has not: split, 2004combined or reclassified any equity securities; declared, either failed set aside, or paid any dividend or other distribution (whether in cash, equity or property, or any combination thereof) in respect of any equity securities; or redeemed, repurchased or otherwise acquired, or offered to manage its working redeem, repurchase or otherwise acquire any equity securities; (j) the Company has not incurred any capital expenditures or any obligations or liabilities of any capital expenditures, except in the Ordinary Course ordinary course of Business business; (k) the Company has not (i) granted any bonuses outside the ordinary course of business, whether monetary or suffered otherwise, or increased any wages, salary, severance, pension or other compensation or benefits in respect of its current or former officers or directors, (ii) changed the terms of employment for any employee or termination of any employee which has resulted, or would upon termination of employment result, in aggregate additional costs and expenses to the Company in excess of $25,000, or (iii) acted to accelerate the vesting or payment of any compensation or benefit for any current or former employee, officer, director, independent contractor or consultant or their spouses, dependents or beneficiaries; (l) the Company has not issued, sold or otherwise disposed of any of its capital stock, or granted any options, warrants or other rights to purchase or obtain (including upon conversion, exchange or exercise) any of its capital stock; (m) the Company has not entered into any Contract that would constitute a Material Contract, other than in the ordinary course of business consistent with past practice; (n) the Company has not transferred, assigned or granted any license or sublicense of any material reduction in working capital not rights under or with respect to any Intellectual Property, other than in the Ordinary Course ordinary course of Business; orbusiness consistent with past practice; (xviio) the Company has not hired or promoted any person as or to (as the case may be) an officer; (p) the Company has not adopted, modified or terminated any: (i) employment, severance, retention or other agreement with any current or former officer or director, (ii) employment, severance, retention or other agreement with any current or former employee who is not an officer, other than in the ordinary course of business, (iii) material Plans (other than as required by applicable Law) or (iii) collective bargaining or other agreement with a Union, in each case whether written or oral; (q) the Company has not loaned to (or forgiven any loan to), or entered into any other transaction with, the Shareholder or the Company’s current or former directors, officers or employees; (r) the Company has not entered into a new line of business or abandonment or discontinuance of existing lines of business; (s) the Company has not amended any Contract with any customer to make any material change in the commercial terms of such agreement (i.e. pricing, rebates, payment terms, etc.), other than in the ordinary course of business with respect to pricing proposals; (t) the Company has not, except for the Merger, adopted any plan of merger, consolidation, reorganization, liquidation or dissolution or filed a petition in bankruptcy under any provisions of federal or state bankruptcy Law or consented to the filing of any bankruptcy petition against it under any similar Law; (u) the Company has not purchased, leased or acquired the right to own, use or lease any property or assets for an amount in excess of $25,000, individually (in the case of a lease, per annum) or $50,000 in the aggregate (in the case of a lease, for the entire term of the lease, not including any option term), except for purchases of inventory or supplies in the ordinary course of business consistent with past practice; (v) the Company has not incurred, assumed or entered into any guarantee of any indebtedness for borrowed money except unsecured current obligations and Liabilities incurred in the ordinary course of business consistent with past practice; and (w) the Company has not committed to do any of the foregoing.

Absence of Certain Developments. (i) Except as set forth on §3(h) of the Disclosure Schedule or otherwise expressly contemplated by this Agreement, the Transaction Documents or as disclosed in the Company Reports since the Most Recent Fiscal Month EndAudit Date, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h) of the Disclosure Schedule, the Company and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries Subsidiary has: (iA) issued any notes, bonds or other debt securities or any capital stock or other equity securities or any securities convertible, exchangeable or exercisable into any capital stock or other equity securities (other than employee stock options and shares of Common Stock issued upon the exercise thereof, shares of the Company's Series A Preferred Stock and Series B Preferred Stock issued in connection with the Company's dividend payment and exchange offer related to its outstanding Shares of Preferred Stock and shares issued in connection with the acquisition of its Subsidiaries); (B) borrowed any amount or incurred or become subject to any material liabilities, except amounts borrowed or liabilities incurred in the Ordinary Course ordinary course of Business or business and liabilities under contracts entered into in the Ordinary Course ordinary course of Businessbusiness (including any capital lease obligations); (iiC) mortgaged, pledged discharged or subjected to satisfied any material lien, charge Lien or other encumbrance, paid any material portion of its assetsobligation or liability, except for Permitted Liens arising other than in the Ordinary Course ordinary course of Businessbusiness; (iiiD) sold, assigned, licensed declared or transferred made any Owned Real Property, Leased Real Property payment or any material portion distribution of its other tangible assets, except in the Ordinary Course of Business; (iv) sold, assigned or transferred any material patents, trademarks, trade names, copyrights, trade secrets cash or other intangible assets; (v) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed property to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights its stockholders with respect to, any material agreement, contract, lease to its capital stock or license outside the Ordinary Course of Business; (vii) issued, sold or transferred any of its equity securities, securities convertible into its other equity securities or purchased or redeemed any shares of its capital stock or other equity securities (including, without limitation, any warrants, options or other rights to acquire its capital stock or other equity securities, or any notes, bonds or debt securities) other than dividend payments made with respect to the Company's Preferred Stock; (viiiE) declared sold, assigned or paid transferred any dividend, made material Intellectual Property or disclosed any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management or other fees proprietary confidential information to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either Person (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregate, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made disclosure in the Ordinary Course ordinary conduct of Businessbusiness operations or which disclosure was subject to a confidentiality agreement, which in either case does not have a Material Adverse Effect); (xivF) commenced suffered any extraordinary losses, waived any rights of material value or settled canceled any material legaldebts or claims, administrative or arbitral proceedingother than in the ordinary course of business and consistent with past practice; (xvG) made changed its accounting principles, practices or changed any material Tax electionmethods, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Businessexcept as required by GAAP; or (xviiH) committed suffered any loss, or threatened loss, of any supplier or customer or group of related suppliers or customers which is reasonably expected to do any of the foregoinghave a Material Adverse Effect.

Absence of Certain Developments. Except as set forth disclosed on §3(hSchedule 2.1(aa) of the Disclosure Schedule or otherwise contemplated by this Agreementhereto, since the Most Recent Fiscal Month EndSeptember 30, there has not been any Material Adverse Effect. In addition to the foregoing2009, since that date and except as set forth on §3(h) of the Disclosure Schedule, the Company and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries Subsidiary has: (i) borrowed issued or become obligated to issue any amount stock, bonds or incurred other corporate securities or any material liabilitiesright, except amounts borrowed options or liabilities incurred warrants with respect thereto other than under the Company’s stock option plan(s) and otherwise in the Ordinary Course ordinary course of Business or under contracts entered into in the Ordinary Course of Businessbusiness; (ii) mortgaged, pledged borrowed or subjected become obligated to borrow any amount or incurred or become subject to any material lien, charge liabilities (absolute or other encumbrance, any material contingent) except current liabilities incurred in the ordinary course of business which are comparable in nature and amount to the current liabilities incurred in the ordinary course of business during the comparable portion of its assetsprior fiscal year, except for Permitted Liens arising in as adjusted to reflect the Ordinary Course current nature and volume of Businessthe Company’s or such Subsidiary’s business; (iii) solddischarged or satisfied any lien or encumbrance or paid any obligation or liability (absolute or contingent), assigned, licensed or transferred any Owned Real Property, Leased Real Property or any material portion of its other tangible assets, except than Permitted Liens and current liabilities paid in the Ordinary Course ordinary course of Businessbusiness; (iv) declared or made, or become obligated to make, any payment or distribution of cash or other property to stockholders with respect to its stock, or purchased or redeemed, or made any agreements so to purchase or redeem, any shares of its capital stock other than under any equity incentive plans of the Company or any pre-existing cashless exercise rights issued in connection with a prior financing, which plans and/or prior financing(s) are disclosed on Schedule 2.1(aa); (v) sold, assigned or transferred transferred, or become obligated to sell, assign or transfer, any material patentsother tangible assets, or canceled any debts or claims, except in the ordinary course of business; (vi) sold, assigned or transferred, or become obligated to sell, assign or transfer, any patent rights, trademarks, trade names, copyrights, trade secrets or other intangible assetsassets or intellectual property rights necessary for the conduct of its business activities; (vvii) suffered any material losses or waived, or agreed to waive, any rights of material value, whether or not in the ordinary course of business; (viii) made any material changes in employee compensation except in the ordinary course of business and consistent with past practices; (ix) made capital expenditures or commitments therefor outside the Ordinary Course that aggregate in excess of Business or failed to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (vii) issued, sold or transferred any of its equity securities, securities convertible into its equity securities or warrants, options or other rights to acquire its equity securities, or any notes, bonds or debt securities; (viii) declared or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business$100,000; (x) waived, released, cancelled made charitable contributions or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration pledges in excess of $500,00010,000 in the aggregate; (xi) (A) acquired (by merger, consolidation, acquisition experienced any material problems with labor or management in connection with the terms and conditions of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person;their employment; or (xii) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregate, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement an agreement, written or settled any material Tax claim or assessmentotherwise, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Business; or (xvii) committed to do take any of the foregoingforegoing actions.

Absence of Certain Developments. Except as set forth on §3(h) of the Disclosure Schedule or otherwise contemplated by this Agreement, since the Most Recent Fiscal Month Year End, the Company and IMP have conducted their business only in the Ordinary Course of Business and there has not been any Material Adverse EffectChange with respect to the Company or IMP. In addition to Without limiting the generality of the foregoing, since that date and except as set forth on §3(h) of the Disclosure Scheduledate, the Company and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries IMP has: (i) borrowed any amount or incurred any material liabilities, except amounts borrowed or liabilities incurred in the Ordinary Course of Business or under contracts entered into in the Ordinary Course of Business; (ii) mortgaged, pledged or subjected to any material lien, charge or other encumbrance, Lien any material portion of its assets, except for Permitted Liens arising in the Ordinary Course of BusinessLiens, or entered into any conditional sale or other title retention agreement with respect to any property or asset; (iii) except as set forth in section 3B(g)(iii) OF THE DISCLOSURE SCHEDULE, sold, assigned, licensed transferred or transferred removed any Owned Real Property, Leased Real Property or any material portion of its other tangible assets, except for sales of Inventory in the Ordinary Course of Business; (iv) sold, assigned or transferred any material patents, trademarks, trademarks or trade names, names or any material copyrights, trade secrets or other intangible assets; (v) suffered any extraordinary losses or waived any rights of material value; (vi) except as set forth in section 3B(g)(vi) OF THE DISCLOSURE SCHEDULE, made any material capital expenditures or commitments therefor outside the Ordinary Course in excess of Business $25,000 individually or failed to make any material capital expenditures that otherwise would have been made $100,000 in the Ordinary Course of Businessaggregate; (vivii) entered into, materially amended or modified, or waived any material rights with respect to, into any material agreement, contract, lease or license outside the Ordinary Course of Business; (vii) issued, sold or transferred any of its equity securities, securities convertible into its equity securities or warrants, options or other rights to acquire its equity securities, or any notes, bonds or debt securities; (viii) declared or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregate50,000 to its property, whether or not covered by insurance; (ix) entered into any agreement with any labor union or association representing any employee; (x) made any wage or salary increase or bonus, or increase in any other direct or indirect compensation, for or to any of its officers, directors or employees, or otherwise made any material change in employment terms for any of its directors, officers and employees; (xi) made any change in its accounting methods, principles or practices; (xii) made any increase in or established any bonus, insurance, deferred compensation, pension, retirement, profit-sharing, stock option (including the granting of stock options, stock appreciation rights, performance awards or restricted stock awards or the amendment of any existing stock options, stock appreciation rights, performance awards or restricted stock awards), stock purchase or other employee benefit plan or agreement or arrangement; (xiii) paidexcept as set forth in section 3B(g)(xiii) OF THE DISCLOSURE SCHEDULE, discharged, cancelled, compromised made any payment (including any dividends or satisfied other distributions with respect to the Company Common Stock or IMP Stock) to any material liability Seller or any Affiliate of any Seller (other than compensation otherwise payable in the Ordinary Course of Business to any such paymentSeller employed by the Company) or forgiven any indebtedness due or owing from any Seller or any Affiliate of any Seller to the Company or IMP; (xiv) except as set forth in section 3B(g)(xiv) OF THE DISCLOSURE SCHEDULE, dischargereclassified, cancellationcombined, compromise split, subdivided or satisfaction redeemed or otherwise repurchased any capital stock of the Company or IMP, or created, authorized, issued, sold, delivered, pledged or encumbered any additional capital stock (whether authorized but unissued or held in treasury) or other securities equivalent to or exchangeable for capital stock, or granted or otherwise issued any options, warrants or other rights with respect thereto; (xv) acquired or agreed to acquire by merging or consolidating with, or by purchasing any portion of the capital stock, partnership interests or assets of, or by any other manner, any business or any corporation, partnership, limited liability company, association or other business organization or division thereof; (xvi) made any loan or advance (whether in cash or other property), or made any investment in or capital contribution to, or extended any credit to, any Person, except (i) short-term investments pursuant to customary cash management policies, and (ii) advances made in the Ordinary Course of Business; (xivxvii) commenced taken any action which if taken would adversely affect the eligibility of the Company to be taxed pursuant to the provisions of Subchapter S of the Code or settled under any material legal, administrative comparable state or arbitral proceedinglocal law for any period prior to the Closing Date; (xvxviii) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xviA) between November 30, 2003 and January 3, 2004, either failed to manage its working capital except in the Ordinary Course of Business liquidated Inventory or suffered accepted product returns, (B) accelerated receivables, (C) delayed payables, or (D) changed in any material reduction respect the Company's practices in working capital not connection with the payment of payables in the Ordinary Course respect of Businessraw materials purchases; or (xviixix) committed to do any of the foregoing.

Absence of Certain Developments. Except as set forth on §3(h) of Schedule 3.6 or as described in the Disclosure Schedule or otherwise contemplated by this Agreementaudited Financial Statements, since the Most Recent Fiscal Month End, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h) of the Disclosure ScheduleLatest Balance Sheet, the no Atlas Company and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries has: (a) sold, leased, assigned, transferred or otherwise disposed of any (i) borrowed any amount tangible material assets or incurred any properties (other than the sale or disposal of inventory or obsolete equipment) or (ii) material liabilitiesIntellectual Property, except amounts borrowed or liabilities incurred in the Ordinary Course of Business or under contracts entered into other than licenses in the Ordinary Course of Business; (b) made any amendments to its Governing Documents; (c) made or granted any (i) bonus other than in the Ordinary Course of Business pursuant to a Company Employee Benefit Plan or (ii) mortgagedmaterial increase in base salary or cash bonus to any director or senior executive; (d) amended (other than as required by applicable Law or as part of an annual renewal for health and/or welfare benefits), pledged terminated or subjected adopted any Company Employee Benefit Plan; (e) effectuated any reduction in force, early retirement program or other voluntary or involuntary employment termination program, or otherwise implemented any employee layoff, in each case, not in compliance with the WARN Act; (f) made any changes to its accounting policies, methods or practices; (g) changed or revoked any material election relating to Taxes, made any material election related to Taxes outside of the Ordinary Course of Business, entered into any agreement, settlement or compromise with any Taxing Authority relating to any material lienTax matter, charge filed any amended Tax Return, changed a material method of accounting or accounting period with respect to Taxes or surrendered any right to claim any refund of material Taxes; (h) (i) issued, sold, delivered, redeemed or purchased any Equity Interests, (ii) declared, set aside or paid any dividends on, or made any other encumbrancedistributions (whether in cash, securities or property) in respect of any material portion Equity Interests or (iii) adjusted, split, combined or reclassified any of its assetsEquity Interests; (i) amended or terminated any Material Contract or Leases (other than extension or renewal of any Lease in the Ordinary Course of Business); (j) (i) incurred or guaranteed any additional Indebtedness for Borrowed Money or (ii) made any loans or advances to any other Person, except for Permitted Liens arising other than advances to employees in the Ordinary Course of Business; (iiik) soldother than inventory and other assets acquired in the Ordinary Course of Business, assignedacquired properties or assets, licensed including Equity Interests of another Person, with a value in excess of $500,000, whether through merger, consolidation, share exchange, business combination or transferred otherwise; (l) adopted a plan of complete or partial liquidation, dissolution, merger, consolidation, recapitalization or other reorganization; (m) instituted or settled any Owned Real PropertyProceeding that alleged or resulted in a settlement of at least $50,000; (n) entered into any joint venture, Leased Real Property partnership or any similar arrangement; (o) collected material portion amounts of its accounts receivable or paid material amounts of any accrued liabilities or accounts payable or prepaid any expenses or other tangible assetsitems, except in each case, other than in the Ordinary Course of Business; (ivp) soldmade or effected any amendment, assigned waiver, change, release or transferred termination of any material patentsterm, trademarks, trade names, copyrights, trade secrets condition or other intangible assetsprovision of any Material Contract; (vq) made taken or omitted to take any action which has, or would reasonably be expected to result in, a material capital expenditures adverse change in any Atlas Company’s relationship with any Material Customer or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Business;Material Supplier; or (vir) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (vii) issued, sold or transferred any of its equity securities, securities convertible into its equity securities or warrants, options or other rights to acquire its equity securities, or any notes, bonds or debt securities; (viii) declared or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employee, authorized or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregate, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Business; or (xvii) committed Contract to do any of the foregoing.

Absence of Certain Developments. Except as set forth on §3(h) of in Schedule 3.18 or as disclosed in the Disclosure Schedule Pubco SEC Filings or as otherwise contemplated by this Agreement, since Pubco's Latest Balance Sheet, Pubco and each Pubco Subsidiary have conducted their business only in the Most Recent Fiscal Month End, ordinary course consistent with past practice and there has not been occurred (a) any event having a Material Adverse Effect. In addition Effect on Pubco or any Pubco Subsidiary, (b) any event that would reasonably be expected to prevent or materially delay the performance of Pubco's obligations pursuant to this Agreement, (c) any material change by Pubco or any Pubco Subsidiary in its accounting methods, principles or practices, (d) any declaration, setting aside or payment of any dividend or distribution in respect of the shares of capital stock of Pubco or any Pubco Subsidiary or any redemption, purchase or other acquisition of any of Pubco's or any of Pubco Subsidiary's securities, (e) any increase in the compensation or benefits or establishment of any bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing, stock option (including without limitation the granting of stock options, stock appreciation rights, performance awards or restricted stock awards), stock purchase or other employee benefit plan of Pubco or any Pubco Subsidiary, or any other increase in the compensation payable or to become payable to any employees, officers, consultants or directors of Pubco or any Pubco subsidiary, (f) any issuance, grants or sale of any stock, options, warrants, notes, bonds or other securities, or entry into any agreement with respect thereto by Pubco or any Pubco Subsidiary, (g) any amendment to the foregoingcertificate of incorporation or bylaws of Pubco or any Pubco Subsidiary, since that date and except as set forth on §3(h(h) of the Disclosure Schedule, the Company and its Subsidiaries have operated other than in the Ordinary Course ordinary course of Business and neither the Company nor business consistent with past practice, any of its Subsidiaries has: (i) borrowed capital expenditures by Pubco or any amount Pubco Subsidiary, (ii) purchase, sale, assignment or incurred transfer of any material liabilitiesassets by Pubco or any Pubco Subsidiary, (iii) mortgage, pledge or existence of any lien, encumbrance or charge on any material assets or properties, tangible or intangible of Pubco or any Pubco Subsidiary, except amounts borrowed for liens for taxes not yet due and such other liens, encumbrances or charges which do not, individually or in the aggregate, have a Material Adverse Effect on Pubco, or (iv) cancellation, compromise, release or waiver by Pubco or any Pubco Subsidiary of any rights of material value or any material debts or claims, (i) any incurrence by Pubco or any Pubco Subsidiary of any material liability (absolute or contingent), except for current liabilities and obligations incurred in the Ordinary Course ordinary course of Business business consistent with past practice, (j) damage, destruction or under contracts entered into in similar loss, whether or not covered by insurance, materially affecting the Ordinary Course business or properties of Business; Pubco, (iik) mortgaged, pledged or subjected to any material lien, charge or other encumbrance, any material portion of its assets, except for Permitted Liens arising in the Ordinary Course of Business; (iii) sold, assigned, licensed or transferred any Owned Real Property, Leased Real Property entry by Pubco or any material portion of its other tangible assets, except in the Ordinary Course of Business; (iv) sold, assigned or transferred Pubco Subsidiary into any material patents, trademarks, trade names, copyrights, trade secrets or other intangible assets; (v) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside other than in the Ordinary Course ordinary course of Business; business consistent with past practice, (viil) issuedany acceleration, sold termination, modification or transferred cancellation of any agreement, contract, lease or license to which Pubco or any Pubco Subsidiary is a party or by which any of its equity securitiesthem is bound, securities convertible (m) entry by Pubco or any Pubco Subsidiary into its equity securities or warrants, options any loan or other rights to acquire its equity securitiestransaction with any officers, directors or employees of Pubco or any notesPubco Subsidiary, bonds or debt securities; (viiin) declared or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management charitable or other fees to any Shareholder capital contribution by Pubco or any Affiliates of Pubco Subsidiary or pledge therefore, (o) entry by Pubco or any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employee, or entered Pubco Subsidiary into any transaction of a material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, nature other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct ordinary course of business withconsistent with past practice, or (Ep) guaranteed any indebtedness for borrowed money of, any Person negotiation or agreement by the Pubco or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregate, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Business; or (xvii) committed Pubco Subsidiary to do any of the foregoingthings described in the preceding clauses (a) through (p).

Absence of Certain Developments. Except as set forth on §3(h) of the Disclosure Schedule or otherwise 3.05 and except as expressly contemplated by this Agreement, since April 30, 2019, no Acquired Company has: (a) had any change in any material respect in the Most Recent Fiscal Month Endassets, there has not been any Material Adverse Effect. In addition to the foregoingliabilities, since that date and except as set forth on §3(h) financial condition, prospects or operations of the Disclosure ScheduleCompany from that reflected in the 2018 Financial Statements, the Company and its Subsidiaries have operated other than changes in the Ordinary Course of Business Business, none of which individually or in the aggregate has had or is reasonably expected to have a Material Adverse Effect and neither the Company nor none of which relates to breach of contract, breach of warranty, tort, infringement, misappropriation, violation of Law or any Proceeding; (b) entered into any Material Contract or had any acceleration, termination, amendment, modification, waiver or change in any Material Contract; (c) mortgaged, pledged or subjected to any material Lien, any of its Subsidiaries has:assets, except Permitted Liens; (id) borrowed any amount discharged or incurred satisfied any material liabilitiesLien or paid any material liability, except amounts borrowed or other than current liabilities incurred paid in the Ordinary Course of Business or under contracts entered into repayments of Indebtedness in accordance with the terms of the loan agreements set forth on Schedule 1.13(b); (e) sold, assigned or transferred any material portion of its tangible assets, other than sales of products in the Ordinary Course of Business, or canceled without fair consideration any debts or claims owing to or held by it; (f) sold, assigned, transferred or licensed any material Company Intellectual Property other than non-exclusive licenses granted to distributors in the Ordinary Course of Business; (iig) mortgaged, pledged allowed to lapse or subjected to abandoned any material lien, charge or other encumbrance, any material portion of its assets, except for Permitted Liens arising in the Ordinary Course of BusinessCompany Intellectual Property; (iiih) soldgranted, assigned, licensed or transferred any Owned Real Property, Leased Real Property or any material portion of its other tangible assets, except in the Ordinary Course of Business; (iv) sold, assigned or transferred any material patents, trademarks, trade names, copyrights, trade secrets or other intangible assets; (v) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (vii) issued, sold or transferred any of its equity securities, securities convertible into its equity securities or warrants, options or other rights to acquire its equity securities; (i) made any capital investment in, or any notesmaterial loan to, bonds or debt securitiesany other Person; (viiij) declared declared, set aside or paid any dividend, non-cash dividend or made any non-tax distribution on with respect to its capital stock equity securities or equity interestsredeemed, redeemed purchased or purchased otherwise acquired any shares of its capital stock equity securities, except for repurchases of membership interests from current or equity interestsformer employees, consultants, directors or paid any management or other fees to any Shareholder or any Affiliates managers of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligationAcquired Company; (ixk) increased made any capital expenditures (or commitments therefor) in excess of $25,000 per capital expenditure project; (l) made any loans or advances to, or guarantees for the benefit of, any Person; (m) entered into any employment Contract providing for a base salary in excess of $100,000 per year; (n) (i) made (or agreed to make) any material change in employment terms (including compensation and benefits) for any of its directors or executive officers or for any employees having employment Contracts with base salary exceeding $100,000 per year, or made (or agreed to make) any material change in employment terms (including compensation and benefits) for any of its other employees other than in the Ordinary Course of Business, (ii) accelerated or modified the period of exercisability or vesting of any officer or other key management employeeequity compensation awards, (iii) established, adopted or entered into any material employmentcollective bargaining agreement, severanceor any other Contract or work rule or practice with any labor union, bonus labor organization or consulting works council, (iv) established, adopted, entered into, materially amended or terminated any Plan, or (v) hired, promoted or terminated (other than for cause) the employment of any officer; (o) entered into any agreement with any Person, which, in the event of a sale or other transfer of any of the Company’s assets, would give rise to an obligation of the Company and/or any of its Affiliates to pay to such Person a severance payment, change of control payment, retention bonus, transaction bonus, similar payment or other consideration of any nature whatsoever; (p) made, changed or revoked any material compensation agreement Tax election, changed any Tax accounting period, adopted or caused changed any method of Tax accounting, filed any amended Tax Return, entered into any closing agreement, settled any Tax claim or suffered assessment (other than in the Ordinary Course of Business), surrendered any cancellation right to claim a Tax refund, or consented to any extension or waiver of the limitations period applicable to any Tax claim or assessment, or taken any other action, or omitted taking any action, in either case inconsistent with past practice relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission could have had the effect of increasing the present or future Tax liability or decreasing any present or future Tax asset of any Acquired Company; (q) borrowed any money or issued or exchanged any notes or other evidences of any Indebtedness; (r) incurred or become subject to any material amendment thereofliability or obligation, except for liabilities under Contracts entered into in the Ordinary Course of Business which liabilities do not arise from a breach of such Contract; (s) delayed or postponed the payment of any accounts payable and other material liabilities; accelerated or accepted the prepayment of any notes payable to any Acquired Company; or accelerated the payment of or accepted the prepayment of accounts receivable, in each case, other than cost of living or merit increases granted in the Ordinary Course of Business; (xt) waivedchanged conduct related to cash management customs and practices (including with respect to maintenance of working capital balances, releasedcollection of accounts receivable, cancelled payment of accounts payable, accrued liabilities and other liabilities and pricing and credit policies, or forgiven the sale, securitization, factoring or transfer of any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000accounts receivable); (xiu) (A) acquired (by mergeraccelerated the delivery or sale of products, consolidationservices, acquisition offered discounts or price protections on the sale of stockproducts or services, other securities delayed or assets cancelled the purchase of products, services or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business withInventory, or (E) guaranteed any indebtedness for borrowed money ofpaid premiums on the purchase of products or services, any Person or any portion in each case, Outside the Ordinary Course of the assets of any Person that constitutes a division or operating unit of such PersonBusiness; (xiiv) waived any rights of material value, whether or not in the Ordinary Course of Business, or settled or compromised any material Proceeding; (w) instituted any Proceeding; (x) suffered any theft, damage, destruction destruction, theft or casualty loss affecting to its business or any of their respective tangible assets in excess of $250,000 in any single instance or $500,000 in the aggregate25,000, whether or not covered by insurance; (xiiiy) paidmaterially diminished, discharged, cancelled, compromised increased or satisfied terminated any material liability other than promotional program; (z) entered into a new line of business or abandoned or discontinued any such paymentexisting line of business; (aa) entered into, discharge, cancellation, compromise modified or satisfaction made in terminated any purchase orders outside the Ordinary Course of Business; (xivbb) commenced taken or settled omitted to take any material legal, administrative action which has or arbitral proceedingwould reasonably be expected to result in a Material Adverse Effect; (xvcc) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing Contract or other agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Business; or (xvii) committed to do any of the foregoing; or (dd) accelerated the delivery of any of the Acquired Companies’ products under any Contract.

Absence of Certain Developments. Except as set forth on §3(h) of Since the Disclosure Schedule or otherwise contemplated by this AgreementBalance Sheet Date, since the Most Recent Fiscal Month End, there Seller has not been any Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h) of the Disclosure Schedule, the Company and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries hasnot: (a) incurred or become subject to any liability except (i) borrowed any amount or incurred any material liabilities, except amounts borrowed or current liabilities incurred in the Ordinary Course ordinary course of the Business or and (ii) liabilities under contracts Contracts entered into in the Ordinary Course ordinary course of the Business; (b) subjected any of the Assets to any Lien except (i) Liens for taxes not yet due and payable, (ii) mortgagedLiens incurred or deposits made to secure workers' compensation, pledged or subjected to any material lien, charge employment insurance or other encumbrancesocial security obligations, surety or appeal bonds when required by law; (iii) Liens granted to a public utility or any material portion of its assetsGovernmental Body when required by such utility or Governmental Body; (iv) any mechanic's, except for Permitted Liens laborer's, materialman's or repairman's statutory or other similar Lien arising in the Ordinary Course ordinary course of business or out of the construction, repair or improvement of any assets of Seller or arising out of the furnishing of materials or supplies therefor, provided that such Liens are related to obligations not due or delinquent, are not registered against title to any of the Assets or in respect of which adequate holdbacks are being maintained as required by applicable law; or (v) any Liens in any personal property granted by Seller in the ordinary course of business in connection with the lease or purchase of such personal property (the Liens referred to in the foregoing clauses (i) through (v) being hereinafter referred to as "Permitted Liens"); (c) discharged or satisfied any Lien or paid any liability other than current liabilities paid in the ordinary course of the Business; (iiid) sold, assigned, licensed or otherwise transferred (including, without limitation, transfers to any employees, affiliates or shareholders) any tangible or intangible assets of Seller or canceled any debts or claims, except in each case, in the ordinary course of the Business; (e) sold, assigned, licensed or otherwise transferred any Owned Real Property, Leased Real Property rights in or any material portion of its other tangible assetsto the Assets, except in the Ordinary Course ordinary course of the Business; (ivf) soldsubject to the disclosures to the list of third party contacts contemplated in Section 6.02, assigned disclosed to any Person other than Buyer and professional advisors of Buyer and Seller, any proprietary confidential information related to the Business or transferred the Assets except in the ordinary course of business and pursuant to a written non-disclosure agreement; eFunds Project Panther APA Execution Copy (g) waived any rights of material patentsvalue or suffered any extraordinary losses or adverse changes in collection loss experience, trademarks, trade names, copyrights, trade secrets whether or other intangible assetsnot in the ordinary course of the Business or consistent with past practice; (vh) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made other than in the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (vii) issued, sold or transferred any of its equity securities, securities convertible into its equity securities or warrants, options or other rights to acquire its equity securities, or any notes, bonds or debt securities; (viii) declared or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash ordinary course of the Company existing on January 3Business and in accordance with past custom and practice, 2004 and deducted from the definition of Closing Cash Consideration taken any other action or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including entered into any interest, expenses or fees incurred other material transaction in connection with the borrowingBusiness with any Insider (as hereinafter defined), and other than the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligationtransactions contemplated by this Agreement; (ix) increased the compensation of any officer or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xiii) suffered any material theft, damage, destruction or casualty loss affecting its business of or to any of their respective assets in excess of $250,000 in any single instance property or $500,000 properties owned or used by Seller in the aggregateBusiness, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xvj) made any change in or changed amended or terminated any material Tax election, filed existing Employee Benefit Plan or adopted any amended material Tax Return, entered into any material closing agreement new Employee Benefit Plan or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Business; or (xvii) committed provisioned to do any of the foregoing.foregoing or made any commitment or incurred any liability to any labor union or employee association; (k) terminated the employment of any officer or key employee or received any notice of any impending resignation by any such Person; (l) made any loans or advances to, or guarantees for the benefit of, any Person or acquired any material assets of any other Person; (m) made any modification, waiver, change, amendment, release, rescission, accord and satisfaction or termination of, or with respect to, any term, condition or provision of any Seller Agreements that could reasonably be expected to have a Material Adverse Effect, other than any satisfaction by performance in accordance with the terms thereof in the usual and ordinary course of the Business; (n) suffered any labor disputes or disturbances including, without limitation, the filing of any petition or charge of unfair labor practices with the National Labor Relations Board, the Ontario Labour Relations Board, the United Kingdom equivalent, or like body in any jurisdiction in which the Business is carried on; (o) to the knowledge of Seller, suffered any adverse change in its relationships with its vendors or customers that could reasonably be expected to have a Material Adverse Effect; (p) Except as described in the Schedules to this Agreement (i) entered into or modified any employment, severance or similar agreements or arrangements with, or granted any bonuses, salary increases, severance or termination pay to, any Insiders or consultants or (ii) in the case of employees, officers or consultants who earn in excess of $50,000 per year, taken any action with respect to the grant of any bonuses, salary increases, severance or termination pay or with respect to any other increase in employment related benefits;

Absence of Certain Developments. Except as set forth on §3(h) disclosed in Section 3.09 of the Disclosure Schedule or otherwise contemplated by this Agreement, since the Most Recent Fiscal Month End, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h) of the Company Disclosure Schedule, the Company and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries hassince September 30, 2002: (ia) borrowed any amount or incurred any the business of Company has been conducted in all material liabilities, except amounts borrowed or liabilities incurred in the Ordinary Course of Business or under contracts entered into respects only in the Ordinary Course of Business; (iib) Company has not become liable in respect of any guarantee incurred or otherwise become liable in respect of any debt; (c) Company has not mortgaged, pledged or subjected to any material lien, charge or other encumbrance, lien any material portion of its assetsproperty or Assets, except for Permitted Liens arising purchase money or similar security interests granted in connection with the purchase of equipment or supplies in the Ordinary Course of Business in an amount not exceeding Ten Thousand Dollars ($10,000) in the aggregate; (d) Company has not made any declaration, setting aside or payment of any dividend or other distribution with respect to, or repurchase of, any of its capital stock or other equity interests; (e) Company has not (i) acquired or leased from any other Person any material Assets, or sold or leased to any other Person or otherwise disposed of any material Assets (in any case except for Assets acquired, leased or sold in the Ordinary Course of Business); (ii) entered into any contractual obligation relating to (A) the purchase or sale of any capital stock, partnership interest or other equity interest in any Person, (B) the purchase of Assets constituting a business or (C) any merger, consolidation or other business combination (other than this Merger Agreement); (iii) entered into or amended any lease of real property or material personal property (whether as lessor or lessee); (iv) canceled or compromised any debt or claim other than accounts receivable in the Ordinary Course of Business; (v) sold, transferred, licensed or otherwise disposed of any material intangible Assets other than in the Ordinary Course of Business; (vi) waived or released any right of substantial value; (vii) instituted, settled or agreed to settle any material action; or (viii) entered into or consummated any transaction with any Affiliate; (f) there has been no loss, destruction or damage to any material item of property of Company, whether or not insured, which has had or could reasonably be expected to have a Company Material Adverse Effect; (g) other than in the Ordinary Course of Business, Company has not made any changes in the rate of compensation payable or paid, or agreed or orally promised to pay, conditionally or otherwise, any extra compensation, or severance or vacation pay, to any director, officer, employee, consultant or agent of Company; (h) there has been no material labor trouble (including any work slowdown, stoppage or strike) involving Company or any material change in personnel or the terms and conditions of the employment of such personnel; (i) Company has not (x) made any change in (aa) its methods of accounting or accounting practices, except as required by GAAP, or (bb) its pricing policies or payment or credit practices or (y) failed to pay any creditor any amount owed to such creditor when due or (z) granted any extensions of credit other than in the Ordinary Course of Business; (iiij) sold, assigned, licensed Company has not terminated or transferred any Owned Real Property, Leased Real Property or closed any material portion of its other tangible assetsfacility, except in the Ordinary Course of Businessbusiness or operation; (ivk) sold, assigned or transferred any material patents, trademarks, trade names, copyrights, trade secrets or other intangible assets; (v) Company has not made any material loan, advance or capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights with respect contributions to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (vii) issued, sold or transferred any of its equity securities, securities convertible into its equity securities or warrants, options or other rights to acquire its equity securities, or any notes, bonds or debt securities; (viii) declared or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xiil) suffered Company has not adopted or increased any theft, damage, destruction or casualty loss affecting its business or benefits under any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregate, whether or not covered by insurancePlan; (xiiim) paid, discharged, cancelled, compromised Company has not written up or satisfied written down any of its material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of BusinessAssets; (xivn) commenced Company has not terminated or settled amended, or failed in any material legalrespect to perform obligations or suffered the occurrence of any default under, administrative or arbitral proceeding;any material contractual obligation; and (xvo) made or changed any material Tax election, filed any amended material Tax Return, Company has not entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Business; or (xvii) committed contractual obligation to do any of the foregoingthings referred to elsewhere in this Section 3.09.

Absence of Certain Developments. Except as set forth on §3(h) of the Disclosure Schedule or otherwise contemplated by this AgreementLBI DEVELOPMENTS SCHEDULE, since the Most Recent Fiscal Month EndJune 30, 2003, there has not been any Material Adverse EffectEffect with respect to LBI and its Subsidiaries, taken as a whole. In addition to the foregoing, since that date and except Except as set forth on §3(h) of the Disclosure ScheduleLBI DEVELOPMENTS SCHEDULE and except as expressly contemplated by this Agreement, the Company and its Subsidiaries have operated in the Ordinary Course of Business and since June 30, 2003, neither the Company LBI nor any Subsidiary of its Subsidiaries has: LBI has (ia) borrowed any amount or incurred or become subject to any material liabilities, liabilities (except amounts borrowed or liabilities incurred in the Ordinary Course ordinary course of Business or business, liabilities under contracts entered into in the Ordinary Course ordinary course of Business; business and borrowings from banks (iior similar financial institutions) necessary to meet ordinary course working capital requirements), (b) mortgaged, pledged or subjected to any material lien, charge or other encumbrance, Lien (except Permitted Liens) any material portion of its assets, except for Permitted Liens arising in the Ordinary Course of Business; (iii) sold, assigned, licensed or transferred any Owned Real Property, Leased Real Property or any material portion of its other tangible assets, except in the Ordinary Course of Business; (ivc) sold, assigned or transferred any material patentsportion of its tangible assets, trademarks(d) sold, trade names, copyrights, trade secrets assigned or transferred any material Intellectual Property or other intangible assets; , (ve) made suffered any material capital expenditures extraordinary loss(es) in an amount exceeding $100,000 individually or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Business; (vi) entered into, materially amended or modified, aggregate or waived any right(s) of material rights with respect tovalue, any material agreement, contract, lease or license outside the Ordinary Course of Business; (viif) issued, sold or transferred any of its capital stock or other equity securities, securities convertible into its capital stock or other equity securities or warrants, options or other rights to acquire its capital stock or other equity securities, or any notes, bonds or debt securities; , (viiig) declared or paid any dividend, made any distribution on its material capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration expenditures in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities 100,000 or assets or otherwise)commitments therefor, (Bh) made a capital investment inany material change in its accounting methods, practices or policies, (Ci) made a loan advance revalued any of its assets, including, without limitation, by writing down the value of contracts or agreement to loan or advance toby writing off accounts receivable, except in the ordinary course of business, (Dj) entered into any joint ventureother material transaction, partnership (k) declared, set aside or paid any dividends or other similar arrangement for the conduct of business withdistributions with respect to its capital stock or, directly or (E) guaranteed any indebtedness for borrowed money ofindirectly, any Person redeemed, purchased or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting its business or acquired any of their respective assets its capital stock, (l) amended or terminated any material contract, (m) loaned to or invested in any other entity (other than a wholly-owned Subsidiary of LBI) an amount in excess of $250,000 in any single instance 100,000, (n) waived or $500,000 in the aggregate, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied released any material liability other than any such payment, discharge, cancellation, compromise right or satisfaction made in the Ordinary Course of Business; claim or (xivo) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Business; or (xvii) committed to do any of the foregoing.

Absence of Certain Developments. Except as expressly contemplated by this Agreement or as set forth on §3(h) of the Disclosure Schedule or otherwise contemplated by this Agreement, since the Most Recent Fiscal Month End, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h) 4.20 of the Disclosure Schedule, since the Company and its Subsidiaries have operated in the Ordinary Course of Business and Latest Balance Sheet Date, neither the Company nor any of its Subsidiaries Subsidiary has: (ia) issued any notes, bonds or other debt securities or any capital stock or other equity securities or any securities convertible, exchangeable or exercisable into any capital stock or other equity securities; (b) borrowed any amount or incurred any material liabilities, except amounts borrowed or liabilities incurred in other than pursuant to the Ordinary Course terms of Business or under contracts entered into in the Ordinary Course of BusinessSenior Debt; (iic) mortgaged, pledged declared or subjected to made any material lien, charge payment or distribution of cash or other encumbrance, any material portion of property to its assets, except for Permitted Liens arising in the Ordinary Course of Business; (iii) sold, assigned, licensed or transferred any Owned Real Property, Leased Real Property or any material portion of stockholders with respect to its other tangible assets, except in the Ordinary Course of Business; (iv) sold, assigned or transferred any material patents, trademarks, trade names, copyrights, trade secrets Equity Interests or other intangible assets; (v) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (vii) issued, sold or transferred any of its equity securities, securities convertible into its equity securities or purchased or redeemed any Equity Interests or other equity securities (including, without limitation, any warrants, options or other rights to acquire its Equity Interests or other equity securities, or any notes, bonds or debt securities); (viiid) declared mortgaged or paid pledged any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock properties or equity interests, assets or paid any management or other fees subjected them to any Shareholder or any Affiliates of any Shareholder; providedLien, that the Company may pay a cash dividend except Liens arising with respect to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 Senior Debt or for current property Taxes not yet due and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligationpayable; (ixe) increased the compensation sold, assigned or transferred any of any officer or other key management employeeits material tangible assets, or entered into canceled any material employmentdebts or claims, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted except in the Ordinary Course of Business; (x) waived, released, cancelled Business or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in with respect to the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion transfer of the assets of any Person that constitutes a division Transferred Subsidiaries; (f) sold, assigned or operating unit of such transferred any patents or patent applications, trademarks, service marks, trade names, corporate names, copyrights or copyright registrations, trade secrets or other intangible assets, or disclosed any proprietary confidential information to any Person; (xiig) other than non-cash losses or asset writedowns or other impairments, suffered any extraordinary losses from events occurring on or after the Latest Balance Sheet Date or waived any rights of material value, whether or not in the Ordinary Course of Business or consistent with past practice; (h) other than with regard to the Non-Controlled Subsidiaries, made capital expenditures or commitments therefor in excess of those amounts set forth on Schedule 4.20 of the Disclosure Schedule; (i) made any loans or advances to, guarantees for the benefit of, or any Investments in, any Persons in excess of $100,000 in the aggregate; (j) made any charitable contributions or pledges in excess of $10,000 in the aggregate; (k) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of exceeding $250,000 in any single instance 500,000 individually or $500,000 1,000,000 in the aggregate, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xvl) made any Investment in or changed taken steps to incorporate any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of BusinessSubsidiary; or (xviim) committed to do conducted any business or transactions with any of the foregoingTransferred Subsidiaries or Non-Controlled Subsidiaries other than on an arm’s-length basis or made any loans or advances to the Transferred Subsidiaries or Non-Controlled Subsidiaries, guaranteed any obligations of the Transferred Subsidiaries or Non-Controlled Subsidiaries or transferred any assets to the Transferred Subsidiaries or Non-Controlled Subsidiaries.

Absence of Certain Developments. (a) Between January 1, 2011 and the date hereof the Targets have conducted the Business in the ordinary course of Business in all material respects and there has not been a Material Adverse Effect. (b) Except as set forth on §3(h) of the Disclosure Schedule or otherwise contemplated by this Agreement, since between January 1, 2011 and the Most Recent Fiscal Month End, date hereof: (i) there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h) of the Disclosure Schedule, the Company and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries has: (i) borrowed any amount or incurred any material liabilities, except amounts borrowed or liabilities incurred in the Ordinary Course of Business or under contracts entered into in the Ordinary Course of Business; (ii) mortgaged, pledged or subjected to any material lien, charge or other encumbrance, any material portion of its assets, except for Permitted Liens arising in the Ordinary Course of Business; (iii) sold, assigned, licensed or transferred any Owned Real Property, Leased Real Property or any material portion of its other tangible assets, except in the Ordinary Course of Business; (iv) sold, assigned or transferred any material patents, trademarks, trade names, copyrights, trade secrets or other intangible assets; (v) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (vii) issued, sold or transferred any of its equity securities, securities convertible into its equity securities or warrants, options or other rights to acquire its equity securities, or any notes, bonds or debt securities; (viii) declared or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregateLoss, whether or not covered by insuranceinsurance with respect to the any of the Targets’ respective assets having a replacement cost of more than $500,000 for any single Loss or $1,000,000 for all such Losses; (xiiiii) paidno Target has entered into any employment, dischargeddeferred compensation, cancelledseverance or similar agreement (nor amended any such agreement) or agreed to increase the compensation payable or to become payable by it to any employees, compromised agents or satisfied Representatives related to the Business or agreed to increase the coverage or benefits available under any material liability severance pay, termination pay, vacation pay, company awards, salary continuation for disability, sick leave, deferred compensation, bonus or other incentive compensation, insurance, pension or other Employee Benefit Plan, payment or arrangement made to, for or with such employees, agents or representatives related to the Business, other than any such paymentin each case, discharge, cancellation, compromise or satisfaction made in the Ordinary Course ordinary course of Businessbusiness or as required by Law; (xiviii) commenced no Target has (A) made, changed or rescinded any election relating to Taxes, (B) settled or compromised any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to material legalTaxes, administrative or arbitral proceeding; consented to any waiver of the statute of limitations thereof, (xvC) except as required by Law, made any change to any of its methods of reporting income or deductions for Tax purposes from those employed in the preparation of its most recently filed Tax Returns, (D) changed any annual Tax accounting period, (E) adopted or changed any material method of Tax electionaccounting, filed (F) obtained any amended material Tax Return, ruling or entered into any material closing agreement or settled taken any material Tax claim or assessment, surrendered affirmative action to surrender any right to claim a refund of Taxes material Tax refund, offset or consented to any extension other reduction in Tax Liability, or waiver of the limitation period applicable to (G) amended any material Tax claim Returns or assessmentfiled claims for any material Tax refunds except as set forth on Schedule 3.19(b)(iii); (xviiv) between November 30, 2003 and January 3, 2004, either failed no Target has made or committed to manage its working make any capital expenditures in excess of $500,000 individually or $1,500,000 in the Ordinary Course aggregate; and (v) no Target has instituted or settled any Action resulting in an expenditure in excess of Business or suffered any material reduction in working capital not $500,000 in the Ordinary Course of Business; or (xvii) committed to do any of the foregoingaggregate.

Absence of Certain Developments. Except as set forth on §3(h) of the Disclosure Schedule or otherwise "Developments Schedule" attached hereto and except as expressly contemplated by --------------------- this Agreement, since the Most Recent Fiscal Month EndDecember 31, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h) of the Disclosure Schedule1998, the Company and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries hashas not: (ia) borrowed any amount or incurred any material liabilities, except amounts borrowed or liabilities incurred in the Ordinary Course of Business or under contracts entered into in the Ordinary Course of Business; (ii) mortgaged, pledged or subjected to any material lien, charge or other encumbrance, any material portion of its assets, except for Permitted Liens arising in the Ordinary Course of Business; (iii) sold, assigned, licensed or transferred any Owned Real Property, Leased Real Property or any material portion of its other tangible assets, except in the Ordinary Course of Business; (iv) sold, assigned or transferred any material patents, trademarks, trade names, copyrights, trade secrets or other intangible assets; (v) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (vii) issued, sold or transferred any of its equity securities, securities convertible into its equity securities or warrants, options or other rights to acquire its equity securities, or any notes, bonds or debt securities; (viii) declared or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation change that has had or material amendment thereof, other than cost of living could reasonably be expected to have a Material Adverse Effect or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregate10,000, to its assets, whether or not covered by insuranceinsurance or suffered any substantial destruction of its books and records; (xiiib) paidredeemed or repurchased, dischargeddirectly or indirectly, cancelledany shares of capital stock or other equity security or declared, compromised set aside or satisfied paid any material liability dividends or made any other than distributions (whether in cash or in kind) with respect to any such paymentshares of its capital stock or other equity security; (c) issued, dischargesold or transferred any equity securities, cancellationany securities convertible, compromise exchangeable or satisfaction made exercisable into shares of its capital stock or other equity securities, or warrants, options or other rights to acquire shares of its capital stock or other equity securities; (d) incurred or become subject to any liabilities, except liabilities incurred in the Ordinary Course of Business; (xive) commenced subjected any portion of its properties or settled assets to any material legal, administrative or arbitral proceedingLien; (xvf) sold, leased, assigned or transferred (including, without limitation, transfers to any Seller or any Insider) a portion of its tangible assets, except for sales of inventory in the Ordinary Course of Business, or canceled without fair consideration any material debts or claims owing to or held by it; (g) sold, assigned, licensed or transferred (including, without limitation, transfers to any Seller or any Insider) any Proprietary Rights owned by, issued to or licensed to the Company or disclosed any confidential information (other than pursuant to agreements requiring the disclosure to maintain the confidentiality of and preserving all rights of the Company in such confidential information) or received any confidential information of any third party in violation of any obligation of confidentiality; (h) suffered any extraordinary losses or waived any rights of material value; (i) incurred any indebtedness for borrowed money (other than indebtedness to finance its working capital needs); (j) entered into, amended or terminated any material lease, contract, agreement or commitment, or taken any other action or entered into any other transaction other than in the Ordinary Course of Business; (k) entered into any other material transaction, or materially changed any business practice; (l) made or changed granted any material Tax electionbonus or any wage, filed any amended material Tax Return, entered into any material closing agreement salary or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented compensation increase to any extension director, officer, employee or waiver sales representative, group of the limitation period applicable to employees or consultant or made or granted any material Tax claim increase in any employee benefit plan or assessmentarrangement, or amended or terminated any existing employee benefit plan or arrangement or adopted any new employee benefit plan or arrangement; (xvim) between November 30made any other change in employment terms for any of its directors, 2003 officers, and January 3, 2004, either failed to manage employees outside the Ordinary Course of Business; (n) incurred intercompany charges or conducted its working capital cash management customs and practices other than in the Ordinary Course of Business (including, without limitation, with respect to collection of accounts receivable, purchases of inventory and supplies, repairs and maintenance, and payment of accounts payable and accrued expenses); (o) made any capital expenditures or suffered commitments for capital expenditures that aggregate in excess of $20,000; (p) made any material reduction loans or advances to, or guarantees for the benefit of, any Persons; (q) made charitable contributions, pledges, association fees or dues; (r) changed (or authorized any change) in working capital not in the Ordinary Course its Articles of BusinessOrganization or by-laws; or (xviis) agreed or committed to do any of the foregoing.

Absence of Certain Developments. Except Since the date of the Latest Balance Sheet, the Company has conducted the Business in the ordinary course of business consistent with past practice and there has not occurred any event or development that, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect. Since the date of the Latest Balance Sheet, the Company has not: (a) sold, leased, licensed (as licensor), abandoned, failed to maintain, assigned, disposed of or transferred (including transfers to any of the Company’s employees or Affiliates) any of its assets (whether tangible or intangible), other than (i) items physically located at the Company’s office location but used exclusively for personal use by any Seller, (ii) the equipment and fixtures not used in connection with the Business set forth on §3(hSchedule 3.8(a) of the Disclosure Schedule or otherwise contemplated by this AgreementSchedules, since the Most Recent Fiscal Month End, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h(iii) of the Disclosure Schedule, the Company and its Subsidiaries have operated inventory in the Ordinary Course ordinary course of Business and neither the Company nor any of its Subsidiaries has: (i) borrowed any amount or incurred any material liabilities, except amounts borrowed or liabilities incurred in the Ordinary Course of Business or under contracts entered into in the Ordinary Course of Businessbusiness consistent with past practice; (iib) mortgaged, pledged or subjected to any material lien, charge or other encumbrance, Lien any material portion of its assets, except for Permitted Liens arising in the Ordinary Course of Business; (iii) sold, assigned, licensed properties or transferred any Owned Real Property, Leased Real Property or any material portion of its other tangible assets, except in the Ordinary Course of Business; (iv) sold, assigned or transferred any material patents, trademarks, trade names, copyrights, trade secrets or other intangible assets; (vc) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed made, committed to make or authorized any material capital expenditures that otherwise would have been made expenditure in the Ordinary Course excess of Business$50,000; (vid) acquired (including by merger, consolidation, license or sublicense) any interest in any Person or a substantial portion of the assets or business of any Person, or otherwise acquired any material assets of any Person; (e) incurred any Indebtedness or assumed, guaranteed or endorsed the obligations of any Person; (f) entered into, materially amended or amended, modified, accelerated, extended, renewed or waived terminated any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of BusinessMaterial Contract; (viig) issued, sold sold, pledged, disposed of, encumbered or transferred any of its equity securities, securities convertible convertible, exchangeable or exercisable into its equity securities securities, or warrants, options or other rights to acquire its equity securities, or any notes, bonds or debt securitiesof the Company; (viii) declared or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (xh) waived, released, cancelled assigned, settled or forgiven compromised any debtsmaterial rights or claims, claims or rights (any material litigation or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000arbitration; (xii) disclosed any trade secrets or other proprietary and confidential information to any Person other than Buyer and its representatives; (j) amended or modified the organizational documents of the Company; (k) (Ai) acquired hired, engaged, furloughed, reduced the working schedule of or terminated any employee, officer, consultant, director or other service provider of the Company (by mergertogether, consolidation, acquisition of stock, other securities or assets or otherwisethe “Service Providers”), (Bii) made a capital investment inpaid, announced, promised or granted, whether orally or in writing, any increased or new (as applicable) compensation or benefits to any current or former Service Provider (or his or her eligible dependents), including any increase or change pursuant to any Plan (except as required by any applicable Law), (Ciii) made a loan advance accelerated the vesting or agreement to loan payment of any compensation or advance tobenefits under any Plan, (Div) entered into, adopted, terminated or amended any Plan, (v) granted any equity or equity-linked awards or any bonus, commission or incentive compensation (other than payments of sales commissions in the ordinary course of business consistent with past practice) to any Service Provider, or (vi) entered into any joint venture, partnership loan or other similar arrangement for the conduct of business with, extended any credit to any current or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Personformer Service Provider; (xiil) suffered made, changed or revoked any theftTax election; settled or compromised any claim, damagenotice, destruction audit report or casualty loss affecting its business or assessment in respect of Taxes; changed any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregate, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made annual Tax accounting period; adopted or changed any material method of Tax election, accounting; filed any amended material Tax Return, ; entered into any material Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement or settled relating to any material Tax claim or assessment, Tax; surrendered any right to claim a refund of Taxes Tax refund; or consented to any extension or waiver of the limitation statute of limitations period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Business; or (xviim) agreed or committed to do any of the foregoing.

Absence of Certain Developments. Except as set forth on §3(h) of the Disclosure Schedule or otherwise contemplated by this Agreement3.7, since the Most Recent Fiscal Month End, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h) of the Disclosure ScheduleLatest Balance Sheet, the Company and its Subsidiaries have has operated only in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries hashas not: (ia) borrowed discharged or satisfied any amount Encumbrance or incurred paid any material liabilities, except amounts borrowed or liabilities incurred Liabilities exceeding $250,000 in the Ordinary Course of Business or under contracts entered into aggregate, other than current liabilities paid in the Ordinary Course of Business; (iib) mortgageddeclared, pledged set aside or subjected made any payment or distribution of cash or other property to any material lienof its equityholders with respect to such equityholder's equity interest or otherwise; (c) purchased, charge redeemed or otherwise acquired or issued any equity securities (including any warrants, options or other encumbrancerights to acquire its shares, units, membership interests or other equity securities); (d) sold, assigned, transferred, leased, subleased, licensed or sublicensed any material portion of its tangible properties or assets, except for Permitted Liens arising sales, transfers, leases, subleases, licenses or sublicenses of such properties or assets in the Ordinary Course of Business; (iiii) sold, assigned, licensed transferred, abandoned, permitted to lapse (except at the end of their maximum statutory terms), subjected to any Encumbrance (other than a Permitted Encumbrance), or transferred otherwise disposed of any Owned Real PropertyIntellectual Property Rights or (ii) disclosed (or permitted any Person to disclose) any Confidential Information to any Person (other than to Buyer and its Affiliates or in the Ordinary Course of Business, Leased Real Property pursuant to written agreements, in circumstances in which it has imposed reasonable and customary confidentiality restrictions to preserve all rights of the Company in Trade Secrets) or disclosed, made available, licensed, released, or escrowed any Source Code, or, to the Company's knowledge, received any Confidential Information of any Person in violation of any obligations of confidentiality; (f) (i) made, announced or granted any cash or equity or equity-based incentive awards, bonus, retention, change in control, transaction, severance or similar compensation or any material portion wage or salary or other compensation or benefits increase or decrease to any current or former employee or other individual service provider, (ii) except as required by applicable Law, increased or accelerated or committed to accelerate the funding, payment or vesting of its the compensation or benefits provided under any Plan, or amended, modified or terminated any Plan or adopted, established or entered into any Plan or take any action under this clause (ii) with respect to any plan, policy, program, agreement or arrangement that would be a Plan if in effect on the date hereof, (iii) negotiated, modified, extended, terminated, or entered into any collective bargaining agreement or other tangible assetscontract with any labor organization, labor union, or group of employees (each a "CBA"), or recognized or certified any labor union, works council, labor organization, or group of employees as the bargaining representative for any employees of the Company, (iv) taken any action to accelerate the time of payment, funding or vesting of any compensation or benefits under any Plan, or (v) hired or terminated the employment, engagement or service of any employee or independent contractor of the Company with an annual base salary or consulting fee and incentive compensation opportunity in excess of $100,000; (g) implemented or announced any employee layoffs, plant closings, reductions in force, furloughs, temporary layoffs, salary or wage reductions, work schedule changes, or other actions that would implicate the WARN Act; (h) hired, engaged, furloughed, temporarily laid off, or terminated (without cause) any current or former employee or independent contractor with annual compensation in excess of $125,000; (i) waived or released any noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement, or other restrictive covenant obligation of any current or former employee or independent contractor; (j) suffered any extraordinary financial losses or cancelled or waived any debts, claims or other rights (except in the Ordinary Course of Business) in excess of $50,000 in the aggregate; (ivk) soldwaived, assigned settled or transferred compromised any material patentsclaim, trademarksother than waivers, trade names, copyrights, trade secrets settlements or other intangible assets; (v) made any material capital expenditures or commitments therefor outside compromises in the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (vii) issued, sold or transferred any of its equity securities, securities convertible into its equity securities or warrants, options or other rights to acquire its equity securities, or any notes, bonds or debt securities; (viii) declared or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained involving solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does monetary payments not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,00050,000 in the aggregate; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xiil) suffered any theft, damage, destruction or casualty loss affecting to one of its business assets or any of their respective assets in excess of $250,000 in any single instance or $500,000 properties exceeding in the aggregateaggregate $150,000, whether or not covered by insurance; (xiiim) paidmade any commitment for capital expenditures in an amount in excess of $250,000 that remain unpaid; (n) made any charitable pledges exceeding in the aggregate $20,000 or made any political contributions; (o) made any loans or advances to any Person of more than $25,000; (p) made any change in any method of accounting or accounting policies, dischargedexcept as required by GAAP or applicable Law; (q) made or changed any Tax election, cancelledsettled any Tax claim or assessment, compromised filed any amended Tax Return, entered into any closing agreement, adopted or satisfied changed any material liability Tax accounting method; agreed to (or requested) an extension or waiver of a Tax statute of limitations period, failed to pay any Tax when due and payable (including any estimated Tax payments), incurred any Tax Liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xiv) commenced , prepared or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessmentReturn in a manner inconsistent with past practice, surrendered any right to claim a refund of Taxes or consented to Taxes, sought (nor has any extension or waiver Affiliate that would be aggregated with the Company and treated as one employer for purposes of Section 2301 of the limitation period CARES Act sought) a covered loan under paragraph (36) of Section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as added by Section 1102 of the CARES Act, deferred any payroll tax obligations (including those imposed by Sections 3101(a) and 3201 of the Code) (including by a failure to timely withhold, deposit or remit such amounts in accordance with the applicable provisions of the Code and the Treasury Regulations promulgated thereunder) pursuant to or in connection with Notice 2020-65 or any material U.S. presidential memorandum or executive order, or taken any other similar action relating to the filing of any Tax claim Return or assessmentthe payment of any Tax; (xvir) between November 30amended, 2003 and January 3modified or terminated any contract which, 2004but for such termination, either failed amendment, or modification would be a Material Contract; (s) applied for or received any relief under the CARES Act or any other applicable Law or governmental program designed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Businessprovide relief related to COVID-19; or (xviit) committed agreed or committed, whether orally or in writing, to do any of the foregoing.

Absence of Certain Developments. Except as contemplated by this Agreement or as set forth in the Latest Stewardship Balance Sheet, the Related Stewardship Statements or on §3(h) Schedule 4.14, since December 31, 2018, none of the Disclosure Schedule or otherwise contemplated by this Agreement, since the Most Recent Fiscal Month End, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h) of the Disclosure Schedule, the Company and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries Stewardship Entities has: (ia) borrowed any amount issued or incurred any material liabilities, except amounts borrowed or liabilities incurred in the Ordinary Course of Business or under contracts entered into in the Ordinary Course of Business; (ii) mortgaged, pledged or subjected to any material lien, charge or other encumbrance, any material portion of its assets, except for Permitted Liens arising in the Ordinary Course of Business; (iii) sold, assigned, licensed or transferred any Owned Real Property, Leased Real Property or any material portion of its other tangible assets, except in the Ordinary Course of Business; (iv) sold, assigned or transferred any material patents, trademarks, trade names, copyrights, trade secrets or other intangible assets; (v) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (vii) issued, sold or transferred any of its equity securities, membership units, securities convertible into or exchangeable for its equity securities or securities, warrants, options or other rights to acquire its equity securitiessecurities or membership units, or any notes, bonds or debt other securities; (viii) declared or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management or except deposit and other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 bank obligations and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted investment securities in the Ordinary Course of Business; (xb) waivedredeemed, releasedpurchased, cancelled acquired or forgiven offered to acquire, directly or indirectly, any debtsshares of its capital stock, claims membership units or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000other securities; (xic) (A) acquired (by mergersplit, consolidationcombined or reclassified any of its outstanding shares of capital stock or declared, acquisition set aside or paid any dividends or other distribution payable in cash, property or otherwise with respect to any shares of capital stock, membership units or other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such PersonStewardship Entity; (xiid) incurred any Liability, whether due or to become due, other than in the Ordinary Course of Business and, in the case of Stewardship Bank, consistent with safe and sound banking practices; (e) discharged or satisfied any Encumbrance or paid any Liability other than in the Ordinary Course of Business and, in the case of Stewardship Bank, consistent with safe and sound banking practices; (f) mortgaged or subjected to Encumbrance any of its property, business or assets, tangible or intangible except for (i) Permitted Encumbrances and (ii) pledges of assets to secure public funds deposits; (g) sold, transferred or otherwise disposed of any of its assets or canceled any material Indebtedness or claims or waived any rights of material value, other than sales of assets disposed of for fair value in the Ordinary Course of Business since December 31, 2018 in accordance with prudent banking practices; (h) suffered any theft, damage, destruction or casualty loss affecting its business of or to any of their respective assets in excess of $250,000 in any single instance property or $500,000 in the aggregateproperties owned or used by it, whether or not covered by insurance, which would, individually or in the aggregate, have a Material Adverse Effect on Stewardship; (xiiii) paidmade or granted any bonus or any wage, dischargedsalary or compensation increase or severance or termination payment to, cancelledor promoted, compromised any director, officer, employee, group of employees or satisfied consultant, entered into any material liability employment contract or hired any employee, in each case, other than in the Ordinary Course of Business or as required by an existing Contract with any such paymentdirector, dischargeofficer, cancellationemployee, compromise group of employees or satisfaction consultant, in each case as is set forth on Schedule 4.14(i); (j) made or granted any increase in the benefits payable under any employee benefit plan or arrangement, amended or terminated any existing employee benefit plan or arrangement or adopted any new employee benefit plan or arrangement, except as required by Law; (k) made any single or group of related capital expenditures or commitments therefor in excess of $50,000 or entered into any lease or group of related leases with the same party which involves aggregate lease payments payable of more than $100,000 for any individual lease or involves more than $150,000 for any group of related leases in the aggregate; (l) acquired (by merger, exchange, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division or material assets thereof, or assets or deposits that are material to any Stewardship Entity; (m) taken any other action or entered into any other transaction other than in the Ordinary Course of Business; (xivn) commenced made any change in its accounting methods or settled practices, other than changes required by Law made in accordance with GAAP or regulatory accounting principles generally applicable to depository institutions such as Stewardship Bank; or (o) made, modified or revoked any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right election with respect to claim a refund of Taxes or consented to any waiver or extension of time to assess or waiver of the limitation period applicable to collect any material Tax claim or assessmentTaxes; (xvip) between November 30, 2003 and January 3, 2004, either failed to manage reversed any amount of its working capital previously established ALLL; (q) purchased any investment securities or sold any securities in the Ordinary Course of Business or suffered any material reduction in working capital not its investment portfolio other than in the Ordinary Course of Business; or or (xviir) committed agreed to do any of the foregoing.

Absence of Certain Developments. Since the date of the Latest Balance Sheet (the "Latest Balance Sheet Date"), there has not been any change, occurrence or event which (individually or together with other changes, occurrences or events) has had or will have a Material Adverse Effect on the Company and the Subsidiary, taken as a whole. Except as set forth on §3(h) of the Disclosure attached Developments Schedule or otherwise and except as expressly contemplated by this Agreement, since the Most Recent Fiscal Month EndLatest Balance Sheet Date, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h) of the Disclosure Schedule, the Company and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries the Subsidiary has: (ia) borrowed any amount or incurred or become subject to any material liabilities, except amounts borrowed or liabilities incurred in the Ordinary Course ordinary course of Business or business, liabilities under contracts entered into in the Ordinary Course ordinary course of Businessbusiness and borrowings from banks (or similar financial institutions) necessary to meet ordinary course working capital requirements; (iib) mortgaged, pledged or subjected to any material lien, charge or other encumbrance, any material portion of its assets, except liens for Permitted Liens arising current property taxes not yet due and payable and mechanics', materialmen's and contractors' liens or encumbrances incurred in the Ordinary Course ordinary course of Business;business; 14 (iiic) sold, assigned, licensed assigned or transferred any Owned Real Property, Leased Real Property or any material portion of its other tangible assets, except in the Ordinary Course ordinary course of Businessbusiness; (ivd) sold, assigned or transferred any material patents, trademarks, trade names, copyrights, trade secrets or other intangible assetsassets except in the ordinary course; (ve) made suffered any extraordinary losses or waived any rights of material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Businessvalue; (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (viif) issued, sold or transferred any of its capital stock or other equity securities, securities convertible into its capital stock or other equity securities or warrants, options or other rights to acquire its capital stock or other equity securities, or any notes, bonds or debt securities; (viiig) declared or paid any dividend, dividends or made any distribution distributions on its the Company's capital stock or other equity interests, securities or redeemed or purchased any shares of its the Company's capital stock or other equity interestssecurities, except for the cancellation and redemption of the Non-Shareholder Options pursuant to Section 6.06 hereof; (h) made any material change in its accounting methods, principles or practices affecting its assets, liabilities or businesses, except insofar as may have been required by a change in generally accepted accounting principles ("GAAP"); (i) adopted a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or the Subsidiary; (j) entered into any agreement relating to, or paid the occurrence of any management wage or salary increase or bonus, or increase in any other direct or indirect compensation or benefits (including any severance or termination payment) for or to any officers, directors or employees of the Company or the Subsidiary or any accrual for or contract or other fees agreement to make or pay the same except in the ordinary course of business in a manner consistent with past practice; (k) entered into any loan or facility to advance to any Shareholder officers, directors or employees, or other representatives of the Company or the Subsidiary (other than travel advances made in the ordinary course of business in a manner consistent with past practice) or any Affiliates other loan or advance except in the ordinary course of business in a manner consistent with past practice; 15 (l) except for any acquisition of tangible property acquired in the ordinary course of business in a manner consistent with past practice, acquired all or any part of the assets, properties, capital stock or business of any Shareholderother person; (m) undertaken any action that is outside the ordinary course of business and in a manner inconsistent with past practice; (n) undertaken any actions outside of the ordinary course of business which would affect its respective cash position, including (i) any failure to make scheduled capital expenditures substantially in accordance with its ordinary course and customary practice; provided(ii) any failure to pay trade payables or other liabilities in the ordinary course; (iii) any discounting or other actions designed to accelerate the payment of accounts receivable or (iv) any use of cash to prepay Indebtedness, that otherwise than in the ordinary course of business; (o) used any Cash, including Excess Cash or any proceeds of the revolving credit facility of the Company may pay a cash dividend described on the Indebtedness Schedule (the "Revolver"), for any purpose other than (i) up to the Shareholders as long as $7,100,000 plus the amount of such cash dividend is obtained solely from either Excess CSC Consideration (which Excess CSC Consideration shall not exceed $1,200,000), for the acquisitions of (w) CSC, (x) the retail store in Flagstaff, Arizona, (y) the retail stores in Charleston, Columbia and West Columbia, South Carolina and (z) the retail store in Houston, Texas, (ii) for normal capital expenditure projects consistent with past practices, (iii) for the payment of Taxes when due and payable, (iv) for the payment of interest on Indebtedness when due and payable, (v) for payment of (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred specific monthly mortgage payment amounts in connection with the borrowingretail property in Knoxville, Tennessee, described on the Indebtedness Schedule as being due and payable in the ordinary course and (B) an amount of $75,000 in connection with a scheduled repayment of principal amount of Tranche B (as described on the Indebtedness Schedule), and the (vi) for payment of such cash dividend does not subject amounts due under the Company to any adverse Tax consequences, including any withholding Tax obligationRevolver and (vii) for normal general working capital obligations incurred in the ordinary course consistent with past practices; (ixp) increased the compensation of any officer or other key management employee, or entered into suffered any material employmentdamage, severancedestruction or theft, bonus or consulting agreement or other not covered by insurance, to any of its material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Businessassets; (xq) waivedsuffered or undertaken any cancellation, releasedcompromise, cancelled waiver or forgiven release of any debts, claims right or rights claim (or series of debts, claims rights or rightsclaims) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made except such as would not have a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregate, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of BusinessMaterial Adverse Effect; or (xviir) committed granted any material license or sublicense of any rights under or with respect to do any of its intangible property not in the foregoing.ordinary course of business. 16

Absence of Certain Developments. Except as set forth on §3(h) of in Schedule 4.5 or as disclosed in the Disclosure Schedule EasyWeb SEC Filings or as otherwise contemplated by this Agreement, since December 31, 2004, EasyWeb has conducted its business in all material respects in the Most Recent Fiscal Month End, ordinary course consistent with past practice and there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h) of the Disclosure Schedule, the Company and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries has: occurred (i) borrowed any amount or incurred any material liabilitiesevent that would have a Material Adverse Effect on EasyWeb, except amounts borrowed or liabilities incurred in the Ordinary Course of Business or under contracts entered into in the Ordinary Course of Business; (ii) mortgagedany event that would reasonably be expected to prevent or materially delay the performance of EasyWeb’s obligations pursuant to this Agreement, pledged or subjected to any material lien, charge or other encumbrance, any material portion of its assets, except for Permitted Liens arising in the Ordinary Course of Business; (iii) sold, assigned, licensed or transferred any Owned Real Property, Leased Real Property or any material portion of change by EasyWeb in its other tangible assetsaccounting methods, except in the Ordinary Course of Business; principles or practices, (iv) soldany declaration, assigned setting aside or transferred payment of any material patentsdividend or distribution in respect of the shares of capital stock of EasyWeb, trademarksor any redemption, trade names, copyrights, trade secrets purchase or other intangible assets; acquisition of any of EasyWeb’s securities, (v) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made increase in the Ordinary Course compensation or benefits or establishment of Business; any bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing, stock option (including, without limitation, the granting of stock options, stock appreciation rights, performance awards or restricted stock awards), stock purchase or other employee benefit plan of EasyWeb, or any other material increase in the compensation payable or to become payable to any employees, officers, consultants or directors of EasyWeb, (vi) entered into, materially amended or modified, or waived any material rights with respect toother than issuances of options pursuant to duly adopted option plans, any material agreementissuance, contractgrants or sale of any stock, lease or license outside the Ordinary Course of Business; (vii) issuedoptions, sold or transferred any of its equity securities, securities convertible into its equity securities or warrants, options or other rights to acquire its equity securities, or any notes, bonds or debt other securities; , or entry into any agreement with respect thereto by EasyWeb, (vii) any amendment to the certificate of incorporation or bylaws of EasyWeb, (viii) declared or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course ordinary course of Business; business consistent with past practice, any (w) capital expenditures by EasyWeb, (x) waivedpurchase, releasedsale, cancelled assignment or forgiven transfer of any debtsmaterial assets by EasyWeb, claims (y) mortgage, pledge or rights (existence of any Lien on any material assets or series properties, tangible or intangible, of debtsEasyWeb, claims or rights) involvingexcept for Liens for taxes not yet due and such other Liens which do not, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made have a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business withMaterial Adverse Effect on EasyWeb, or (Ez) guaranteed cancellation, compromise, release or waiver by EasyWeb of any indebtedness for borrowed money of, any Person rights of material value or any portion of the assets material debts or claims, (ix) any incurrence by EasyWeb of any Person that constitutes a division material liability (absolute or operating unit contingent), except for current liabilities and obligations incurred in the ordinary course of such Person; business consistent with past practice, (xiix) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregatesimilar loss, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised materially affecting the business or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course properties of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Business; or (xvii) committed to do any of the foregoing.EasyWeb,

Absence of Certain Developments. Except as set forth on §3(h) of ------------------------------- the Disclosure Schedule or otherwise contemplated by this Agreementattached "Developments Schedule," since March 31, since 2000, neither the Most Recent Fiscal Month End, there has not been any Material Adverse Effect. In addition Seller --------------------- (with respect only to the foregoing, since that date and except as set forth on §3(hAcquired Business) of the Disclosure Schedule, the Company and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries the Acquired Companies has: (ia) borrowed suffered any amount change that has had or incurred could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; (b) subjected or permitted to be subjected any portion of its properties or assets to any Lien (other than Permitted Encumbrances); (c) sold, leased, assigned, or transferred to a third party a portion of its assets (including, without limitation, assets and Capital Stock of the Acquired Companies and the Residual Acquired Commercial Assets), or canceled without fair consideration any debts or claims owing from a third party to or held by it; (d) sold, assigned, licensed or transferred (including, without limitation, transfers to the Seller or any Insider) any material liabilitiesProprietary Rights owned by, except amounts borrowed issued to, or liabilities incurred licensed to the Seller or any Acquired Company or disclosed any confidential information (other than pursuant to agreements requiring the disclosure to maintain the confidentiality of and preserving all rights of the Seller and any Acquired Company in such confidential information) or, to the Ordinary Course Seller's knowledge, received any confidential information of Business any third party in violation of any obligation of confidentiality; (e) entered into, amended or under contracts terminated any material lease, contract, agreement or commitment, or taken any other action or entered into any other material transaction other than in the Ordinary Course of Business; (iif) mortgagedentered into any other material transaction, pledged or subjected to materially changed any material lien, charge or business practice other encumbrance, any material portion of its assets, except for Permitted Liens arising than in the Ordinary Course of Business; (iiig) declared, set aside or paid outside of the Ordinary Course of Business any dividends or made any other distributions (whether in cash or in kind) with respect to any shares (or other interests) of the Capital Stock of any Acquired Company; (h) issued, sold or transferred any shares (or other interests) of its Capital Stock (including, without limitation, any securities convertible, exchangeable or exercisable into its Capital Stock, or warrants, options or other rights to acquire its Capital stock and excluding any issuances of the Seller's capital stock in accordance with the Seller's Amended and Restated Stock Option Plan, the Seller's 1999 Employee Stock Purchase Plan and/or the Seller's 1999 UK Sharesave Plan); (i) incurred or become subject to any material liabilities outside of the Ordinary Course of Business; (j) conducted its cash management customs and practices other than in the Ordinary Course of Business (including, without limitation, with respect to collection of accounts receivable, purchases of inventory and supplies, repairs and maintenance, payment of accounts payable and accrued expenses, levels of capital expenditures and operation of cash management practices generally); (k) made any capital expenditures or commitments for capital expenditures outside of the Ordinary Course of Business; (l) made any change in its accounting methods, made any material Tax election affecting the Acquired Business or settled or compromised any material Tax liability with respect to the Acquired Business or any Acquired Company; (m) made or committed to make any payments or other transfers in connection with, or in contemplation of, the transactions contemplated by this Agreement or the other Transaction Documents; or (n) paid, discharged or satisfied any claim, liability or obligation (whether absolute, accrued, contingent or otherwise) other than the payment, discharge or satisfaction in the Ordinary Course of Business of liabilities and obligations reflected or reserved against in the Latest Balance Sheet or incurred in the Ordinary Course of Business; (o) sold, assignedtransferred, licensed or transferred otherwise disposed of any Owned Real Property, Leased Real Property or any material portion of its other properties or assets (real, personal or mixed, tangible assetsor intangible), except in the Ordinary Course of Business; (ivp) sold, assigned or transferred granted any material patents, trademarks, trade names, copyrights, trade secrets or other intangible assets; (v) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made increase in the Ordinary Course of Business; compensation payable or to become payable to (vii) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (vii) issued, sold or transferred any of its equity securitiesofficers, securities convertible into its equity securities directors, unless such increase is customary on a periodic basis or warrants, options required by agreement or other rights to acquire its equity securities, understanding or (ii) any notes, bonds or debt securities; (viii) declared or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock employees or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of consultants unless such cash dividend increase is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregate, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered required by agreement or understanding; (q) paid, loaned or advanced any material reduction in working capital amount to, or sold, transferred or leased any properties or assets (real, personal or mixed, tangible or intangible) to, or entered into any agreement or arrangement with, any of its officers or directors or Insiders or any Affiliate or Associate of any of the foregoing except for directors' fees and compensation to officers at rates not in exceeding the Ordinary Course rates of Businesssuch fees and compensation paid during the year ended December 31, 1999; or (xviir) committed committed, in writing or otherwise, to do any of the foregoing.

Absence of Certain Developments. Except as set forth on §3(h) of the Disclosure in Schedule or otherwise contemplated by this Agreement5.6 attached hereto, since the Most Recent Fiscal Month EndDecember 31, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h) of the Disclosure Schedule2005, the Company and its Subsidiaries GFA Brands have operated conducted their respective businesses only in the Ordinary Course ordinary course of Business business consistent with past custom and practice, and neither the Company nor any of its Subsidiaries GFA Brands has: (ia) borrowed any amount or incurred any material liabilities, except amounts borrowed or liabilities incurred in the Ordinary Course of Business or under contracts entered into in the Ordinary Course of BusinessSuffered a Material Adverse Effect; (iib) mortgagedSold, pledged or subjected to any material lien, charge or other encumbrance, any material portion of its assets, except for Permitted Liens arising in the Ordinary Course of Business; (iii) soldleased, assigned, licensed or transferred any Owned Real Property, Leased Real Property of its Assets or any material portion thereof with a value of its in excess of One Hundred Thousand Dollars ($100,000.00) in the aggregate (other tangible than sales of inventory, in the ordinary course of business, or sales of obsolete assets) or mortgaged, pledged or subjected them to any Lien, except in the Ordinary Course of Businessfor Permitted Liens; (ivc) sold, assigned or transferred any material patents, trademarks, trade names, copyrights, trade secrets or other intangible assets; (v) made Made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made therefor, other than in the Ordinary Course ordinary course of Businessbusiness consistent with past custom and practice; (vid) entered intoCreated, materially amended incurred or modifiedassumed any Indebtedness involving more than $250,000, other than Indebtedness that is incurred in the ordinary course of business consistent including borrowings from banks (or waived similar financial institutions) necessary to meet ordinary working capital requirements, and has not guaranteed any material rights with respect to, Indebtedness or Liability of any material agreement, contract, lease or license outside Person and all Indebtedness will be included in the Ordinary Course calculation of BusinessAdjusted Cash; (viie) issuedDeclared, sold set aside or transferred paid any dividend or distribution of cash or other property to any shareholder of the Company with respect to its equity or purchased, or redeemed or otherwise acquired any of its equity securities, securities convertible into its equity securities or any warrants, options or other rights to acquire its equity securitiesequity, or other than cash dividends paid to any notes, bonds or debt securitiesshareholder of the Company in the ordinary course of business consistent with past custom and practice prior to the Cutoff Date; (viiif) declared Amended or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares authorized the amendment of its capital stock certificate of incorporation or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligationbylaws; (ixg) increased the compensation of Committed or agreed to any officer or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregate, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Businessforegoing; or (xviih) committed Received any notice from any material customer, supplier or other Person with whom the Company or GFA Brands has a material business relationship indicating that said Person intends to do any of change their respective relationship the foregoingCompany or GFA Brands.

Absence of Certain Developments. Except as set forth on §3(h) of the Disclosure in Schedule or otherwise 3.7 and except as expressly contemplated by this Agreement, since the Most Recent Fiscal Month EndDecember 31, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h) of the Disclosure Schedule2016, the Company and its Subsidiaries have operated has conducted their business only in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries hashas not: (ia) borrowed any amount suffered a Material Adverse Effect or incurred any material liabilities, except amounts borrowed or liabilities incurred in the Ordinary Course of Business or under contracts entered into in the Ordinary Course of Business; (ii) mortgaged, pledged or subjected to any material lien, charge or other encumbrance, any material portion of its assets, except for Permitted Liens arising in the Ordinary Course of Business; (iii) sold, assigned, licensed or transferred any Owned Real Property, Leased Real Property or any material portion of its other tangible assets, except in the Ordinary Course of Business; (iv) sold, assigned or transferred any material patents, trademarks, trade names, copyrights, trade secrets or other intangible assets; (v) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (vii) issued, sold or transferred any of its equity securities, securities convertible into its equity securities or warrants, options or other rights to acquire its equity securities, or any notes, bonds or debt securities; (viii) declared or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 5,000 in the aggregateaggregate to its assets, whether or not covered by insurance; (xiiib) paidredeemed or repurchased, dischargeddirectly or indirectly, cancelledany shares of capital stock or other equity security or declared, set aside or paid any dividends or made any other distributions (whether in cash or in kind) with respect to any shares of its capital stock or other equity security; (c) issued, sold or transferred any notes, bonds or other debt securities, any equity securities, any securities convertible, exchangeable or exercisable into shares of its capital stock or other equity securities, or options or other rights to acquire shares of its capital stock or other equity securities; (d) borrowed any amount or incurred or become subject to any Indebtedness or other Liabilities, except Liabilities incurred in the Ordinary Course of Business and not constituting Indebtedness; (e) discharged or satisfied any Lien or paid any Liability (other than Liabilities paid in the Ordinary Course of Business), prepaid any amount of Indebtedness or subjected any portion of its properties or assets to any Lien; (f) sold, leased, assigned or transferred (including, without limitation, transfers to Seller or any Insider) any of its tangible or intangible assets (including Proprietary Rights), except for sales of inventory, non-exclusive licenses granted in the Ordinary Course of Business to unaffiliated third Persons on an arm’s length basis, or disclosed any confidential information (other than pursuant to agreements requiring the person to whom the disclosure was made to maintain the confidentiality of and preserving all rights of the Company in such confidential information); (g) waived, canceled, compromised or satisfied released any rights or claims of material liability other than any such paymentvalue, discharge, cancellation, compromise whether or satisfaction made not in the Ordinary Course of Business; (xivh) commenced entered into, amended or settled terminated any material legal, administrative Contract or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any other material closing agreement transaction, whether or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Business, or materially changed any business practice; (i) made, granted or promised any bonus or any wage, salary or compensation increase in excess of $5,000 per year to any director, officer, employee, sales representative or consultant or made, granted or promised any increase in any employee benefit plan or arrangement, or amended or terminated any existing employee benefit plan or arrangement or adopted any new employee benefit plan or arrangement; (j) made any other change in employment terms for any of its directors, officers, and employees outside the Ordinary Course of Business or entered into any transaction with any Insider; (k) conducted its cash management customs and practices other than in the Ordinary Course of Business (including, without limitation, with respect to maintenance of working capital balances and inventory levels, collection of accounts receivable, payment of accounts payable, accrued liabilities and other Liabilities and pricing and credit policies); (l) made any capital expenditures that aggregate in excess of $5,000; (m) made any loans or advances in excess of $5,000 in the aggregate to, or guarantees for the benefit of, any Persons; (n) amended or authorized any amendment to its certificate of incorporation, by-laws or other governing or organizational documents; (o) instituted or settled any claim or lawsuit for an amount involving in excess of $5,000 in the aggregate or involving equitable or injunctive relief, unless same was done in connection with a policy of insurance and the Company’s obligations not covered by insurance do not exceed $5,000; (p) granted any performance guarantee to its customers other than in the Ordinary Course of Business and consistent with past policies and practices; (q) acquired any other business or Person (or any significant portion or division thereof), whether by merger, consolidation or reorganization or by purchase of its assets or stock or acquired any other material assets; or (xviir) committed or agreed to do any of the foregoing.

Absence of Certain Developments. Since December 31, 2015 to the date hereof, there has occurred no event, change, circumstance, occurrence, fact, condition, effect or development that has had a Company Material Adverse Effect. Except as set forth on §3(h) of the Disclosure attached Schedule or otherwise 3.06 and except as expressly contemplated by this Agreement, since the Most Recent Fiscal Month EndDecember 31, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h) of the Disclosure Schedule, 2015 the Company and its Subsidiaries have operated conducted their businesses only in the Ordinary Course ordinary course of Business business consistent with past practice, and neither the Company nor any of its Subsidiaries has: (ia) borrowed any amount or incurred or become subject to any Indebtedness or other material liabilities, except amounts borrowed or liabilities (other than liabilities incurred in the Ordinary Course ordinary course of Business or business consistent with past practice, liabilities under contracts Contracts entered into in the Ordinary Course ordinary course of Businessbusiness consistent with past practice or disclosed on the Disclosure Schedules); (iib) mortgaged, pledged or subjected to any material lienLien, charge or other encumbrance, any material portion of its assets, except for Permitted Liens arising in the Ordinary Course of BusinessLiens; (iiic) sold, assigned, transferred, leased or licensed or transferred any Owned Real Property, Leased Real Property otherwise encumbered all or any material portion of its other tangible assets, except in the Ordinary Course ordinary course of business; (d) (i) sold, assigned, transferred, leased, licensed, sublicensed or otherwise encumbered any Intellectual Property owned by the Company or its Subsidiaries or necessary for or used in the Business, except in the ordinary course of business, (ii) to the Company’s knowledge, disclosed any proprietary confidential information or trade secrets to any Person that is not an Affiliate of the Company or any of its Subsidiaries, except pursuant to a valid and binding non-disclosure or confidentiality agreement or (iii) abandoned or permitted to lapse any Intellectual Property (including registrations and applications for registrations of Intellectual Property) necessary for or used in the Business; (iv) sold, assigned or transferred any material patents, trademarks, trade names, copyrights, trade secrets or other intangible assets; (v) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (viie) issued, sold or transferred any of its capital stock or other equity securities, securities convertible convertible, exchangeable or exercisable into its capital stock or other equity securities or warrants, options or other rights to acquire its capital stock or other equity securities, or stock appreciation, phantom stock, profit participation or similar rights with respect to the Company, or any notes, bonds or debt securities; (viiif) declared made any material capital investment in, or any material loan or advance to, or guaranty for the benefit of, any other Person (other than a Subsidiary of the Company); (g) declared, set aside, or paid any dividend, dividend or made any non-cash distribution on with respect to its capital stock or other equity interestssecurities or redeemed, redeemed purchased, or purchased otherwise acquired any shares of its capital stock or other equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing securities (including any interestwarrants, expenses options or fees incurred in connection with the borrowingother rights to acquire its capital stock or other equity securities), and except for dividends or distributions made by the payment Company’s Subsidiaries to their respective parents in the ordinary course of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligationbusiness; (ixh) increased made any capital expenditures or commitments therefor in excess of $250,000, except for such capital expenditures or commitments therefor that are reflected in the compensation of Company’s budget for the fiscal year ending December 31, 2016 previously provided to the Purchaser; (i) made any officer or other key management employeematerial loan to, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered transaction with, any cancellation or material amendment thereofof its directors, other than cost officers, and employees outside the ordinary course of living or merit increases granted in the Ordinary Course of Businessbusiness; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (Di) entered into any joint ventureemployment Contract with payments exceeding $150,000 per year or any collective bargaining agreement, partnership or materially modified the terms of any such existing Contract or agreement or (ii) made or granted any bonus, retention, or severance payments or rights, or any wage, salary or other similar arrangement for compensation increase to any employee or group of employees other than in the conduct ordinary course of business withconsistent with past practice; (k) made any other material change in employment terms (including compensation) for any of its directors or officers or for any employees having employment Contracts with annual payments exceeding $150,000 per year; (l) discharged or satisfied any material Lien (other than any Permitted Lien) or paid any material obligation or material liability, other than current liabilities paid in the ordinary course of business consistent with past practice; (m) except in the ordinary course of business, (i) made or granted any material increase in any benefits under an employee benefit plan, policy or arrangement, or (Eii) guaranteed materially amended or materially terminated any indebtedness for borrowed money ofexisting employee benefit plan, policy or arrangement or adopted any Person new material employee benefit plan, policy or any portion of the assets of any Person that constitutes a division or operating unit of such Personarrangement; (xiin) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 exceeding, in the aggregate, $250,000, whether or not covered by insurance; (xiiio) paid, discharged, cancelled, compromised made any change in any accounting policies or satisfied any material liability principles other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Businesschanges consistent with GAAP; (xivp) commenced entered into any Material Contract or settled any material legal, administrative or arbitral proceedingreal property lease other than in the ordinary course of business; (xvq) made or materially changed any material Tax election, changed any annual accounting period, adopted or changed any accounting method, filed any amended material Tax Return, entered into any material “closing agreement or agreement” as described in Section 7121 of the Code with respect to Taxes, settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or Taxes, consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Business; or (xviir) committed entered into any Contract, written or oral, to do take any of the foregoingforegoing actions described in clauses (a) through (q) above.

Absence of Certain Developments. Except as set forth on §3(h) Schedule 3.6, since December 31, 2015, each of the Disclosure Schedule or otherwise contemplated by this Agreement, since the Most Recent Fiscal Month End, there BioD Companies has not been any Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h) of the Disclosure Schedule, the Company and its Subsidiaries have operated in the Ordinary Course of Business and neither (i) there has not been any event, change, occurrence or circumstance that has had, or could reasonably be expected to have, a Material Adverse Effect, and (ii) none of the Company nor BioD Companies has (except as contemplated by this Agreement or any Ancillary Agreement): (a) mortgaged, pledged, or subjected to any Lien (except Permitted Liens) any of its Subsidiaries has:assets or properties; (ib) borrowed sold, leased, conveyed, assigned, pledged, or transferred any portion of its tangible assets or transferred, assigned, or licensed any of the BioD Intellectual Property; (c) issued, sold, or transferred any of its Equity Interests, securities convertible into its Equity Interests, or warrants, options, or other rights to acquire its Equity Interests, or any bonds or debt securities; (d) purchased, leased, or otherwise acquired any property or assets of any Person for an amount in excess of $50,000 individually (in the case of a lease, per annum) or $500,000 in the aggregate (in the case of a lease, for the entire term of the lease, not including an option term); **** This material has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. (e) declared or paid any dividends or distributions on or in respect of any of its Equity Interests or redeemed, purchased, or acquired any Equity Interest of any Person; (f) incurred any Indebtedness or waived any material liabilitiesright or claim, except amounts borrowed or liabilities incurred in the Ordinary Course including any write-off of Business or under contracts entered into any accounts receivable not made in the Ordinary Course of Business, or made any capital contributions to, investment in, or any loan to any other Person; (iig) mortgaged, pledged made any capital expenditures or subjected to any material lien, charge or other encumbrance, any material portion of its assets, except for Permitted Liens arising in the Ordinary Course of Business; (iii) sold, assigned, licensed or transferred any Owned Real Property, Leased Real Property or any material portion of its other tangible assetscommitments therefor, except in the Ordinary Course of BusinessBusiness in accordance with its existing capital expenditure budget; (ivh) soldpaid, assigned discharged, or transferred satisfied any material patentsLiability in excess of $50,000, trademarks, other than the repayment of trade names, copyrights, trade secrets obligations or other intangible assetsnote obligations pertaining to the Company’s revolving line of credit at Triumph Bank; (vi) failed to promptly pay and discharge any current Liability; (j) terminated any Material Contract (other than as a result of the expiration of the term of such Material Contract pursuant to its terms) or executed any amendment or modification of any Material Contract; (k) made any material capital expenditures changes in its Employee Benefit Plans or commitments therefor outside the Ordinary Course of Business made any changes in wages, salary, or failed other compensation with respect to make its officers, managers, or employees, or made any material capital expenditures that otherwise would have been changes to the terms of any agreement with any employee; (l) adopted, amended, modified, or terminated any bonus, profit sharing, incentive, severance, or other plan, agreement or commitment for the benefit of any employee, officer, or manager; (m) adopted any plan of merger, consolidation, reorganization, liquidation, or dissolution or filing of a petition in bankruptcy under any provisions of federal or state bankruptcy Law or consented to the filing of any bankruptcy petition against it under any similar Law; (n) except as required by Law, made or entered into any (i) new Tax election or change in any Tax election, (ii) amendment of any Tax Return, (iii) settlement or compromise of any Tax audit, (iv) change in any Tax accounting method or practice, or (v) agreement with respect to Taxes; (o) made any change in any accounting methods, elections, principles or practices used by the Company, except as required by GAAP or as disclosed in the 2015 Audited Financial Statements or Management Financial Statements; (p) made any change in cash management practices and policies, practices, and procedures with respect to the collection of accounts receivable, establishment of reserves for doubtful accounts, accrual of accounts receivable, prepayment of expenses, payment of trade accounts payable, accrual of other expenses, deferral of revenue, and acceptance of customer deposits, other than those changes required by the Company’s auditor during the Company’s 2014 and 2015 financial audits; (q) paid, loaned, or advanced (other than the payment of salary and benefits in the Ordinary Course of Business; (vi) entered into, materially amended or modifiedany amounts to, or waived any material rights with respect tosold, any material agreement, contract, lease transferred or license outside the Ordinary Course of Business; (vii) issued, sold or transferred leased any of its equity securities, securities convertible into its equity securities or warrants, options or other rights to acquire its equity securities, or any notes, bonds or debt securities; (viii) declared or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employeeassets to, or entered into any other transactions with, any of its Affiliates, or made any loan to, or entered into any other **** This material employmenthas been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. transaction with, severanceany of its employees, bonus managers, or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, officers (other than cost compensation, standard employee-related agreements, and the payment, advance, or reimbursement of living or merit increases granted expenses, in each case, in the Ordinary Course of Business); (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregate, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xivr) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Businesslitigation; or (xviis) committed agreed (whether in writing or orally) to do any of the foregoing.

Absence of Certain Developments. Except as set forth on §3(h) Since the date of the Disclosure Schedule or otherwise contemplated by this Agreement, since the Most Recent Fiscal Month EndLatest Balance Sheet, there has not been any Material Adverse Effect. In addition Except as expressly contemplated by this Agreement, since the date of the Latest Balance Sheet to the foregoing, since that date and except as set forth on §3(h) of the Disclosure Schedulehereof, the Company and its Subsidiaries have operated conducted their business in the Ordinary Course ordinary course of Business and business. Except as set forth on Schedule 3.6 or except as expressly contemplated by this Agreement, since the date of the Latest Balance Sheet to the date hereof, neither the Company nor any of its Subsidiaries has: (ia) borrowed any amount amended or incurred any material liabilities, except amounts borrowed modified its certificate of formation or liabilities incurred in the Ordinary Course of Business limited liability company agreement (or under contracts entered into in the Ordinary Course of Businessequivalent governing documents); (ii) mortgaged, pledged or subjected to any material lien, charge or other encumbrance, any material portion of its assets, except for Permitted Liens arising in the Ordinary Course of Business; (iii) sold, assigned, licensed or transferred any Owned Real Property, Leased Real Property or any material portion of its other tangible assets, except in the Ordinary Course of Business; (ivb) sold, assigned or transferred any of its material patentsassets, trademarks, trade names, copyrights, trade secrets or other intangible assetsexcept in the ordinary course of business; (vc) made sold, assigned, allowed to lapse, licensed, abandoned, transferred or otherwise disposed of any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed Company Intellectual Property, except for non-exclusive licenses granted to make any material capital expenditures that otherwise would have been made customers in the Ordinary Course of BusinessCourse; (vid) entered into, materially amended or modified, or waived disclosed any material rights with respect to, Trade Secrets to any material agreement, contract, lease or license outside Person other than pursuant to a written and enforceable confidentiality agreement that requires such Person to maintain the Ordinary Course confidentiality and security of Businesssuch information; (viie) issued, sold or transferred any of its membership interests or other equity securities, securities convertible into its membership interests or other equity securities or warrants, options or other rights to acquire its membership interests or other equity securities, or any notes, bonds or debt securities; (viiif) declared changed or paid modified in any dividendmanner accounting, cash management and working capital policies and procedures, including (but not limited to) its existing credit, collection and payment policies and procedures, customer and vendor policies and procedures, prepayment of expenses, accrual of expenses, deferral and/or recognition of revenue, and acceptance of customer deposits. (g) made any distribution on its material capital stock investment in, or equity interestsany material loan to, redeemed or purchased any shares other Person (other than a Subsidiary of its capital stock or equity intereststhe Company), except in the ordinary course of business; (h) declared, set aside, or paid any management dividend or other fees made any distribution with respect to its membership interests or redeemed, purchased, or otherwise acquired any Shareholder of its membership interests, except for dividends or distributions made by the Company’s Subsidiaries to their respective parents in the ordinary course of business or tax distributions made in the ordinary course of business; (i) made any Affiliates material capital expenditures or commitments therefor, except in the ordinary course of business; (j) except as required by applicable Law or the terms of any Shareholder; providedPlan, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash granted or agreed to grant any change in control, transaction or retention bonus to any current (or former) employee or other individual service provider of the Company existing on January 3or any of its Subsidiaries, 2004 and deducted from or increased or agreed to increase any of the definition of Closing Cash Consideration or foregoing payments, (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation payable or paid, whether conditionally or otherwise, to any current (or former) employee or other individual service provider (other than any increase adopted in the ordinary course of business in accordance with past practice for any non-officer employee whose annual base compensation does not exceed $125,000 after giving effect to such increase), (C) amended, terminated or adopted any plan, agreement, program, arrangement, practice, or policy that would be a Plan if it were in existence as of the date of this Agreement or (D) taken any action, or granted any right, to accelerate the vesting, funding or payment of any officer compensation or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Businessbenefits; (xk) waivedhired, releasedengaged, cancelled or forgiven terminated the employment or engagement of any debts, claims employee or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration independent contractor with annual base compensation in excess of $500,000125,000; (xil) (A) acquired (by mergernegotiated, consolidationentered into, acquisition of stock, other securities amended or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or extended any collective bargaining agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes contract with a division or operating unit of such PersonUnion; (xiim) suffered implemented any theftlayoffs affecting, damageplaced on unpaid leave or furlough, destruction or casualty loss affecting its business materially reduced the hours or any of their respective assets in excess of $250,000 in any single instance weekly pay of, ten (10) or $500,000 in the aggregate, whether or not covered by insurancemore employees; (xiiin) paidadopted a plan of liquidation, dischargeddissolution, cancelledmerger, compromised consolidation or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Businessreorganization; or (xviio) committed to do any of the foregoing.

Absence of Certain Developments. Except (a) as set forth on §3(h) of the Disclosure Schedule or otherwise expressly contemplated by this Agreement, since (b) as specifically disclosed in the Most Recent Fiscal Month EndCompany Filings filed with respect to periods ended on or after December 28, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except 2012 or (c) as set forth on §3(h) of the Disclosure attached Developments Schedule, the Company and its Subsidiaries have operated in the Ordinary Course of Business and since December 28, 2012, neither the Company nor any of its Subsidiaries Subsidiary has: : (i) issued any notes, bonds or other debt securities or any Capital Stock or other equity securities or any securities convertible, exchangeable or exercisable into any Capital Stock or other equity securities; (ii) borrowed any amount or incurred or become subject to any material liabilities, except amounts borrowed or current liabilities incurred in the Ordinary Course ordinary course of Business or business and liabilities under contracts entered into in the Ordinary Course ordinary course of Business; (ii) mortgaged, pledged or subjected to any material lien, charge or other encumbrance, any material portion of its assets, except for Permitted Liens arising in the Ordinary Course of Business; business; (iii) sold, assigned, licensed discharged or transferred any Owned Real Property, Leased Real Property or satisfied any material portion of its Lien or paid any material obligation or liability, other tangible assets, except than current liabilities paid in the Ordinary Course ordinary course of Business; business; (iv) sold, assigned declared or transferred made any material patents, trademarks, trade names, copyrights, trade secrets payment or distribution of cash (other than a distribution from a Subsidiary of the Company to the Company) or other intangible assets; (v) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed property to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights its equityholders with respect to, any material agreement, contract, lease to its Capital Stock or license outside the Ordinary Course of Business; (vii) issued, sold or transferred any of its equity securities, securities convertible into its other equity securities or purchased or redeemed any shares of its Capital Stock or other equity securities (including, without limitation, any warrants, options or other rights to acquire its Capital Stock or other equity securities), other than repurchases of Common Stock pursuant to Qualified Incentive Plans or employment agreements existing on the date of this Agreement and disclosed in the Disclosure Schedules hereto or any employment or consulting agreements entered into in the ordinary course of business thereafter and approved by the Board; (v) mortgaged or pledged any of its properties or assets or subjected them to any Lien, except for Permitted Liens; (vi) sold, assigned or transferred any of its tangible assets, except in the ordinary course of business, or canceled any material debts or claims; (vii) suffered any extraordinary losses or waived any rights of material value, whether or not in the ordinary course of business or consistent with past practice; (viii) made any loans or advances to, guarantees for the benefit of, or any notesInvestments in, bonds or debt securities; (viii) declared or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration Persons in excess of $500,000; 50,000 in the aggregate; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (Bix) made a capital investment in, any charitable contributions or pledges in excess of $50,000 in the aggregate; (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xiix) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 exceeding in the aggregateaggregate $50,000, whether or not covered by insurance; ; (xi) terminated, amended or modified any agreement or other contract which would be required to be set forth on the Contracts Schedule if it were in effect on the date of this Agreement (ignoring, if applicable, any such termination, amendment or modification); (xii) made any material change in the accounting principles utilized by the Company in connection with the business of the Company and its Subsidiaries, made any change in the Company’s independent public accounting firm, had any disagreement with its independent public accounting firm over the Company’s and its Subsidiaries’ application of accounting principles or with the preparation of any of their financial statements that was required to be disclosed in such Company Filings, or, given notification to the Company’s audit committee of any facts with respect to the Company’s or its Subsidiaries’ financial statements or methods of accounting that could reasonably be expected to result in a restatement of or amendment to the Company’s or its Subsidiaries’ financial statements; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, changed an annual accounting period for Tax, adopted or changed any Tax accounting method, filed any amended material Tax Return, entered into any material closing agreement or agreement, settled any material Tax claim or assessmentassessment relating to the Company or any of its Subsidiaries, surrendered any right to claim a refund of Taxes or Taxes, consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; assessment relating to the Company or any of its Subsidiaries, or took any other similar action relating to the filing of any Tax Return or the payment of any Tax; (xiv) received any written notice from the Securities and Exchange Commission in connection with any investigation or action by the Securities and Exchange Commission; (xv) experienced any resignation or termination of employment of any of the Company’s executive officers or (xvi) between November 30entered into any other material transaction, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business whether or suffered any material reduction in working capital not in the Ordinary Course ordinary course of Business; or (xvii) committed to do any of the foregoingbusiness.

Absence of Certain Developments. Except as set forth on §3(hSection 5G(a) of the Company Disclosure Schedule or otherwise contemplated by this AgreementLetter, since the Most Recent Fiscal Month End, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h) of the Disclosure ScheduleLatest Balance Sheet, (x) the Company and its Subsidiaries have operated conducted their business in the Ordinary Course ordinary course, consistent with past practice to the extent relevant, and (y) there has not been any event, change, condition, state of Business facts or development that, individually or in the aggregate, has had or would reasonably be expected to have a Company Material Adverse Effect. In addition, and without limiting the foregoing, except as set forth on Section 5G(b) of the Company Disclosure Letter or as expressly permitted or expressly required by the terms of this Agreement, since the date of the Latest Balance Sheet, neither the Company nor any of its Subsidiaries has: (i) borrowed issued or sold any amount of its equity interests or incurred any material liabilitiesother equity securities, except amounts borrowed securities convertible into its equity interests or liabilities incurred in the Ordinary Course of Business other equity securities, or under contracts entered into in the Ordinary Course of Businesswarrants, options or other rights to purchase its equity interests or other equity securities; (ii) mortgagedsold, pledged assigned or subjected to any material lien, charge or other encumbrance, transferred any material portion of its tangible properties or assets, except for Permitted Liens arising in the Ordinary Course ordinary course of Businessbusiness, consistent with past practice to the extent relevant; (iii) sold, assigned, licensed leased, licensed, conveyed or otherwise transferred any Owned Real Property, Leased Real Property or rights under any material portion of its other tangible assets, except in the Ordinary Course of Business; (iv) sold, assigned or transferred any material patents, trademarks, trade names, copyrights, trade secrets or other intangible assets, in each case owned by the Company or any of its Subsidiaries, other than in the ordinary course of business, consistent with past practice to the extent relevant; (iv) made or granted any material bonus (including, without limitation, any transaction bonus or retention bonus), compensation or salary increase to any former or current employee or group of former or current employees (except for increases in base compensation not exceeding 5% in the aggregate in the ordinary course of business, consistent with past practice to the extent relevant), or made, granted any increase in or established any employee benefit, severance, insurance, deferred compensation, pension, retirement or profit sharing plan or materially amended or terminated any existing Employee Benefit Plan (other than in the ordinary course of business, consistent with past practice to the extent relevant and except as may be required by, or in order to facilitate compliance with, applicable law), or adopted any new Employee Benefit Plan; (v) paid (or committed to pay) any management fee or made (or committed to make) any material capital expenditures loan or commitments therefor outside distribution of property or assets of the Ordinary Course Company or any of Business its Subsidiaries to any member, or failed declared, paid or set aside for payment any dividend or distribution with respect to make the equity interests of the Company, or purchased or redeemed (or committed to purchase or redeem) any material capital expenditures that otherwise would have been made in equity interests of the Ordinary Course of BusinessCompany; (vi) entered into, materially amended written down or modifiedcancelled any material receivables or debt, or waived or released any material rights right or claim, except for cancellations, waivers and releases in the ordinary course of business, consistent with respect to, any material agreement, contract, lease or license outside past practice to the Ordinary Course of Businessextent relevant; (vii) issued, sold or transferred suffered any of its equity securities, securities convertible into its equity securities or warrants, options or other rights to acquire its equity securitiesmaterial judgment with respect to, or made any notesmaterial settlement of, bonds or debt securitiesany Legal Proceeding; (viii) declared or paid effected any dividendmaterial change in accounting practices and procedures, made any distribution on its capital stock or equity interests, redeemed or purchased any shares other than changes as a result of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholderchanges in GAAP; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation;or (ix) increased the compensation made or authorized any capital expenditures in excess of any officer $50,000 individually or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted $250,000 in the Ordinary Course of Businessaggregate; (x) waivedentered into or materially amended any employment, releasedseverance or similar agreement with any equityholder, cancelled director, officer or forgiven employee, or changed the job title, position or job responsibilities of any debts, claims senior management employees of the Company or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000its Subsidiaries; (xi) (A) acquired (by mergeror disposed of any hospitals, consolidation, acquisition of stockfacilities or businesses, other securities than the opening or assets establishment of new hospitals, facilities or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Personbusinesses; (xii) suffered made any theftloans or advances to, damageor guarantees for the benefit of, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 Persons (except to employees in the aggregateordinary course of business, whether or not covered by insuranceconsistent with past practice to the extent relevant); (xiii) paid, discharged, cancelled, compromised or satisfied suffered any material liability destruction, loss or other than casualty with respect to any such payment, discharge, cancellation, compromise or satisfaction made material assets which are used in the Ordinary Course operation of Business;conduct of its business; or (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Business; or (xvii) committed agreed to do any of the foregoing.

Absence of Certain Developments. Except as set forth on §3(h) of the Disclosure Schedule or otherwise expressly ------------------------------- contemplated by this AgreementAgreement or disclosed on the Certain Developments Schedule ----------------------------- attached hereto, since the Most Recent Fiscal Month Enddate of the Latest Statement, there Seller has not been any Material Adverse Effect. In addition with respect to the foregoing, since that date and except as set forth on §3(h) of Business or the Disclosure Schedule, the Company and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries hasPurchased Assets: (i) borrowed any amount or incurred any material liabilities, except amounts borrowed or liabilities incurred in the Ordinary Course of Business or under contracts entered into in the Ordinary Course of Business; (iia) mortgaged, pledged or subjected to any material lien, charge or any other encumbrance, any material portion of its assets, except for the Purchased Assets (including the Real Property) other than Permitted Liens arising in the Ordinary Course of BusinessEncumbrances; (iiib) sold, leased, assigned or transferred any of its material tangible assets (including the Purchased Assets), or canceled without fair consideration any debts or claims owing to or held by it except in each case in the ordinary course of business consistent with past practice; (c) sold, assigned, licensed licensed, sublicensed, transferred or transferred encumbered any Owned Real Property, Leased Real Property or any material portion of its other tangible assets, except in the Ordinary Course of Business; (iv) sold, assigned or transferred any material patents, trademarks, trade names, copyrights, trade secrets Business Proprietary Rights or other intangible assets, disclosed any proprietary confidential information to any person (other than Buyer and Buyer's representatives, agents, attorneys and accountants), or abandoned or permitted to lapse any of the Business Proprietary Rights; (vd) made or granted any material capital expenditures bonus or commitments therefor outside the Ordinary Course any wage or salary increase to any employee or group of Business employees (except as required by pre-existing contracts or failed to make applicable law or consistent with past practice), or made or granted any material capital expenditures that otherwise would have been made increase in the Ordinary Course of Business; (vi) entered intoany employee benefit plan or arrangement, materially or amended or modified, terminated any existing employee benefit plan or waived arrangement; adopted any material rights with respect to, any material agreement, contract, lease new employee benefit plan or license outside arrangement (except as required by applicable law or the Ordinary Course of Business; (vii) issued, sold or transferred any of its equity securities, securities convertible into its equity securities or warrants, options or other rights to acquire its equity securities, or any notes, bonds or debt securities; (viii) declared or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates terms of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (Acollective bargaining agreement) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employee, or entered into any material employment, severance, bonus or consulting collective bargaining agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Businessnot previously disclosed to Buyer; (xe) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed incurred any indebtedness for borrowed money or incurred or became subject to any material liability, except current liabilities incurred in the ordinary course of business consistent with past practice and liabilities under contracts entered into in the ordinary course of business consistent with past practice; (f) made any loans or advances to, or guarantees for the benefit of, any Person person or any portion of the assets of any Person that constitutes a division or operating unit of such Personentity; (xiig) suffered any theftextraordinary material losses or waived any rights of material value, whether or not in the ordinary course of business or consistent with past practice; (h) suffered any damage, destruction or casualty loss affecting to its business or any of their respective tangible assets (including the Purchased Assets) in excess of $250,000 in any single instance or $500,000 in the aggregate25,000, whether or not covered by insurance; (xiiii) paidmade any change in any method of accounting or accounting policies, discharged, cancelled, compromised or satisfied any material liability other than those required by GAAP which have been disclosed in writing to Buyer, or made any such payment, discharge, cancellation, compromise or satisfaction made write-down in the Ordinary Course value of Businessits inventory that is material or that is other than in the usual, regular and ordinary course consistent with past practice; (xivj) commenced made any commitments for capital expenditures in an amount in excess of $50,000 or settled made any material legalcharitable pledges, administrative or arbitral proceedingin each case which will not be paid for in full prior to Closing; (xvk) made instituted or changed permitted any material Tax electionchange in the conduct of the Business, filed any amended material Tax Return, entered into or any material closing agreement change in its method of purchase, sale, lease, management, marketing, promotion or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Businessoperation; or (xviil) committed to do entered into any other material transaction not in the ordinary course of the foregoingbusiness.

Absence of Certain Developments. Except as set forth on §3(h) of the Disclosure in Schedule or otherwise 4.8 and except as expressly contemplated by this Agreement, since the Most Recent Fiscal Month End, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h) of the Disclosure ScheduleLatest Balance Sheet, the Company and has conducted its Subsidiaries have operated business in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries has: (i) borrowed any amount or incurred any all material liabilities, except amounts borrowed or liabilities incurred in the Ordinary Course of Business or under contracts entered into respects only in the Ordinary Course of Business;. Since the Latest Balance Sheet, the Company has not: (iia) mortgaged, pledged suffered a Material Adverse Effect or subjected to any material lien, charge or other encumbrance, any material portion of its assets, except for Permitted Liens arising in the Ordinary Course of Business; (iii) sold, assigned, licensed or transferred any Owned Real Property, Leased Real Property or any material portion of its other tangible assets, except in the Ordinary Course of Business; (iv) sold, assigned or transferred any material patents, trademarks, trade names, copyrights, trade secrets or other intangible assets; (v) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (vii) issued, sold or transferred any of its equity securities, securities convertible into its equity securities or warrants, options or other rights to acquire its equity securities, or any notes, bonds or debt securities; (viii) declared or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of Twenty Five Thousand Dollars ($250,000 in any single instance or $500,000 25,000) in the aggregateaggregate to its assets, whether or not covered by insurance; (xiiib) paidborrowed any amount or incurred or become subject to any Indebtedness not otherwise disclosed pursuant to the terms of this Agreement; (c) other than in the Ordinary Course of Business, dischargeddischarged or satisfied any Lien or paid any Liability, prepaid any amount of Indebtedness or subjected any portion of its properties or assets to any Lien; (d) sold, leased, licensed, assigned, transferred, pledged, allowed to lapse, cancelled, abandoned, or otherwise disposed of or encumbered (including transfers to the Seller or any Insider) any of its material tangible or intangible assets (including Company Proprietary Rights) except for sales of inventory, non-exclusive licenses granted in the Ordinary Course of Business to customers on an arm’s length basis, or disclosed any confidential information regardless of whether that information may constitute Company Proprietary Rights (other than pursuant to agreements requiring the person to whom the disclosure was made to maintain the confidentiality of and preserve all rights of the Company in such confidential information); (e) waived, canceled, compromised or satisfied released any material liability other than any such paymentrights or claims of value in excess of Twenty Five Thousand Dollars ($25,000) individually or Fifty Thousand Dollars ($50,000) in the aggregate, discharge, cancellation, compromise whether or satisfaction made not in the Ordinary Course of Business; (xivf) commenced entered into, amended or settled terminated any material legal, administrative Contract or arbitral proceedingentered into any other material transaction or materially changed any business practice other than in the Ordinary Course of Business; (xvg) implemented any employee layoffs that could implicate the WARN Act; (h) other than annual salary increases made in the Ordinary Course of Business, made, granted or promised any bonus or any wage, salary or compensation increase to any director, officer, employee, sales representative or consultant or made, granted or promised any increase in any employee benefit plan or arrangement, or established, adopted, entered into, amended or terminated any Employee Benefit Plan (or arrangement that, had it been in existence on the date of this Agreement, would be an Employee Benefit Plan) other than an amendment required by Law or which would not materially increase the cost of the Employee Benefit Plan or arrangement to the Company; (i) made any other change in employment terms for any of its directors, officers, and employees outside the Ordinary Course of Business or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled transaction with any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessmentInsider; (xvij) between November 30, 2003 conducted its cash management customs and January 3, 2004, either failed to manage its working capital practices other than in the Ordinary Course of Business or suffered any material reduction in (including, without limitation, with respect to maintenance of working capital not balances and inventory levels, collection or acceleration of accounts receivable, payment of accounts payable, accrued liabilities and other Liabilities and pricing and credit policies); (k) made any capital expenditure in excess of One Hundred Thousand Dollars ($100,000); (l) made any loans or advances to, or guarantees for the benefit of, any Persons (other than advances to employees for travel and business expenses incurred in the Ordinary Course of Business which do not exceed Twenty Five Thousand Dollars ($25,000) in the aggregate); (m) instituted or settled any claim or lawsuit for an amount involving in excess of Twenty Five Thousand Dollars ($25,000) in the aggregate or involving equitable or injunctive relief; (n) acquired any other business or Person (or any significant portion or division thereof), whether by merger, consolidation or reorganization or by purchase of its assets or stock or acquired any other material assets outside of the Ordinary Course of Business; (o) received any notice of any claim or potential claim of ownership, interest, or right by any Person other than the Company in or to the Company Proprietary Rights, or of infringement, misappropriation, dilution or misuse by the Company of any other Person’s Proprietary Rights; (p) materially changed the pricing or royalties set or charged by the Company to its customers or licensees; or (xviiq) committed or agreed to do any of the foregoing.

Absence of Certain Developments. Except as set forth on §3(h) in Section 7F of the Company Disclosure Schedule Letter or as otherwise contemplated by this Agreement, since during the Most Recent Fiscal Month Endperiod from December 31, there has not been any Material Adverse Effect. In addition 2005 to the foregoingdate of this Agreement, since that date and except as set forth on §3(h) of the Disclosure Schedule, the Company and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries has: (i) borrowed any amount or incurred operated in any material liabilities, except amounts borrowed or liabilities incurred respect other than in the Ordinary Course ordinary course of Business or under contracts entered into in the Ordinary Course of Businessbusiness consistent with past practice; (ii) mortgagedissued or sold any of its capital stock or equity securities, pledged securities convertible into its capital stock or subjected to any material lienequity securities, charge or warrants, options or other encumbrance, any material portion of rights to purchase its assets, except for Permitted Liens arising in the Ordinary Course of Businesscapital stock or equity securities; (iii) sold, assigned, licensed or transferred any Owned Real Property, Leased Real Property or subjected to any material Lien any portion of its other tangible properties or assets, except in the Ordinary Course of Business; (iv) incurred any indebtedness for borrowed money or any capitalized lease obligations, or guaranteed any such indebtedness or capitalized lease obligations, or issued or sold any debt securities or warrants or rights to acquire any debt securities of the Company or any of its Subsidiaries, or guaranteed any debt securities of others, other than (x) in the ordinary course of business consistent with past practice, (y) pursuant to the Equipment Facility, the Senior Credit Agreement or the Underwriting Agreement, or (z) amounts that will be included in the computation of Company Closing Net Indebtedness; (v) sold, assigned or transferred any material portion of its tangible assets, except in the ordinary course of business; (vi) sold, assigned or transferred any patents, trademarks, trade names, copyrights, trade secrets or other intangible assets; (v) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made , except in the Ordinary Course ordinary course of Business; (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Businessbusiness; (vii) issued, sold made or transferred granted any material bonus or any material compensation or salary increase to any former or current employee or group of its equity securities, securities convertible into its equity securities former or warrants, options or other rights to acquire its equity securitiescurrent employees (except in the ordinary course of business in accordance with past practice), or made or granted any notesmaterial increase in any employee benefit plan or arrangement, bonds or debt securitiesamended or terminated any existing employee benefit plan or arrangement or severance agreement or employment contract or adopted any new employee benefit plan or arrangement or severance agreement or employment contract; (viii) declared or paid any dividend, made any distribution on its capital stock loans or equity interests, redeemed or purchased any shares of its capital stock or equity interestsadvances to, or paid guarantees for the benefit of, any management Persons, other than (x) in the ordinary course of business consistent with past practices, (y) intercompany loans and advances among or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that between the Company may pay a cash dividend and its Subsidiaries and (z) pursuant to the Shareholders as long as Equipment Facility, the amount of such cash dividend is obtained solely from either (A) Cash of Senior Credit Agreement, the Company existing on January 3, 2004 and deducted from Underwriting Agreement or the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation;Indenture; or (ix) increased the compensation of any officer or other key management employee, or entered into suffered any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or other casualty loss affecting its business with respect to material property owned by the Company or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregate, whether or its Subsidiaries that is not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Business; or (xvii) committed to do any of the foregoing.

Absence of Certain Developments. Except as set forth on §3(h) of the Disclosure Schedule or otherwise contemplated by this Agreementwould not have a Material Adverse Effect, since the Most Recent Fiscal Month End, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h) of the Disclosure Schedule, the Company and its Subsidiaries have operated financial statement contained in the Ordinary Course of Business and most recently filed Form 10-Q (or 10-QSB) or Form 10-K (or 10KSB), whichever is most current, neither the Company nor any of its Subsidiaries subsidiary has: (i) borrowed issued any amount stock, bonds or incurred other corporate securities or any material liabilitiesrights, except amounts borrowed options or liabilities incurred in warrants with respect thereto (other than pursuant to equity incentive plans or arrangements adopted by the Ordinary Course of Business or under contracts entered into in the Ordinary Course of BusinessCompany); (ii) mortgaged, pledged borrowed any material amount or subjected incurred or become subject to any material lien, charge liabilities (absolute or other encumbrance, any material contingent) except current liabilities incurred in the ordinary course of business which are comparable in nature and amount to the current liabilities incurred in the ordinary course of business during the comparable portion of its assetsprior fiscal year, except for Permitted Liens arising in as adjusted to reflect the Ordinary Course current nature and volume of Businessthe Company's or such subsidiary's business; (iii) sold, assigned, licensed discharged or transferred satisfied any Owned Real Property, Leased Real Property lien or encumbrance or paid any material portion of its obligation or liability (absolute or contingent), other tangible assets, except than current liabilities paid in the Ordinary Course ordinary course of Businessbusiness; (iv) declared or made any payment or distribution of cash or other property to stockholders with respect to its stock, or purchased or redeemed, or made any agreements so to purchase or redeem, any shares of its capital stock; (v) sold, assigned or transferred any material patentsother tangible assets, or canceled any debts or claims, except in the ordinary course of business; (vi) sold, assigned or transferred any patent rights, trademarks, trade names, copyrights, trade secrets or other intangible assetsassets or intellectual property rights, or disclosed any proprietary confidential information to any person except to customers in the ordinary course of business or to the Purchaser or its representatives or other parties has in connection with any proposed debt or equity financing; (vvii) suffered any material losses (except for anticipated losses consistent with prior quarters) or waived any rights of material value, whether or not in the ordinary course of business, or suffered the loss of any material amount of prospective business; (viii) made any material changes in employee compensation except in the ordinary course of business and consistent with past practices; (ix) made capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (vii) issued, sold or transferred any of its equity securities, securities convertible into its equity securities or warrants, options or other rights to acquire its equity securities, or any notes, bonds or debt securities; (viii) declared or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration aggregate in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (Dx) entered into any joint ventureother material transaction, partnership whether or other similar arrangement for not in the conduct ordinary course of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Personbusiness; (xiixi) suffered any theft, material damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregateloss, whether or not covered by insurance; (xiiixii) paid, discharged, cancelled, compromised or satisfied experienced any material liability other than any such payment, discharge, cancellation, compromise problems with labor or satisfaction made management in connection with the Ordinary Course terms and conditions of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Businesstheir employment; or (xviixiii) committed to do effected any two or more events of the foregoingforegoing kind which in the aggregate would be material to the Company or its subsidiaries.

Absence of Certain Developments. Except as set forth on §3(h) of the Disclosure Schedule provided in any disclosure schedule or otherwise contemplated by this Agreementexhibit attached hereto, since the Most Recent Fiscal Month End, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h) of the Disclosure Scheduleits last Audited Financial Statements, the Company and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries hashas not: (ia) issued any share, bonds or other corporate securities or any rights, options or warrants with respect thereto; (b) borrowed any amount or incurred or become subject to any material liabilities, liabilities (absolute or contingent) except amounts borrowed or current liabilities incurred in the Ordinary Course ordinary course of Business or under contracts entered into in the Ordinary Course of Businessbusiness; (iic) mortgageddischarged or satisfied any Lien or encumbrance or paid any obligation or liability (absolute or contingent), pledged other than current liabilities paid in the ordinary course of business; (d) declared or subjected to made any material lien, charge payment or distribution of cash or other encumbranceproperty to shareholders with respect to its shares, or purchased or redeemed, or made any agreements to purchase or redeem, any material portion shares of its shares; (e) mortgaged or pledged any of its assets, tangible or intangible, or subjected them to any Liens, except Liens for Permitted Liens arising in the Ordinary Course of Businesscurrent property taxes not yet due and payable; (iii) sold, assigned, licensed or transferred any Owned Real Property, Leased Real Property or any material portion of its other tangible assets, except in the Ordinary Course of Business; (ivf) sold, assigned or transferred any other material tangible assets, or cancelled any debts or claims; (g) sold, assigned or transferred any patents, patent rights, trademarks, trade names, copyrights, trade secrets or other intangible assetsassets or other Intellectual Property Rights, or disclosed any material proprietary or confidential information to any Person not associated with the Company, unless such Person, prior to such disclosure executed and delivered a non-disclosure agreement in favor of the Company; (vh) made suffered any substantial casualty losses or waived any rights of material value, whether or not in the ordinary course of business or covered by insurance, or otherwise suffered any material capital expenditures adverse effect to its assets, business, prospects or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Businessfinancial condition; (vii) entered into, materially amended or modified, or waived suffered any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (vii) issued, sold or transferred any of its equity securities, securities convertible into its equity securities or warrants, options or other rights to acquire its equity securitieslabor trouble, or any notesevent or condition of any character, bonds materially adversely affecting the business or debt securities;plans of the Company; or (viiij) declared or paid entered into any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares other transaction other than in the ordinary course of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employeebusiness, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregatetransaction, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course ordinary course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Business; or (xvii) committed to do any of the foregoingbusiness.

Absence of Certain Developments. Except as contemplated by this Agreement or as set forth on §3(h) Schedule 5.10, since August 31, 2006, the Seller, the Company and DSTC have conducted the Business only in the Ordinary Course of Business. Without limiting the generality of the Disclosure Schedule or otherwise foregoing sentence, since August 31, 2006, and except as contemplated by this Agreement, since the Most Recent Fiscal Month End, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except Section 7.13 or as set forth on §3(hSchedule 5.10, and except for any dividend of cash, neither the Business, nor the Company or DSTC has: (a) experienced any event, change, occurrence or circumstance that has had or reasonably could be expected to have a Material Adverse Effect; (b) declared, set aside, made or paid any dividend or other distribution in respect of the Disclosure Schedulecapital stock of the Company or DSTC or repurchased, redeemed or otherwise acquired any outstanding shares of the capital stock or other securities of, or other ownership interests in, the Company and its Subsidiaries have operated or DSTC, except for distribution to the Seller of shares of the Excluded Subsidiaries; (c) issued or sold any shares of capital stock or other securities of the Company or DSTC or granted options, warrants, calls, convertible securities or other rights to purchase or otherwise acquire shares of the capital stock or other securities or ownership interest of the Company or DSTC; (d) effected any recapitalization, reclassification, redemption, split, combination or like change in the capitalization of the Company or DSTC; (e) amended the articles of incorporation or bylaws or equivalent organizational documents of the Company or DSTC; (f) borrowed any amount or incurred or become subject to any Liability except (i) current Liabilities incurred in the Ordinary Course of Business, (ii) Liabilities under Contracts entered into in the Ordinary Course of Business and neither (iii) Liabilities to the Seller or other Affiliates of the Seller which will be discharged prior to the Closing; (g) except in the Ordinary Course of Business, (i) increased the annual level of compensation of any Employee, (ii) granted any bonus, benefit or other direct or indirect compensation to any Employee, (iii) increased the coverage or benefits available under any (or created any new) severance pay, termination pay, vacation pay, company awards, salary continuation for disability, sick leave, deferred compensation, bonus or other incentive compensation, insurance, pension or other employee benefit plan or arrangement made to, for, or with any of the Employees or otherwise modified or amended or terminated any such plan or arrangement or (iv) entered into any employment, deferred compensation, severance, consulting, non-competition or similar agreement (or amended any such agreement) to which the Company nor or DSTC is a party or involving any Employee, except, in each case, as required by the terms of its Subsidiaries has:any Seller Benefit Plans, and except for agreements and arrangements set forth on Schedule 5.18; (h) entered into or agreed to enter into any merger or consolidation with any corporation or other entity, or acquired any material amount of equity securities or other ownership interest of any other Person; (i) borrowed except in the Ordinary Course of Business, entered into or modified any amount Contract with the Seller or incurred any Affiliate of the Seller (other than DSTC); (j) authorized any capital expenditures or commitments therefor in excess of $100,000 individually or $250,000 in the aggregate, which, as of March 14, 2007, remain open; (k) instituted or settled any Legal Proceeding that involved more than $175,000 or that provided for any non-monetary relief that would affect the operation of the Company or DSTC following the Closing; (l) experienced any material liabilitieschange in the relationship of the Company or DSTC with any of its material suppliers, customers, distributors, lessors, licensors, licensees or other third parties; (m) acquired any material properties or assets or sold, assigned, licensed, transferred, conveyed, leased or otherwise disposed of any of the material properties or assets of the Company or DSTC, except amounts borrowed or liabilities incurred in the Ordinary Course of Business or under contracts entered into in for the Ordinary Course purpose of Businessdisposing of obsolete or worthless assets; (iin) mortgagedcreated any Liens on any of the assets of the Company or DSTC, pledged or subjected to any material lien, charge or other encumbrance, any material portion of its assets, except for than Permitted Liens arising in the Ordinary Course of BusinessExceptions; (iiio) sold, assigned, licensed made any loan or transferred advance to any Owned Real Property, Leased Real Property or any material portion of its other tangible assets, third party except in the Ordinary Course of Business; (ivp) sold, assigned licensed in or transferred purchased any material patents, trademarks, trade names, copyrights, trade secrets or Intellectual Property other intangible assets; (v) made any material capital expenditures or commitments therefor outside than in the Ordinary Course of Business or failed licensed out or otherwise permitted any Person to make use any material capital expenditures that otherwise would have been made Intellectual Property included in the Stoneville Package, other than in the Ordinary Course of Business; (viq) entered into, materially amended engaged in any sale or modified, or waived any material rights with respect to, any material agreement, contract, lease or license distribution of products of the Business outside of the Ordinary Course of Business, including providing discounts, rebates or any other sales actions in order to incentivize distributors and customers to prematurely satisfy their needs for products of the Business for the 2007 season or the 2008 season; (viir) issued, sold or transferred taken any action the taking of its equity securities, securities convertible into its equity securities or warrants, options or other rights to acquire its equity securitieswhich, or omitted any notesaction the omission of which, bonds or debt securities; (viii) declared or paid could reasonably be expected to cause any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management or other fees condition set forth in Section 8.1 not to any Shareholder or any Affiliates of any Shareholder; provided, that be satisfied at the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation; (ix) increased the compensation of any officer or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregate, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of BusinessOutside Date; or (xviis) committed or agreed to do any of the foregoingforegoing items (a) through (r).

Absence of Certain Developments. Except as expressly contemplated by this Agreement or the transactions contemplated hereby and other than in the ordinary course of business or as set forth on §3(h) of the Disclosure Schedule or otherwise contemplated by this Agreementattached DEVELOPMENTS SCHEDULE, since the Most Recent Fiscal Month Enddate of the LATEST STATEMENT OF ASSETS AND LIABILITIES, there Seller has not been any Material Adverse Effect. In addition not, with respect to the foregoing, since that date and except as set forth on §3(h) of the Disclosure Schedule, the Company and its Subsidiaries have operated in the Ordinary Course of Business and neither the Company nor any of its Subsidiaries hasBusiness: (ia) borrowed any amount incurred or incurred become subject to any material liabilities, except amounts borrowed or liabilities incurred in the Ordinary Course of Business or under contracts entered into in the Ordinary Course of Business; (iib) mortgaged, discharged or satisfied any material Lien or paid any material obligation or liability; (c) mortgaged or pledged any of the Purchased Assets or subjected them to any material lien, charge or other encumbrance, any material portion of its assetsLien, except for Permitted Liens arising in the Ordinary Course of BusinessLiens; (iiid) sold, assigned, transferred, leased, licensed or transferred otherwise encumbered any Owned Real Property, Leased Real Property or any material portion of its other tangible assets, except in the Ordinary Course of BusinessPurchased Assets; (ive) sold, assigned assigned, transferred, leased, licensed or transferred otherwise encumbered any material patents, trademarks, trade names, copyrights, trade secrets Intellectual Property Rights or other intangible assets, disclosed any material proprietary confidential information to any Person (other than to Buyer) or abandoned or permitted to lapse any Intellectual Property Rights; (vf) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (vii) issued, sold or transferred any of its equity securities, securities convertible into its equity securities or warrants, options or other rights to acquire its equity securities, or any notes, bonds or debt securities; (viii) declared or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interests, or paid any management or other fees to any Shareholder or any Affiliates employee of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred Seller who has worked for Seller in connection with the borrowingBusiness and whom Buyer has indicated it may hire pursuant to discussions with Seller prior to the date hereof, made or granted any bonus (other than stay bonuses to be paid by Seller at Closing) or any wage or salary increase to any such employee or group of such employees (except as required by pre-existing contracts described on the attached CONTRACTS SCHEDULE or except in the case of ordinary course increases of not more than that those indicated in the attached SCHEDULE OF EMPLOYEES' PROPOSED 1999 SALARIES), and the payment of such cash dividend does not subject the Company to or made or granted any adverse Tax consequencesincrease in any employee benefit plan or arrangement, including or amended or terminated any withholding Tax obligationexisting employee benefit plan or arrangement or adopted any new employee benefit plan or arrangement; (ixg) increased the compensation of any officer or other key management employee, or entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation extraordinary losses or waived any rights of material amendment thereof, other than cost of living value (whether or merit increases granted not in the Ordinary Course ordinary course of Business; (xbusiness or consistent with past practice) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,00025,000 in the aggregate; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (Bh) made a commitments for capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for expenditures which are included in the conduct Assumed Liabilities that aggregate in excess of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person$25,000; (xiii) with respect to accounts payable included in the Assumed Liabilities, delayed or postponed the payment of any such accounts payable or any other liability or obligation or agreed or negotiated with any party to extend the payment date of any accounts payable; (j) suffered any theft, damage, destruction or casualty loss affecting its business or involving any of their respective assets in excess of $250,000 in any single instance or $500,000 the Purchased Assets exceeding in the aggregateaggregate $25,000, whether or not covered by insurance; (xiiik) paidmade any change in any method of accounting or accounting policies (including without limitation with respect to the collection of accounts receivable) relating to the compilation of the LATEST STATEMENT OF ASSETS AND LIABILITIES and related annualized proforma income and expense statement, discharged, cancelled, compromised or satisfied any material liability other than those required by GAAP which have been disclosed in writing to Buyer, or made any such payment, discharge, cancellation, compromise or satisfaction made write-down in the Ordinary Course value of its inventory included in the Purchased Inventory that is material; (l) entered into any agreement or arrangement prohibiting or restricting it from freely engaging in the Business or otherwise restricting the conduct of the Business; (xivm) commenced agreed, whether orally or settled any material legalin writing, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Business; or (xvii) committed to do any of the foregoing.

Absence of Certain Developments. Except as contemplated or permitted by this Agreement or as set forth on §3(h) of the Disclosure Schedule or otherwise contemplated by this Agreement, since the Most Recent Fiscal Month End, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h) Section 5.08 of the Disclosure Schedule, since December 31, 2017: (a) the business of the Company and its Subsidiaries has been conducted in all material respects in the ordinary course of business; (b) there has not occurred any change, event, circumstance, occurrence or development that has resulted in, or could reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect; (c) the Company and its Subsidiaries have operated not sold, transferred, leased, licensed, mortgaged, pledged or otherwise subjected to any Lien (other than Permitted Liens) any material portion of their assets or property (tangible or intangible), taken as a whole, or entered into a Contract to do any of the foregoing; (d) the Company and its Subsidiaries have not acquired, or entered into any Contract to make an acquisition (whether by merger, acquisition of stock or assets, or otherwise) of any business or line of business; (e) there has not been any change in, or amendment to, the organizational documents of the Company or any of its Subsidiaries; (f) no election has been made or action taken to change the status of the Company or any of its Subsidiaries (as a corporation, partnership or disregarded entity) for federal, state or local income Tax purposes; (g) there has not been any damage, destruction or loss (other than ordinary course repair and maintenance), whether or not covered by insurance, with respect to the property and assets of the Company and its Subsidiaries having aggregate replacement costs in the Ordinary Course excess of Business and $500,000; (h) neither the Company nor any of its Subsidiaries has:has materially increased the compensation payable or to become payable by it to any of the Company’s or its Subsidiaries’ employees whose base salary is in excess of $100,000, or increased the coverage or benefits available under any severance pay, termination pay, deferred compensation, bonus or other incentive compensation plan or arrangement, or any Plan, except for the payment of bonuses payable to certain officers and employees of the Company or any of its Subsidiaries in connection with the consummation of the - 20 - transactions contemplated by this Agreement (which will be included as part of the Transaction Expenses); (i) borrowed any amount or incurred any material liabilities, except amounts borrowed or liabilities incurred other than in the Ordinary Course ordinary course of Business business, there has not been any change by the Company or under contracts entered into any of its Subsidiaries in the Ordinary Course of Businessits accounting or Tax reporting methods, principles or policies; (iij) mortgagedneither the Company nor any of its Subsidiaries has issued, pledged transferred, pledged, encumbered, or subjected to sold (or authorized any material lien, charge or other encumbranceof the foregoing), any material portion notes, bonds, securities, voting or ownership interests (or securities convertible into or exchangeable for shares of its assetsequity, except for Permitted Liens arising in the Ordinary Course of Businessvoting or ownership interests); (iiik) sold, assigned, licensed or transferred neither the Company nor any Owned Real Property, Leased Real Property or any material portion of its other tangible assetsSubsidiaries has redeemed, except in the Ordinary Course of Business; (iv) soldpurchased or acquired, assigned directly or transferred any material patentsindirectly, trademarks, trade names, copyrights, trade secrets or other intangible assets; (v) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of Business; (vii) issued, sold or transferred any of its equity securities, voting or ownership interests (or securities convertible into or exchangeable for shares of its equity securities equity, voting or warrants, options or other rights to acquire its equity securities, or any notes, bonds or debt securitiesownership interests); (viiil) declared or paid neither the Company nor any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock Subsidiaries has incurred, assumed or equity interests, guaranteed any indebtedness or paid any management or other fees to any Shareholder or any Affiliates debt of any Shareholder; providednature, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees except unsecured current obligations incurred in connection with the borrowing), and the payment ordinary course of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligationbusiness; (ixm) increased neither the compensation Company nor any of its Subsidiaries has discharged or satisfied any material Lien, paid any material liability or obligation or waived or released any material right other than liabilities or obligations paid or settled in the ordinary course of business; (n) there has not been any acceleration, termination, material modification or cancellation of any officer Material Contract; (o) neither the Company nor any of its Subsidiaries has adopted, modified or other key management employee, or entered into any material terminated any: (i) employment, severance, bonus or consulting agreement retention or other material compensation agreement with any current or caused former employee, officer, director, (ii) independent contractor or suffered any cancellation consultant agreement other than in the ordinary course of business, or material amendment thereof(iii) Plan, other than cost of living or merit increases granted in the Ordinary Course of Businessas required by applicable Law; (xp) waivedthe Company has not declared, releasedpaid or distributed cash or other property to its equity holders with respect to their equity ownership interests; (q) neither the Company nor any of its Subsidiaries has made any single capital expenditure in excess of $250,000 or capital expenditures that, cancelled in the aggregate, exceed of $500,000; (r) neither the Company nor any of its Subsidiaries has settled or forgiven compromised any debtspending or threatened Proceeding or governmental investigation (other than immaterial ordinary course inspections or inquiries) or any claim or claims for, claims or rights (or series that would result in a loss of debtsannual revenue of, claims or rights) involvingan amount that could, individually or in the aggregate, consideration in excess of reasonably be expected to be greater than $500,000200,000; (xis) neither the Company nor any of its Subsidiaries has materially changed or modified its credit, collection, or payment policies, procedures or practices, including any acceleration of collections or receivables (Awhether or not past due) acquired (by merger, consolidation, acquisition or failure to pay or delay in payment of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership payables or other similar arrangement for the conduct of business with, liabilities or obligations; and (Et) guaranteed any indebtedness for borrowed money of, any Person or any portion none of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting its business Company or any of their respective assets in excess of $250,000 in any single instance its Subsidiaries has committed or $500,000 in the aggregate, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Business; or (xvii) committed agreed to do any of the foregoing.

Absence of Certain Developments. Except as set forth on §3(hSince December 31, 2018: (a) of the Disclosure Schedule no Acquired Asset has become subject to any Lien; (b) there has been no loss, destruction, or otherwise contemplated by this Agreementdamage (in each case, since the Most Recent Fiscal Month End, whether or not insured) affecting any Acquired Asset; (c) there has not been any Material Adverse Effect. In addition to the foregoingsale, since that date and except as set forth on §3(h) pledge, disposition, transfer, lease, license, encumbrance or authorization of the Disclosure Schedulesale, the Company and its Subsidiaries have operated in the Ordinary Course pledge, disposition, transfer, lease, license or encumbrance of Business and neither the Company nor any assets, including any Intellectual Property, that are (or would otherwise be) Acquired Assets, other than sales of its Subsidiaries has: (i) borrowed any amount or incurred any material liabilities, except amounts borrowed or liabilities incurred in the Ordinary Course of Business or under contracts entered into Products in the Ordinary Course of Business; (iid) mortgagedthere has not been any acquisition of any properties, pledged assets or subjected Intellectual Property that constitute Acquired Assets, other than Acquired Assets that would not reasonably be expected to result in any material lien, charge or other encumbrance, any material portion of its assets, except for Permitted Liens arising in the Ordinary Course of BusinessAssumed Liabilities; (iiie) soldthere has not been any settlement by Prophylix of any Action or waiver of any Claims or rights of value in a manner that constitutes an Assumed Liability or otherwise would reasonably be expected to be materially adverse to the Acquired Assets or the researching, assigneddeveloping, licensed manufacturing, making, using, selling, offering for sale, importing, exporting or transferred any Owned Real Property, Leased Real Property or any material portion other exploitation of its other tangible assets, except in the Ordinary Course of BusinessProducts; (ivf) soldProphylix has not terminated, assigned cancelled, allowed to lapse, adversely amended, waived or transferred adversely modified any Governmental Authorizations material patentsto the researching, trademarksdeveloping, trade namesmanufacturing, copyrightsmaking, trade secrets using, selling, offering for sale, importing, exporting or other intangible assetsexploitation of the Products or the Acquired Assets; (vg) made Prophylix has not waived a provision of, or amended or modified any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made in the Ordinary Course of BusinessAssumed Contract; (vih) entered intothere has not been any abandonment, materially amended termination or modifiedlapse of any Intellectual Property, or waived rights relating to any material rights with respect to, any material agreement, contract, lease or license outside the Ordinary Course of BusinessProducts Intellectual Property; (viii) issuedthere has not been any transfer, sold assignment or transferred grant of any license or sublicense of its equity securities, securities convertible into its equity securities any rights under or warrants, options or other rights with respect to acquire its equity securities, or any notes, bonds or debt securitiesProducts Intellectual Property; (viiij) declared no event or paid any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock or equity interestscircumstance has occurred that has had, or paid any management or other fees would reasonably be expected to any Shareholder or any Affiliates of any Shareholderhave, a Material Adverse Effect; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing (including any interest, expenses or fees incurred in connection with the borrowing), and the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation;and (ixk) increased the compensation of any officer or other key management employee, or Prophylix has not entered into any material employment, severance, bonus or consulting agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Business; (x) waived, released, cancelled or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration in excess of $500,000; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (B) made a capital investment in, (C) made a loan advance or agreement to loan or advance to, (D) entered into any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such Person; (xii) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of $250,000 in any single instance or $500,000 in the aggregate, whether or not covered by insurance; (xiii) paid, discharged, cancelled, compromised or satisfied any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made in the Ordinary Course of Business; (xiv) commenced or settled any material legal, administrative or arbitral proceeding; (xv) made or changed any material Tax election, filed any amended material Tax Return, entered into any material closing agreement or settled any material Tax claim or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (xvi) between November 30, 2003 and January 3, 2004, either failed to manage its working capital in the Ordinary Course of Business or suffered any material reduction in working capital not in the Ordinary Course of Business; or (xvii) committed Contractual Obligation to do any of the foregoingthings referred to elsewhere in this Section.

Absence of Certain Developments. Since March 31, 2006, there has occurred no fact, event or circumstance which has had or would reasonably be expected to have a Material Adverse Effect. Except as expressly contemplated by this Agreement and as set forth on §3(h) of the Disclosure Schedule or otherwise contemplated by this Agreement2.10, since the Most Recent Fiscal Month EndMarch 31, there has not been any Material Adverse Effect. In addition to the foregoing, since that date and except as set forth on §3(h) of the Disclosure Schedule2006, the Company and its the Company’s Subsidiaries have operated conducted business only in the Ordinary Course of Business ordinary course consistent with past custom and neither practice, and the Company nor any of its the Company’s Subsidiaries hashave: (ia) borrowed authorized for issuance, issued, sold, delivered, or granted any amount notes, bonds or incurred other debt securities or any material liabilitiescapital stock or other equity securities or any securities or rights convertible, except amounts borrowed exchangeable or liabilities incurred in the Ordinary Course of Business exercisable into any capital stock or under contracts entered into in the Ordinary Course of Businessother equity securities; (iib) mortgaged, pledged or subjected to incurred any material lien, charge or other encumbrance, any material portion of its assets, except for Permitted Liens arising Indebtedness not disclosed in the Ordinary Course Financial Statements, other than Indebtedness in the ordinary course of Businessbusiness not exceeding $50,000; (iiic) sold, assigned, licensed discharged or transferred satisfied any Owned Real Property, Leased Real Property Lien or paid any material portion of its obligation or Liability, other tangible assets, except than current Liabilities paid in the Ordinary Course ordinary course of Businessbusiness consistent with past custom and practice; (ivd) solddeclared, assigned set aside or transferred made any material patents, trademarks, trade names, copyrights, trade secrets payment or distribution of cash or other intangible assets; (v) made any material capital expenditures or commitments therefor outside the Ordinary Course of Business or failed to make any material capital expenditures that otherwise would have been made in the Ordinary Course of Business; (vi) entered into, materially amended or modified, or waived any material rights property with respect to, any material agreement, contract, lease to its capital stock or license outside the Ordinary Course of Business; (vii) issued, sold or transferred any of its equity securities, securities convertible into its other equity securities or purchased, redeemed or otherwise acquired any shares of its capital stock or other equity securities (including any warrants, options or other rights to acquire its capital stock or other equity securities, or any notes, bonds or debt securities); (viiie) declared mortgaged or paid pledged any dividend, made any distribution on its capital stock or equity interests, redeemed or purchased any shares of its capital stock properties or equity interestsassets or subjected them to any Lien, except Permitted Liens; (f) sold, assigned, transferred, leased, licensed or permitted the loss, lapse or abandonment of, or paid failed to take steps to maintain, enforce and protect any management or other fees to any Shareholder or any Affiliates of any Shareholder; provided, that the Company may pay a cash dividend to the Shareholders as long as the amount of such cash dividend is obtained solely from either (A) Cash of the Company existing on January 3, 2004 and deducted from the definition of Closing Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at or prior to the Closing its assets (including any interest, expenses or fees incurred in connection with the borrowingCompany Intellectual Property Rights), except in the ordinary course of business consistent with past custom and practice, provided that no such representation is made with respect to the payment of such cash dividend does not subject the Company to any adverse Tax consequences, including any withholding Tax obligation“O Travel” Xxxx; (ixg) increased made or granted any bonus or any wage or salary increase to any employee or group of employees (other than bonuses and wage increases in the compensation ordinary course of business consistent with past custom and practice) or made or granted any officer increase in any employee benefit plan or other key management employeearrangement, or amended or terminated any existing employee benefit plan or arrangement or adopted any new employee benefit plan or arrangement, or entered into into, modified or terminated any material employment, severance, bonus or consulting collective bargaining agreement or other material compensation agreement or caused or suffered any cancellation or material amendment thereof, other than cost of living or merit increases granted in the Ordinary Course of Businessrelationship; (xh) waived, released, cancelled made capital expenditures or forgiven any debts, claims or rights (or series of debts, claims or rights) involving, individually or in the aggregate, consideration commitments therefore in excess of $500,00050,000 individually, or $100,000 in the aggregate; (xi) (A) acquired (by merger, consolidation, acquisition of stock, other securities or assets or otherwise), (Bi) made a capital investment any loans or advances (other than for ordinary course business travel and other ordinary course business expenses) to, guarantees for the benefit of, or any Investments in, (C) made a loan advance any Persons or agreement to loan or advance to, (D) entered into formed any joint venture, partnership or other similar arrangement for the conduct of business with, or (E) guaranteed any indebtedness for borrowed money of, any Person or any portion of the assets of any Person that constitutes a division or operating unit of such PersonSubsidiary; (xiij) suffered any theft, damage, destruction or casualty loss affecting its business or any of their respective assets in excess of exceeding $250,000 in any single instance or $500,000 10,000 in the aggregate, whether or not covered by insurance, or experienced any material changes in the amount and scope of insurance coverage; (xiiik) paidmade any change in its cash management practices or in any method of accounting or accounting policies, discharged, cancelled, compromised or satisfied made any material liability other than any such payment, discharge, cancellation, compromise or satisfaction made write-down in the Ordinary Course value of Businessits inventory that is material or out of the ordinary course of business consistent with past custom and practice; (xivl) commenced other than compensation, employee benefits, employee bonuses and rent paid in the ordinary course of business, consistent with past custom and practice, directly or settled indirectly engaged in any material legaltransaction or entered into, administrative amended or arbitral proceedingterminated, any arrangement with any of its officers, directors, shareholders or other Affiliates; (xvm) made amended its charter, bylaws or changed other organizational documents; (n) taken any action or omitted to take any action which act or omission would reasonably be expected to have a Material Adverse Effect; (o) been involved in any labor dispute, other than routine non-material Tax electiongrievances, filed or any amended material Tax Returnactivity or proceeding by a labor union or representative thereof to organize any of its employees, or any lockouts, strikes, slowdowns, work stoppages or threats thereof by or with respect to such employees; (p) entered into any material closing agreement new line of business, or settled incurred or committed to incur any material Tax claim capital expenditures, obligations or assessment, surrendered any right to claim a refund of Taxes or consented to any extension or waiver of the limitation period applicable to any material Tax claim or assessmentLiabilities in connection therewith; (xviq) between November 30entered into any acquisition agreement or agreement to acquire by merger, 2003 and January 3consolidation or otherwise, 2004or agreement to acquire a substantial portion of the assets of, either failed to manage its working capital or in the Ordinary Course any other manner, any business of Business or suffered any material reduction in working capital not in the Ordinary Course of Business; orother Person; (xviir) committed cancelled or waived (i) any right material to the operation of its business or (ii) any debts or claims against any of its Affiliates; (s) accelerated, terminated, modified or cancelled any agreement, contract, lease or license involving more than $50,000; (t) delayed, postponed or canceled the payment of accounts payable or any other Liability; (u) agreed, whether orally or in writing, to do any of the foregoing.