Common use of Absence of Changes or Events Clause in Contracts

Absence of Changes or Events. Since December 31, 1996: (a) there has not been any direct or indirect redemption, purchase or other acquisition of any shares of capital stock of the Company, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (b) except in the ordinary course of business and consistent with past practice, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) there has not been any material change in the accounting methods, principles or practices of the Company; (d) there has not been any damage, destruction or loss, whether or not covered by insurance, except for such as would not, individually or in the aggregate, have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement by the Company to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrect.

Absence of Changes or Events. Since Except as set forth in Shared Technologies' Form 10-K for the fiscal year ended December 31, 19961994, as filed with the SEC, since December 31, 1994: (a) there has been no material adverse change, or any development involving a prospective material adverse change, in the general affairs, management, business, operations, condition (financial or otherwise) or pros- pects of Shared Technologies and its subsidiaries taken as a whole; (b) there has not been any direct or indirect redemption, purchase or other acquisition of any shares of capital stock of the CompanyShared Technologies or any of its subsid- iaries, or any declaration, setting aside or payment of any dividend or other distribution by the Company Shared Technologies or any of its subsidiaries in respect of its capital stock, other than stock (except for the payment made by distribution of the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30Shared Tech- nologies Cellular, 1997Inc.); (bc) except in the ordinary course of its business and consistent with past practice, the Company practice neither Shared Technolo- xxxx nor any of its subsidiaries has not incurred any indebtedness indebt- edness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible respon- sible for the obligations of any other individual, firm or corporation, or made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a wholecorporation; (cd) there has not been any material change in the accounting methods, principles or practices of the CompanyShared Technologies or its subsidiaries; (de) except in the ordinary course of business and for amounts which are not material, there has not been any revaluation by Shared Technologies or any of its subsid- iaries of any of their respective assets, including, with- out limitation, writing down the value of inventory or writing off notes or accounts receivables; (f) there has not been any damage, destruction or loss, whether or not covered by insuranceinsurance or not, except for such as would not, individually or in the aggregate, have a Shared Technologies Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement;; and (g) there has not been any increase in 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 or agreement or arrangement, by Shared Tech- nologies or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement by the Company its subsidiaries to (i) do any of the things described in the preceding clauses (a) through (gf) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwiseother- wise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III V untrue or incorrect.

Absence of Changes or Events. Since December 31Except as set forth in Xxxxxxxxx'x Form 10-K for the fiscal year ended June 30, 19961995, as filed with the SEC, since June 30, 1995: (a) there has been no material adverse change, or any development involving a prospective material adverse change, in the general affairs, management, business, operations, condition (financial or otherwise) or pros- pects of Xxxxxxxxx and its subsidiaries taken as a whole; (it being understood that no such material adverse change shall be deemed to have occurred with respect to Xxxxxxxxx and VSI, taken as a whole, if the pro forma consolidated net worth of Xxxxxxxxx, as evidenced by a pro forma clos- ing date balance sheet to be delivered to Shared Technolo- xxxx on the Effective Date, is at least $80,000,000); (b) except as contemplated by Schedule 9.1 and except for dividends by Xxxxxxxxx to RHI in an amount not exceeding capital contributions made to Xxxxxxxxx by RHI since June 30, 1995 plus $4,000,000, there has not been any direct or indirect redemption, purchase or other acquisition of any shares of capital stock of the CompanyXxxxxxxxx or any of its subsidiaries, or any declaration, setting aside or payment of any dividend or other distribution by the Company Xxxxxxxxx or any of its subsidiaries in respect of its their capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (bc) except in the ordinary course of its business and consistent with past practice, the Company practice neither Xxxxxxxxx nor any of its subsidiaries has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise other- wise as an accommodation become responsible for the obligations obli- gations of any other individual, firm or corporation, or made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a wholecorporation; (cd) there has not been any material change in the accounting methods, principles or practices of the CompanyXxxxxxxxx or its subsidiaries; (de) except in the ordinary course of business and for amounts which are not material, there has not been any revaluation by Xxxxxxxxx or any of its subsidiaries of any of their respective assets, including, without limitation, writing down the value of inventory or writing off notes or accounts receivables; (f) there has not been any damage, destruction or loss, whether or not covered by insuranceinsurance or not, except for such as would not, individually or in the aggregate, have a Xxxxxxxxx Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement;; and (g) there has not been any increase in 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 or agreement or arrangement, by Xxxxxxxxx or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement by the Company its subsidiaries to (i) do any of the things described in the preceding clauses (a) through (gf) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III VI untrue or incorrect.

Absence of Changes or Events. Since December 31the date of the respective Balance Sheets, 1996: (a) there has not been any direct Material Adverse Effect or indirect redemptionany development or change in circumstances that is reasonably likely to result in a Material Adverse Effect. Except as set forth in Schedule 2.9 or as otherwise contemplated or permitted by this Agreement, purchase since the date of the respective Balance Sheets, the business of each of the Companies and their respective Subsidiaries has been conducted in the ordinary course and in substantially the same manner as previously conducted, and neither of the Companies nor any of their respective Subsidiaries has (i) declared or paid any dividend or made any other acquisition distribution to its respective shareholders whether or not upon or in respect of any shares of capital stock of the Company, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its their respective capital stock, other than the payment made by the Company with respect to 500,000 (ii) redeemed or otherwise acquired any shares of Common Stock put to the Company their respective capital stock or issued any capital stock or any option, warrant or right relating thereto or any securities convertible into or exchangeable for any shares of their respective capital stock, (iii) adopted or materially amended any Benefit Plan (as defined in Section 2.16), except as required by Valcheck Company on June 30law, 1997; (b) except in the ordinary course of business and consistent with past practice, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into or amended any commitment employment, severance or transaction material to the Company taken as a whole; (c) there has not been any material change in the accounting methodsconsulting agreement, principles contract or practices of the Company; (d) there has not been any damage, destruction or loss, whether or not covered by insurance, except for such as would not, individually or in the aggregate, have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 or agreement or similar arrangement, or any other increase in the compensation payable or to become payable (iv) granted to any present or former their respective directors, officers or key employees of the Companyany increase in compensation or benefits, except for increases in base compensation for any such director, officer or employee in the ordinary course of business consistent with past practicepractice or as may be required under existing agreements, (v) incurred or assumed any liability, obligation or indebtedness for borrowed money or guaranteed any such liability, obligation or indebtedness, (vi) permitted, allowed or suffered any of their respective assets to become subject to any mortgage, security interest, lien or other similar restriction of any nature whatsoever, (vii) cancelled any indebtedness or waived any claims or rights of substantial value, except for customer trade adjustments in the ordinary course of business that for either Company do not exceed $25,000 individually or $100,000 in the aggregate, (viii) entered into, or modified, amended, terminated, or permitted the lapse of, any employmentreal property lease or other material agreement relating to real property, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement by the Company to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (iiix) take, whether in writing or otherwise, incurred any action which, if taken prior indebtedness that is senior to the date Notes in terms of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectrights of payment.

Absence of Changes or Events. Since December 31the Interim Balance Sheet Date, 1996:each Brand Company has (and Seller, in so far as it operated any aspect of the Brand Business or owned any asset constituting a Contributed Asset prior to the date hereof, has) (ai) conducted its business in the ordinary course consistent with past practice, and there has not been occurred any direct change, effect, event, condition or indirect redemptioncircumstance that, purchase individually or in the aggregate, has resulted in or would reasonably be expected to result in a Company Material Adverse Effect, (ii) used its commercially reasonable efforts to preserve intact its business organization and goodwill and relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities, and other acquisition third parties and to keep available the services of its current officers and employees, and (iii) used its commercially reasonable efforts to protect its Intellectual Property, and to avoid infringing, violating or misappropriating any Intellectual Property of any shares of capital stock of third party (assuming that the Companypractices, customs, actions and omissions in effect on or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put taken prior to the Company by Valcheck Company on June 30Interim Balance Sheet Date were sufficient to avoid the same). Since the Interim Balance Sheet Date, 1997; (b) except in the ordinary course of business and consistent with past practicepractice or as would not be material and adverse to the Brand Companies: (a) none of the Brand Companies has sold, the Company has not incurred any indebtedness for borrowed moneyleased, transferred, or assumedassigned any of its assets, guaranteedtangible or intangible, endorsed to a third party for more than $100,000 or otherwise as an accommodation become responsible for caused or permitted to exist any Lien (other than Permitted Liens) on any of its assets, including Company Intellectual Property; (b) none of the obligations Brand Companies has acquired by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other individualmanner, firm any business or any corporation, made any loans partnership, association or advances to any other individual, firm business organization or corporation or entered into any commitment or transaction material to the Company taken as a wholedivision thereof; (c) there has not been any material change in the accounting methods, principles or practices none of the CompanyBrand Companies has entered into any Contract outside of the ordinary course of business requiring aggregate expenditures of more than $50,000; (d) there none of the Brand Companies has not been made or committed to make any capital expenditure in excess of $50,000, individually, or $150,000, in the aggregate, outside of the ordinary course of business; (e) none of the Brand Companies has issued, created, incurred, assumed, or guaranteed any Indebtedness involving more than $50,000; (f) none of the Brand Companies has changed any of its payment policies with landlords, vendors, suppliers or other creditors or collection policies with respect to customers; (g) none of the Brand Companies has amended its Organizational Documents; (h) none of the Brand Companies has 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 other than in connection with the Contribution; (i) other than in accordance with the Brand Companies’ Organizational Documents, none of the Brand Companies has declared, set aside, or paid any dividend or made any distribution with respect to its capital stock (whether in cash or in kind) or redeemed, purchased, or otherwise acquired any of its capital stock; (j) none of the Brand Companies has experienced any damage, destruction destruction, or loss, loss (whether or not covered by insurance, except for such as would not, individually or ) to its property in the aggregate, have a Material Adverse Effectexcess of $250,000; (ek) there none of the Brand Companies has been no change granted any increase in the business, operations, assets base compensation or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company wages of any of its material assetsdirectors or officers or employees outside of the ordinary course of business; (l) none of the Brand Companies has (1) made, including but not limited to writing down the value of inventory revoked or writing off notes or accounts receivableamended any Tax election, in changed any caseaccounting method for Tax purposes, other than in filed any Tax Return outside the ordinary course of business and or amended any Tax Return, (2) settled any claim for Taxes or entered into any Tax sharing or similar, contract, or (3) surrendered any right to claim a refund of Taxes; (m) none of the Brand Companies has settled or compromised any dispute, claim or assessment regarding a Tax liability in connection with excess of $50,000; (n) none of the revaluation Brand Companies has discharged or settled any Proceeding or Liability, other than respect to any of certain fixed assets as the matters set forth in Section 5.14 of the Disclosure StatementSchedule; (go) there none of the Brand Companies has not been made any increase change in its accounting methods or establishment principles except as required by or in a manner consistent with GAAP and Applicable Laws; (p) none of the Brand Companies has sold, transferred, leased, abandoned, cancelled, licensed or otherwise disposed of any bonusCompany Intellectual Property, insurance, severance, deferred compensation, pension, retirement, profit sharing, stock option other than (including without limitation the granting of stock options, stock appreciation rights, performance awards or restricted stock awards), stock purchase or other employee benefit plan or agreement or arrangement, or any other increase in the compensation payable or i) non-exclusive licenses to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation customers granted in the ordinary course of business consistent with past practice, (ii) to other Brand Companies, and (iii) pursuant to the Contribution Agreement or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employeesthe Gaia Agreements; orand (h) there has not been any agreement by the Company to (i) do any of the things described in the preceding clauses (a) through (gq) other than as expressly contemplated set forth above, none of the Brand Companies has entered into or provided for in this Agreement or (ii) take, whether in writing or otherwise, agreed to enter into any action which, if taken prior Contract relating to any of the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectforegoing.

Absence of Changes or Events. Since Except as set forth in Section 4.7 of the Disclosure Schedule and in the Company's Form 10-K for the fiscal year ended December 31, 1996: (a) there has not been any direct 1999, as filed with the SEC, or indirect redemption, purchase or other acquisition of any shares of capital stock of the Company's Form 10-Q for the fiscal quarter ended March 31, or any declaration2000, setting aside or payment of any dividend or other distribution by as filed with the SEC, since December 31, 1999, the Company and its subsidiaries have conducted their respective businesses in respect of its capital stockthe ordinary course consistent with their past practices and have not incurred any material liability, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (b) except in the ordinary course of business and their businesses consistent with their past practicepractices, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) and there has not been (i) any material change in the accounting methodsbusiness, principles financial condition or practices results of operations of the Company; Company or any of its subsidiaries which has had, or could have, individually or in the aggregate, a Material Adverse Effect; (dii) there has not been any damage, destruction or loss, whether or not covered by insuranceinsurance or not, except for such as would notwhich has had, or could have, individually or in the aggregate, have a Material Adverse Effect; ; (eiii) there has been no change in any entry into or termination of any material commitment, contract, agreement or transaction (including, without limitation, any material borrowing or capital expenditure or sale or other disposition of any material asset or assets) of or involving the businessCompany and its subsidiaries, operationsother than this Agreement; (iv) any redemption, assets repurchase or financial condition other acquisition for value of its capital stock by the Company, or any issuance of capital stock of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its subsidiaries or of securities convertible into or rights to acquire any such capital stock or any dividend or distribution declared, set aside, or paid on capital stock of the Company; (v) any transfer of or right granted under any material assetslease, including but not limited to writing down license, agreement or Intellectual Property (as defined in Section 4.14 below) of the value Company or any of inventory its subsidiaries or writing off notes any liens or accounts receivable, other security interests in any caseIntellectual Property of the Company or any of its subsidiaries; (vi) any sale or other disposition of any asset of the Company or any of its subsidiaries or any charge, mortgage, pledge or imposition of any lien or other encumbrance (or any satisfaction and discharge thereof) on any asset of the Company or any of its subsidiaries, other than in the ordinary course of business and business, or any agreement relating to any of the foregoing; (vii) any default or breach by the Company or any of its subsidiaries in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; any material respect under any contract, license or permit; (gviii) there has not been any general wage or salary increase or any increase in 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 compensation or other employee benefit plan or agreement or arrangement, or any other increase in the compensation benefits payable or to become payable to any present or former directors, executive officers or key management employees of the Company, except for increases in base compensation Company or any of its subsidiaries or any entry into any employment contract with any executive officer or key salaried employee of the Company or any of its subsidiaries; and (ix) any change in the ordinary course accounting methods of business consistent with past practice, the Company or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement by the Company to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectits subsidiaries.

Absence of Changes or Events. Since December 31Except as disclosed in Schedule 3.8, 1996: (a) since June 30, 2013, there has not been any direct Material Adverse Effect. Except as disclosed in Schedule 3.8, and except in connection with or indirect redemption, purchase or other acquisition of any shares of capital stock as a result of the CompanyRestructuring, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on since June 30, 1997; (b) except 2013, the Company has conducted the Business in the ordinary course of business and consistent with past practice. Without limiting the generality of the foregoing, except as disclosed in the applicable subsection of Schedule 3.8 and except in connection with or as a result of the Restructuring, since June 30, 2013 (or such later date as may be set forth below): (a) the Company has not incurred any indebtedness for borrowed moneysold, leased, transferred, or assumedassigned any material assets used in, guaranteed, endorsed or otherwise as an accommodation become responsible necessary for the obligations of any other individualoperation of, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) there has not been any material change in the accounting methods, principles or practices of the Company; (d) there has not been any damage, destruction or loss, whether or not covered by insurance, except for such as would not, individually or in the aggregate, have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any caseBusiness, other than in the ordinary course of business and in connection the Business consistent with past practice; (b) no party (including the revaluation Company) has terminated, cancelled, amended, modified or accelerated any Contract that is listed or required to be listed on Schedule 3.11(a); (c) the Company has not imposed any Liens upon any of certain fixed the Business Assets (other than Permitted Liens); (d) the Company has not made any capital investment in, any loan to, or any acquisition of the securities or assets as set forth of, any Person or business; (e) the Company has not created, incurred, assumed, or guaranteed any Indebtedness (other than draws under a revolving line of credit in the Disclosure Statementordinary course consistent with past practice); (f) the Company has not delayed or postponed the payment of any material amount of accounts payable or other material Liabilities past the date when such obligation would have been paid in the ordinary course; (g) there the Company has not been cancelled, compromised, waived, or released any increase in right or establishment claim (or series of related rights and claims) related to the Business involving an amount of more than $25,000; (h) the Company has not transferred, assigned, or granted any license or sublicense 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 material rights under or restricted stock awards), stock purchase or other employee benefit plan or agreement or arrangement, or with respect to any other increase Intellectual Property used in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation Business other than in the ordinary course of business consistent with past practice; (i) the Company has not made or authorized any change in any of its organizational documents; (j) since the effective date of the Reorganization, the Company has not issued, sold, or otherwise disposed of any employmentof its equity securities, consulting or severance agreement granted any options, warrants, or arrangement other rights to purchase or obtain (including upon conversion, exchange, or exercise) any of its equity securities; (k) since the effective date of the Reorganization, the Company has not declared, set aside, or paid any dividend or made any distribution with respect to its equity securities (whether in cash or in kind) or redeemed, purchased, or otherwise acquired any of its equity securities; (l) the Company has not experienced any damage, destruction, or loss (whether or not covered by insurance) to any of its material property; (m) the Company has not entered into any transaction with any such present or former of its directors, officers or key employees; orofficers, and employees outside of the ordinary course of business consistent with past practice; (hn) there the Company has not been (i) made any agreement increase in the base compensation of any of its directors, officers, and employees, except in the ordinary course of business consistent with past practices, (ii) adopted, materially amended, or terminated any Employee Benefit Plan or (iii) made any other material change in employment terms for any of its directors, officers, and employees except in the ordinary course of business consistent with past practices; (o) the Company has not made any loans or advances of money (other than routine expense advances to employees of the Company consistent with past practice and in accordance with the Company’s policies) to any Person; and (p) the Company has not entered into any agreement, understanding or commitment by the Company to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectforegoing.

Absence of Changes or Events. Since December 31, 19962003, the business of the Company and its Subsidiaries has been conducted in the ordinary course consistent with past practice and there has not been any event, violation or other matter that could, individually or in the aggregate, have a Material Adverse Effect. Except as set forth on Schedule 3.23 and except as contemplated by the Restructuring Documents, the Stonehouse Restructuring Agreement, the Stonehouse Royalty Agreement and the Transaction Documents, since December 31, 2003, the business of the Company and its Subsidiaries has been conducted in the ordinary course consistent with past practice and there has not been: (a) there has not been any direct obligation or indirect redemptionliability (whether absolute, purchase accrued, contingent or otherwise, and whether due or to become due) incurred by the Company or any of its Subsidiaries, in excess of $100,000 individually, other acquisition than obligations under customer contracts, current obligations and liabilities, in each case incurred in the ordinary course of business and consistent with past practice; (b) any payment, discharge, satisfaction or settlement of any shares of capital stock suit, action, claim, arbitration, proceeding or obligation of the CompanyCompany or any of its Subsidiaries, or except in the ordinary course of business and consistent with past practice; (c) any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 any shares of Common Stock put to capital stock of the Company by Valcheck Company on June 30or any of its Subsidiaries or any direct or indirect redemption, 1997; (b) except in the ordinary course of business and consistent with past practice, the Company has not incurred any indebtedness for borrowed money, purchase or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations other acquisition of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) there has not been any material change in the accounting methods, principles or practices of the Companysuch shares; (d) there has not been any damageissuance or sale, destruction or lossany contract entered into for the issuance or sale, whether of any shares of capital stock or not covered by insurance, except securities convertible into or exercisable or exchangeable for such as would not, individually shares of capital stock of the Company or in the aggregate, have a Material Adverse Effectany of its Subsidiaries; (e) there has been no change in the businessany sale, operationsassignment, assets pledge, encumbrance, transfer or financial condition other disposition of any tangible asset of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, Subsidiaries (other than in sales or the ordinary course licensing of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or its products to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation customers in the ordinary course of business consistent with past practice), or any employmentsale, consulting assignment, transfer or severance agreement other disposition of any Intellectual Property (other than licensing of products of the Company or its Subsidiaries in the ordinary course of business and on a non-exclusive basis); (f) any creation of any Lien on any property of the Company or any of its Subsidiaries except for Liens in existence on the date of this Agreement that are described on Schedules 3.15, 3.16, 3.17 or 3.18; (g) any write-downs of the value of any asset of the Company or its Subsidiaries or any write-off as uncollectible of any accounts or notes receivable or any portion thereof except in the ordinary course of business and in a magnitude consistent with historical practice; (h) any cancellation of any debts or claims or any material amendment, termination or waiver of any rights of the Company or its Subsidiaries; (i) any capital expenditure or commitment or addition to property, plant or equipment of the Company or its Subsidiaries in excess of $100,000 individually or $200,000 in the aggregate; (j) any material increase in the compensation of employees of the Company or its Subsidiaries (including any increase pursuant to any written bonus, pension, profit sharing or other benefit or compensation plan, policy or arrangement entered into or commitment), or (ii) any increase in any such compensation or bonus payable to any officer, stockholder, director, consultant or agent of the Company or any of its Subsidiaries having an annual salary or remuneration in excess of $100,000; (k) any damage, destruction or loss (whether or not covered by insurance) affecting any asset or property of the Company or any of its Subsidiaries resulting in liability or Loss in excess of $100,000; (l) any change in the independent public accountants of the Company or its Subsidiaries or any material change in the accounting methods or accounting practices followed by the Company or its Subsidiaries, as applicable, or any material change in depreciation or amortization policies or rates; (m) any resignation or termination of any officer, key employee or group of employees of the Company or any of its Subsidiaries; (n) any material change in any compensation arrangement or agreement with any such present employee, officer, director or former directors, officers or key employeesstockholder; or (ho) there has not been any agreement by the Company to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) takeagreement, whether in writing or otherwise, to take any action which, if taken prior to of the date of this Agreement, would have made any representation or warranty actions specified in this Article III untrue or incorrectthe foregoing items (a) through (n).

Absence of Changes or Events. Since December 31, 19962004: (a) there has not been, and there would not reasonably be expected to be, a Company Material Adverse Effect; (b) there has not been any direct or indirect redemption, purchase or other acquisition of any shares of capital stock stock, options, warrants, or other rights to acquire shares of capital stock, of the Company, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (bc) except in the ordinary course of its business and consistent with past practice, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, or made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a wholecorporation; (cd) there has not been any material change in the financial or the accounting methods, principles or practices of the Company, except as may be required by GAAP; (de) except in the ordinary course of business consistent with past practice and for amounts which are not material, there has not been any revaluation by the Company of any of its assets, including, without limitation, writing down the value of inventory or writing off notes or accounts receivables; (f) there has not been any damage, destruction or loss, whether or not covered by insuranceinsurance or not, except for such damages, destruction or loss as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect; (eg) there the Company has been no change not entered into any agreement or transaction with any director, officer or holder of more than 5% of Company Shares or any family member or affiliate of any of the foregoing; (h) the Company has not offered any trade or consumer promotion programs except as disclosed in the business, operations, assets or financial condition Section 5.11(h) of the Company that Disclosure Letter and, except as disclosed in Section 5.11(h) of the Company Disclosure Letter, the Company has had not (at any time) offered any trade or will have a Material Adverse Effect;consumer promotions extending beyond December 31, 2005; and (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (hi) there has not been any agreement by the Company to (i) do any of the things described in the preceding clauses (a) through (gh) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III V untrue or incorrect.

Absence of Changes or Events. Since December 31Except as contemplated by this Agreement, 1996since the Reference Date, no SEQUUS Material Adverse Effect has occurred. In addition, between the Reference Date and the date of this Agreement, SEQUUS and its Subsidiaries have not, directly or indirectly: (a) there has not been any direct purchased, otherwise acquired, or indirect redemption, agreed to purchase or other acquisition of otherwise acquire, any shares of capital stock of the CompanySEQUUS or any of its Subsidiaries, or any declarationdeclared, setting set aside or payment of paid any dividend or other otherwise made a distribution by the Company (whether in cash, stock or property or any combination thereof) in respect of its their capital stock, stock (other than dividends or other distributions payable solely to SEQUUS or a wholly owned Subsidiary of SEQUUS or repurchases of unvested shares from employees in connection with the payment made by termination of employment (for any reason) in accordance with agreements outstanding or policies existing on the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30date hereof, 1997; (b) except or entered into thereafter in the ordinary course of business and consistent with past practice, the Company has not business); (i) created or incurred any indebtedness for borrowed moneymoney exceeding $250,000 in the aggregate, or (ii) assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material exceeding $100,000 in the aggregate except for travel advances and other advances made to employees in the Company taken as a wholeordinary course of business; (c) there has not been instituted any material change in the accounting methods, principles or practices of other than as required by GAAP or the Companyrules and regulations promulgated by the SEC and disclosed in the notes to the SEQUUS Financial Statements; (d) there has not been revalued any damage, destruction or loss, whether or not covered by insurance, except for such as would not, individually or in the aggregate, have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to including, without limitation, writing down the value of inventory or writing off notes or accounts receivablereceivable in excess of amounts previously reserved as reflected in the SEQUUS Balance Sheet; (e) suffered any damage, destruction or loss, whether covered by insurance or not, except for such as would not, individually and in the aggregate exceed $250,000; (i) increased in any casemanner the compensation of any of its directors, officers (including specifically that in the aggregate bonuses payable to its officers with respect to 1998 will not exceed 30% of the aggregate salaries of such officers for 1998) or, other than in the ordinary course of business and consistent with past practice or pursuant to written agreements outstanding on the date hereof, non-officer employees; (ii) granted any severance or termination pay to any Person; (iii) entered into any oral or written employment, consulting, indemnification or severance agreement with any Person other than agreements involving amounts in connection with each case not in excess of $75,000; (iv) other than as required by law or the revaluation specific terms of certain fixed assets as set forth in its Employee Benefit Plans, adopted, become obligated under, or amended any employee benefit plan, program or arrangement; or (v) repriced any SEQUUS options granted under the Disclosure StatementSEQUUS Stock Plans; (g) there has not been sold, transferred, leased to a third party, licensed to a third party, pledged, mortgaged, encumbered, or otherwise disposed of, or agreed to sell, transfer, lease to a third party, license to a third party, pledge, mortgage, encumber or otherwise dispose of, any increase in or establishment material portion of any bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing, stock option material properties (including without limitation the granting intangibles, real, personal or mixed); (h) amended its certificate of stock optionsincorporation, stock appreciation rights, performance awards or restricted stock awards), stock purchase or other employee benefit plan or agreement or arrangement, bylaws or any other increase charter document, or effected or been a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction; (i) made any capital expenditure in any calendar month which, when added to all other capital expenditures made by or on behalf of SEQUUS and its Subsidiaries in such calendar month resulted in such capital expenditures exceeding $250,000 in the compensation payable aggregate; (j) paid, discharged or to become payable to satisfied any present material claims, liabilities or former directorsobligations (absolute, officers accrued, contingent or key employees otherwise), other than the payment, discharge or satisfaction of liquidated claims, liabilities or obligations when due and the Companypayment, except for increases in base compensation discharge or satisfaction of liabilities (including accounts payable) in the ordinary course of business and consistent with past practice, or collected, or accelerated the collection of, any employmentmaterial amounts owed (including accounts receivable) other than their collection in the ordinary course of business; (k) waived, consulting released, assigned, settled or severance agreement compromised any material claim or arrangement entered into with any such present litigation, or former directors, officers or key employeescommenced a lawsuit other than in the ordinary course of business for the routine collection of bills; or (hl) there has not been any agreement by the Company offered or become obligated to (i) do any of the things described in the preceding clauses (a) through (gk) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrect.

Absence of Changes or Events. (a) Since December 31, 1996: 1995 (ai) there has GranCare and its Subsidiaries have conducted their business in the ordinary course and have not been incurred any material liability or obligation (indirect, direct or indirect redemption, purchase contingent) or entered into any material oral or written agreement or other acquisition of any shares of capital stock of the Company, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (b) except transaction that is not in the ordinary course of business (other than the Distribution Agreement and consistent with past practice, the Company has not incurred this Agreement) or that could reasonably be expected to result in any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; GranCare Material Adverse Effect; (cii) there has not been neither GranCare nor its Pharmacy Subsidiaries have sustained any material change in the accounting methodsloss or interference with their business or properties from fire, principles flood, windstorm, accident, strike or practices of the Company; other calamity (d) there has not been any damage, destruction or loss, whether or not covered by insurance); (iii) there has been no material change in the indebtedness of GranCare and its Pharmacy Subsidiaries, except for such as would notno change in the authorized capital stock of GranCare and no dividend or distribution of any kind declared, individually paid or made by GranCare on any class of its capital stock other than the Distribution; (iv) there has been no event or condition which has caused a GranCare Material Adverse Effect, nor any development, occurrence or state of facts or circumstances that could, singly or in the aggregate, have reasonably be expected to result in a GranCare Material Adverse Effect; ; (ev) there has been no change amendment, modification or supplement to any material term of any GranCare Contract to which a Pharmacy Subsidiary is a party required to be identified in the business, operations, assets or financial condition Section 4.21 of the Company that has had GranCare Disclosure Statement or will have a Material Adverse Effect; any equity security; and (fvi) there has not been any revaluation no material change by the Company of any of GranCare in its material assetsaccounting principles, including but not limited to writing down the value of inventory practices or writing off notes or accounts receivablemethods. (b) Since December 31, in any case1995, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement increase in the compensation or other benefits payable, or which could become payable, by the Company GranCare, to (i) do its officers or key employees, or any amendment of any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectGranCare Compensation and Benefit Plans.

Absence of Changes or Events. Since Except as disclosed in the Company SEC Documents filed and publicly available prior to the date hereof, and except for the Company Distribution and the other transactions contemplated by the Company Distribution Agreement, (a) since December 31, 1996: (a) 1997, there has not been any direct change or indirect redemptionoccurrence which resulted in or is reasonably likely to have a Material Adverse Effect with respect to the Company Retained Business and (b) from December 31, purchase or other acquisition 1997 to the date of any shares of capital stock of this Agreement, Company and its Subsidiaries have conducted the Company, or Company Retained Business only in the ordinary course and there has not been (i) any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 the capital stock of Company, (ii) any issuance of any shares of Company Common Stock put to or other capital stock of Company or any securities convertible into or exchangeable or exercisable for capital stock of Company that is not reflected in Section 4.3, (iii) any split, combination or reclassification of any of the capital stock of Company by Valcheck Company on June 30, 1997; (b) except in or any issuance or the ordinary course authorization of business and consistent with past practice, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations issuance of any other individualsecurities in respect of, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) there has not been any material change in the accounting methods, principles or practices lieu of the Company; (d) there has not been any damage, destruction or loss, whether or not covered by insurance, except for such as would not, individually or in the aggregatesubstitution for shares of capital stock of Company, have a Material Adverse Effect; (eiv) there has been no change in the business, operations, assets (x) any granting by Company or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited Subsidiaries to writing down the value any director or officer of inventory Company or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation its Subsidiaries of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in compensation, (y) any granting by Company or establishment any of its Subsidiaries to any such Person 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 increase in severance or restricted stock awards), stock purchase or other employee benefit plan or agreement or arrangementtermination pay, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, (z) except for increases in base compensation employment, severance or termination arrangements in the ordinary course of business consistent with past practicepractice with employees other than any officer of Company or any of its Subsidiaries, any entry by Company or any of its Subsidiaries into any employment, consulting severance or severance termination agreement or arrangement entered into with any such present Person, (v) any acquisition of or former directorscommitment to purchase or build any property or project involving an expenditure in excess of $2 million in the aggregate, officers except to the extent reflected in the Company's Capital Expenditure Plan attached hereto as Exhibit F or key employees; or (h) there has not been any agreement by as set forth on the Company Disclosure Schedule, (vi) any damage, destruction or loss that has or reasonably could be expected to (i) do any of have a Material Adverse Effect with respect to Company or the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement Company Retained Business or (iivii) takeany change in accounting methods, whether principles or practices by Company materially affecting its assets, liabilities or business, except insofar as may have been required by a change in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectGAAP.

Absence of Changes or Events. Since Except as set forth on Section 3.10 of the Company Disclosure Schedule and as contemplated by this Agreement, since December 31, 19962005, the Company [+] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED FOR CONFIDENTIALITY PURPOSES has (i) conducted business only in the ordinary and usual course, consistent with past practices, and (ii) without limiting the generality of the foregoing, there has not been, occurred or arisen any: (a) there has transaction by the Company except in the Ordinary Course of Business consistent with past practices; (b) modifications, amendments or changes to the certificate of incorporation or bylaws of the Company; (c) payment, discharge, waiver or satisfaction, in any amount in excess of $10,000 in any one case, or $20,000 in the aggregate, of any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise); (d) creation of any Lien (as defined in Section 3.15(b)(vii)) on any of the Company's assets or properties, tangible or intangible, except for liens for current Taxes (as defined in Section 2.10) which are not been any direct yet due and payable or indirect redemption, in good faith dispute and purchase money liens arising out of the purchase or sale of products or services made in the ordinary and usual course of business, consistent with past practice; (e) destruction of, damage to, or loss of any material assets (whether tangible or intangible), material business or material customer of the Company (whether or not covered by insurance); (f) employment dispute, including claims or matters raised by any individual, Governmental Entity, or any workers' representative organization, bargaining unit or union regarding labor trouble or claim of wrongful discharge or other acquisition unlawful employment or labor practice or action with respect to the Company; (g) change in any material election in respect of Taxes, change in any material accounting method in respect of Taxes, agreement or settlement of any material claim or assessment in respect of Taxes, or extension or waiver of the limitation period applicable to any material claim or assessment in respect of Taxes; (h) issuance or sale, or contract to issue or sell, by the Company of any shares of capital stock Company Common Stock or securities convertible into, or exercisable or exchangeable for, shares of the CompanyCompany Common Stock, or any securities, warrants, options or rights to purchase any of the foregoing; (i) declaration, setting aside or payment of any a dividend or other distribution by the Company (whether in cash, stock or property) in respect of its capital stockany Company Common Stock, other than the payment made by the Company with or any split, combination or reclassification in respect to 500,000 of any shares of Company Common Stock put to the Company by Valcheck Company on June 30, 1997; (b) except in the ordinary course of business and consistent with past practice, the Company has not incurred any indebtedness for borrowed moneyStock, or assumed, guaranteed, endorsed any issuance or otherwise as an accommodation become responsible for the obligations authorization of any issuance of any other individualsecurities in respect of, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) there has not been any material change in the accounting methods, principles or practices lieu of the Company; (d) there has not been any damage, destruction or loss, whether or not covered by insurance, except for such as would not, individually or in the aggregatesubstitution for shares of Company Common Stock, have a Material Adverse Effect; (e) there has been no change in the businessor any direct or indirect repurchase, operationsredemption, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation other acquisition by the Company of any shares of its material assetsCompany Common Stock (or options, including but not limited to writing down the value of inventory warrants or writing off notes other rights convertible into, exercisable or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statementexchangeable therefor); (gj) there has not been loan by the Company to any increase in person or establishment entity, incurring by the Company of any bonusindebtedness, insuranceguaranteeing by the Company of any indebtedness, severanceissuance or sale of any debt securities of the Company or guaranteeing of any debt securities of others, deferred compensation, pension, retirement, profit sharing, stock option except for advances to employees for travel and business expenses in the Ordinary Course of Business consistent with past practices; (including without limitation the granting of stock options, stock appreciation rights, performance awards k) any termination or restricted stock awards), stock purchase or other employee benefit plan or agreement or arrangementextension, or any amendment, waiver or modification of the terms, of any Contract; (l) sale, lease, sublease, license or other increase disposition of any of the material assets (whether tangible or intangible) or material properties of the Company or any creation of any Lien in such material assets or material properties; (m) waiver or release of any material right or claim of the compensation payable or Company; [+] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED FOR CONFIDENTIALITY PURPOSES (n) the commencement, settlement, notice or, to become payable to any present or former directors, officers or key employees the Knowledge of the Company, except for increases in base compensation in the ordinary course threat of business consistent with past practice, any lawsuit or any employment, consulting proceeding or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement by other investigation against the Company to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrect.its affairs;

Absence of Changes or Events. Since December 31, 1996: (a) there has Since May 31, 1996 (i) Vitalink and its Subsidiaries have conducted their business in the ordinary course and have not been incurred any material liability or obligation (indirect, direct or indirect redemption, purchase contingent) or entered into any material oral or written agreement or other acquisition of any shares of capital stock of the Company, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (b) except transaction that is not in the ordinary course of business and consistent with past practice(other than the Voting Agreement, the Company has not incurred Shareholders Agreement (as hereinafter defined) and this Agreement) or that could reasonably be expected to result in any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; Vitalink Material Adverse Effect; (cii) there has not been neither Vitalink nor its Subsidiaries have sustained any material change in the accounting methodsloss or interference with their business or properties from fire, principles flood, windstorm, accident, strike or practices of the Company; other calamity (d) there has not been any damage, destruction or loss, whether or not covered by insurance); (iii) there has been no material change in the indebtedness of Vitalink and its Subsidiaries, except for such as would notno change in the capital stock of Vitalink and no dividend or distribution of any kind declared, individually paid or made by Vitalink on any class of its capital stock; (iv) there has been no event or condition which has caused an Vitalink Material Adverse Effect, nor any development, occurrence or state of facts or circumstances that could, singly or in the aggregate, have a reasonably be expected to result in an Vitalink Material Adverse Effect; ; (ev) there has been no change amendment, modification or supplement to any material term of any Vitalink Contract required to be identified in the business, operations, assets or financial condition Section 3.20 of the Company that has had Vitalink Disclosure Statement or will have a Material Adverse Effect; any equity security; and (fvi) there has not been any revaluation no material change by the Company of any of Vitalink in its material assetsaccounting principles, including but not limited to writing down the value of inventory practices or writing off notes or accounts receivablemethods. (b) Since May 31, in any case1996, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement increase in the compensation or other benefits payable, or which could become payable, by the Company Vitalink, to (i) do its officers or key employees, or any amendment of any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectVitalink Compensation and Benefit Plans.

Absence of Changes or Events. Since Except as contemplated by this Agreement or as described in Section 2.11 of the Disclosure Schedule, since December 31, 19961999, the Business has in all material respects been conducted only in the ordinary course, and neither Seller nor any of its affiliates has: (a) there has not been Mortgaged, pledged or subjected to any direct Encumbrance any material portion of the Sale Assets or indirect redemption, purchase or other acquisition any material portion of the assets of any shares of capital stock members of the Company, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997Group; (b) except Encountered any actual or, to Seller's Knowledge, threatened labor union organizing activity or collective bargaining agreement negotiation, had any actual or, to Seller's Knowledge, threatened employee strikes, work stoppages, slow-downs or lock-outs, or experienced any material change in its relationship with employees or the agents, consultants, salespersons, distributors or independent contractors of the Business; (c) Except for the Transition Arrangements, made any change in the rate of compensation, commission, bonus or other direct or indirect remuneration payable, or paid or agreed to pay, conditionally or otherwise, any bonus, extra compensation, pension, severance or vacation pay, to any director, officer, Employee, consultant, sales representative, distributor or independent contractor of the Business, other than in the ordinary course of business and the Business, consistent with past practice, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or ; entered into any commitment employment contract with any officer or transaction material to the Company taken as a whole; (c) there has not been salaried employee, or instituted any material change employee welfare, bonus, stock option, profit-sharing, retirement or similar plan or arrangement other than in the accounting methods, principles or practices ordinary course of the CompanyBusiness, consistent with past practice; (d) there has not been Suffered any damagechange, destruction event or losscondition that, whether or not covered by insurance, except for such as would not, individually in any individual case or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement by the Company to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, Taken any action which, if it had been taken prior to after the date of this Agreement, would have been a breach of Section 4.2; or (f) Entered into any agreement or contract, made any representation commitment or warranty otherwise obligated itself to take any of the types of action described in subsections (a) through (e) of this Article III untrue or incorrectSection 2.11.

Absence of Changes or Events. Since December 31Except as set forth in Xxxxxxxxx'x Form 10-K for the fiscal year ended June 30, 19961997, as amended, as filed with the SEC, or in Xxxxxxxxx'x Form 8-K as filed with the SEC on January 28, 1998, or in Xxxxxxxxx'x Form 13-D as filed with the SEC on January 21, 1998, since June 30, 1997: (a) there has been no material adverse change, or any development involving a prospective material adverse change, in the general affairs, management, business, operations, condition (financial or otherwise) or prospects of Xxxxxxxxx and its subsidiaries taken as a whole; (b) there has not been any direct or indirect redemption, purchase or other acquisition of any shares of capital stock of the CompanyXxxxxxxxx or any of its subsidiaries, or any declaration, setting aside or payment of any dividend or other distribution by the Company Xxxxxxxxx or any of its subsidiaries in respect of its their capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (bc) except in the ordinary course of its business and consistent with past practice, the Company practices neither Xxxxxxxxx nor any of its subsidiaries has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, or made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a wholecorporation; (cd) there has not been any material change in the accounting methods, principles or practices of the CompanyXxxxxxxxx or its subsidiaries; (de) except in the ordinary course of business and for amounts which are not material, there has not been any revaluation by Xxxxxxxxx or any of its subsidiaries of any of their respective assets, including, without limitation, writing down the value of inventory or writing off notes or accounts receivables; (f) there has not been any damage, destruction or loss, whether or not covered by insuranceinsurance or not, except for such as would not, individually or in the aggregate, have a Xxxxxxxxx Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement;; and (g) there has not been any increase in 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 or agreement or arrangement, by Xxxxxxxxx or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement by the Company its subsidiaries to (i) do any of the things described in the preceding clauses (a) through (gf) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III VII untrue or incorrect.

Absence of Changes or Events. Since December 31the Most Recent Balance Sheet Date, 1996: (ai) Seller has not taken any action of a type identified in Section 5.1.2; (ii) Seller has conducted and operated the Portamedic Business in the ordinary course of business, (iii) there has not been a material change in any direct method of accounting or indirect redemption, purchase or other acquisition of any shares of capital stock of the Company, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (b) except in the ordinary course of business and consistent with past practice, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible accounting practice for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; Portamedic Business; (civ) there has not been any material change in damage to or destruction or loss of any Transferred Asset (or other assets or properties owned or previously owned by Seller or its Affiliates relating to the accounting methodsPortamedic Business), principles whether or practices of the Company; not such damage, destruction or loss is covered by insurance; (dv) there has not been any damagesale, destruction lease or loss, whether or not covered by insurance, except for such as would not, individually or other disposition (other than uses of Inventories in the aggregate, have a Material Adverse Effect; ordinary course of business) of any Transferred Asset (e) there has been no change in the business, operations, or other assets or financial condition of properties owned or previously owned by Seller or its Affiliates relating to the Company that has had or will have a Material Adverse Effect; Portamedic Business); (fvi) there has not been any revaluation by the Company creation of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any caseEncumbrance, other than a Permitted Encumbrance, on any Transferred Asset; (vii) Seller has not received notice in the ordinary course of writing (and to Seller’s Knowledge there has been no other indication) by any landlord, carrier, insurer, vendor, customer, supplier or other Person having business and in connection dealings with the revaluation Portamedic Business of certain fixed assets as set forth in any intention to discontinue, diminish or change the Disclosure Statement; terms or conditions of its relationship with Seller (gor with Buyer following the Closing); (viii) there has not been any increase in cancellation or establishment waiver 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 claims or restricted stock awards), stock purchase or other employee benefit plan or agreement or arrangement, rights by Seller or any other increase Person relating to the Portamedic Business in any material respect; (ix) no Contract involving payments during calendar year 2012 or 2013 of more than $100,000 (in either or a combination of both such years) relating to the Portamedic Business has been terminated ; (x) there has been no acceleration, termination, material modification to, cancellation or, waiver under any material Contract relating to (and there has been no material change in the compensation payable properties, assets, rights, conduct or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employeesoperations of) Seller’s Portamedic Business; or (hxi) there has not been any agreement by the Company Contract to (i) do take any action identified in any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this AgreementSection 3.13; and (xii) there has not been any event, would change, or development that has had or could reasonably be expected to have made any representation or warranty in this Article III untrue or incorrecta Material Adverse Effect.

Absence of Changes or Events. Since Except as set forth on Schedule 3.10, since December 31, 19962003, there has been: (a) no change, or development involving a prospective change, in the general affairs, management shareholders’ equity, assets, liabilities, properties, business operations, condition (financial or otherwise) or results of operations of any of the Companies, taken as a whole, that has had or may reasonable be expected to have a Material Adverse Effect, other than those resulting from a change in the general economic or financial conditions in the United States; and (b) no material change in the manner in which the business of any of the Companies is conducted, nor will there be prior to Closing, other than those resulting from actions contemplated under this Agreement. Without limiting the foregoing, except as set forth on Schedule 3.10, since December 31, 2003 there has not occurred: (ai) there has not been any direct or indirect redemption, purchase or other acquisition of any shares of capital stock of the Company, or any declaration, setting aside aside, or payment of any dividend or other distribution by the Company in respect of its the capital stock of any of the Companies or any direct or indirect redemption, purchase, or other acquisition by any of the Companies of any such capital stock or of any interest in or right to acquire any such stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (bii) except any increase in the salary or other compensation (including benefits) of any officer or Employee of AFL (as hereinafter defined) other than increases made in the ordinary course of business and consistent with past practice that did not result in an increase of more than 10% in the salary or other compensation of any such person, nor the hiring of any new employees or the contracting with any present or former employees; (iii) any issuance, sale or disposition by any of the Companies of any debenture, note, other evidence of borrowing (other than borrowing incurred in the ordinary course of business and consistent with past practice), stock or other security issued by any of the Company has not incurred any indebtedness for borrowed moneyCompanies, or assumed, guaranteed, endorsed any modification or otherwise as an accommodation become responsible for the obligations amendment of any right of the holder of any outstanding debenture, note, other individualevidence of borrowing, firm stock or corporation, made other security issued by any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to of the Company taken as a wholeCompanies; (civ) there has not been any material change in the accounting methods, principles or practices of the Company; (d) there has not been any damage, destruction or loss, loss (whether or not covered by insurance) affecting any of the property, except for such as plant or equipment of any of the Companies, which damage, destruction or loss would not, individually or in the aggregate, have a Material Adverse Effect; (ev) there has been no change in the businessany sale, operations, assets transfer or financial condition of the Company that has had or will have a Material Adverse Effect; conveyance (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and consistent with past practice) of the assets or properties of any of the Companies with aggregate book values in connection with the revaluation excess of certain fixed assets as set forth in the Disclosure Statement$50,000; (gvi) any amendment to the articles or certificate of incorporation or bylaws of any of the Companies; (vii) any sale of bonds owned by any of the Companies other than in the ordinary course of business and consistent with past practices. The proceeds of any such sales have been promptly reinvested by such of the Companies in securities with yields equivalent to the yields on the securities sold by such of the Companies; (viii) any material change in any of the Company’s accounting principles, practices or methods, except as required by SAP or applicable law; or (ix) there has not been any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or negative adjustment to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement by the Company to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectA.M. Best ratings.

Absence of Changes or Events. (a) Since December August 31, 19962019, there has been no change or event that has resulted in, or could reasonably be expected to result in, a Material Adverse Effect, and Seller and SHCM have operated the PEO Business only in the Ordinary Course of Business. Without limiting the generality of the foregoing, except as set forth in Schedule 5.13, since August 31, 2019: (i) Neither Seller nor SHCM has entered into, amended or terminated any material Contract with respect to the PEO Business outside the Ordinary Course of Business; (ii) No party (including Seller) has accelerated, terminated, made material modifications to, canceled, rescinded, or waived or entered into an accord and satisfaction with respect to any term, condition, provision, right or remedy of, any Contract with respect to the PEO Business to which Seller is a party or by which it or any of the Purchased Assets are bound; (iii) There has been no material loss, damage or destruction to, or any material interruption in the use of, any of the Purchased Assets (whether or not covered by insurance); (iv) No party has imposed any Lien upon any of the Purchased Assets, whether tangible or intangible; (v) Neither Seller nor SHCM has waived, settled or compromised any material dispute or claim with respect to the PEO Business; (vi) Neither Seller nor SHCM has made any material capital expenditures with respect to the PEO Business outside the Ordinary Course of Business; (vii) Neither Seller nor SHCM has granted any license or sublicense of any material rights under or with respect to any Intellectual Property included in the Purchased Assets; (viii) Neither Seller nor SHCM has made any material change in its method of doing business or any change in its accounting principles or method of application of such principles or practices with respect to the PEO Business; (ix) Neither Seller nor SHCM has written off as uncollectible any notes or accounts receivable, except write‑offs in the Ordinary Course of Business consistent with past practice charged to applicable reserves; (x) Neither Seller nor SHCM has made any loans, advances or capital contributions to, or investments in, any other Person other than loans, advances or capital contributions by Seller to any direct or indirect wholly-owned subsidiary of Seller; (xi) Neither Seller nor SHCM has acquired by merger, consolidation or otherwise any material assets, equity interests or business of any Person or division thereof; (xii) Neither Seller nor SHCM has made any assignment for the benefit of creditors, admitted in writing an inability to pay debts as they mature, filed a petition in voluntary bankruptcy, a petition or answer seeking reorganization, or an arrangement with creditors under the federal bankruptcy laws or any other similar laws; (xiii) Neither Seller nor SHCM has made any material change in employment terms for any of the Employees outside the Ordinary Course of Business; and (xiv) Neither Seller nor SHCM has committed to do, effect, implement or acquiesce to any of the foregoing. (b) Except as set forth in Schedule 5.13(b), since 12:01 a.m. Eastern Time on the Effective Date, (a) Seller has conducted operations of the PEO Business in the Ordinary Course of Business, and (b) there has not been (i) any direct sale or indirect redemption, purchase or other acquisition transfer of any shares assets of capital stock Seller used or held for use primarily in the PEO Business, other than in the Ordinary Course of Business during the Companyperiod after 12:01 a.m. Eastern Time on the Effective Date, or (ii) any declaration, setting aside declaration or payment of any dividend or other distribution by the Company Seller, or any redemption, repurchase or other acquisition of any of their respective equity securities, (iii) any loan, advance or capital contribution to any other Person by Seller in respect of its capital stockthe PEO Business or any investment in or acquisition of any other Person by Seller in respect of the PEO Business, other than the payment made by the Company with respect advances to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (b) except employees for travel-related expenses in the ordinary course Ordinary Course of business and consistent with past practiceBusiness during the period after 12:01 a.m. Eastern Time on the Effective Date, the Company has not incurred (iv) any indebtedness for borrowed moneycapital expenditures, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations any incurrence of any other individualobligation to make any capital expenditures, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) there has not been any material change in the accounting methods, principles or practices respect of the Company; PEO Business, (dv) there has not been any damage, destruction or loss, whether or not covered by insurance, except for such as would not, individually or in the aggregate, have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in the base wage 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 or agreement or arrangementsalary payable to, or any other increase components of compensation and/or employee health and welfare benefits of, any employee of or consultant to Seller in the compensation payable or to become payable to any present or former directors, officers or key employees respect of the CompanyPEO Business other than to the extent mandated by applicable Law, except for increases in base compensation in (vi) any transaction with any party to the ordinary course Noncompetition Agreement, any of business consistent with past practicetheir Affiliates, or any employment, consulting or severance agreement or arrangement member of their family entered into with or consummated by Seller (including any such present payment of compensation, commissions or former directorsbonuses, officers but excluding payment of base salary at the annualized rate disclosed to Buyer prior to the Effective Date and excluding employee health and welfare benefits in the Ordinary Course of Business for the period after 12:01 a.m. Eastern Time on the Effective Date), in respect of the PEO Business, (vii) any cancellation, settlement or key employees; or waiver of any claims by Seller against any third party, in respect of the PEO Business, (hviii) there has not been any costs and expenses of Seller, paid or reimbursed by Seller, in respect of the PEO Business, (ix) any incurrence or guaranty of any indebtedness, except (A) customer or client deposits held by Seller arising in the Ordinary Course of Business and received after 12:01 a.m. Eastern Time on the Effective Date, and (B) current charges for business expenses on company credit cards arising in the Ordinary Course of Business and incurred after 12:01 a.m. Eastern Time on the Effective Date, (x) any election relating to Taxes, any entry into any closing agreement by relating to Taxes, any surrender of any right to claim a refund of Taxes, any settlement or compromise of any Tax claim or assessment, any filing of any Tax Return or any amended Tax Return, any consent to any extension or waiver of the Company limitation period applicable to any Tax claim or assessment, any failure to pay any Tax that becomes due and payable (including any estimated Tax payments), any adoption or change of any Tax accounting method and/or (xi) any Seller Interim Transfer in excess of $50,000 after netting the aggregate amount any and all Buyer Interim Payable and Expenses (clauses (i) do any of the things described in the preceding clauses through and including (axi) through (g) other than are hereby referred to herein as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrect“Unpermitted Financial Leakage”).

Absence of Changes or Events. Since December 31, 1996: (a) Since the Balance Sheet Date, there has not been any direct change, effect, event or indirect redemption, purchase occurrence that has had or other acquisition of any shares of capital stock of the Company, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect would reasonably be expected to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997;have a Seller Material Adverse Effect. (b) From the Balance Sheet Date to the date of this Agreement, except as set forth in Section 3.13(b) of the Seller Disclosure Schedule, Seller has caused the Business to be conducted in all material respects in the ordinary course and: (i) the Company has not made any distribution to any holder of any Equity Interests, whether or not upon or in respect of any interests of the Company; (ii) neither Seller nor the Company has granted to any Employee any material increase in base salary, wages, bonuses, incentive compensation, pension, severance, other enhanced payment or termination pay, except (A) in the ordinary course of business and consistent business, (B) in connection with past practicea promotion based on job performance or workplace requirements or (C) as may have been required under existing agreements, including any Company Benefit Plan, or applicable Law; (iii) the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) there has not been any material change in the its accounting methods, principles or practices of the Companyexcept as required by GAAP or by applicable Law; (div) there the Company has not been incurred or guaranteed any damageindebtedness for borrowed money; (v) neither Seller nor the Company has sold, destruction leased or loss, whether otherwise disposed of any assets of the Company used in the operation or not covered by insuranceconduct of the Business, except for such as would not(A) sales of raw materials, individually or in the aggregatework-in-process, have a Material Adverse Effect; (e) there has been no change in the businessfinished goods, operationssupplies, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assetsparts, including but not limited to writing down the value of inventory or writing off notes or accounts receivablespare parts and other inventories, in any each case, other than in the ordinary course of business and in connection with the revaluation of certain fixed business, (B) assets as set forth that were obsolete or no longer used in the Disclosure StatementBusiness and (C) cash distributions to its Affiliates; (gvi) there the Company has not been consummated the acquisition of, by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any increase in other manner, any business or establishment of any bonuscorporation, insurancepartnership, 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 association or other employee benefit plan business organization or agreement division or arrangement, or any a substantial portion of the assets thereof (other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of than inventory); and (vii) neither Seller nor the Company, except for increases in base compensation in the ordinary course of business consistent with past practiceas applicable, has authorized or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement by the Company agreed to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) takedo, whether in writing or otherwise, any action which, if taken prior to of the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectforegoing actions.

Absence of Changes or Events. Since December 31, 1996: 2001, the Purchased Business has been carried on in the ordinary course in a manner consistent with past practice. Sellers have not, since December 31, 2001, (a) there has not been incurred any direct obligation or indirect redemptionliability relating to the Assets or the Purchased Business (whether absolute, purchase accrued, contingent or other acquisition of any shares of capital stock of the Company, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stockotherwise), other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (b) except in the ordinary course of business and consistent with past practice; (b) mortgaged, the Company has not incurred any indebtedness for borrowed moneypledged, granted a security interest in or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances subjected to any other individual, firm or corporation or entered into Encumbrance any commitment or transaction material to of the Company taken as a whole; Assets; (c) there has not been sold or transferred any material change of the Assets, other than in the accounting methodsordinary course of business, principles or practices canceled any debts or claims or waived or released any rights of the Company; Purchased Business; (d) there leased, licensed or granted to any third party any rights in any of the Assets; (e) experienced any event, circumstance or condition which has not been had, or with the passage of time is reasonably likely to have, a Material Adverse Effect; (f) suffered any material damage, destruction or lossloss of physical property or goods, whether or not covered by insurance, except for such as would not, individually or in relating to the aggregate, have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; Assets; (g) there has not been made any increase change in any accounting principles or establishment practices or in its method 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 applying such accounting principles or restricted stock awards), stock purchase or other employee benefit plan or agreement or arrangementpractices, or made any other material change in any business practice affecting the Purchased Business; (h) granted any material increase in the salary, commission rate or other compensation (including, without limitation, bonuses, profit sharing or deferred compensation) payable or to become payable to any present Employee, Former Employee, consultant or former directors, officers or key employees agent of the Company, except for increases in base compensation Purchased Business other than in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement by the Company to (i) waive any material right or cancel or enter into any material contract, lease, license, obligation, commitment, purchase or sale, debt or claim relating to the Purchased Business other than in the ordinary course of business; or (j) entered into any agreement to do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectforegoing.

Absence of Changes or Events. Since December 31Except as set forth in Section 2.08 of the Disclosure Schedule, 1996since the Most Recent Balance Sheet Date: (a) the Company has conducted its business only in the Ordinary Course of Business; (b) there has occurred no Material Adverse Change, nor any change, circumstance, development, state of facts, events or effect that the Company reasonably expects would result in a Material Adverse Change; (c) the Company has not been (i) amended its articles of association or by-laws; (ii) issued, sold, transferred, pledged, disposed of or encumbered any direct share of any class or indirect redemptionseries of its Capital Stock or securities convertible into or exchangeable for, purchase or other acquisition options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock any class or series of the Companyits Capital Stock; (iii) declared, or any declaration, setting set aside or payment of paid any dividend or other distribution by the Company payable in respect of its capital stockcash, other than the payment made by the Company stock or property with respect to 500,000 any shares of Common Stock put any class or series of its Capital Stock; (iv) split, combined or reclassified any shares of any class or series of its Capital Stock; (v) except as expressly contemplated herein, modified the terms of any option, warrant, call commitment or right; or (vi) redeemed, purchased or otherwise acquired directly or indirectly any shares of any class or series of its Capital Stock, or any instrument or security that consists of or includes a right to the Company by Valcheck Company on June 30, 1997acquire such shares; (bd) except the Company has not adopted a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or otherwise permitted the corporate existence of the Company or the rights or franchises or any license, permit or authorization under which its business operates to be suspended, lapsed or revoked; (e) the Company has not changed in any material respect any of the ordinary course of business and consistent with past practice, accounting methods used by it; (f) the Company has not incurred any indebtedness for borrowed moneya loss of, or assumedsignificant injury to, guaranteed, endorsed or otherwise any of its assets whether as an accommodation become responsible for the obligations a result of any natural disaster, labor trouble, accident, other individual, firm casualty or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a wholeotherwise; (cg) there the Company has not been incurred, or become subject to, any material change liability (absolute or contingent, matured or unmatured, known or unknown), and the Company knows of no basis for such liabilities, except current liabilities incurred in the accounting methods, principles or practices Ordinary Course of the CompanyBusiness consistent with past practice; (dh) there the Company has not been mortgaged, pledged or subjected to any damageLien any of its assets; (i) the Company has not sold, destruction exchanged, transferred or loss, whether or not covered by insuranceotherwise disposed of any of its assets, except for such in the Ordinary Course of Business; (j) the Company has not canceled any debts or claims individually in excess of EUR 1,000 or in aggregate in excess of EUR 10,000; (k) the Company has not written down the value of any assets or written off as would notuncollectible any accounts receivable, except in the Ordinary Course of Business and none of which, individually or in the aggregate, have would result in a Material Adverse EffectChange; (el) there has been no change in the businessexcept as may be required by applicable Law, operations, assets or financial condition of the Company that has had not entered into, adopted, amended or will have a Material Adverse Effectterminated (i) any Benefit Plan; (ii) any arrangement to increase in any manner the compensation or fringe benefits of any Company Personnel; or (iii) any arrangement to pay any bonus, severance, termination pay, or similar benefit to any Company Personnel; (fm) there the Company has not been any revaluation by the Company of changed its fiscal year, revalued any of its material assetsassets or made any changes in financial or Tax accounting methods, including but not limited to writing down the value of inventory principles, practices or writing off notes policies, except as required by German GAAP or accounts receivableapplicable Law, in or made, changed or revoked any caseTax election or settled or compromised any Tax liability, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statementor amended any Tax Return; (gn) there the Company has not been permitted any increase in insurance policy naming the Company as a beneficiary 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 or agreement or arrangementloss payee to expire, or any other increase in the compensation payable to be canceled or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employeesterminated; or (ho) there the Company has not been made any agreement by the Company to (i) do any of the things described in the preceding clauses (a) through (g) foregoing, other than as expressly negotiations with Buyer and its Representatives regarding the transactions contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of by this Agreement, would have made any representation or warranty in this Article III untrue or incorrect.

Absence of Changes or Events. Since December 31, 1996: (a) there has not been any direct or indirect redemption, purchase or other acquisition of any shares of capital stock of the Company, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (b) except in the ordinary course of business and consistent with past practice, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) there has not been any material change in the accounting methods, principles or practices of the Company; (d) there has not been any damage, destruction or loss, whether or not covered by insurance, except for such as would not, individually or in the aggregate, have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any any~employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement by the Company to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrect.

Absence of Changes or Events. Since December 31Except as set forth in the Company Current SEC Reports, 1996since the date of the Company 10-K: (a) there has been no material adverse change, or any development involving a prospective material adverse change, in the general affairs, management, business, op- erations, condition (financial or otherwise) or prospects of the Company and its subsidiaries taken as a whole; (b) there has not been any direct or indirect redemption, purchase or other acquisition of any shares of capital stock of the CompanyCompany or any of its subsidiaries, or any declaration, setting aside or payment of any dividend or other distribution by the Company or any of its subsidiaries in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (bc) except in the ordinary course of its business and consistent with past practice, neither the Company nor any of its subsidiaries has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, or made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a wholecorporation; (cd) there has not been any material change in the financial or the accounting methods, principles or practices of the CompanyCompany or its subsidiaries; (de) except in the ordinary course of business and for amounts which are not material, there has not been any revaluation by the Company or any of its subsidiaries of any of their respective assets, including, without limitation, writing down the value of inventory or writing off notes or accounts receivables; (f) there has not been any damage, destruction or loss, whether or not covered by insuranceinsurance or not, except for such as would not, individually or in the aggregate, have a Company Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement;; and (g) there has not been any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement by the Company or any of its subsidiaries to (i) do any of the things described in the preceding clauses (a) through (gf) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III V untrue or incorrect.

Absence of Changes or Events. Since December 31the date of the Reference Balance Sheet, 1996except as set forth in Schedule 3.08 of the Company Disclosure Schedule, the Company has conducted its businesses only in the ordinary course of business and in a manner consistent with past custom and practice (the “Ordinary Course of Business”), and none of the following have occurred: (a) there has not been any direct Material Adverse Effect; (b) any change in any method of accounting or indirect redemptionaccounting practice by the Company, purchase except for any change required by a change in the Specified Accounting Principles or applicable Law; (c) any (i) general increase in benefits payable under any existing severance or termination pay policies or (ii) material increase in compensation, bonus or other benefits payable to directors, officers or employees of the Company; (d) any declaration or payment of any dividends or distributions with respect to equity securities of the Company or any redemption of any equity securities of the Company; (e) any sale, lease or disposal of any of the Company’s assets, which assets individually have a value in excess of USD$50,000, other than inventory sold in the Ordinary Course of Business; (f) any agreement, contract, lease, or license (or series of related agreements, contracts, leases, and licenses) entered into by the Company involving more than USD$50,000 or outside the Ordinary Course of Business, including (without limitation) any severance, termination or change of control agreement with any directors, officers or employees of the Company; (g) any acceleration, termination, modification, or cancellation of any agreement, contract, lease, or license (or series of related agreements, contracts, leases, and licenses) involving more than USD$50,000 to which the Company is a party or by which it is bound; (h) any imposition or creation of any Liens (other than Permitted Liens) upon any of the Company’s assets, tangible or intangible; (i) any capital expenditure (or series of related capital expenditures) involving more than USD$50,000 or outside the Ordinary Course of Business; (j) any capital investment in, any loan to, or any acquisition of the securities or assets of, any shares other person (or series of related capital investments, loans, and acquisitions) involving more than USD$50,000 or outside the Ordinary Course of Business; (k) any issuance, sale, or other disposal of capital stock of the Company, or any declaration, setting aside or payment grant of any dividend options, warrants, or other distribution by the Company in respect of its rights to purchase or obtain (including upon conversion, exchange, or exercise) any such capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (bl) except in the ordinary course of business and consistent with past practice, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered entry into any commitment employment contract or transaction material to the Company taken as a whole; (c) there has not been any material change in the accounting methods, principles or practices of the Company; (d) there has not been any damage, destruction or loss, whether or not covered collective bargaining agreement by insurance, except for such as would not, individually or in the aggregate, have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practicewritten or oral, or modification of the terms of any employment, consulting existing such contract or severance agreement or arrangement entered into with any such present or former directors, officers or key employeesagreement; or (hm) there has not been any agreement by the Company to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectforegoing.

Absence of Changes or Events. Since December 31the Microsource Balance Sheet Date, 1996Microsource has conducted its business in all material respects in the ordinary course and has not, without the prior written consent of Giga-tronics: (a) there has not been incurred any direct obligation or indirect redemptionliability, absolute, accrued, contingent or otherwise, whether due or to become due, except current liabilities for trade or business obligations incurred in connection with the purchase of goods or other acquisition of any shares of capital stock of the Company, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (b) except services in the ordinary course of business and consistent with past its prior practice, none of which liabilities, in any case or in the Company has not incurred aggregate, materially and adversely affects the business, liabilities or financial condition of Microsource; (b) discharged or satisfied any indebtedness for borrowed moneylien, charge or encumbrance other than those then required to be discharged or satisfied, or assumedpaid any obligation or liability, guaranteedabsolute, endorsed accrued, contingent or otherwise as an accommodation otherwise, whether due or to become responsible for due, other than current liabilities shown on the obligations Balance Sheet and current liabilities incurred since the Balance Sheet Date in the ordinary course of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a wholebusiness and consistent with its prior practice; (c) there has not been declared or made any material change payment of dividends or other distribution to its shareholders or upon or in the accounting methodsrespect of any shares of its capital stock, principles or practices purchased, retired or redeemed, or obligated itself to purchase, retire or redeem, any of the Companyits shares of capital stock or other securities; (d) there has not been mortgaged, pledged or subjected to lien, charge, security interest or any other encumbrance or restriction any of its property, business or assets, tangible or intangible; (e) sold, transferred, leased to others or otherwise disposed of any of its assets, except for inventory sold in the ordinary course of business, or canceled or compromised any debt or claim, or waived or released any right of substantial value; (f) received any notice of termination of any contract, lease or other agreement or suffered any damage, destruction or loss, loss (whether or not covered by insurance, except for such as would not, individually ) which in any case or in the aggregate, have has had a Material Adverse Effectmaterially adverse effect on the assets, operations or prospects of Microsource; (eg) there has been no encountered any labor union organizing activity, had any actual or employee strikes, work stoppages, slow-downs or lock-outs, or had any material change in its relations with its employees, agents, customers or suppliers or with any governmental authorities or self-regulatory organizations; (h) transferred or granted any rights under, or entered into any settlement regarding the breach or infringement of, any United States or foreign license, patent, copyright, trademark, trade name, invention or similar rights, or modified any existing rights with respect thereto; (i) made any change in the businessrate of compensation, operationscommission, assets bonus or financial condition other direct or indirect remuneration payable, or paid or agreed or orally promised to pay, conditionally or otherwise, any bonus, extra compensation, pension or severance or vacation pay, to any shareholder, director, officer, employee, salesman, distributor or agent of Microsource; (j) issued or sold any shares of its capital stock or other securities, or issued, granted or sold any options, rights or warrants with respect thereto (other than under its stock option plans identified in the Microsource Disclosure Letter), or acquired any capital stock or other securities of any corporation or any interest in any business enterprise, or otherwise made any loan or advance to or investment in any person, firm or corporation; (k) made any capital expenditures or capital additions or betterments in excess of an aggregate of $25,000; (l) changed its banking or safe deposit arrangements; (m) instituted, settled or agreed to settle any litigation, action or Proceeding before any court or governmental body relating to Microsource or its property; (n) failed to replenish its inventories and supplies in a normal and customary manner consistent with its prior practice and prudent business practices prevailing in the industry, or made any purchase commitment in excess of the Company that normal, ordinary and usual requirements of its business or at any price in excess of the then current market price or upon terms and conditions more onerous than those usual and customary in the industry, or made any change in its selling, pricing, advertising or personnel practices inconsistent with its prior practice and prudent business practices prevailing in the industry; (o) suffered any change, event or condition which, in any case or in the aggregate, has had or will may have a Material Adverse Effectmaterially adverse effect on Microsource's condition (financial or otherwise), properties, assets, liabilities or operations, including, without limitation, any change in Microsource's revenues, costs, backlog or relations with its employees, agents, customers, or suppliers; (fp) there has not been entered into any revaluation by the Company of any of its material assetstransaction, including but not limited to writing down the value of inventory contract or writing off notes or accounts receivable, in any case, commitment other than in the ordinary course of business and or paid or agreed to pay any legal, accounting, brokerage, finder's fee, taxes or other expenses in connection with with, or incurred any severance pay obligations by reason of this Agreement or the revaluation of certain fixed assets as set forth in the Disclosure Statementtransactions contemplated hereby; (gq) there has not been any increase in change by Microsource of its accounting principles, methods 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 practices or restricted stock awards), stock purchase or other employee benefit plan or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employeesmanner it keeps its books and records; or (hr) there has not been entered into any agreement by the Company or made any commitment to (i) do take any of the things types of action described in the preceding clauses subparagraphs (a) through (gq) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectabove.

Absence of Changes or Events. Since December 31Except as otherwise contemplated by this Agreement or such actions as have been taken in connection with the transactions contemplated hereby, 1996since the Balance Sheet Date the business of the Target Companies has been conducted in the Ordinary Course of Business and there has not been, except as set forth in Schedule 4.15: (a) there any event, occurrence, development or state of circumstances or facts that has not been any direct or indirect redemptioncould reasonably be expected to have, purchase individually or other acquisition of any shares of capital stock of in the Companyaggregate, or a Material Adverse Effect; (b) any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 any shares of Common Stock put to capital stock of the Company Target Companies or any repurchase, redemption or other acquisition by Valcheck Company on June 30any of the Target Companies of any outstanding shares of capital stock or other securities of, 1997; (b) except in the ordinary course of business and consistent with past practiceor other ownership interests in, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a wholeTarget Companies; (c) there has not been any amendment of any material change in the accounting methods, principles or practices term of any outstanding security of the CompanyTarget Companies; (d) there has not been any incurrence, assumption or guarantee by any Target Company of any Indebtedness other than (i) with respect to existing bank arrangements in the Ordinary Course of Business, or (ii) trade payables and accrued liabilities in the Ordinary Course of Business; (e) any making of any material loan, advance or capital contribution to or investment in any Person; (f) except as required by Applicable Law, any adoption or material amendment in any respect of any material bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, pension, retirement, employment or other employee benefit agreement, trust, plan or other arrangement for the benefit or welfare of any director or elected officer of any Target Company; (g) any damage, destruction or loss, whether or loss not covered by insurance, except for such as would notthat has or could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; (eh) there has been no change in the business, operations, assets or financial condition any taking of the Company that has had or will have a Material Adverse Effectactions set forth in Section 7.6(b); (fi) there has not been a loss of service of any revaluation Personnel who are material, individually or in the aggregate, to the operations or conduct of the Target Companies, as the case may be; (j) any cancellations or terminations by any material supplier, customer or contractor of the Company Target Companies; and (k) any material damage to or loss or theft of any of its the material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement by the Company to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectTarget Companies.

Absence of Changes or Events. Since (a) Except as set forth on Schedule 3.4(a) hereto, since December 31, 1996: (a) there has 1999, Seller and MSSC have conducted their respective businesses in the ordinary course consistent with their past practices and have not been incurred any direct or indirect redemptionmaterial liability, purchase or other acquisition of any shares of capital stock of the Company, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (b) except in the ordinary course of business and their businesses consistent with their past practice, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole;practices. (cb) Except as specifically described in Schedule 3.4(b) hereto and other than the sale or distribution of Seller's interest in DGH (including amounts owed to Seller by DGH), since December 31, 1999 there has not been (i) any material change change, or any event involving a prospective change, in the accounting methodsbusiness, principles financial condition or practices results of operations of Seller or MSSC which has had, or could have, individually or in the Company; aggregate, a GAC Material Adverse Effect; (dii) there has not been any damage, destruction or loss, whether or not covered by insuranceinsurance or not, except for such as would notwhich has had, or could have, individually or in the aggregate, have a GAC Material Adverse Effect; ; (eiii) there has been no change any entry into or termination of any material commitment, contract, agreement or transaction (including, without limitation, any material borrowing or capital expenditure or sale or other disposition of any material asset or assets) of or involving Seller and MSSC, other than this Agreement or in the ordinary course of business; (iv) any redemption, operationsrepurchase or other acquisition for value of their respective capital stock by Seller, assets or financial condition any issuance of the Company that has had capital stock of Seller or will have a Material Adverse Effect; MSSC or of securities convertible into or rights to acquire any such capital stock or any dividend or distribution declared, set aside, or paid on capital stock of Seller or MSSC; (fv) there has not been any revaluation by the Company transfer of or right granted under any material lease, license, agreement or Intellectual Property of Seller or MSSC or any liens or other security interests in any Intellectual Property of Seller or MSSC; (vi) any sale or other disposition of any asset of its material assets, including but not limited to writing down the value Seller or MSSC or any Encumbrance (or any satisfaction and discharge thereof) on any asset of inventory Seller or writing off notes or accounts receivable, in any caseMSSC, other than in the ordinary course of business and business, or any agreement relating to any of the foregoing; (vii) any default or breach by Seller or MSSC in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; any material respect under any contract, license or permit; (gviii) there has not been any general wage or salary increase or any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, executive officers or key management employees of the Company, except for increases in base compensation Seller or MSSC or any entry into any employment contract with any executive officer or key salaried employee of Seller or MSSC; and (ix) any change in the ordinary course accounting methods of business consistent with past practice, Seller or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement by the Company to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectMSSC.

Absence of Changes or Events. Since December 31, 1996: (a) Since September 30, 2003, there has not been any direct change, event, fact or indirect redemptioncircumstance affecting the Companies or their subsidiaries that, purchase when taken in the aggregate with all other changes, events and circumstances whether beneficial or other acquisition of any shares of capital stock of detrimental to the CompanyCompanies and their subsidiaries, taken as a whole, has had, or any declarationwould reasonably be expected to have, setting aside or payment of any dividend or other distribution by the a Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997;Material Adverse Effect. (b) except Between September 30, 2003 and the date hereof, the Companies and their subsidiaries have been operated in the ordinary course of business in substantially the same manner as currently conducted, and consistent have not: (i) amended their articles of incorporation, bylaws, limited liability company agreements or comparable organizational documents; (ii) declared, set aside or paid any dividend or made any other distribution on or in respect of any shares of their capital stock, membership interests, equity interests or similar ownership interests other than transfers between a Company and its subsidiaries; (iii) redeemed or otherwise acquired any shares of their capital stock, membership interests, equity interests, or similar ownership interests; (iv) issued, delivered, sold, granted, pledged or otherwise encumbered any capital stock, membership interests or similar ownership interest or any securities convertible or exchangeable into or exchangeable for any rights, warrants, "phantom" stock rights, stock appreciation rights, options or similar derivative securities to acquire, any such capital stock, membership interests or similar ownership interest or made any announcement of the intention to so issue, deliver, sell, grant, pledge or encumber any such capital stock, membership interests or similar ownership interest, convertible securities, rights, warrants, "phantom" stock rights, stock appreciation rights, options or similar derivative securities; (A) split, combined or reclassified any of its capital stock, membership interests or similar ownership interest or engaged in a recapitalization, exchange of shares or similar transaction with past practicerespect to its capital stock, membership interests or similar ownership interest or (B) issued or authorized the issuance of any other securities in respect of, in lieu of, or in substitution for, any of its capital stock, membership interests or similar ownership interest; (A) granted any severance or termination pay to any of their employees, directors or officers, (B) entered into, amended or increased benefits payable under any severance or termination pay policies or employment or other agreements, (C) established, adopted or amended any bonus, profit sharing, thrift, pension, retirement, change-in-control, deferred compensation, compensation, stock option, restricted stock or other benefit plan or arrangement covering any of their directors, officers or employees or (D) increased compensation, bonus or other benefits payable to any of their directors or officers, in each case other than (1) as required by Applicable Law, and (2) as required under the terms of any Company has not Benefit Plan or to satisfy contractual obligations in existence on September 30, 2003; (vii) incurred any indebtedness for borrowed money, money or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of granted any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a wholeguarantee in respect thereof; (cviii) there has not been any material change in the accounting methodsacquired by merging or consolidating with, principles or practices by purchasing a substantial portion of the Company; (d) there has not been assets of, or by any damageother manner, destruction any business or lossany corporation, whether partnership, association or not covered by insurance, except for such as would not, individually other business organization or in the aggregate, have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any casedivision thereof, other than those in the ordinary course of business and not in connection with the revaluation excess of certain fixed assets as set forth $100,000 in the Disclosure Statementaggregate; (gix) there has not been any increase in sold, transferred, leased or establishment otherwise disposed of any bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing, stock option (including without limitation the granting assets in excess of stock options, stock appreciation rights, performance awards or restricted stock awards), stock purchase or other employee benefit plan or agreement or arrangement, or any other increase $100,000 in the compensation payable or to become payable to any present or former directors, officers or key employees of the Companyaggregate, except for increases in base compensation (A) the sale or disposal of obsolete or excess equipment or (B) sales, transfers, leases or disposals in the ordinary course of business consistent with past practice; (x) canceled any material indebtedness (individually or in the aggregate) or waived any claims or rights of material value; (xi) paid, loaned or advanced any amount to, or sold, transferred or leased any employmentassets to, consulting or severance entered into any agreement or arrangement entered into with with, any Seller; (xii) made any change in accounting methods, principles or practices, except as required by GAAP or Applicable Law; (xiii) taken or permitted any action that would cause either Ecolochem or International to fail to be treated as an "S corporation" within the meaning of Section 1361 of the Code, or to fail to be treated as an "S corporation" under comparable state and local Tax laws (or permitted any such present action to be taken by any of their respective shareholders); (xiv) amended any Tax Return or former directorschanged or modified any method of reporting income, officers deductions or key employeesother items for Tax purposes; or (hxv) there has not been any agreement by the Company to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) takeagreed, whether in writing or otherwise, to do any action whichof the foregoing. (c) Between September 30, if taken prior 2003 and the date hereof, there has not occurred any event or occurrence resulting in damage, destruction or other casualty loss of $100,000 or more (whether or not covered by insurance) to the date of this Agreement, would have made any representation Companies or warranty in this Article III untrue their subsidiaries or incorrecttheir respective assets.

Absence of Changes or Events. Since December 31, 1996: (a) From the date of the Balance Sheet through (and including) the date of this Agreement, there has not been any direct or indirect redemption, purchase or other acquisition of any shares of capital stock of material adverse effect on the Company, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997;Business. (b) except From the date of the Balance Sheet through (and including) the date of this Agreement, the Business has been conducted in the ordinary course, and in substantially the same manner as previously conducted. (c) Since the date of the Balance Sheet through (and including) the date of this Agreement: (i) the Business has not amended the organizational documents of any Transferred Entity; (ii) the Business has not declared, set aside or paid any dividend or made any other distribution to the holders of the equity interests in any Transferred Entity, other than dividends or other distributions paid or payable to another Transferred Entity; (iii) the Business has not redeemed or otherwise acquired any shares of equity interests in, or any other securities of, a Transferred Entity or issued (A) any equity interest in, or any other security of, a Transferred Entity, (B) any option or warrant for, or any security convertible into, or exercisable or exchangeable for, any equity interests in, or any other security of, a Transferred Entity, (C) “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings to which any Transferred Entity is a party or by which any of them is bound (1) obligating any Transferred Entity to issue, deliver or sell, or cause to be issued, delivered or sold, additional units of its equity interests or any security convertible into, or exercisable or exchangeable for, any equity interest in any Transferred Entity or any Transferred Entity Voting Debt, (2) obligating any Transferred Entity to issue, grant, extend or enter into any such option, warrant, security, right, unit, commitment, Contract, arrangement or undertaking or (3) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of the Transferred Equity Interests or (D) any bond, debenture, note or other indebtedness having the right to vote (or convertible into, or exercisable or exchangeable for, securities having the right to vote) on any matters on which the holders of equity interests in a Transferred Entity may vote; (iv) the Business has not split, combined or reclassified any of the equity interests in any Transferred Entity, or issued any other security in respect of, in lieu of or in substitution for the equity interests in any Transferred Entity; (v) the Business has not loaned, advanced, invested or made a capital contribution of any amount to or in any person, other than (A) advances in the ordinary course of business and consistent with past practiceor (B) loans, the Company has not incurred any indebtedness for borrowed moneyadvances, investments or assumed, guaranteed, endorsed capital contributions to or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a wholein another Transferred Equity; (cvi) there the Business has not been commenced any material change litigation, other than (i) litigation in connection with the accounting methodscollection of accounts receivable or (ii) litigation as a result of suits, principles actions or practices of other proceedings commenced against the CompanyBusiness; (dvii) there the Business has not been changed the fiscal year of any damageTransferred Entity, destruction or loss, whether or not covered by insurance, except for such as would not, individually or in the aggregate, have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of revalued any of its material assets, assets or made any change in any method of accounting or accounting practice or policy (including but not limited procedures with respect to writing down the value payment of inventory or writing off notes or accounts payable and collection of accounts receivable), except as required by GAAP or applicable Law; (viii) the Business has not made, revoked or changed any material Tax election, adopted or changed any material Tax accounting method or period, filed any material amended Tax Return, settled any material Tax claim or assessment or consented to any extension or waiver of the statute of limitations period applicable to any Tax claim or assessment, or surrendered any right to claim a Tax refund, offset or other reduction in Tax liability; or (ix) the Business has not agreed to make any casecapital expenditures, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets (A) as set forth in the Disclosure Statement; (g) there has not been any increase Capital Expenditure Budget attached in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees Section 3.15 of the Company, except for increases in base compensation in Seller Letter (the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or “Cap Ex Budget”) and (hB) there has not been any agreement by the Company to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken capital expenditures made prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrect.

Absence of Changes or Events. Since Except as set forth on Section 4.6 of the Schedule of Exceptions, since December 31, 1996:2005 (the date of the Base Financial Statements): (a) there has not been any direct or indirect redemption, purchase or other acquisition of any shares of capital stock Neither of the Company, or Target Entities has entered into any declaration, setting aside or payment material transaction that was not in the Ordinary Course of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997Business; (b) except for sales or licenses of goods and services in the ordinary course Ordinary Course of business and consistent with past practiceBusiness, the Company there has not incurred any indebtedness for borrowed moneybeen no sale, assignment, transfer, mortgage, pledge, encumbrance or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations lease of any other individual, firm asset or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to property of either of the Company taken as a wholeTarget Entities; (c) there has not been no declaration or payment of a dividend, or any material change in the accounting methodsother declaration or payment of a dividend, principles or practices any other declaration, payment or distribution of any type or nature by either of the CompanyTarget Entities, whether in cash or property, and no purchase or redemption of any Equity Securities or other securities of either of the Target Entities; (d) there has been no declaration, payment or commitment for the payment by either of the Target Entities of a bonus or other additional salary, compensation or benefit to any employee of the Target Entities that was not been any damage, destruction or loss, whether or not covered by insurance, except for such as would not, individually or in the aggregate, have a Material Adverse EffectOrdinary Course of Business; (e) there has been no change release, compromise, waiver or cancellation of any debt to, claim by, or right of either of the Target Entities other than in the business, operations, assets or financial condition Ordinary Course of the Company that has had or will have a Material Adverse EffectBusiness; (f) there has not have been any revaluation no capital expenditures by either of the Company Target Entities in excess of any of its material assets, including but not limited to writing down the value of inventory $25,000 individually or writing off notes or accounts receivable, in any case, other than $100,000 in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statementaggregate; (g) there has not been any increase no change in accounting methods or establishment practices or revaluation of any bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing, stock option (including without limitation the granting asset of stock options, stock appreciation rights, performance awards or restricted stock awards), stock purchase or other employee benefit plan or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees either of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; orTarget Entities; (h) there has not been any agreement by no damage, destruction to or loss of, physical property of either of the Company to Target Entities; (i) there has been no loan by either of the Target Entities, or guaranty by either of the Target Entities of any loan, to any stockholder, director, officer or employee of either of the Target Entities, other than routine advances on account of travel, lodging and other business expenses in the Ordinary Course of Business; (j) there has been no amendment or termination of any oral or written contract, agreement or license to which either of the Target Entities is a party or by which either of the Target Entities is bound, except in the Ordinary Course of Business, or except as expressly contemplated thereby; (k) neither of the Target Entities has failed to satisfy any of its debts, obligations or liabilities as the same became due and payable; (l) neither of the Target Entities has entered, renewed or permitted the renewal of (whether by operation of any term thereof providing for automatic renewal or otherwise) into any agreement, contract, lease or license (or series of related agreements, contracts, leases or licenses) with any vendor or supplier either involving more than $25,000 in any 12-month period, other than in the Ordinary Course of Business; (m) neither of the Target Entities has imposed any Lien, other than Permitted Liens, upon any of its assets or properties, tangible or intangible; (n) Neither of the Target Entities has made any capital investment in, any loan to, or any acquisition of the securities or assets of, any other Person (or series of related capital investments, loans, and acquisitions) either involving more than $25,000 or outside the Ordinary Course of Business; (o) neither of the Target Entities has issued any note, bond, or other debt security or created, incurred, assumed, or guaranteed any indebtedness for borrowed money or capitalized lease obligation either involving more than $25,000 singly or $100,000 in the aggregate; (p) neither of the Target Entities has delayed or postponed the payment of accounts payable or other liabilities or indebtedness outside the Ordinary Course of Business; (q) neither of the Target Entities has transferred, assigned or granted any license or sublicense of any rights under or with respect to any Intellectual Property other than in the Ordinary Course of Business; (r) there has been no change made or authorized in the Governing Documents of either of the Target Entities; (s) neither of the Target Entities has issued, sold, or otherwise disposed of any of its Equity Securities or other securities, or granted any options, warrants, or other rights to purchase or obtain (including upon conversion, exchange, or exercise) any of its Equity Securities or other securities other than in the Ordinary Course of Business pursuant to the Stock Option Plans; (t) neither of the Target Entities has adopted, amended, modified, or terminated any bonus, profit-sharing, incentive, severance, or other plan, contract, or commitment for the benefit of any of its directors, officers, and employees (or taken any such action with respect to any other benefit plan); (u) neither of the Target Entities has made or pledged to make any material charitable contribution; and (v) there has been no agreement or commitment by either of the Target Entities to do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectforegoing.

Absence of Changes or Events. Since December 31, 1996: (a) Since September 30, 2003, there has not been any direct change, event, fact or indirect redemptioncircumstance affecting the Companies or their subsidiaries that, purchase when taken in the aggregate with all other changes, events and circumstances whether beneficial or other acquisition of any shares of capital stock of detrimental to the CompanyCompanies and their subsidiaries, taken as a whole, has had, or any declarationwould reasonably be expected to have, setting aside or payment of any dividend or other distribution by the a Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997;Material Adverse Effect. (b) except Between September 30, 2003 and the date hereof, the Companies and their subsidiaries have been operated in the ordinary course of business in substantially the same manner as currently conducted, and consistent have not: (i) amended their articles of incorporation, bylaws, limited liability company agreements or comparable organizational documents; (ii) declared, set aside or paid any dividend or made any other distribution on or in respect of any shares of their capital stock, membership interests, equity interests or similar ownership interests other than transfers between a Company and its subsidiaries; (iii) redeemed or otherwise acquired any shares of their capital stock, membership interests, equity interests, or similar ownership interests; (iv) issued, delivered, sold, granted, pledged or otherwise encumbered any capital stock, membership interests or similar ownership interest or any securities convertible or exchangeable into or exchangeable for any rights, warrants, “phantom” stock rights, stock appreciation rights, options or similar derivative securities to acquire, any such capital stock, membership interests or similar ownership interest or made any announcement of the intention to so issue, deliver, sell, grant, pledge or encumber any such capital stock, membership interests or similar ownership interest, convertible securities, rights, warrants, “phantom” stock rights, stock appreciation rights, options or similar derivative securities; (v) (A) split, combined or reclassified any of its capital stock, membership interests or similar ownership interest or engaged in a recapitalization, exchange of shares or similar transaction with past practicerespect to its capital stock, membership interests or similar ownership interest or (B) issued or authorized the issuance of any other securities in respect of, in lieu of, or in substitution for, any of its capital stock, membership interests or similar ownership interest; (vi) (A) granted any severance or termination pay to any of their employees, directors or officers, (B) entered into, amended or increased benefits payable under any severance or termination pay policies or employment or other agreements, (C) established, adopted or amended any bonus, profit sharing, thrift, pension, retirement, change-in-control, deferred compensation, compensation, stock option, restricted stock or other benefit plan or arrangement covering any of their directors, officers or employees or (D) increased compensation, bonus or other benefits payable to any of their directors or officers, in each case other than (1) as required by Applicable Law, and (2) as required under the terms of any Company has not Benefit Plan or to satisfy contractual obligations in existence on September 30, 2003; (vii) incurred any indebtedness for borrowed money, money or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of granted any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a wholeguarantee in respect thereof; (cviii) there has not been any material change in the accounting methodsacquired by merging or consolidating with, principles or practices by purchasing a substantial portion of the Company; (d) there has not been assets of, or by any damageother manner, destruction any business or lossany corporation, whether partnership, association or not covered by insurance, except for such as would not, individually other business organization or in the aggregate, have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any casedivision thereof, other than those in the ordinary course of business and not in connection with the revaluation excess of certain fixed assets as set forth $100,000 in the Disclosure Statementaggregate; (gix) there has not been any increase in sold, transferred, leased or establishment otherwise disposed of any bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing, stock option (including without limitation the granting assets in excess of stock options, stock appreciation rights, performance awards or restricted stock awards), stock purchase or other employee benefit plan or agreement or arrangement, or any other increase $100,000 in the compensation payable or to become payable to any present or former directors, officers or key employees of the Companyaggregate, except for increases in base compensation (A) the sale or disposal of obsolete or excess equipment or (B) sales, transfers, leases or disposals in the ordinary course of business consistent with past practice; (x) canceled any material indebtedness (individually or in the aggregate) or waived any claims or rights of material value; (xi) paid, loaned or advanced any amount to, or sold, transferred or leased any employmentassets to, consulting or severance entered into any agreement or arrangement entered into with with, any Seller; (xii) made any change in accounting methods, principles or practices, except as required by GAAP or Applicable Law; (xiii) taken or permitted any action that would cause either Ecolochem or International to fail to be treated as an “S corporation” within the meaning of Section 1361 of the Code, or to fail to be treated as an “S corporation” under comparable state and local Tax laws (or permitted any such present action to be taken by any of their respective shareholders); (xiv) amended any Tax Return or former directorschanged or modified any method of reporting income, officers deductions or key employeesother items for Tax purposes; or (hxv) there has not been any agreement by the Company to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) takeagreed, whether in writing or otherwise, to do any action whichof the foregoing. (c) Between September 30, if taken prior 2003 and the date hereof, there has not occurred any event or occurrence resulting in damage, destruction or other casualty loss of $100,000 or more (whether or not covered by insurance) to the date of this Agreement, would have made any representation Companies or warranty in this Article III untrue their subsidiaries or incorrecttheir respective assets.

Absence of Changes or Events. Since December 31, 1996: 2002, the Business has been conducted only in the Ordinary Course of Business. Without limiting the generality of the foregoing, since December 31, 2002, Seller has not: (a) there suffered any material adverse change which has not been any direct had, or indirect redemptionwould reasonably be expected to have, purchase or other acquisition of any shares of capital stock a Material Adverse Effect, and to the Knowledge of the CompanySeller Parties, no other event has occurred or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect circumstances exist that would reasonably be expected to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; cause a Material Adverse Effect; (b) suffered any damage, destruction or casualty loss (whether or not covered by insurance) which has had, or would reasonably be expected to have, a Material Adverse Effect on the Business or the Purchased Assets; (c) converted any Current Assets of the Business into non-current assets other than in the Ordinary Course of Business consistent with past practice; (d) written down the value of any inventory of the Business or written off as uncollectible any notes or Accounts Receivable of the Business other than in the Ordinary Course of Business consistent with past practice; (e) canceled any debts of the Business or waived any material claims or rights relating to the Business other than in the Ordinary Course of Business; (f) sold, transferred, leased or otherwise disposed of any of its properties or assets relating to the Business, except in the ordinary course Ordinary Course of business Business and consistent with past practice; (g) except as set forth on SCHEDULE 5.11, disposed of, abandoned or permitted to lapse any rights to the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations use of any other individualSeller IP; (h) agreed, firm whether in writing or corporationotherwise, to take any action described in this Section 5.11; (i) made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) there has not been any material change in the accounting methods, principles methods of Seller relating to the Business; (j) failed to pay or practices of the Company; (d) there has not been any damage, destruction or loss, whether or not covered by insurance, except for such as would not, individually or in the aggregate, have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of satisfy any of its material assetsdebts, including but not limited obligations or liabilities as the same become due and owing; or (k) agreed to writing down do any of the value foregoing. In addition, without limiting the generality of inventory or writing off notes or accounts receivablethe foregoing, in any case, except as set forth on SCHEDULE 5.11 and other than in the ordinary course Ordinary Course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; Business, since December 31, 2002, Seller has not: (gi) there has not been granted any increase in the rate or establishment terms 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present officers, directors or former directors, officers or key employees of the CompanyBusiness or granted any extraordinary bonus or compensation to any employee of Seller during the year ended December 31, 2002 that was not paid in full during such year; (ii) granted any increase in the rate or terms of any bonus, insurance, pension or other employee benefit plan payment or arrangement relating to the Business; (iii) entered into any employment bonus or deferred compensation agreement with any employee of the Business; (iv) entered into any agreement (including but not limited to, any borrowing, capital expenditure or capital financing of more than $50,000), material to the Business, except for increases in base compensation agreements in the ordinary course Ordinary Course of business Business; (v) made any change in accounting methods, principles or practices relating to Seller or the Business; (vi) paid, discharged or satisfied any claim, liability or obligation relating to the Business other than the payment, discharge or satisfaction of liabilities and obligations reflected or reserved against in the Financial Statements, or incurred in the Ordinary Course of Business and consistent with past practice; (vii) prepaid any obligation relating to the Business having a fixed maturity of more than ninety (90) days from the date such obligation was issued or incurred, or not paid, within a reasonable date of when due, consistent with past practice, an account payable relating to the Business, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement by sought the Company to (i) do any extension of the things described in payment date of any account payable relating to the preceding clauses (a) through (g) Business, other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrect.an account payable that was

Absence of Changes or Events. Since December 31Except as set forth in SCHEDULE 6.8 (or Schedules denominated according to the subsections of this SECTION 6.8), 1996since the Balance Sheet Date Company has conducted its business only in the ordinary course and has not: (a) there has not been 6.8.1 incurred any direct obligation or indirect redemptionliability, absolute, accrued, contingent or otherwise, whether due or to become due, except current liabilities for trade or business obligations incurred in connection with the purchase of goods or other acquisition of any shares of capital stock of the Company, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (b) except services in the ordinary course of business and consistent with past its prior practice, the Company has not incurred none of which liabilities, in any indebtedness for borrowed money, case or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) there has not been any material change in the accounting methodsaggregate, principles materially and adversely affects the business, liabilities or practices financial condition of the Company; (d) there has not been 6.8.2 discharged or satisfied any material lien, charge or encumbrance other than those then required to be discharged or satisfied, or paid any obligation or liability, absolute, accrued, contingent or otherwise, whether due or to become due, other than current liabilities shown on the Balance Sheet and current liabilities incurred since the Balance Sheet Date in the ordinary course of business and consistent with its prior practice; 6.8.3 declared or made any payment of dividends or other distribution to its shareholders or upon or in respect of any shares of its capital stock, or purchased, retired or redeemed, or obligated itself to purchase, retire or redeem, any of its shares or capital stock or other securities; 6.8.4 mortgaged, pledged or subjected to lien, charge, security interest or any other encumbrance or restriction any of its property, business or assets, tangible or intangible, other than pledges of leased office equipment; 6.8.5 sold, transferred, leased to others or otherwise disposed of any of its assets, except for inventory sold in the ordinary course of business, or canceled or compromised any debt or claim, or waived or released any right of material value; 6.8.6 received any notice of termination of any contract, lease or other agreement prior to its expiration date or suffered any damage, destruction or loss, loss (whether or not covered by insurance) which, except for such as would not, individually in any case or in the aggregate, has had or would have a Material Adverse Effectmaterially adverse effect on the assets, operations or prospects of Company; (e) there has been no 6.8.7 encountered any labor union organizing activity, had any actual or, threatened employee strikes, work stoppages, slow-downs or lock-outs, or had any material change in its relations with its employees, agents, customers or suppliers; 6.8.8 made any change in the businessrate of compensation, operationscommission, assets bonus or financial condition other direct or indirect remuneration payable, or paid or agreed or orally promised to pay, conditionally or otherwise, any bonus, extra compensation, pension or severance or vacation pay, to any shareholder, director, officer, employee, salesman, distributor or agent of Company; 6.8.9 issued or sold any shares of its capital stock or other securities, or issued, granted or sold any options, rights or warrants with respect thereto, or acquired any capital stock or other securities of any corporation or any interest in any business enterprise, or otherwise made any loan or advance to or investment in any person, firm or corporation; 6.8.10 made any capital expenditures or capital additions in excess of an aggregate of $20,000; 6.8.11 changed its banking or safe deposit arrangements; 6.8.12 instituted, settled or agreed to settle any litigation, action or proceeding before any court or governmental body relating to the Company or its property; 6.8.13 failed to replenish its inventories and supplies in a normal and customary manner consistent with its prior practice and ordinary business practices prevailing in the industry, or made any purchase commitment in excess of the Company that normal, ordinary and usual requirements of its business or at any price materially in excess of the then current market price or upon terms and conditions materially more onerous than those usual and customary in the industry, or made any change in its selling, pricing, advertising or personnel practices inconsistent with its prior practice and ordinary business practices prevailing in the industry; 6.8.14 suffered any change, event or condition which in any case or in the aggregate, has had or will may have a Material Adverse Effectmaterially adverse affect on Company's condition (financial or otherwise), properties, assets, liabilities, operations or prospects, including, without limitation, any change in Company's revenues, costs, backlog or relations with its employees, agents, customers or suppliers; (f) there has not been 6.8.15 entered into any revaluation by the Company of any of its material assetstransaction, including but not limited to writing down the value of inventory contract or writing off notes or accounts receivable, in any case, commitment other than in the ordinary course of business and or paid or agreed to pay any legal, accounting, brokerage, finder's fee, taxes or other expenses in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 or agreement or arrangementwith, or incurred any other increase in severance pay obligations by reason of, this Agreement or the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employeestransactions contemplated hereby; or (h) there has not been 6.8.16 entered into any agreement by the Company or made any commitment to (i) do take any of the things types of action described in the preceding clauses (a) Sections 6.8.1 through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrect6.8.15 above.

Absence of Changes or Events. Since December 31January 27, 19962008, the Business has been conducted in the ordinary course and there has not occurred any event or condition which, individually or in the aggregate, has had or is reasonably likely to have a Material Adverse Effect. Without limiting the generality of the foregoing since January 27, 2008 except as set forth in Section 3.1(f) of the Company Disclosure Letter in connection with the Business: (ai) there No DM Entity has not been amended its certificate of incorporation, articles of incorporation or bylaws (or the corresponding documents of any direct DM Entity formed outside of the United States); (ii) No DM Entity has issued any of its capital stock or indirect redemptionrights, purchase warrants or options to acquire shares of such capital stock (including any phantom interest) or issued any securities convertible into or exercisable for such shares or convertible into securities in turn so convertible, or granted any options, warrants or rights to acquire any such convertible securities; (iii) No DM Entity has paid or declared any dividends or other acquisition of any shares of capital stock of the Company, or any declaration, setting aside or payment of any dividend or other distribution by the Company distributions in respect of its capital stock, other than the or made any payment made by the Company with respect to 500,000 shares redeem, purchase or otherwise acquire, or called for redemption, any of Common Stock put to the Company by Valcheck Company on June 30, 1997such stock; (biv) Neither the Company nor any DM Entity has (A) adopted or amended in any material respect any Benefit Plan, except as may be required by Applicable Law or as may be necessary to maintain such Benefit Plan’s Tax qualified status or (B) increased the compensation or benefits of any of its current or former directors, officers or Business Employees, except in the ordinary course of business and the Business consistent with past practice, including scheduled annual merit increases in base salary as disclosed on Section 3.1(f) of the Company Disclosure Letter; (v) No DM Entity has not incurred any indebtedness for borrowed money, money or assumed, guaranteed, endorsed issued any debt securities or otherwise as an accommodation become responsible for assumed or guaranteed the obligations of any other individualPerson in an amount in excess of $200,000, firm or corporation, made except for any intercompany loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to among the Company taken as a wholeand any DM Entity; (cvi) there Neither the Company nor any DM Entity has entered into, materially amended or terminated any contract which is listed on Section 3.1(i) of the Company Disclosure Letter, except in the ordinary course of the Business; (vii) Neither the Company nor any DM Entity has sold, leased or licensed any of its material assets used in the Business except in the ordinary course of the Business; (viii) There has not been any material change in the accounting methods, principles methods or accounting practices of the Business or the Company; (dix) there There has not been any damage, damage to or destruction or lossloss of any Conveyed Asset with a book value in excess of $200,000, whether or not covered by insurance, except for such as would not, individually or in the aggregate, have a Material Adverse Effect;; and (ex) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there There has not been any revaluation by sale (other than sales of inventory in the Company ordinary course of the Business), abandonment, lapse or other disposition or encumbrance of any Conveyed Asset or other property primarily related to the Business with a fair market value in excess of its material assets$200,000 nor any granting of any Lien in connection with the assets of any DM Entity, including but not limited to writing down the value except for any granting of inventory or writing off notes or accounts receivable, in any case, other than a Lien in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement by the Company to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectexceed $200,000.

Absence of Changes or Events. Since December 31Except as set forth in Schedule 2.5, 1996since the Balance Sheet Date, the Company has conducted its business in the ordinary course substantially consistent with past practices; provided that from and after the filing of the Petition, the Company may be required to subject certain transactions to Bankruptcy Court approval, may be precluded from paying pre-petition liabilities except as otherwise authorized by the Bankruptcy Court, may be granted authority to incur new and replacement Liens in favor of its debtor-in-possession lenders and certain other secured creditors, and may be subject to set-off, recoupment and reclamation claims by creditors, and to the alteration of normal trade credit terms by many suppliers. As a result of the Petition, the Company may be in default in many of its obligations to creditors, which creditors are stayed from proceeding on their claims. Except as set forth above, there has not been since the Balance Sheet Date: (a) there has not been any direct or indirect redemption, purchase or other acquisition of any shares of capital stock material adverse change in the condition of the Company's business, operating results, assets or any declarationproperties (including, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (b) except in the ordinary course of business and consistent with past practicebut not limited to, the Company has not incurred any indebtedness for borrowed moneyCompany's plants, or assumedproperties and equipment), guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (cb) there has not been any material change in the accounting methods, principles creation or practices of the Company; (d) there has not been any damage, destruction or loss, whether or not covered by insurance, except for such as would not, individually or in the aggregate, have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation assumption by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in Lien on any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation 's properties or assets other than in the ordinary course of business consistent with past practicepractices; (c) any making of any loan, advance or capital contribution to or investment in any Person other than in customers or suppliers of the Company (who are not Affiliates) in the ordinary course of business; (d) any damage, destruction or other casualty loss (whether or not covered by insurance) or condemnation or other governmental taking or sale in lieu thereof affecting the Company; (e) any transaction or commitment made, or any contract or agreement entered into, by the Company (including the acquisition or disposition of any assets not in the ordinary course of business) or any relinquishment by the Company of any contract or other right, in any such case, that is material to its business, except for dispositions of obsolete or worn-out equipment; (f) any change in any method of accounting or accounting practice (including consistent application) by the Company, except, after the filing of the Petition, as may be required by GAAP; (g) any (i) individual employment, consulting deferred compensation, severance, retirement or severance other similar agreement or arrangement entered into with any director, officer or employee of the Company (or any amendment to any such present existing agreement), (ii) grant of any severance or former directorstermination pay to any director, officers officer or key employeesemployee of the Company, or (iii) change in compensation or other benefits payable to any director, officer or employee of the Company pursuant to any severance or retirement plans or policies thereof, except in each case, such agreements, grants or changes as have been (A) on a Company-wide basis pursuant to a written Company policy concurrently in effect, (B) in the ordinary course of business consistent with past practices or (C) after the filing of the Petition, set forth in the Reorganization Plan; or (h) there has not been any agreement (including any modification, cancellation or termination of any existing agreement) with or for the benefit of (i) any stockholder, officer or director of the Company, or (ii) Consumers Packaging, Inc., G&G Investments, Inc., Glenshaw Holdings, Inc., GGC Holdings, Inc., Hillsboro Glass Company, I.M.T.E.C. Enterprises Inc., Consumers International Inc., Consumers U.S., Inc., or CUS II, Inc. or (iii) any of their respective officers, directors or Affiliates, other than, compensatory arrangements with non-executive employees entered into in the ordinary course of business; (i) any capital expenditure, or commitment for a capital expenditure, for additions or improvements to property, plant and equipment, which expenditure or commitment, when taken together with all other such expenditures and commitments, exceeds that set forth on the Company's budget previously furnished by the Company to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectInvestors.

Absence of Changes or Events. Since December 31the Parent Balance Sheet Date, 1996and except as disclosed in any filing by Parent with the Securities and Exchange Commission prior to the Closing: (aA) Parent has operated its business in the ordinary course and consistent with past practices; (B) there has not been any direct event that has had a material adverse effect on Parent, and no fact, event, circumstance or indirect redemptioncondition exists or has occurred that could reasonably be expected to have a material adverse effect on Parent; (C) Parent has not (i) declared, purchase accrued, set aside or paid any dividend or made any other acquisition distribution in respect of any shares of capital stock; (ii) repurchased, redeemed or otherwise reacquired any shares of capital stock of the Companyor other securities; (iii) sold, issued or granted, or authorized the issuance of, (A) any declaration, setting aside or payment of any dividend capital stock or other distribution by security (except for Parent Common Stock issued upon the Company in respect valid exercise of outstanding Parent Options), (B) any option, warrant or right to acquire any capital stock or any other security (except for Parent Options), or (C) any instrument convertible into or exchangeable for any capital stock or other security; (iv) received any acquisition proposal from any Person; or (v) changed any of its capital stockmethods of accounting or accounting practices, other than the payment made except as required by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997GAAP; (bD) Parent has not (i) sold or otherwise disposed of, or acquired, leased, licensed, waived or relinquished any material right or other material asset to, from or for the benefit of, any other Person except for rights or other assets sold, disposed of, acquired, leased, licensed, waived or relinquished in the ordinary course of business and consistent with past practice; (ii) made any pledge of any of its material assets or otherwise permitted any of its material assets to become subject to any Encumbrance, except in the ordinary course of business and consistent with past practice, the Company has not incurred ; or (iii) guaranteed any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) there has not been any material change in the accounting methods, principles or practices of the Company; (d) there has not been any damage, destruction or loss, whether or not covered by insurance, except for such as would not, individually or in the aggregate, have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement by the Company to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrect.

Absence of Changes or Events. Since December 31Except as set forth in Schedule ---------------------------- 5.10 of the Disclosure Schedule, 1996since February 1, 2001 each of Sellers has conducted the business of each of the Stations only in the ordinary course in a manner consistent with past practices. Without limiting the foregoing, since such date (and with respect to (iv) below as of the date of this Agreement), neither of Sellers in connection with any of the Stations nor any of the Stations has, except as set forth on said Schedule 5.10: (ai) there has not been incurred any direct obligation or indirect redemptionliability, purchase absolute, accrued, contingent or other acquisition of any shares of capital stock of the Companyotherwise, whether due or any declarationto become due, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (b) except current liabilities for trade obligations incurred in the ordinary course of business and consistent with past its prior practice, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) there has not been any material change in the accounting methods, principles or practices of the Company; (d) there has not been any damage, destruction or loss, whether or not covered by insurance, and except for such as would notliabilities, individually in any case or in the aggregate, that neither have had nor reasonably could be expected to have a Material Adverse Effectmaterial adverse affect on the financial condition, assets, or operations of the Business or any of the Stations; (eii) there has been no change in the businesssold, operationstransferred, assets leased to others or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company otherwise disposed of any of its material assets, including but not limited to writing down the value except for supplies consumed and inoperative, obsolete equipment disposed of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statementbusiness; (giii) there has not been accepted any increase in prepayment for the sale of air time or establishment of canceled or compromised 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 substantial debt or restricted stock awards), stock purchase or other employee benefit plan or agreement or arrangementclaim, or waived or released any right of substantial value or collected or compromised any accounts receivable other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation than in the ordinary course of business consistent with past practice; (iv) received any notice from any advertiser that it, nor has knowledge that any advertiser, intends to cease doing business with any of the Stations, which, in any case or in the aggregate, has had, or could reasonably be expected to have, a material adverse effect on the financial condition, assets, or operations of the Business or any employmentof the Stations; (v) made any change or changes (in excess of 5% per annum) in the rate of compensation, consulting commission, bonus or other direct or indirect remuneration payable, conditionally or otherwise, and whether as bonus, extra compensation, pension or severance agreement or arrangement vacation pay or otherwise, to any director, officer, employee, salesman, representative or agent, except for such changes that are expressly set forth in employment contracts or agreements that have been disclosed and provided to Buyer pursuant to Section 5.8; (vi) entered into with any such present transaction, contract or former directorscommitment other than in the ordinary course of business on customary terms and conditions, officers or key employeespaid or agreed to pay any brokerage, finder's fee, or other compensation in connection with, or incurred any severance pay obligations by reason of, this Agreement or the transactions contemplated hereby; or (hvii) there has not been entered into any agreement by the Company or made any commitment to (i) do take any of the things types of actions described in the preceding clauses any of subsections (ai), (ii), (iii), (v) through (g) other than as expressly contemplated or provided for in this Agreement or (iivi) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectabove.

Absence of Changes or Events. Since December 31, 1996: (a) there has not been any direct or indirect redemption, purchase or other acquisition of any shares of capital stock of Except as specifically disclosed in the Company, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put SEC Documents filed prior to the Company by Valcheck Company on date of this Agreement and furnished to Purchaser, since June 30, 1997; 1998: (bx) except in neither the ordinary course of business Company nor any Subsidiary has suffered or been threatened with (and consistent with past practice, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations no knowledge of any other individualfacts which may cause or result in) any material adverse change in its assets, firm properties, liabilities, condition (financial or corporation, made any loans otherwise) or advances to any other individual, firm or corporation or entered into any commitment or transaction material to prospects; and (y) the Company taken as a whole; (c) there and each Subsidiary has not been any material change operated only in the accounting methods, principles or practices of the Company; (d) there has not been any damage, destruction or loss, whether or not covered by insurance, except for such as would not, individually or in the aggregate, have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business usual and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practicepractice except as contemplated by the Power Facility Sales or the Distribution. Without limiting the generality of the foregoing, since such date, neither the Company nor any Subsidiary has: (a) sold, assigned, leased, exchanged, transferred or otherwise disposed of any material portion of its assets or property, except in the usual and ordinary course of business consistent with past practice other than the sale of shares of common stock of Niagra Mohawk Power Corporation ("NIMO") and the Power Facility Sales; (b) suffered any material casualty, damage or loss, or any employmentmaterial interruption in use, consulting of any material assets or severance agreement property (whether or arrangement entered into not covered by insurance), on account of fire, flood, riot, strike or other hazard or Act of God; (c) paid, declared or set aside any dividends or other distributions on its securities of any class or purchased or redeemed any of its securities of any class; (d) made any change in accounting methods or principles; (e) with respect to the Remaining Subsidiaries, made or committed to make capital expenditures; (f) with respect to the Remaining Subsidiaries, increased the compensation payable to any such present officer or former directorsemployee except in the ordinary course of business; (g) with respect to the Remaining Subsidiaries, officers elected any director or key employeeshired any officer or employee; (h) borrowed any money or issued any bonds, notes, debentures or other evidence of indebtedness; (i) acquired by merger, consolidation or acquisition of stock or assets any Person or business; (j) adopted, amended or terminated any Employee Benefit Plan (as defined herein) except as contemplated by Section 2.5; or (hk) there has not been any agreement by the Company agreed in writing or otherwise to (i) do take any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectforegoing actions.

Absence of Changes or Events. Since Except as set forth on Section 6.8 of the Disclosure Schedule, since December 31, 19961997: (a) there has been no material adverse change, or any development involving a prospective material adverse change, in the business, operations, condition (financial or other), assets or prospects of the Company and its subsidiaries, taken as a whole; (b) there has not been any direct or indirect redemption, purchase or other acquisition of any shares of capital stock of the CompanyCompany or any of its subsidiaries, or any declaration, setting aside or payment of any dividend or other distribution by the Company or any of its subsidiaries in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (bc) except in the ordinary course of its business and consistent with past practice, neither the Company nor any of its subsidiaries has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, or made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) there has not been any material change in the accounting methods, principles or practices of the Companycorporation; (d) there has not been any damage, destruction or loss, whether or not covered by insurance, except for such as would not, individually or change in the aggregatefinancial or tax accounting methods, have a Material Adverse Effectprinciples or practices of the Company or its subsidiaries; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company or any of its subsidiaries of any of its material their respective assets, including but not limited to writing down the value of inventory or including, without limitation, writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (gf) without limiting the generality of the foregoing, there has not been any increase in action 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of inaction by the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, its subsidiaries or any employmentShareholder the result of which would constitute a violation of the covenants contained in Section 8.1 hereof as if such covenants applied beginning December 31, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees1997; orand (hg) there has not been any agreement by the Company or any of its subsidiaries or the Shareholders to (i) do any of the things described in the preceding clauses (a) through (gf) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III VI untrue or incorrect.

Absence of Changes or Events. Since December 31June 30, 1996: (a) 2000, SeraNova has conducted its business in the ordinary course consistent with past practice, and there has not been any direct change, event or indirect redemption, purchase or other acquisition development to the Knowledge of any shares of capital stock of the CompanySeraNova, or any declaration, setting aside or payment discovery of any dividend pre-existing facts, that has resulted or other distribution is reasonably likely to result in a Material Adverse Effect. Without limiting the generality of the foregoing sentence, except as set forth in Schedule 3.12 of the SeraNova Disclosure Schedule and as otherwise contemplated by the Company in respect of its capital stockthis Agreement, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997;SeraNova has not: (bi) transferred, assigned, sold or otherwise disposed of any of the assets reflected on the Balance Sheet, or canceled any debts or claims, except in the ordinary course of business and consistent with past practice, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (cii) there has not been incurred any material change obligation or liability (absolute, accrued, contingent or otherwise) except obligations with respect of SeraNova Preferred Stock and those incurred in the accounting methods, principles or practices ordinary course of the Companybusiness; (diii) there has not been discharged or satisfied any Liens, or paid or satisfied any material obligation or liability (absolute, accrued, contingent or otherwise) other than (x) liabilities shown or reflected on the Balance Sheet or (y) liabilities incurred since the date of the Balance Sheet in the ordinary course of business consistent with past practice; (iv) to the Knowledge of SeraNova experienced any change, or received any threat of any change, in SeraNova's relations with, or any loss or threat of loss of, any significant suppliers, clients, partners or employees of SeraNova; (v) disposed of or failed to keep in effect any rights in, to or for the use of any material license or intellectual property; (vi) incurred any damage, destruction or loss, whether or not covered by insurance, except for such as would nothaving a Material Adverse Effect; (vii) suffered any operating loss or any extraordinary loss, individually or waived any rights of substantial value, or entered into any commitment or transaction not in the aggregateordinary course of business where such loss, rights, commitment or transaction has or would have a Material Adverse Effect; (eviii) there has been no change made any general wage or salary increases in the business, operations, assets or financial condition respect of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 or agreement or arrangementpersonnel which it employs, or paid any other increase in the compensation payable or bonuses to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in personnel outside the ordinary course of business consistent with past practice; (ix) mortgaged, pledged, subjected to lien, granted a security interest in, or otherwise encumbered itself, or any employmentmaterial portion of its assets or property, consulting whether tangible or severance agreement intangible; (x) made any single capital expenditure in excess of $100,000; (xi) authorized or arrangement entered into with agreed or otherwise become committed to do any such present or former directors, officers or key employeesof the foregoing; or (hxii) there has not been prepared or filed any agreement by the Company to Tax Return inconsistent with past practice or, on any such Tax Return, taken any position, made any election, or adopted any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated including, without limitation, positions, elections or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, methods which would have made any representation or warranty in this Article III untrue or incorrectthe effect of deferring income).

Absence of Changes or Events. Since December 31Except as set forth on SCHEDULE 4.15, 1996since the date of the Latest Balance Sheet, there has not been any Material Adverse Effect on the Corporation Entities taken as a whole. Buyer acknowledges that there may have been disruption to the Corporation's business as a result of the announcement by the Corporation of its intention to sell such business (and there may be disruption to the Corporation's business as a result of the execution of this Agreement and the consummation of the transactions contemplated hereby), and Buyer acknowledges that such disruptions do not and shall not constitute a breach of this SECTION 4.15. Except as set forth on SCHEDULE 4.15, from the date of the Audited Balance Sheet to the date hereof, each Corporation Entity has caused its respective businesses to be conducted in the ordinary course consistent with past practices and there has not been: (a) there has not been any direct or indirect redemption(i) amendment to the certificate of incorporation, purchase by-laws or other acquisition organizational documents of any Corporation Entity, (ii) subdivision in any way or reclassification of any shares of capital stock of the Companyany Corporation Entity, or (iii) change or agreement to change in any declaration, setting aside or payment manner the rights of the outstanding capital stock of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997Corporation Entity; (b) except any waiver of any right of any Corporation Entity with a value in excess of $300,000, the cancellation of any right of any Corporation Entity with a value in excess of $300,000, or the cancellation of any debt or claim held by any Corporation Entity with a value in excess of $300,000, in each case other than any action taken in the ordinary course of business and consistent with past practice, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) there has not been any material change payment or declaration of dividends on, or other distribution with respect to, or any direct or indirect redemption or acquisition of, any securities of any Corporation Entity (other than the repurchase of stock options and capital stock from employees in the accounting methods, principles or practices of the Companyconnection with their termination); (d) there has not been any damagesale, destruction assignment or loss, whether transfer of any tangible or not covered by insuranceintangible assets of any Corporation Entity, except for such as would not, individually or in the aggregate, have a Material Adverse Effect; (ei) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, and (ii) assets for which the book value does not exceed $300,000 and which would not, in either case, be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect on the Corporation Entities taken as a whole; (e) any employmentloan by any Corporation Entity to any officer, consulting director, employee, consultant or severance agreement shareholder of any Corporation Entity (other than advances to such persons in the ordinary course of business consistent with past practice or arrangement entered into in connection with salary, wages, travel and travel related expenses or other customary expenses); (f) any such present damage, destruction or former directorsloss (whether or not covered by insurance) which is reasonably expected to exceed $300,000 to remedy; (g) any increase, officers direct or indirect, in the compensation paid or payable to any officer, director or key employees; oremployee of any Corporation Entity, other than in the ordinary course of business; (h) any change in the accounting or Tax methods, practices or policies or in any Tax election of any Corporation Entity, except for changes that, in the aggregate, would not reasonably be expected to have a Material Adverse Effect on the Corporation Entities taken as a whole; (i) any material capital expenditure or commitment for any material capital expenditure by any Corporation Entity, other than as set forth in the 2002 Fiscal Budget; (j) any material change in amount of insurance coverage; (k) any material change to, or increase in the amounts of, or acceleration of the payment or vesting of, any benefits under the Corporation Benefit Plans, and there has not been any Corporate Benefit Plan adopted or established by any Corporation Entity; (l) any grants or increases in severance or termination pay to employees, other than severance payments made in the ordinary course of business; (m) any settlement of any litigation in which the amount in controversy exceeds $300,000; (n) any grant or award of options or warrants to purchase the capital stock of any Corporation Entity, other than those grants required to be made by a Corporation Benefit Plan; or (o) any agreement by the Company or commitment (contingent or otherwise) to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectforegoing.

Absence of Changes or Events. (a) Since December 31, 1996: (a) 2002, there has not been any direct change, event, fact or indirect redemptioncircumstance affecting Purchaser or its subsidiaries that, purchase when taken in the aggregate with all other changes, events and circumstances whether beneficial or other acquisition of any shares of capital stock of the Companydetrimental to Purchaser and its subsidiaries, taken as a whole, has had, or any declarationwould reasonably be expected to have, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997;a Purchaser Material Adverse Effect. (b) except Between December 31, 2002 and the date hereof, Purchaser and its subsidiaries have been operated in the ordinary course of business in substantially the same manner as currently conducted, and consistent have not: (i) redeemed or otherwise acquired any shares of Purchaser's capital stock or similar ownership interests; (ii) issued, delivered, sold, granted, pledged or encumbered any shares of the Purchaser's capital stock, voting securities or any securities convertible or exchangeable into or exchangeable for, or any rights, "phantom stock rights", stock appreciation rights, warrants or options or similar derivative securities to acquire, any such shares of capital stock, voting securities or convertible securities or made any announcement of the intention to so issue, deliver, sell, grant, pledge or encumber any such shares, other voting securities, convertible or exchangeable securities, rights, warrants, options or similar derivative securities (other than (A) as was required under existing agreements with past practicecurrent or former employees, and directors, and the Company has not Purchaser Employee Stock Option Plan and the Purchaser Benefit Plans in effect on the date of this Agreement and (B) the issuance of Common Stock and related rights on the exercise of Purchaser Employee Stock Options in accordance with their present terms); (iii) split, combined or reclassified any of Purchaser's capital stock or similar ownership interests or engaged in a recapitalization, exchange of shares or similar transaction with respect to Purchaser's capital stock or similar ownership interests or (B) issued or authorized the issuance of any other securities in respect of, in lieu of, or in substitution for, any of Purchaser's capital stock or similar ownership interests; (iv) incurred any indebtedness for borrowed money, money or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of granted any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) there has not been any material change guarantee in the accounting methods, principles or practices of the Company; (d) there has not been any damage, destruction or loss, whether or not covered by insurance, except for such as would not, individually or in the aggregate, have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivablerespect thereof, in any case, other than in each case outside of the ordinary course of business and in connection consistent with the revaluation of certain fixed assets as set forth in the Disclosure Statementpast practice; (gv) there has not been acquired by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any increase in other manner, any business or establishment of any bonuscorporation, insurancepartnership, 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 association or other employee benefit plan business organization or agreement division thereof, other than those not in excess of $10,000,000 in the aggregate; (vi) sold, transferred, leased or arrangementotherwise disposed of (x) more than 10% of the assets of Purchaser's ultrapure water group, or (y) any other increase in assets material to the compensation payable or to become payable to any present or former directorsPurchaser and its subsidiaries, officers or key employees of the Companytaken as a whole, except for increases in base compensation (A) the sale or disposal of obsolete or excess equipment or (B) sales, transfers, leases or disposals in the ordinary course of business consistent with past practice; (vii) made any change in accounting methods, principles or any employmentpractices, consulting except as required by GAAP or severance agreement or arrangement entered into with any such present or former directors, officers or key employeesApplicable Law; or (hviii) there has not been any agreement by the Company to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) takeagreed, whether in writing or otherwise, to do any action whichof the foregoing. (c) Between December 31, if taken prior to 2002 and the date hereof, there has not occurred any event or occurrence resulting in damage, destruction or other casualty loss of this Agreement, would have made any representation $100,000 or warranty in this Article III untrue more (whether or incorrectnot covered by insurance) to Purchaser or its subsidiaries or its respective assets.

Absence of Changes or Events. Since Except as set forth in Section 3.17 of the Seller Disclosure Letter, since December 31, 19962022 through the date of this Agreement: (a) except for the execution and performance of this Agreement and the discussions, negotiations and transactions related thereto and to any transaction of the type contemplated by this Agreement, the Business has been carried on and conducted in all material respects in the Ordinary Course of Business; (b) there has not been any direct or indirect redemptionMaterial Adverse Effect; (c) no Business Group Member has: (i) adopted a plan of liquidation, purchase dissolution, merger, consolidation or other reorganization; (ii) made any acquisition (including by merger) of the equity securities or a material portion of the assets of any shares other Person; or (iii) commenced any new line of capital stock of the Companybusiness; (d) no Business Group Member has: (i) sold, leased, transferred, assigned, exclusively licensed or sublicensed, abandoned, or otherwise disposed any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stockmaterial assets or property, other than (A) sales of inventory and dispositions of obsolete equipment in the payment made Ordinary Course of Business and (B) dispositions of properties or assets that are no longer used or useful in the conduct of the Business, including leases that have expired by the Company with respect to 500,000 shares their terms; or (ii) terminated any line of Common Stock put to the Company by Valcheck Company on June 30, 1997business; (be) except in the ordinary course of business and consistent with past practice, the Company no Business Group Member has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a wholePerson in excess of $150,000; (cf) there no Business Group Member has not been any material change in the accounting methods, principles or practices of the Company; (d) there has not been experienced any damage, destruction or loss, loss (whether or not covered by insurance, except for such as would not, individually or in the aggregate, have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of to any of its material assets, including but not limited to writing down the value assets or property (tangible or intangible) in excess of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement$150,000; (g) there no Group Company has not been made any increase change in its accounting methods, principles or establishment practices, or made any material election relating to Taxes, changed any material election relating to Taxes already made, adopted or changed any material Tax accounting method, settled or compromised any material audit, examination or other Action by any Taxing Authority of any bonusGovernmental Authority relating to Taxes, insurancefiled any amended Tax Return, severancesurrendered or compromised any right to claim a material Tax refund, deferred compensation, pension, retirement, profit sharing, stock option (including without limitation the granting consented to or requested any extension or waiver of stock options, stock appreciation rights, performance awards or restricted stock awards), stock purchase or other employee benefit plan or agreement or arrangementany statute of limitations period relating to Taxes, or initiated any other increase voluntary disclosure, Tax amnesty filing or similar action relating to Taxes, in the compensation payable or to become payable to any present or former directors, officers or key employees of the Companyeach case, except for increases in base compensation in as required by GAAP, the ordinary course of business consistent with past practice, Code or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; orapplicable Law; (h) there no Business Group Member has not been engaged in any agreement by promotional, sales or discount or other activity outside of the Company Ordinary Course of Business that has or could reasonably be expected to have the effect of accelerating sales prior to the Closing that would otherwise be expected to occur subsequent to the Closing; (i) no Business Group Member has made any commitment outside of the Ordinary Course of Business or in excess of $2,000,000 in the aggregate for capital expenditures to be paid after the Closing or failed to incur capital expenditures in accordance with its capital expense budget; (j) except (A) in the Ordinary Course of Business, (B) in connection with a promotion based on job performance, (C) as may be required under applicable Law, any Benefit Plan or Business Collective Bargaining Agreement, or (D) in the case of any action that is generally applicable to employees of Seller and its Affiliates in a particular jurisdiction or geographic area, with respect to any non-Business Employee so long as the action is designed to apply uniformly to eligible employees of Seller or its Affiliates that are not employees in the Business, (1) granted to any Business Employee any material increase in compensation, (2) granted to any Business Employee any material increase in severance, retention or termination pay, (3) established, adopted, enter into or amended in any material respect any Business Collective Bargaining Agreement or Assumed Benefit Plan, (4) taken any action to accelerate any rights or benefits with respect to any Business Employee under any material Benefit Plan, (5) taken any action to accelerate the vesting or payment of, or established or provided any funding for any rabbi trust or similar arrangement for, any compensation or benefits under any Assumed Benefit Plan, (6) granted or provided to any Business Employee any change-in-control bonus, “single-trigger” or “double-trigger” transaction bonus, retention bonus or other similar payments that are payable solely as a result of the consummation of the Transactions (and not entered into with Purchaser at or prior to the Closing and effective as of the Closing), Tax gross-up, severance or termination benefits (other than Tax equalization, severance or termination benefits that, in each case, are in the Ordinary Course of Business pursuant to existing Contracts or policies), or (7) engaged in any mass layoff or plant closing as such terms are defined under the WARN Act; (k) no Business Group Member has collected its accounts receivable or paid any accrued liabilities or accounts payable or prepaid any expenses or other items, in each case other than in the Ordinary Course of Business, or taken any other action, or omitted to take any other action, not in the Ordinary Course of Business, which would materially affect Closing Working Capital; and (l) neither Seller Group with respect to the Business Group nor any Business Group Member has agreed or committed to do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectforegoing.

Absence of Changes or Events. (a) Since December 31, 1996: (a) 2002, there has not been any direct change, event, fact or indirect redemptioncircumstance affecting Purchaser or its subsidiaries that, purchase when taken in the aggregate with all other changes, events and circumstances whether beneficial or other acquisition of any shares of capital stock of the Companydetrimental to Purchaser and its subsidiaries, taken as a whole, has had, or any declarationwould reasonably be expected to have, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997;a Purchaser Material Adverse Effect. (b) except Between December 31, 2002 and the date hereof, Purchaser and its subsidiaries have been operated in the ordinary course of business in substantially the same manner as currently conducted, and consistent have not: (i) redeemed or otherwise acquired any shares of Purchaser’s capital stock or similar ownership interests; (ii) issued, delivered, sold, granted, pledged or encumbered any shares of the Purchaser’s capital stock, voting securities or any securities convertible or exchangeable into or exchangeable for, or any rights, “phantom stock rights”, stock appreciation rights, warrants or options or similar derivative securities to acquire, any such shares of capital stock, voting securities or convertible securities or made any announcement of the intention to so issue, deliver, sell, grant, pledge or encumber any such shares, other voting securities, convertible or exchangeable securities, rights, warrants, options or similar derivative securities (other than (A) as was required under existing agreements with past practicecurrent or former employees, and directors, and the Company has not Purchaser Employee Stock Option Plan and the Purchaser Benefit Plans in effect on the date of this Agreement and (B) the issuance of Common Stock and related rights on the exercise of Purchaser Employee Stock Options in accordance with their present terms); (iii) split, combined or reclassified any of Purchaser’s capital stock or similar ownership interests or engaged in a recapitalization, exchange of shares or similar transaction with respect to Purchaser’s capital stock or similar ownership interests or (B) issued or authorized the issuance of any other securities in respect of, in lieu of, or in substitution for, any of Purchaser’s capital stock or similar ownership interests; (iv) incurred any indebtedness for borrowed money, money or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of granted any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) there has not been any material change guarantee in the accounting methods, principles or practices of the Company; (d) there has not been any damage, destruction or loss, whether or not covered by insurance, except for such as would not, individually or in the aggregate, have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivablerespect thereof, in any case, other than in each case outside of the ordinary course of business and in connection consistent with the revaluation of certain fixed assets as set forth in the Disclosure Statementpast practice; (gv) there has not been acquired by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any increase in other manner, any business or establishment of any bonuscorporation, insurancepartnership, 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 association or other employee benefit plan business organization or agreement division thereof, other than those not in excess of $10,000,000 in the aggregate; (vi) sold, transferred, leased or arrangementotherwise disposed of (x) more than 10% of the assets of Purchaser’s ultrapure water group, or (y) any other increase in assets material to the compensation payable or to become payable to any present or former directorsPurchaser and its subsidiaries, officers or key employees of the Companytaken as a whole, except for increases in base compensation (A) the sale or disposal of obsolete or excess equipment or (B) sales, transfers, leases or disposals in the ordinary course of business consistent with past practice; (vii) made any change in accounting methods, principles or any employmentpractices, consulting except as required by GAAP or severance agreement or arrangement entered into with any such present or former directors, officers or key employeesApplicable Law; or (hviii) there has not been any agreement by the Company to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) takeagreed, whether in writing or otherwise, to do any action whichof the foregoing. (c) Between December 31, if taken prior to 2002 and the date hereof, there has not occurred any event or occurrence resulting in damage, destruction or other casualty loss of this Agreement, would have made any representation $100,000 or warranty in this Article III untrue more (whether or incorrectnot covered by insurance) to Purchaser or its subsidiaries or its respective assets.

Absence of Changes or Events. Since December 31the Financial Statements Date the Company has conducted business only in the ordinary course and has not taken, 1996entered into any agreement, or made any commitment to take, any of the following actions: (a) there has Incurred any obligation or liability, except liabilities (i) for trade or business obligations incurred in the ordinary course of business or (ii) which do not been any direct materially affect its business or indirect redemption, purchase or other acquisition of any shares of capital stock of the Company, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997financial condition; (b) Paid any obligation or liability other than current liabilities (i) shown on the Financial Statements or (ii) incurred since the Financial Statements Date in the ordinary course of business; (c) Declared or paid dividends or other distributions to any of the Stockholders or purchased, retired or redeemed, or obligated itself to purchase, retire or redeem, any of its capital stock or other securities; (d) Issued or sold any shares of, or Security Rights to, its capital stock or other securities; (e) Acquired any capital stock of, interest in, or other securities of any business entity, or otherwise made any loan or advance to or investment in any business entity; (f) Subjected any of its property, business or assets to any Encumbrance, except in the ordinary course of business and consistent with past practice, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a wholebusiness; (cg) there Sold or otherwise disposed of any material assets, except in the ordinary course of business; (h) Canceled, compromised, waived, or released any debt, claim, or right of substantial value, except in the ordinary course of business; (i) Received or given notice of termination of any Contract whose termination has not been had, or may have, a material adverse effect on its business or financial condition; (j) To its knowledge, or the knowledge of any Stockholder, experienced any labor union organizing activity, had any actual or threatened employee strikes, work stoppages, slow-downs, or lock-outs, or had any material change in the accounting methodsterms of agreements with its employees, principles agents, customers or practices of the Companysuppliers; (dk) there has not been Made or agreed to make any damage, destruction or loss, whether or not covered by insurance, except for such as would not, individually or in the aggregate, have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directorsdirector, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practiceofficer, or employee; (l) Acquired any employmentcapital assets which cost in excess of an aggregate of $10,000; (m) Instituted, consulting settled or severance agreement or arrangement entered into with agreed to settle any such present or former directors, officers or key employeesmaterial Proceeding; or (hn) there has not been Suffered any agreement by the Company to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated change, event, condition, damage, destruction, or provided for in this Agreement loss having a material adverse affect on its business or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectfinancial condition.

Absence of Changes or Events. Since December Except as set forth in the Company SEC Reports, since October 31, 19962002: (a) there has been no material adverse change, or any development involving a prospective material adverse change, in the business, assets, liabilities, results of operations, condition (financial or otherwise) or prospects of the Company and its subsidiaries, taken as a whole; (b) there has not been any direct or indirect redemption, purchase or other acquisition of any shares of capital stock of the CompanyCompany or any of its subsidiaries, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (bc) except in the ordinary course of its business and consistent with past practice, neither the Company nor any of its subsidiaries has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, or made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a wholecorporation; (cd) there has not been any material change in the financial or the accounting methods, principles or practices of the CompanyCompany or its subsidiaries, except to the extent required by GAAP or the rules and regulations of the SEC; (de) except in the ordinary course of business and for amounts which are not material, there has not been any revaluation by the Company or any of its subsidiaries of any of their respective assets, including, without limitation, writing down the value of inventory or writing off notes or accounts receivables; (f) there has not been any damage, destruction or loss, whether or not covered by insuranceinsurance or not, except for such as would not, individually or in the aggregate, have a Company Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement;; and (g) there has not been any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement by the Company or any of its subsidiaries to (i) do any of the things described in the preceding clauses (a) through (gf) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III V untrue or incorrect.

Absence of Changes or Events. Since December 31, 1996: (a) 2012, there has not been any direct change, event or indirect redemption, purchase occurrence that has had or other acquisition of any shares of capital stock of the Company, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect is reasonably likely to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (b) except in the ordinary course of business and consistent with past practice, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) there has not been any material change in the accounting methods, principles or practices of the Company; (d) there has not been any damage, destruction or loss, whether or not covered by insurance, except for such as would nothave, individually or in the aggregate, have a Company Material Adverse Effect; (e) there . From December 31, 2012 to the date of this Agreement, the Post Business has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than conducted in the ordinary course consistent with past practice. From December 31, 2012 to the date of business and this Agreement, none of the Companies has taken any of the following actions or omitted to take any of the following actions, in connection each case, with respect to the revaluation of certain fixed assets as set forth Post Business, other than actions in the Disclosure Statement;ordinary course consistent with past practice: (ga) there has not been any increase in 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 or agreement or arrangement, or any other increase in materially increased the compensation payable or to become payable or the benefits provided to any present or former directors, officers or key employees of the CompanyPost Business Employee, except (A) for increases in base compensation in the ordinary course of business consistent with past practicefor which Seller shall be solely liable or (B) as required by Applicable Law or any Benefit Plan, Benefit Agreement, Collective Bargaining Agreement or other Contract; (b) adopted, established or entered into any new material Assumed Benefit Plan or material Assumed Benefit Agreement, or materially amended any employmentexisting Assumed Benefit Plan or Assumed Benefit Agreement; (c) materially amended or terminated any Contract listed or required to be listed on Schedule 3.09 or any Collective Bargaining Agreement; (d) sold, consulting leased or severance agreement disposed of any assets material to the Post Business (other than any Excluded Assets), in any single transaction or arrangement entered into series of related transactions; (e) made any amendment to the organizational documents of any Company; (f) cancelled any indebtedness owed to a Company or waived any claims or rights of a Company; (g) adopted any plan of merger, consolidation, reorganization, liquidation or dissolution with respect to, or filed a petition in bankruptcy under any such present provisions of Federal or former directorsstate bankruptcy law or consented to the filing of any bankruptcy petition against, officers or key employees; orany Company under any similar law; (h) there has not been any agreement by the Company to (i) do made or changed any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement material Tax election relating solely to a Company or (ii) takesettled or compromised any material Tax liability of a Company, whether but, in writing each case, only to the extent such action would reasonably be expected to have a significant effect on Purchaser or otherwiseany Company; (i) terminated, abandoned, canceled, let lapse, failed to continue to prosecute or renew, sold, transferred or otherwise disposed of any material Post Intellectual Property; (j) made or committed to make any material capital expenditures to be made following the Closing, or failed to make any material capital expenditure, in either case in a manner inconsistent with the annual budget for the Post Business provided to Purchaser; and (k) other than transactions in connection with Section 1.06, made any loans, advances or capital contributions to, or investments in, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectother person (other than a Company).

Absence of Changes or Events. Since December 31Except as set forth in Schedule 6.8, 1996since the Balance Sheet Date Company has conducted its business only in the ordinary course and has not: (a) there has not been 6.8.1 incurred any direct obligation or indirect redemptionliability, absolute, accrued, contingent or otherwise, whether due or to become due, except current liabilities for trade or business obligations incurred in connection with the purchase of goods or other acquisition of any shares of capital stock of the Company, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (b) except services in the ordinary course of business and consistent with past its prior practice, the Company has not incurred none of which liabilities, in any indebtedness for borrowed money, case or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) there has not been any material change in the accounting methodsaggregate, principles materially and adversely affects the business, liabilities or practices financial condition of the Company; (d) there has not been 6.8.2 discharged or satisfied any material lien, charge or encumbrance other than those then required to be discharged or satisfied, or paid any obligation or liability, absolute, accrued, contingent or otherwise, whether due or to become due, other than current liabilities shown on the Balance Sheet and current liabilities incurred since the Balance Sheet Date in the ordinary course of business and consistent with its prior practice; 6.8.3 declared or made any payment of dividends or other distribution to its shareholders or upon or in respect of any shares of its capital stock, or purchased, retired or redeemed, or obligated itself to purchase, retire or redeem, any of its shares or capital stock or other securities; 6.8.4 mortgaged, pledged or subjected to lien, charge, security interest or any other encumbrance or restriction any of its property, business or assets, tangible or intangible; 6.8.5 sold, transferred, leased to others or otherwise disposed of any of its assets, except for inventory sold in the ordinary course of business, or canceled or compromised any debt or claim, or waived or released any right of material value; 6.8.6 received any notice of termination of any contract, lease or other agreement prior to its expiration date or suffered any damage, destruction or loss, loss (whether or not covered by insurance) which, except for such as would not, individually in any case or in the aggregate, has had or would have a Material Adverse Effectmaterially adverse effect on the assets, operations or prospects of Company; (e) there has been no 6.8.7 encountered any labor union organizing activity, had any actual or, threatened employee strikes, work stoppages, slow-downs or lock-outs, or had any material change in its relations with its employees, agents, customers or suppliers which could have a material adverse effect on the Company; 6.8.8 made any change in the businessrate of compensation, operationscommission, assets bonus or financial condition other direct or indirect remuneration payable, or paid or agreed or orally promised to pay, conditionally or otherwise, any bonus, extra compensation, pension or severance or vacation pay, to any shareholder, director, officer, employee, salesman, distributor or agent of Company; 6.8.9 issued or sold any shares of its capital stock or other securities, or issued, granted or sold any options, rights or warrants with respect thereto, or acquired any capital stock or other securities of any corporation or any interest in any business enterprise, or otherwise made any loan or advance to or investment in any person, firm or corporation; 6.8.10 other than an expenditure in the approximate amount of $18,000 for repair or replacement of a compressor in the Company's Winter Park location, made any capital expenditures or capital additions in excess of an aggregate of $20,000; 6.8.11 changed its banking or safe deposit arrangements; 6.8.12 instituted, settled or agreed to settle any litigation, action or proceeding before any court or governmental body relating to the Company or its property; 6.8.13 failed to replenish its inventories and supplies in a normal and customary manner consistent with its prior practice and ordinary business practices prevailing in the industry, or made any purchase commitment in excess of the Company that normal, ordinary and usual requirements of its business or at any price materially in excess of the then current market price or upon terms and conditions materially more onerous than those usual and customary in the industry, or made any change in its selling, pricing, advertising or personnel practices inconsistent with its prior practice and ordinary business practices prevailing in the industry; 6.8.14 suffered any change, event or condition which in any case or in the aggregate, has had or will may have a Material Adverse Effectmaterially adverse affect on Company's condition (financial or otherwise), properties, assets, liabilities, operations or prospects, including, without limitation, any change in Company's revenues, costs, backlog or relations with its employees, agents, customers or suppliers; (f) there has not been 6.8.15 entered into any revaluation by the Company of any of its material assetstransaction, including but not limited to writing down the value of inventory contract or writing off notes or accounts receivable, in any case, commitment other than in the ordinary course of business and or paid or agreed to pay any legal, accounting, brokerage, finder's fee, taxes or other expenses in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 or agreement or arrangementwith, or incurred any other increase in severance pay obligations by reason of, this Agreement or the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employeestransactions contemplated hereby; or (h) there has not been 6.8.16 entered into any agreement by the Company or made any commitment to (i) do take any of the things types of action described in the preceding clauses (a) Sections 6.8.1 through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrect6.8.15 above.

Absence of Changes or Events. Since December 31Except as described on the Disclosure Statement and except for actions taken after the date hereof pursuant to a specific covenant hereunder, 1996: since February 28, 1998 the Seller has not: (a) there has not been Discharged or satisfied any direct lien or indirect redemption, purchase or other acquisition of any shares of capital stock of the Companyencumbrance, or paid any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stockliabilities, other than in the payment made by ordinary course of business consistent with past practice, or failed to pay or discharge when due any liabilities which the Company with respect failure to 500,000 shares pay or discharge has caused or will cause any material damage or risk of Common Stock put material loss to Purchased Assets or the Company by Valcheck Company on June 30, 1997; Business; (b) Sold, assigned or transferred any of its Assets or properties except in the ordinary course of business consistent with past practice; (c) Created, incurred, assumed or guaranteed any indebtedness for money borrowed, or mortgaged, pledged or subjected to any Lien, any of its Purchased Assets, other than the liens, if any, for current taxes not yet due and payable; (d) Made or suffered any amendment or termination of any Contract to which it is a party or by which it is bound or canceled, modified or waived any debts or claims held by it, other than in the ordinary course of business consistent with past practice, the Company has or waived any right of substantial value, whether or not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) there has not been any material change in the accounting methods, principles or practices ordinary course of the Company; business; (de) there has not been Suffered any damage, destruction or loss, whether or not covered by insurance, except for such as would notof any item carried on its books of account at more than $1,000, individually or in the aggregatesuffered any repeated, have a Material Adverse Effect; (e) there has been no change in the businessrecurring or prolonged shortage, operations, assets cessation or financial condition interruption of the Company that has had supplies or will have a Material Adverse Effect; utility services required to conduct its Business; (f) there has not been Suffered any revaluation by the Company decrease in its retained earnings or working capital, or any material adverse change in its Business, except as contemplated in this Agreement (g) Suffered any adverse change or any threat of an adverse change in its relation with, or any loss or threat of loss of, any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, customers other than usual attrition in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth customers that are not individually or in the Disclosure Statement; (g) there has not been any increase in or establishment of any bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing, stock option (including without limitation aggregate material to the granting of stock options, stock appreciation rights, performance awards or restricted stock awards), stock purchase or other employee benefit plan or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employeesBusiness; or (h) there has not been Made any agreement by the Company to capital expenditure or capital addition or betterment except such as may be involved in ordinary repair, maintenance and replacement of its Purchased Assets; (i) do Increased the salaries or other compensation of, or made any advance (excluding advances for ordinary and necessary business expenses) or loan to, any of the things described in the preceding clauses its shareholders, directors, officers, employees or independent Exhibit 10.2 (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectcont.)

Absence of Changes or Events. Since Except as set forth in Section 5.7 of the Disclosure Schedule, the Company's Form 10-K for the fiscal year ended December 31, 1996: (a) there has not been any direct 1997, as filed with the SEC, or indirect redemption, purchase or other acquisition of any shares of capital stock of the Company's Form 10-Q for the fiscal quarter ended March 28, or any declaration1998, setting aside or payment of any dividend or other distribution by as filed with the SEC, since December 31, 1997, the Company and its subsidiaries have conducted their respective businesses in respect of its capital stockthe ordinary course consistent with their past practices and have not incurred any material liability, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (b) except in the ordinary course of business and their businesses consistent with their past practicepractices, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) and there has not been (i) any material change change, or any event involving a prospective change, in the accounting methodsbusiness, principles financial condition or practices results of operations of the Company; Company or any of its subsidiaries which has had, or could have, individually or in the aggregate, a Company Material Adverse Effect; (dii) there has not been any damage, destruction or loss, whether or not covered by insuranceinsurance or not, except for such as would notwhich has had, or could have, individually or in the aggregate, have a Company Material Adverse Effect; ; (eiii) there has been no change any entry into or termination of any material commitment, contract, agreement or transaction (including, without limitation, any material borrowing or capital expenditure or sale or other disposition of any material asset or assets) of or involving the Company and its subsidiaries, other than this Agreement, the Stock Purchase Agreement, a form of which is attached hereto as Exhibit B (the "Wilcom Agreement"), to be entered into among Wilcom Acquisition Corp., as Buyer, and the Company, as Seller, relating to the sale of Wilcom, Inc. and agreements executed in the ordinary course of business; (iv) any redemption, operationsrepurchase or other acquisition for value of its capital stock by the Company, assets or financial condition any issuance of capital stock of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its subsidiaries or of securities convertible into or rights to acquire any such capital stock or any dividend or distribution declared, set aside, or paid on capital stock of the Company, other than the sale of Wilcom, Inc.; (v) any transfer of or right granted under any material assetslease, including but not limited to writing down license, agreement or Intellectual Property (as defined in Section 5.18 below) of the value Company or any of inventory its Retained Subsidiaries or writing off notes any liens or accounts receivable, other security interests in any caseIntellectual Property of the Company or any of its Retained Subsidiaries; (vi) any sale or other disposition of any asset of the Company or any of its subsidiaries or any charge, mortgage, pledge or imposition of any lien or other encumbrance (or any satisfaction and discharge thereof) on any asset of the Company or any of its subsidiaries, other than in the ordinary course of business and business, or any agreement relating to any of the foregoing; (vii) any default or breach by the Company or any of its subsidiaries in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; any material respect under any contract, license or permit; (gviii) there has not been any general wage or salary increase or any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, executive officers or key management employees of the Company, except for increases in base compensation Company or any of its subsidiaries or any entry into any employment contract with any executive officer or key salaried employee of the Company or any of its subsidiaries; and (ix) any change in the ordinary course accounting methods of business consistent with past practice, the Company or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement by the Company to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectits subsidiaries.

Absence of Changes or Events. Since Except as set forth in the applicable subsection of Section 3.10 of the Disclosure Schedule, since December 31, 19962013: (a) The Company and its Subsidiaries have conducted their businesses only in the Ordinary Course of Business; (b) There has occurred no Material Adverse Change; (c) Neither the Company nor any of its Subsidiaries have: (i) amended its Constitutive Documents; (ii) issued, sold, transferred, pledged, disposed of or encumbered any of its capital stock, membership interests or other equity interests or any commitments or rights of any kind to acquire any of its capital stock, membership interests or other equity interests; (iii) purchased or otherwise acquired directly or indirectly any of its capital stock, membership interests or other equity interests, or any instrument or security which consists of or includes a right to acquire such capital stock, membership interests or other equity interests; or (iv) declared or paid any dividends or distributions on or with respect to its capital stock, membership interests or other equity interests; (d) Neither the Company nor any of its Subsidiaries have adopted a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring or other reorganization; (e) Neither the Company nor any of its Subsidiaries has changed in any material respect any of the accounting policies or methods used by it; (f) Neither the Company nor any of its Subsidiaries has incurred loss of, or damage to, its tangible personal property assets in excess of $150,000 individually or $250,000 in the aggregate; (g) Neither the Company nor any of its Subsidiaries has mortgaged, pledged or subjected to any Lien (other than Permitted Liens), any of its assets; (h) Neither the Company nor any of its Subsidiaries has sold, exchanged, transferred, licensed or otherwise disposed of any of its assets, except in the Ordinary Course of Business; (i) Neither the Company nor any of its Subsidiaries has canceled, compromised, waived or released any debts or claims involving more than $150,000; (j) Neither the Company nor any of its Subsidiaries has reserved for or written down the value of any assets or written off as uncollectible any accounts receivable, except in the Ordinary Course of Business; (k) Neither the Company nor any of its Subsidiaries has (i) made, or committed to make, any capital expenditures in excess of $75,000 individually or $150,000 in the aggregate or (ii) failed in any material respect to make any capital expenditure reflected in the budget reflected in Section 3.10(k) of the Disclosure Schedule; (l) There has not been any labor dispute or disturbance adversely affecting the business operations, prospects or financial condition of the Company or any of its Subsidiaries, including the filing of any petition or charge of unfair labor practice with any Governmental Entity, efforts to effect a union representation election, actual or threatened employee strike, work stoppage or slowdown; (i) there has not been any direct employment, severance, termination, retention, change of control or indirect redemption, purchase similar agreements or other acquisition of any shares of capital stock of the Company, arrangements entered into or any declaration, setting aside or payment of any dividend or other distribution modified by the Company in respect or any of its capital stockSubsidiaries related to any employee, other than or (ii) except as would not result in an aggregate incremental cost to the payment Company and its Subsidiaries of $150,000 or more, any bonuses, salary increases, severance or termination pay made or granted by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (b) except in the ordinary course of business and consistent with past practice, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) there has not been any material change in the accounting methods, principles or practices of the Company; (d) there has not been any damage, destruction or loss, whether or not covered by insurance, except for such as would not, individually or in the aggregate, have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited Subsidiaries to writing down the value of inventory any employee or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable benefits provided to any present current or former directors, officers or key employees employee of the CompanyCompany or any of its Subsidiaries, as the case may be; (n) Except as would not result in an aggregate incremental cost to the Company and its Subsidiaries of $150,000 or more, neither the Company nor any of its Subsidiaries has adopted, amended or modified any Company Benefit Plan; (o) No party has terminated, cancelled, amended, modified, or accelerated any Material Contract or waived any material rights under any such Material Contract; (p) There has not been any loan or advance of money or other property by the Company or any of its Subsidiaries to any employee other than business travel advances, use of a Company or Subsidiary credit card in the Ordinary Course of Business or any loans which may have been satisfied prior to the date of this Agreement; (q) Neither the Company nor any of its Subsidiaries has created, incurred, assumed, or guaranteed any Indebtedness (other than draws under a revolving line of credit in the Ordinary Course of Business); (r) Neither the Company nor any of its Subsidiaries has delayed the payment of accounts payable past the date when such obligation would have been paid in the Ordinary Course of Business, or accelerated the collection of account receivable in advance of when such receivable would have been collected in the Ordinary Course of Business; (s) Neither the Company nor any of its Subsidiaries has made any material Tax election, changed its method of Tax accounting, (except as the result of any change in Law), prepared any Tax Returns in a manner which is materially inconsistent with the past practices of such Person with respect to the treatment of items on such Tax Returns, incurred any material liability for increases in base compensation Taxes other than in the ordinary course of business consistent with past practice, filed an amended Tax Return or a claim for refund of Taxes with respect to the income, operations or property of such Person, or settled any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employeesclaim relating to a material amount of Taxes; orand (ht) there has not been Neither the Company nor any of its Subsidiaries have made any agreement by the Company to (i) do any of the things described in the preceding clauses (a) through (g) foregoing, other than as expressly negotiations with the Purchaser and its Representatives regarding the transactions contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of by this Agreement, would have made any representation or warranty in this Article III untrue or incorrect.

Absence of Changes or Events. Since December 31Except as set forth on Schedule 6(j) annexed hereto, 1996since the Balance Sheet Date, Seller has conducted its business only in the ordinary course and has not: (ai) there has not been incurred any direct obligation or indirect redemptionliability, purchase absolute, accrued, contingent or other acquisition of any shares of capital stock of the Companyotherwise, whether due or any declarationto become due, setting aside except current liabilities for trade or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (b) except business obligations in the ordinary course of business and consistent with past its prior practice, none of which liabilities, in any case or in the Company has not incurred any indebtedness for borrowed moneyaggregate, materially and adversely affects the business, properties, assets, liabilities or assumedcondition, guaranteedfinancial or otherwise, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a wholeSeller; (cii) there has not been discharged or satisfied any material change lien, charge or encumbrance other than those then required to be discharged or satisfied, or paid any obligation or liability, absolute, accrued, contingent or otherwise, whether due or to become due, other than current liabilities shown on the Balance Sheet and current liabilities incurred since the Balance Sheet Date in the accounting methods, principles or practices ordinary course of the Companybusiness and consistent with its prior practice; (diii) there has not been declared or made any payment of dividends or other distribution to its shareholders or upon or in respect of any shares of its capital stock, or purchased, retired or redeemed, or obligated itself to purchase, retire or redeem, any of its shares of capital stock or other securities; (iv) mortgaged, pledged or subjected to lien, charge, security interest or any other encumbrance or restriction any of its property, business or assets, tangible or intangible; (v) sold, transferred, leased to others or otherwise disposed of any of its assets except in the ordinary course of business, or cancelled or compromised any debt or claim, or waived or released any right of substantial value; (vi) received any notice of termination of any contract, lease or other agreement or suffered any damage, destruction or loss, loss (whether or not covered by insurance) which, except for such as would not, individually in any case or in the aggregate, have has had a Material Adverse Effectmaterially adverse effect on its assets, properties, operations or prospects; (evii) there has been no encountered any labor union organizing activity, had any actual or threatened employee strikes, work stoppages, slow-downs or lock-outs or had any material change in its relations with its employees, agents, customers or suppliers; (viii) transferred or granted any rights under, or entered into any settlement regarding the breach or infringement of, any United States or foreign license, patent, copyright, trademark, trade name, invention or similar rights, or modified any existing rights with respect thereto; (ix) made any material change in the businessrate of compensation, operationscommission, assets bonus or financial condition other direct or indirect remuneration payable, or paid or agreed or orally promised to pay conditionally or otherwise, any material bonus, extra compensation, pension or severance or vacation pay, to any shareholder, director, officer, employee, salesman, distributor or agent of Seller; (x) issued or sold any shares of its capital stock or other securities, or issued, granted or sold any options, rights or warrants with respect thereto, or acquired any capital stock or other securities of any corporation or any interest in any business enterprise, or otherwise made any loan or advance to or investment in any person, firm or corporation; (xi) made any capital expenditures or capital additions or betterments in excess of an aggregate of $250,000; (xii) changed its banking or safe deposit arrangements; (xiii) instituted, settled or agreed to settle any litigation, action or proceeding before any court or governmental body relating to Seller or its property; (xiv) failed in any material manner to replenish its inventories and supplies in a normal and customary manner consistent with its prior practice or made any purchase commitment in excess of the Company that normal, ordinary and usual requirements of its business or at any price in excess of the then current market price or upon terms and conditions more onerous than those usual and customary in the industry, or made any material change in its selling, pricing, advertising or personnel practices inconsistent with its prior practice or, if so, consistent with prudent business practices prevailing in the industry; (xv) suffered any change, event or condition which, in any case or in the aggregate, has had or will may have a Material Adverse Effectmaterially adverse affect on Seller's condition (financial or otherwise), properties, assets, liabilities, operations or prospects including, without limitation, any change in Seller's revenues, costs, levels of committed business or relations with its employees, agents, customers or suppliers; (fxvi) there has not been entered into any revaluation by the Company of any of its material assetstransaction, including but not limited to writing down the value of inventory contract or writing off notes or accounts receivable, in any case, commitment other than in the ordinary course of business and or paid or agreed to pay any legal, accounting, brokerage, finder's fee, taxes or other expenses in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 or agreement or arrangementwith, or incurred any other increase in severance pay obligations by reason of this Agreement or the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employeestransactions contemplated hereby; or (hxvii) there has not been entered into any agreement by or made any commitment, whether written or oral, to take any of the Company to types of action described in subparagraphs (i) do any of the things described in the preceding clauses (a) through (gxvi) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectabove.

Absence of Changes or Events. Since December 31the date of the most recent Financial Statements, 1996there has not been any event, change, occurrence or circumstance outside the Ordinary Course of Business or that has had or could reasonably be expected to have a Material Adverse Effect on the Company. Without limiting the generality of the foregoing, since the date of the most recent Financial Statements: (a) the Company has not sold, leased, transferred, or assigned any of its assets, tangible or intangible, other than routine purchase orders and other sales made in the Ordinary Course of Business; (b) the Company has not entered into any Contract (or series of related Contracts) involving more than $50,000 outside the Ordinary Course of Business, other than loans made in accordance with the Company’s business plan; (c) the Company has not agreed to the imposition of any Encumbrance upon any of its assets, tangible or intangible; (d) the Company has not made any capital expenditure (or series of related capital expenditures) either involving more than $50,000 or outside the Ordinary Course of Business; (e) the Company has not issued any note, bond or other debt security or created, incurred, assumed, or guaranteed any Indebtedness; (f) the Company has not delayed or postponed the payment of accounts payable and other Liabilities outside the Ordinary Course of Business; (g) the Company has not canceled, compromised, waived or released any right or claim (or series of related rights and claims) outside the Ordinary Course of Business; (h) 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, as the case may be; (i) the Company has not experienced any damage, destruction or loss (whether or not covered by insurance) to its property in excess of $50,000; (j) the Company has not made any loan to, or entered into any other transaction with, any of its stockholders, directors, officers or employees; (k) the Company has not granted any increase in the compensation of any of its directors, officers, or employees or made any other change in employment terms for any of its directors, officers or employees or in the terms of its agreements with any independent contractors outside the Ordinary Course of Business; (l) the Company has not adopted, amended, modified or terminated any bonus, profit-sharing, incentive, stock option, severance, or other plan, contract, or commitment for the benefit of any of its directors, officers, and employees (or taken any such action with respect to any other employee benefit plan); (m) there has not been any direct change in the Tax or indirect redemptionaccounting principles, purchase methods, practices, elections or other acquisition of any shares of capital stock of the Company, or any declaration, setting aside or payment of any dividend or other distribution procedures followed by the Company in respect connection with the business of its capital stock, other than the payment made Company or any change in the depreciation or amortization policies or rates theretofore adopted by the Company in connection with respect to 500,000 shares the business of Common Stock put to the Company by Valcheck Company on June 30, 1997;Company; or (bn) except in the ordinary course of business and consistent with past practice, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) there has not been any material change in the accounting methods, principles or practices of the Company; (d) there has not been any damage, destruction or lossobligation, whether written or not covered by insuranceoral, except for such as would not, individually or in the aggregate, have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement by the Company to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectforegoing.

Absence of Changes or Events. Since December 31June 30, 1996: (a) 2008, there has not been any direct change, event, state of circumstances or indirect redemptionfacts, purchase or other acquisition occurrence that has had or could reasonably be expected to have, individually or in the aggregate, a TTX Material Adverse Effect. Except as set forth in Schedule 3.15, from June 30, 2008 to the date of any shares of capital stock this Agreement, the business of the Company, or any declaration, setting aside or payment TTX Entities has been conducted in the Ordinary Course of any dividend or other distribution by Business. Without limiting the Company in respect generality of its capital stockthe foregoing, other than in the payment made by the Company with respect to 500,000 shares Ordinary Course of Common Stock put to the Company by Valcheck Company on Business and except as set forth in Schedule 3.15, since June 30, 1997;2008: (b) except in the ordinary course of business and consistent with past practice, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) there has not been any material change in the accounting methods, principles or practices of the Company; (da) there has not been any damage, destruction or loss, whether or not covered by insurance, except with respect to the property and assets of either of the TTX Entities having a replacement cost of more than $25,000 for any single loss or $50,000 for all such as would not, individually or in the aggregate, have a Material Adverse Effectlosses; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (fb) there has not been any revaluation by the Company declaration, setting aside or payment of any dividend or other distribution in respect of its material assetsany shares of capital stock or other equity interests of either of the TTX Entities or any repurchase, including but not limited to writing down redemption or other acquisition by either of the value TTX Entities of inventory any outstanding shares of capital stock or writing off notes other securities of, or accounts receivableother ownership interest in, in any case, other than in either of the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure StatementTTX Entities; (gc) there neither of the TTX Entities has not been awarded or paid any increase in bonuses to any of their respective employees, except to the extent accrued on the Balance Sheet, or establishment of entered into any bonus, insurance, severanceemployment, deferred compensation, pensionseverance or similar agreement, retirement, profit sharing, stock option arrangement or practice (including without limitation the granting of stock options, stock appreciation rights, performance awards nor amended any such agreement) or restricted stock awards), stock purchase or other employee benefit plan or agreement or arrangement, or any other agreed to increase in the compensation payable or to become payable by it to any present or former of the directors, officers officers, employees, agents or key employees representatives of either of the CompanyTTX Entities or agreed to increase the coverage or benefits available under any severance pay (whether pursuant to a legal obligation or ex gratia), except termination pay, redundancy pay (whether contractual, customary or discretionary), vacation pay, company awards, salary continuation for increases in base compensation in the ordinary course of business consistent with past practicedisability, sick leave, deferred compensation, bonus or any employmentother incentive compensation, consulting insurance, pension or severance agreement other employee benefit plan, payment or arrangement entered into made to, for or with any such present or former directors, officers officers, employees, agents or key employees; orrepresentatives; (hd) there has not been any agreement change by either of the Company TTX Entities in accounting or Tax reporting principles, methods or policies; (e) neither of the TTX Entities has made or rescinded any election relating to Taxes or settled or compromised any claim relating to Taxes; (f) neither of the TTX Entities has entered into any transaction or Contract; (g) neither of the TTX Entities has failed to promptly pay and discharge current Liabilities except where disputed in good faith by appropriate proceedings and except where failure to pay would not have a TTX Material Adverse Effect; (h) neither of the TTX Entities has made any loans, advances or capital contributions to, or investments in, any Person or paid any fees or expenses to Seller or any director, officer, partner, stockholder or Affiliate of Seller; (i) do neither of the TTX Entities has (i) mortgaged, pledged or subjected to any Lien any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement its respective assets, or (ii) takeacquired any assets or sold, assigned, transferred, conveyed, leased or otherwise disposed of any of their respective assets, except, in the case of clause (ii), for assets acquired, sold, assigned, transferred, conveyed, leased or otherwise disposed of; (j) neither of the TTX Entities has discharged or satisfied any Lien, or paid any Liability; (k) neither of the TTX Entities has canceled or compromised any Indebtedness 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 each such TTX Entity; (l) neither of the TTX Entities has made or committed to make any capital expenditures or capital additions or betterments in excess of $25,000 individually or $50,000 in the aggregate; (m) neither of the TTX Entities has issued, created, incurred, assumed, guaranteed, endorsed or otherwise become liable or responsible with respect to (whether in writing directly, contingently, or otherwise) any Indebtedness; (n) neither of the TTX Entities has granted any license or sublicense of any rights under or with respect to any Intellectual Property Rights; (o) neither of the TTX Entities has instituted or settled any Proceeding; (p) from July 1, 2008, there has not been any action whichdividends or other distributions paid, if taken prior partial redemption of loans, payments of any accounts receivable or other similar amounts, or any intercompany payments from either TTX Entity to Seller; and (q) none of the date Seller or the TTX Entities has agreed, committed, arranged or entered into any understanding to do anything, as of this Agreementthe applicable date, would have made any representation or warranty set forth in this Article III untrue or incorrectSection 3.15.

Absence of Changes or Events. Since December 31, 1996: (a) there has not been any direct or indirect redemption, purchase or other acquisition 11.1. Except for the execution and delivery of any shares of capital stock of this Agreement and the Company, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (b) except transactions as contemplated in the ordinary course of business and consistent with past practice, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) Agreement there has not been any material adverse change in in, or any event or development which, individually or together with other such events, could reasonably be expected to have a Material Adverse Effect. 11.2. There has not occurred: 11.2.1. any authorization, issuance, sale or other disposition by the accounting methods, principles Company of (or practices any modification or amendment of any right of any holder of) any shares of the CompanyCompany (or options with respect thereto); (d) there has not been 11.2.2. any physical damage, destruction or lossother casualty loss except for normal wear and tear, (whether or not covered by insurance) affecting any of the plant, except for such as would not, individually real or in personal property or equipment of the aggregate, have a Material Adverse Effect;Company (e) there has been no 11.2.3. any change in the business, operations, assets or financial condition shareholding pattern of the Company that has had or will have a Material Adverse EffectCompany; (f) there has not been any revaluation 11.2.4. incurrence by the Company of Indebtedness, or (B) any voluntary purchase, cancellation, prepayment or complete or partial discharge in advance of its material assetsa scheduled payment date with respect to, including but not limited or waiver of any right of the Company under, any Indebtedness owing to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statementit; 11.2.5. any material change in (gA) there has not been any increase in pricing, investment, accounting, financial reporting, inventory, credit, allowance 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 tax practice or restricted stock awards), stock purchase or other employee benefit plan or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees policy of the Company, except or (B) any method of calculating any bad debt, contingency or other reserve of the Company for increases accounting, financial reporting or tax purposes, or any change in base compensation the fiscal year of the Company; 11.2.6. any acquisition or disposition of, or incurrence of a lien (other than a lien permitted by theInvestors in writing) on, any assets and properties of the Company, other than in the ordinary course of business consistent with past practice; 11.2.7. capital expenditures or commitments for additions to propertyor equipment of the Company constituting capital assets; 11.2.8. any entering into, material amendment, termination (partial or complete) or granting of a waiver under or giving any consent with respect to (A) any material contract which is required (or had it been in effect on the date hereof would have been required) to be disclosed on the Schedules hereto or (B) any material license held by the Company; 11.2.9. any increase in the rate or terms of compensation payable to the Key Employees of the Company, except annual increases occurring in accordance with the Company’s customary practices or any employment, consulting material modification to any benefit arrangement or severance collective bargaining agreement related to the Company; (C) merger or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement by other business combination involving the Company and any other Person unless done to (i) do any of reflect the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date terms of this Agreement, would have made any representation or warranty in this Article III untrue or incorrect.;

Absence of Changes or Events. Except for (a) matters publicly disclosed by CBH prior to the date hereof in CBH SEC Reports filed prior to the date hereof, and (b) the settlement of the litigation in Hong Kong and Canada by RACP Pharmaceutical Holdings Limited, a wholly-owned subsidiary of CBC, against Li Xiaobo and certain other defendants in connection with the acquisition of shares of Enshi International (Holdings) Pte Ltd (the "LXB Litigation"). 3.18.1 Since December 31, 1996: 2007: (ai) there has CBH and its Subsidiaries have conducted their business in the ordinary course and have not been entered into any direct material oral or indirect redemption, purchase written agreement or other acquisition of any shares of capital stock of the Company, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (b) except material transaction that is not in the ordinary course of business and consistent with past practice, the Company has not incurred (other than this Agreement) or that could reasonably be expected to result in a CBH Material Adverse Effect; (ii) neither CBH nor any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) there has not been its Subsidiaries have sustained any material change in the accounting methodsloss or interference with their business or properties from fire, principles flood, windstorm, accident, strike or practices of the Company; other calamity (d) there has not been any damage, destruction or loss, whether or not covered by insurance); (iii) there has been no material change in the indebtedness of CBH and its Subsidiaries, except for such as would notno change in the capital stock of CBH and no dividend or distribution of any kind declared, individually paid or made by CBH on any class of its capital stock; (iv) there has been no event or condition which has caused a CBH Material Adverse Effect, nor any development, occurrence or state of facts or circumstances known to CBH that could, singly or in the aggregate, have reasonably be expected to result in a CBH Material Adverse Effect; ; and (ev) there has been no material change by CBH or Erye in the businessits accounting principles, operationspractices or methods. 3.18.2 Since December 31, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case2007, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement increase in the compensation or other benefits payable, or which could become payable, by the Company CBH, to (i) do its officers or key employees, or any amendment of any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectCBH Employee Benefit Plans.

Absence of Changes or Events. Since December 31, 1996: 2005, Sellers have operated the Business in the ordinary course consistent with past practice and no event, circumstance, occurrence, fact, condition, change, development or effect exists or has occurred that, either individually or in the aggregate, has had or resulted in, or could reasonably be expected to result in, a Material Adverse Effect. Without limiting the generality of the foregoing, except to the extent set forth on Schedule 5.11 hereto, since December 31, 2004 neither Seller has: (a) there has not been incurred any direct obligation or indirect redemptionliability, purchase secured or other acquisition of any shares of capital stock of the Companyunsecured (whether absolute, accrued, contingent, or any declarationotherwise), setting aside and whether due or payment of any dividend or other distribution by the Company in respect of its capital stockto become due, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (b) except current liabilities incurred in the ordinary course of business and consistent with past practice, the Company has not incurred in excess of $5,000; (b) discharged or satisfied any indebtedness for borrowed moneyEncumbrance, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) there has not been paid any material change in the accounting methods, principles obligation or practices of the Company; (d) there has not been any damage, destruction or loss, whether or not covered by insuranceliability, except for such as would not, individually or in the aggregate, have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than current liabilities becoming due in the ordinary course of business and not in connection excess of $5,000; (c) declared, set aside or made any payment or other distribution to stockholders with respect to shares of capital stock of such Seller, purchased or redeemed any of its securities or agreed to do so or entered into any contract, agreement or understanding with any officers or directors; (d) mortgaged, pledged, or subjected to lien, charge, security interest or other Encumbrance any of the revaluation Purchased Assets; (e) terminated or discontinued any business operation of certain fixed assets as set forth in such Seller, or sold, transferred, licensed or otherwise disposed of any of the Disclosure Statement; Purchased Assets; (f) cancelled or compromised any debt or claim, or waived or released any right of material value; (g) there has not been increased the compensation or benefits of, entered into any increase in employment or establishment of compensation arrangement or agreement (including any bonus, insurance, severance, deferred compensation, pensionseverance or equity incentive arrangement) with, 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 or agreement or arrangementhired, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Companyawarded or, except for increases in base compensation in the ordinary course of business consistent with past practice, paid any bonus or other incentive compensation to, any employmentdirector, consulting officer, employee, agent or severance agreement or arrangement entered into with any such present or former directors, officers or key employeesother individual; or (h) there has not been terminated, amended or failed to renew or received any agreement by the Company to notice of termination, suspension, limitation, revocation, impairment, forfeiture or nonrenewal of any Contract, Permit or Intangible Right; (i) suffered any damage, destruction or loss (whether or not covered by insurance) adversely affecting any of the Purchased Assets, or suffered any taking or seizure of any of the Purchased Assets by condemnation or eminent domain; (j) acquired any capital stock or other securities of any corporation or any interest in any business enterprise, or otherwise made any loan or advance to or investment in any person, firm or corporation; (k) made any capital expenditures exceeding $5,000 singly or related capital expenditures exceeding $10,000 in the aggregate or made any commitments for capital expenditures exceeding $5,000 singly or any commitments for related capital expenditures exceeding $10,000 in the aggregate which are non-terminable without payment or penalty; (l) instituted, settled or agreed to settle any litigation, action or proceeding before any Governmental Authority affecting its financial condition, its property or its business operations; (m) had any change in its relations with its employees, agents, customers or suppliers, which change has had or would be reasonably likely to have a Material Adverse Effect; (n) made any change in accounting principles or methods, or in the manner of keeping books, accounts and records of such Seller; (o) except for inventory acquired or to be acquired in the ordinary course of business, acquired or made any agreement or commitment to acquire new or additional assets with an economic value exceeding $5,000 singly or $10,000 in the aggregate; (p) entered into any transaction other than in the ordinary course of business; or (q) entered into any agreement or made any commitment to do any of the things described in the preceding clauses subsections (a) through (gq) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectSection 5.11.

Absence of Changes or Events. Since December 31, 1996: (a) Since the Balance Sheet Date, there has not been any direct change, effect, event or indirect redemption, purchase occurrence that has had or other acquisition of any shares of capital stock of the Company, or any declaration, setting aside or payment of any dividend or other distribution by the would reasonably be expected to have a Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997;Material Adverse Effect. (b) From the Balance Sheet Date to the date of this Agreement, except as set forth in Section 3.13(b) of the Company Disclosure Schedule, the Company has caused the Business to be conducted in all material respects in the ordinary course and: (i) the Company has not granted to any Employee any material increase in base salary, wages, bonuses, incentive compensation, pension, severance, other enhanced payment or termination pay, except (A) in the ordinary course of business and consistent business, (B) in connection with past practicea promotion based on job performance or workplace requirements or (C) as may have been required under existing agreements, including any Transferred Benefit Plan, or applicable Law; (ii) the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) there has not been any material change in the its accounting methods, principles or practices of the Companyexcept as required by GAAP or by applicable Law; (diii) there the Company has not been incurred or guaranteed any damageindebtedness for borrowed money; (iv) the Company has not sold, destruction leased or loss, whether otherwise disposed of any assets of the Company used in the operation or not covered by insuranceconduct of the Business, except for such as would not(A) sales of raw materials, individually or in the aggregatework-in-process, have a Material Adverse Effect; (e) there has been no change in the businessfinished goods, operationssupplies, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assetsparts, including but not limited to writing down the value of inventory or writing off notes or accounts receivablespare parts and other inventories, in any each case, other than in the ordinary course of business and in connection with the revaluation of certain fixed business, (B) assets as set forth that were obsolete or no longer used in the Disclosure StatementBusiness and (C) cash distributions to its Affiliates; (gv) there the Company has not been consummated the acquisition of, by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any increase in other manner, any business or establishment of any bonuscorporation, insurancepartnership, 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 association or other employee benefit plan business organization or agreement division or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees a substantial portion of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employeesassets thereof (other than inventory); orand (hvi) there the Company has not been any agreement by the Company authorized or agreed to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) takedo, whether in writing or otherwise, any action which, if taken prior to of the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectforegoing actions.

Absence of Changes or Events. Since the December 31Balance Sheet Date, 1996Seller has conducted its business only in the ordinary course and has not: (a1) there has not been incurred any direct obligation or indirect redemptionliability, purchase absolute, accrued, contingent or other acquisition of any shares of capital stock of the Companyotherwise, whether due or any declarationto become due, setting aside except current liabilities for trade or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (b) except business obligations incurred in the ordinary course of business and consistent with past its prior practice, none of which liabilities, in any case or in the Company has not incurred any indebtedness for borrowed moneyaggregate, materially and adversely affects the business, liabilities or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations financial condition of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a wholeSeller; (c2) there has not been discharged or satisfied any material change lien, charge or encumbrance other than those then required to be discharged or satisfied, or paid any obligation or liability, absolute, accrued, contingent or otherwise, whether due or to become due, other than current liabilities shown on the December Balance Sheet and current liabilities incurred since the December Balance Sheet Date in the accounting methods, principles or practices ordinary course of the Companybusiness and consistent with its prior practice; (d3) there has not been except for the Pre-Closing Dividend, declared or made any payment of dividends or other distribution to its shareholders or upon or in respect of any shares of its capital stock, or purchased, retired or redeemed, or obligated itself to purchase, retire or redeem, any of its shares of capital stock or other securities; (4) mortgaged, pledged or subjected to lien, charge, security interest or any other encumbrance or restriction any of its property, business or assets, tangible or intangible; (5) except for the Pre-Closing Dividend, sold, transferred, leased to others or otherwise disposed of any of its assets, except for inventory sold in the ordinary course of business, or canceled or compromised any debt or claim, or waived or released any right of substantial value; (6) received any notice of termination of any contract, lease or other agreement or suffered any damage, destruction or loss, loss (whether or not covered by insurance) which, except for such as would not, individually in any case or in the aggregate, has had or may have a Material Adverse Effectmaterially adverse effect on the assets, operations or prospects of Seller; (e7) there has been no encountered any labor union organizing activity, had any actual or threatened employee strikes, work-stoppages, slow-downs or lock-outs, or had or may have any material change in its relations with its employees, agents, customers or suppliers; (8) transferred or granted any rights under, or entered into any settlement regarding the breach or infringement of, any United States or foreign license, patent, copyright, trademark, trade name, invention or similar rights, or modified any existing rights with respect thereto; (9) except as reflected in the Disclosure Schedule, made any change in the businessrate of compensation, operationscommission, assets bonus or financial condition other direct or indirect remuneration payable, or paid or agreed or orally promised to pay, conditionally or otherwise, any bonus, extra compensation, pension or severance or vacation pay, to any shareholder, director, officer, employee, salesman, distributor or agent of Seller; (10) made any capital expenditures or capital additions or betterments in excess of an aggregate of $50,000; (11) changed its banking or safe deposit arrangements; (12) instituted, settled or agreed to settle any litigation, action or proceeding before any court or governmental body relating to Seller or its property; (13) failed to replenish its inventories and supplies in a normal and customary manner consistent with its prior practice and prudent business practices prevailing in the industry, or made any purchase commitment in excess of the Company that normal, ordinary and usual requirements of its business or at any price in excess of the then current market price or upon terms and conditions more onerous than those usual and customary in the industry, or made any change in its selling, pricing, advertising or personnel practices inconsistent with its prior practice and prudent business practices prevailing in the industry; (14) suffered any change, event or condition which, in any case or in the aggregate, has had or will could reasonably be expected to have a Material Adverse Effectmaterially adverse effect on Seller's condition (financial or otherwise), properties, assets, liabilities, operations or prospects, including, without limitation, any change in Seller's revenues, costs, backlog or relations with its employees, agents, customers or suppliers; (f15) there has not been entered into any revaluation by the Company of any of its material assetstransaction, including but not limited to writing down the value of inventory contract or writing off notes or accounts receivable, in any case, commitment other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employeesbusiness; or (h16) there has not been entered into any agreement by the Company or made any commitment to (i) do take any of the things types of action described in the preceding clauses subparagraphs (a1) through (g15) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectabove.

Absence of Changes or Events. Since Except as set forth in Schedule 3.19 or as expressly provided for elsewhere herein, the Company has not, since December 31, 1996: 2001: (a) there has not been incurred any direct or indirect redemption, purchase or other acquisition of Bank Indebtedness (b) permitted any shares of capital stock of the Company, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stockassets to be subjected to any Lien, other than a Permitted Lien, (c) sold, transferred or otherwise disposed of any assets, except for dispositions or consumptions of assets or Inventory in the payment ordinary course of business, (d) made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (b) any material capital expenditure or commitment therefor except in the ordinary course of business, (e) made any loan to any Person, (f) waived any rights or settled any claims, except for such waivers or settlements granted or entered into in the ordinary course of business, (g) granted any increase in the rate of wages, salaries or other compensation or benefits or paid any bonuses to any of its employees, other than increases, payments or bonuses in the ordinary course of its business and consistent with past practice, the Company has not incurred any indebtedness for borrowed money(h) adopted, or assumedamended or modified in any respect, guaranteedany Benefit Arrangement or Employee Plan, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, (i) made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) there has not been any material change in the any method of accounting methodspractice, principles (j) suffered or practices of the Company; (d) there has not been incurred any damage, destruction destruction, fire, explosion, accident, flood, or loss, other casualty loss or act of God (whether or not covered by insurance) that has had a Material Adverse Effect, except for such as would not(k) amended or terminated, individually or in the aggregatesuffered any amendment or termination of, any Permit, contract, lease, license, purchase order or similar commitment or right that is likely to have a Material Adverse Effect; , (el) there has been no change in the business, operations, assets suffered any labor disputes or financial condition of the Company disturbances that has had or will is likely to have a Material Adverse Effect; , (fm) there has not been declared or paid any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory dividends or writing off notes or accounts receivableother distributions, in any casecash, shares of capital stock or other than property, to its shareholders, (n) otherwise failed to operate its business in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practicepractices so as to preserve its business organization intact and to preserve the goodwill of its customers, suppliers, employees and others with whom it has business relations, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (ho) there has not been any agreement by the Company agreed to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectforegoing.

Absence of Changes or Events. Since Except as set forth in Shared Technologies' Form 10-K for the fiscal year ended December 31, 19961994, as filed with the SEC, since December 31, 1994: (a) there has been no material adverse change, or any development involving a prospective material adverse change, in the general affairs, management, business, operations, condition (financial or otherwise) or prospects of Shared Technologies and its subsidiaries taken as a whole; (b) there has not been any direct or indirect redemption, purchase or other acquisition of any shares of capital stock of the CompanyShared Technologies or any of its subsidiaries, or any declaration, setting aside or payment of any dividend or other distribution by the Company Shared Technologies or any of its subsidiaries in respect of its capital stock, other than stock (except for the payment made by distribution of the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30Shared Technologies Cellular, 1997Inc.); (bc) except in the ordinary course of its business and consistent with past practice, the Company practice neither Shared Technologies nor any of its subsidiaries has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, or made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a wholecorporation; (cd) there has not been any material change in the accounting methods, principles or practices of the CompanyShared Technologies or its subsidiaries; (de) except in the ordinary course of business and for amounts which are not material, there has not been any revaluation by Shared Technologies or any of its subsidiaries of any of their respective assets, including, without limitation, writing down the value of inventory or writing off notes or accounts receivables; (f) there has not been any damage, destruction or loss, whether or not covered by insuranceinsurance or not, except for such as would not, individually or in the aggregate, have a Shared Technologies Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement;; and (g) there has not been any increase in 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 or agreement or arrangement, by Shared Technologies or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement by the Company its subsidiaries to (i) do any of the things described in the preceding clauses (a) through (gf) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III V untrue or incorrect.

Absence of Changes or Events. Since December 31Except as set forth in Schedule ---------------------------- 6.16, 1996since the date of the Most Recent Balance Sheet, there has not been any material adverse change in the business, assets, financial condition, results of operations or prospects of the Company, other than changes relating to United States or foreign economies in general or the Company's industries in general and not specifically relating to the Company. Buyer acknowledges that there may have been disruption to the Company's business as a result of the marketing of the Company by Sellers to potential buyers and that there may be disruption to the Company's business as a result of the execution of this Agreement and the consummation of the transactions contemplated hereby, and Buyer agrees that such disruptions do not and shall not constitute a breach of this Section 6.16. Without limiting the generality of the foregoing, except as set forth in Schedule 6.16, since the date of the Most Recent Balance Sheet, the Company has not: (a) there has not been any direct redeemed or indirect redemptionrepurchased, purchase directly or other acquisition of indirectly, any shares of capital stock or other equity security or (with the further exception of the Companypayments allowed under subsections 8.02(n) and 19(a)) declared, or any declaration, setting set aside or payment of paid any dividend dividends or made any other distribution by the Company distributions, whether in cash or in kind, with respect to any shares of its capital stock, stock or other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997equity security; (b) issued, sold or transferred any equity securities, any securities convertible, exchangeable or 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 of the Company; (c) incurred or become subject to any liabilities, except liabilities incurred in the ordinary course of business (for purposes of this provision, potential liabilities related to routine personal injury litigation or claims made, which are both (i) fully covered by the Company's insurance and consistent with past practice, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (cii) there has not been any material change disclosed in the accounting methods, principles or practices updated Schedule 6.13 to be delivered at Closing shall be deemed to have been incurred in the ordinary course of the Company;business). (d) there has not been subjected any damageportion of its properties or assets to any Lien (except (i) Permitted Liens, destruction or loss, whether or not covered by insurance, except and (ii) Liens for such as would not, individually or the purchase price/lease cost of assets acquired since the date of the Most Recent Balance Sheet in the aggregate, have a Material Adverse Effectordinary course of business); (e) there has been no change sold, leased, assigned or transferred (including, without limitation, transfers to Sellers or any of their Affiliates) a portion of its tangible assets, except for sales and rentals of inventory in the ordinary course of business, operations, assets or financial condition of the Company that has had canceled without fair consideration any material debts or will have a Material Adverse Effectclaims owing to or held by it; (f) there has not been sold, assigned, licensed or transferred (including, without limitation, transfers to Sellers or any revaluation by of their Affiliates) any Intellectual Property 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; (g) suffered any extraordinary losses or waived any rights of material value; (h) entered into, amended or terminated any material lease, contract, agreement or commitment (other than sale and rental agreements with customers in the ordinary course), or taken any other action or entered into any other transaction other than in the ordinary course of business; (i) made or granted any bonus or any wage, salary or compensation increase to any director, officer, employee or sales representative, group of employees or consultant or (other than increases to non-officer employees made per customary practices or to meet a competing offer) made or granted 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 material assetsdirectors, including but not limited to writing down officers, and employees outside the value ordinary course of inventory or writing off notes or accounts receivable, in any case, business; (k) 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 in connection with the revaluation supplies, repairs and maintenance, and payment of certain fixed assets as set forth in the Disclosure Statementaccounts payable and accrued expenses); (gl) there has not been made any increase capital expenditures or commitments for capital expenditures that aggregate in or establishment excess of any bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing, stock option (including without limitation $100,000 other than the granting purchase of stock options, stock appreciation rights, performance awards or restricted stock awards), stock purchase or other employee benefit plan or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation Inventory in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employeesbusiness; or (hm) there has not been made any agreement by loans or advances to, or guarantees for the Company to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwisebenefit of, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectpersons.

Absence of Changes or Events. Since Except as set forth on Section 2.8 of the Disclosure Schedule, since December 31, 1996: 2021, Seller has (a) there has not been any direct or indirect redemption, purchase or other acquisition of any shares of capital stock of the Company, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of conducted its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (b) except business in the ordinary course of business and consistent with past practicepractices and (b) not taken any action that would be prohibited by Section 5.1 if such action was taken after the date hereof, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; and (c) there has not been any material change event, change, occurrence or circumstance that, individually or in the accounting methodsaggregate with any such events, principles changes, occurrences or practices circumstances, has had or could reasonably be expected to have a Material Adverse Effect. Without limiting the generality of the Companyforegoing, since December 31, 2021: (a) other than in the Ordinary Course of Business, Seller has not sold, assigned, licensed, leased, transferred, conveyed, or committed itself to sell, assign, license, lease, transfer, or convey any of the Assets; and Seller has not sold, assigned, licensed, leased, transferred, conveyed or committed itself to sell, assign, license, lease, transfer or convey any other asset or property, whether real, personal, or mixed, that would otherwise be included in the Assets if they were held by Seller as of the Closing Date; (b) Seller has not merged with, entered into any consolidation with, or acquired an equity interest in any Person or acquired a substantial portion of the assets or business of any Person or any division, line or business thereof; (c) Seller has not made any material changes in its customary methods of operations, including without limitation, practices and policies relating to marketing, selling, and pricing; (d) there Seller has not been entered into any damageContract with any employee (or with any relative, destruction beneficiary, spouse, or loss, whether or not covered by insurance, except for Affiliate of such as would not, individually or in the aggregate, have a Material Adverse Effectemployee); (e) there Seller has been no change not allowed any permit that would constitute an Assigned Permit if in place on the business, operations, assets Closing Date to lapse or financial condition of the Company that has had or will have a Material Adverse Effectterminate; (f) there Seller has not been failed to maintain any revaluation by the Company of any of its material assetsAsset in good repair and operating condition, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business wear and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statementtear excepted; (g) there has not been any increase in no destruction of, material damage to, or establishment loss of any bonusof the Assets, insuranceand no event, 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 or agreement or arrangementcircumstance, or condition has occurred that has materially impaired or reduced the value of any other increase in Asset, and Seller has not written down or written up the compensation payable value of any Asset or revalued any Asset, nor has it failed to become payable to any present or former directorswrite down, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practicewrite up, or revalue any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; orAsset under circumstances where it would have been required to do so under GAAP; (h) there has not been no acceleration, termination, modification, cancellation, or amendment of any agreement by the Company to Assumed Contract; (i) do Seller has not cancelled, compromised, waived, or released any right or claim (or series of related rights and claims) relating to any Asset; (j) Seller has not repurchased or redeemed, or otherwise paid any dividend or made any distribution with respect to, any of its outstanding equity interests or any other outstanding securities; (k) Seller has not failed to pay any creditor any amount owed to such creditor when due, delayed or postponed the things described payment of accounts payable or other Liabilities or requested that any vendor or service provider hold or delay any invoices or billing statements; (l) Seller has not made any increase or decrease, or announced any increase or decrease, in the preceding clauses wages, salaries, compensation, bonuses, incentives, severance, pension or any other benefits payable by Seller to any employee, including, without limitation, any increase or change pursuant to any Employee Benefit Plan; and (am) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) takethere has been no agreement, whether in writing or otherwise, by Seller to take any action which, if taken prior to of the date of this Agreement, would have made any representation or warranty actions specified in this Article III untrue or incorrectSection 2.8.

Absence of Changes or Events. Since December 31(a) From the Interim Financial Statement Date through the date of this Agreement, 1996the Company and its Subsidiaries have conducted their business only in the Ordinary Course, and the Company and its Subsidiaries, taken as a whole, have not suffered any Material Adverse Effect. Buyer acknowledges that there may have been disruption to the business of the Company and its Subsidiaries as a result of the announcement by the Company of its intention to sell such business (and there may be disruption to the business of the Company and its Subsidiaries as a result of the execution of this Agreement and the Ancillary Agreements and the consummation of the transactions contemplated hereby and thereby), and Buyer acknowledges that such disruptions do not and will not constitute a breach of this Section 3.18. (b) Without limiting the generality of the first sentence of Section 3.18, except as set forth on Section 3.18(b) of the Disclosure Schedule, since the Interim Financial Statement Date, neither the Company nor any of its Subsidiaries has: (ai) there has suffered any damage, destruction, or Loss (other than ordinary wear and tear) to any of its assets or properties (whether or not been covered by insurance), individually in excess of $100,000, or in the aggregate in excess of $250,000; (ii) entered into or authorized any direct Contract or indirect redemptiontransaction other than in the Ordinary Course; (iii) sold, purchase transferred, conveyed, assigned, or other acquisition otherwise disposed of any shares of its assets or properties, except sales of inventory in the Ordinary Course and replacement of equipment and other operating assets in the Ordinary Course; (iv) waived, released, settled, or canceled any claims against third parties or debts owing to it, or any rights that have any value, individually in excess of $25,000, or in the aggregate in excess of $1,000,000; (v) made any changes in its accounting systems, policies, principles, practices, or methods, except as required by GAAP; (vi) entered into, authorized, or permitted any transaction, other than in the Ordinary Course, with any Affiliate of the Company or any Seller, except pursuant to agreements in effect as of the date of the Interim Financial Statements; (vii) made any borrowings (other than under the Company Loan Agreements), incurred any debt (other than trade payables in the Ordinary Course and consistent with past practice or under the Company Loan Agreements), or assumed, guaranteed, endorsed (except for the negotiation or collection of negotiable instruments in transactions in the Ordinary Course and consistent with past practice) or otherwise become liable for the obligations of any other Person, or made any payment or repayment in respect of any indebtedness (other than trade payables and accrued expenses in the Ordinary Course and consistent with past practice or under the Company Loan Agreements); (viii) made any loans, advances, or capital contributions to, or investments in, any other Person, except for advances to individual Employees that are in the amount of $1,000 or less; (ix) increased in any manner the compensation or fringe benefits of any director, officer or employee (except for increases of the annual base salary or fringe benefits for such director, officer, or employee that were made in the Ordinary Course) or paid any benefit not required by any existing plan and arrangement or entered into any Contract, agreement, commitment, or arrangement to do any of the foregoing; (x) acquired, leased, or encumbered any assets outside the Ordinary Course; (xi) acquired, leased, or encumbered any assets requiring payment of or in the amount of $200,000 or more in the aggregate whether or not such acquisition, lease, or encumbrance was in the Ordinary Course (other than acquisitions of inventory in the Ordinary Course consistent with past practice); (xii) paid any amount, performed any obligation, or agreed to pay any amount or perform any obligation, in settlement or compromise of any suit or claim of liability for breach of Contract, breach of warranty, tort, or violation of any Law against the Company or any Subsidiary, individually or in the aggregate in excess of $25,000; (xiii) made any declaration, setting aside, or payment of any dividend whether in cash, stock, or property with respect to the capital stock of the Company, or any declaration, setting aside or payment of any dividend redemption or other distribution by acquisition of the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (b) except in the ordinary course of business and consistent with past practice, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) there has not been any material change in the accounting methods, principles or practices stock of the Company; (dxiv) there has not been adopted or amended any damagecollective bargaining, destruction or loss, whether or not covered by insurance, except for such as would not, individually or in the aggregate, have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in or establishment of any bonus, insuranceprofit sharing, severancecompensation, deferred compensationstock option, pension, retirement, profit sharingdeferred compensation, stock option (including without limitation the granting of stock options, stock appreciation rights, performance awards or restricted stock awards), stock purchase or other employee plan, agreement, trust, fund, or arrangement for the benefit plan of employees or agreement increased in any manner the compensation or fringe benefits of any officer or director or paid any benefit to an officer or director not required by any existing plan, arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employeesagreement; or (hxv) there has not been authorized or made any agreement by the Company commitment with respect to (i) do any single capital expenditure in excess of the things described $250,000 or capital expenditures that are, in the preceding clauses aggregate, in excess of $500,000; or (axvi) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) takeagreed, whether in writing or otherwise, to do any action which, if taken prior to of the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectforegoing.

Absence of Changes or Events. Since December 31February 3, 1996, each Seller has conducted the business of the Northeast Division only in the ordinary course and has not, on behalf of, in connection with or relating to the business of the Northeast Division or the Assets or the Locations: (a) there has not been mortgaged, pledged or subjected to lien, charge, security interest or any direct other encumbrance or indirect redemption, purchase or other acquisition of restriction on any shares of capital stock of the CompanyNortheast Division's property, business or any declarationassets, setting aside tangible or payment of any dividend or other distribution by the Company in respect of its capital stock, intangible other than the payment made by the Company with respect Liens (as defined below) to 500,000 shares be discharged as of Common Stock put to the Company by Valcheck Company on June 30, 1997Closing or Permitted Encumbrances (as defined below); (b) except as set forth on EXHIBIT 4.8(b), sold, transferred, leased to others or otherwise disposed of any of Northeast Divisions's property, business or assets, tangible or intangible, except for inventory sold in the ordinary course of business, assets replaced in the ordinary course of business and with equivalent or superior assets, dispositions in the ordinary course of business of assets of immaterial value or unnecessary for the continued operation of any Location consistent with past practice, the Company has not incurred manner in which it was operated during any indebtedness for borrowed moneyperiod reflected in the Financial Information, or assumedcanceled or compromised any material debt or claim, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations waived or released any right of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a wholesubstantial value; (c) there has not been except as set forth on EXHIBIT 4.8(C), received any material change in the accounting methodsnotice of termination of any contract, principles lease or practices of the Company; (d) there has not been other agreement or suffered any damage, destruction or loss, loss (whether or not covered by insurance) which, in any case or in the aggregate, has had a materially adverse effect on the assets or operations of the Northeast Division or any Location; (d) encountered any labor union organizing activity, had any actual or threatened employee strikes, work stoppages, slowdowns or lockouts, or had any material change in its relations with its employees, agents, customers or suppliers; (e) transferred or granted any rights under, or entered into any settlement regarding the breach or infringement of, any United States or foreign license, patent, copyright, trademark, trade name, invention or similar rights used in connection with the Northeast Business, or modified any existing rights with respect thereto; (f) except for such as would notset forth on EXHIBIT 4.8(f), failed to replenish the Northeast Division's inventories and supplies in a normal and customary manner consistent with its prior practice, or made any material purchase commitment in excess of the normal, ordinary and usual requirements of its business, or made any material change in its selling, pricing, advertising or personnel practices inconsistent with its prior practice or industry standards; (g) except as set forth on EXHIBIT 4.8(g), instituted, settled or agreed to settle any material litigation, action or proceeding before any court or governmental body primarily relating to the operation of the Northeast Division or the Assets or any Location; (h) suffered any change, event or condition which, individually or in the aggregate, have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will would have a Material Adverse Effect; materially adverse effect on the condition (f) there has not been any revaluation by the Company of any of its material financial or otherwise), properties, assets, including but not limited to writing down or operations of the value Northeast Division or any Location, including, without limitation, any materially adverse change in revenues or costs (except for those recognized by Buyer through its review of inventory or writing off notes or accounts receivableFinancial Information through December 28, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 awards1996), stock purchase or other employee benefit plan or agreement or arrangement, or any other increase materially adverse change in the compensation payable relations with employees, agents, customers or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employeessuppliers; or (hi) there has not been entered into any agreement by the Company or made any commitment to (i) do take any of the things types of action described in the preceding clauses paragraphs (a) through (gh) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectabove.

Absence of Changes or Events. Since December 31, 1996: (a) Since January 1, 2019, until the date hereof, there has not been any direct change, effect, event or indirect redemption, purchase or other acquisition of any shares of capital stock of the Company, or any declaration, setting aside or payment of any dividend or other distribution by the occurrence that has resulted in a Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997;Material Adverse Effect. (b) except Except in connection with the marketing of the Business in connection with the Transactions, from and after January 1, 2019 until the date of this Agreement, the Company (x) has conducted the Business in all material respects in the ordinary course of business and substantially consistent with past practice, practices and (y) has not: (i) declared or paid any dividend or made any other distribution to any holder of the Company has not incurred any indebtedness for borrowed moneyInterests, other than, in each case, (A) cash dividends or assumed, guaranteed, endorsed other distributions of cash and (B) dividends or otherwise as an accommodation become responsible for the obligations distributions in settlement of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a wholeintercompany accounts; (cii) there has not been split, combined or reclassified any material change in the accounting methods, principles or practices of the CompanyCompany Interests, or issued or redeemed any Company Interests or any other security in respect of, in lieu of or in substitution for any of the Company Interests; (diii) there has not been adopted or amended any damageBenefit Plan or any Union Contract covering any Business Employee or granted to any Business Employee any material increase in, destruction bonus, incentive compensation, severance or loss, whether or not covered by insurance, except termination pay for such as would not, individually or in the aggregate, have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of which the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by would be liable following the Company of any of its material assetsClosing, including but not limited to writing down the value of inventory or writing off notes or accounts receivableexcept, in any each case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (gA) there has not been any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, (B) in connection with the renewal of any Union Contract, (C) in connection with a promotion based on job performance or workplace requirements, to the extent in the ordinary course of business consistent with past practice, (D) as required under existing agreements, including any Benefit Plan or any employmentUnion Contract covering any Business Employee, consulting or severance agreement by applicable Law; or arrangement entered into with (E) in the event of an adoption, amendment or grant that affects a broad cross section of employees of Seller or any such present of its Affiliates in addition to the Business Employees; (iv) sold, licensed, assigned or former directorsabandoned any material Intellectual Property owned by the Company, officers except for (A) licenses granted in the ordinary course of business, and (B) abandonment or key employeesother similar dispositions in the ordinary course of business; (v) made any material change to the Company’s methods of financial accounting, except as required by GAAP or applicable Law; (vi) taken any action to make, change or rescind any material Tax election or amend any material Tax Return of or applicable to the Company; (vii) settled any claims or disputes in excess of $150,000; or (hviii) there has not been authorized or agreed take any agreement by of the Company to foregoing actions described in the foregoing clauses (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectvii).

Absence of Changes or Events. Since December 31Except as set forth on Schedule 4.8 annexed hereto and in the Financial Statements, 1996since the Balance Sheet Date, the Companies have conducted their business only in the ordinary course and have not: (ai) there has not been incurred any direct obligation or indirect redemptionliability, purchase absolute, accrued, contingent or otherwise, whether due or to become due, except current liabilities for trade or business obligations in the ordinary course of business and consistent with their prior practice, none of which liabilities, individually or in the aggregate, materially and adversely affects the business, properties, prospects, assets, liabilities or condition, financial or otherwise, of the Companies; (ii) discharged or satisfied any Lien other than those then required to be discharged or satisfied, or paid any obligation or liability, absolute, accrued, contingent or otherwise, whether due or to become due, other than current liabilities shown on the Balance Sheet and current liabilities incurred since the Balance Sheet Date in the ordinary course of business and consistent with their prior practice; (iii) other than intercompany dividends between the Companies and the dividends to the Sellers set forth in Schedule 4.8 (subject to the conditions set forth on Section 9.11), declared or made any payment of dividends or other acquisition distribution to their stockholders or upon or in respect of any shares of capital stock of the Company, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect or purchased, retired or redeemed, or obligated themselves to 500,000 purchase, retire or redeem, any of their shares of Common Stock put to the Company by Valcheck Company on June 30, 1997capital stock or other securities; (biv) mortgaged, pledged or subjected to Lien or restriction any of its property, business or assets, tangible or intangible; (v) sold, transferred, leased to others or otherwise disposed of any of their assets except in the ordinary course of business and consistent with past their prior practice, other than with respect to the Company has not sale of the condominium resort owned by Desert Rentals Joint Venture (with respect to which the Sellers shall be responsible for any and all costs and Taxes incurred any indebtedness for borrowed moneyin connection with such sale), or assumedcanceled or compromised any debt or claim, guaranteedor waived or released any right of substantial value; (vi) received any notice of termination or breach of, endorsed or otherwise as an accommodation become responsible for intent to terminate, any contract, including, but not limited to, any contract with any client, customer, ticket outlet, ,promoter or venue, lease or other agreement, or suffered any damage, destruction or loss (whether or not covered by insurance individually above $10,000 or in the obligations of aggregate above $20,000) which, in any other individualcase or in the aggregate, firm has had or corporationmay have a materially adverse effect on its assets, made properties, operations or prospects; (vii) encountered any loans labor union organizing activity, had any actual or advances to threatened employee strikes, work stoppages, slow-downs or lock-outs or had any other individualmaterial change in their relations with their employees, firm agents, customers or corporation suppliers; (viii) transferred or granted any rights under, or entered into any commitment settlement regarding the breach or transaction material to the Company taken as a wholeinfringement of, any Canadian, United States or other foreign license, patent, copyright, trademark, trade name, invention or similar rights, or modified any existing rights with respect thereto; (cix) there has not been made any material change in the accounting methodsrate of compensation, principles commission, bonus or practices other direct or indirect remuneration payable, or paid or agreed or orally promised to pay, conditionally or otherwise, any material bonus, extra compensation, pension or severance or vacation pay, to any stockholder, director, officer, employee, salesman, distributor or agent of the CompanyCompanies; (dx) there has not been issued or sold any damageshares of their capital stock or other securities, destruction or lossissued, whether granted or not covered by insurancesold any options, except for such as would notrights or warrants with respect thereto, or acquired any capital stock or other securities of any corporation or other entity or any interest in any business enterprise, or otherwise made any loan or advance to or investment in any Person; (xi) made any capital expenditures or capital additions or betterments in excess of an aggregate of $50,000; (xii) changed its banking or safe deposit arrangements; (xiii) made any change in any accounting procedure or practice; (xiv) instituted, settled or agreed to settle any litigation, action or proceeding before any court or governmental body relating to the Companies or their property or business; (xv) failed to replenish their inventories and supplies in a normal and customary manner consistent with their prior practice or made any purchase commitment in excess of the normal, ordinary and usual requirements of their business or at any price in excess of the then current market price or upon terms and conditions more onerous than those usual and customary in the industry, or made any material change in their selling, pricing, advertising or personnel practices inconsistent with their prior practice; (xvi) suffered any change, event or condition which, individually or in the aggregate, has had or is now likely to have a Material Adverse Effectmaterially adverse affect on the Companies' condition (financial or otherwise), properties, assets, liabilities, operations or prospects including, without limitation, any change in the Companies' revenues, costs, levels of committed business or relations with its employees, agents, clients, customers or suppliers; (exvii) there has been no change in the businessentered into any transaction, operations, assets contract or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, commitment other than in the ordinary course of business and consistent with their prior practice or paid or agreed to pay any legal, accounting, brokerage, finder's fee, Taxes or other expenses in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 or agreement or arrangementwith, or incurred any other increase in severance pay obligations by reason of, this Agreement or the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employeestransactions contemplated hereby; or (hxviii) there has not been entered into any agreement by or made any commitment, whether written or oral, to take any of the Company to types of action described in subparagraphs (i) do any of the things described in the preceding clauses (a) through (gxvii) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectabove.

Absence of Changes or Events. Since December 31Except as set forth in the applicable subsection of Section 4.05 of the Disclosure Schedules, 1996:since the Balance Sheet Date, (a) there Seller has not been any direct or indirect redemption, purchase or other acquisition conducted the Business only in the ordinary course of any shares of capital stock business consistent with the past customs and practices of the Company, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997Business; (b) There has occurred no event, occurrence, or development that has had a Material Adverse Effect; (c) Seller has not incurred loss of, or damage to, the Purchased Assets in excess of $25,000 individually or $50,000 in the aggregate; (d) No Encumbrances, except for Permitted Encumbrances, have been imposed or permitted to exist upon any of the Purchased Assets; (e) Seller has not sold, exchanged, transferred, licensed or otherwise disposed of any of its assets related to the Business, except in the ordinary course of business and consistent with past practice, the Company except for any assets for an amount of less than $25,000; (f) Seller has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment agreement, contract, lease or transaction material license (or series of related agreements, contracts, leases, and licenses) relating to the Company taken as a wholeBusiness involving payment by the Business of more than $25,000 after the Closing; (cg) Neither the Company nor any of its subsidiaries has canceled, compromised, waived or released any debts or claims related to the Business involving more than $25,000; NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY [****] ARE SUBJECT TO A CONFIDENTIAL TREATMENT REQUEST, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES OF THIS EXHIBIT HAVE BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST. (h) There has not been any labor dispute or disturbance adversely affecting the Business, including the filing of any petition or charge of unfair labor practice with any Governmental Authority, efforts to effect a union representation election, actual or threatened employee strike, work stoppage or slowdown; (i) there has not been any employment, severance, termination, retention, change of control or similar agreements or arrangements entered into or modified by Seller related to any Transferred Employee that will be a Liability of Buyer, or (ii) except as would not result in an aggregate incremental cost to Seller of $15,000 or more, any bonuses, salary increases, severance or termination pay made or granted by Seller to any Transferred Employee; (j) Except as required by Law, Seller has not adopted, amended, modified established, terminated or materially increased benefits under any Benefit Plan; (k) Seller has not 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; (l) Seller has not made any material change in any method of accounting or accounting practice for the accounting methods, principles or practices of the CompanyBusiness; (dm) there has not been any damage, destruction or loss, whether or not covered by insurance, except for such Except as would not, individually or in the aggregate, have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement;business, no party has terminated, cancelled, amended, modified, or accelerated any Material Contract or waived any material rights under any such Material Contract; and (gn) there Seller has not been any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been made any agreement by the Company to (i) do any of the things described foregoing, or any action or omission that would result in any of the preceding clauses (a) through (g) foregoing, other than as expressly negotiations with Buyer and its Representatives regarding the transactions contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of by this Agreement, would have made any representation or warranty in this Article III untrue or incorrect.

Absence of Changes or Events. Since December 31Except as set forth in the Hain Current SEC Reports, 1996since the date of the Hain 10-K: (a) there has been no material adverse change, or any development involving a prospective material adverse change, in the general affairs, management, business, operations, condition (financial or otherwise) or prospects of Hain and its subsidiaries taken as a whole; (b) there has not been any direct or indirect redemption, purchase or other acquisition of any shares of capital stock of the CompanyHain or any of its subsidiaries, or any declaration, setting aside or payment of any dividend or other distribution by the Company Hain or any of its subsidiaries in respect of its their capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (bc) except in the ordinary course of its business and consistent with past practice, the Company practice neither Hain nor any of its subsidiaries has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, or made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a wholecorporation; (cd) there has not been any material change in the accounting methods, principles or practices of the CompanyHain or its subsidiaries; (de) except in the ordinary course of business and for amounts which are not material, there has not been any revaluation by Hain or any of its subsidiaries of any of their respective assets, including, without limitation, writing down the value of inventory or writing off notes or accounts receivables; (f) there has not been any damage, destruction or loss, whether or not covered by insuranceinsurance or not, except for such as would not, individually or in the aggregate, have a Hain Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement;; and (g) there has not been any increase in 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 or agreement or arrangement, by Hain or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement by the Company its subsidiaries to (i) do any of the things described in the preceding clauses (a) through (gf) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III VI untrue or incorrect.

Absence of Changes or Events. Since December 31, 1996: (a) From the date of the Balance Sheet through (and including) the date of this Agreement, there has not been any direct or indirect redemption, purchase or other acquisition of any shares of capital stock of material adverse effect on the Company, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997;Business. (b) except From the date of the Balance Sheet through (and including) the date of this Agreement, the Business has been conducted in the ordinary course, and in substantially the same manner as previously conducted. (c) Since the date of the Balance Sheet through (and including) the date of this Agreement: (i) the Business has not amended the organizational documents of any Transferred Entity; (ii) the Business has not declared, set aside or paid any dividend or made any other distribution to the holders of the equity interests in any Transferred Entity, other than dividends or other distributions paid or payable to another Transferred Entity; (iii) the Business has not redeemed or otherwise acquired any shares of equity interests in, or any other securities of, a Transferred Entity or issued (A) any equity interest in, or any other security of, a Transferred Entity, (B) any option or warrant for, or any security convertible into, or exercisable or exchangeable for, any equity interests in, or any other security of, a Transferred Entity, (C) “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings to which any Transferred Entity is a party or by which any of them is bound (1) obligating any Transferred Entity to issue, deliver or sell, or cause to be issued, delivered or sold, additional units of its equity interests or any security convertible into, or exercisable or exchangeable for, any equity interest in any Transferred Entity or any Transferred Entity Voting Debt, (2) obligating any Transferred Entity to issue, grant, extend or enter into any such option, warrant, security, right, unit, commitment, Contract, arrangement or undertaking or (3) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of the Transferred Equity Interests or (D) any bond, debenture, note or other indebtedness having the right to vote (or convertible into, or exercisable or exchangeable for, securities having the right to vote) on any matters on which the holders of equity interests in a Transferred Entity may vote; Table of Contents (iv) the Business has not split, combined or reclassified any of the equity interests in any Transferred Entity, or issued any other security in respect of, in lieu of or in substitution for the equity interests in any Transferred Entity; (v) the Business has not loaned, advanced, invested or made a capital contribution of any amount to or in any person, other than (A) advances in the ordinary course of business and consistent with past practiceor (B) loans, the Company has not incurred any indebtedness for borrowed moneyadvances, investments or assumed, guaranteed, endorsed capital contributions to or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a wholein another Transferred Equity; (cvi) there the Business has not been commenced any material change litigation, other than (i) litigation in connection with the accounting methodscollection of accounts receivable or (ii) litigation as a result of suits, principles actions or practices of other proceedings commenced against the CompanyBusiness; (dvii) there the Business has not been changed the fiscal year of any damageTransferred Entity, destruction or loss, whether or not covered by insurance, except for such as would not, individually or in the aggregate, have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of revalued any of its material assets, assets or made any change in any method of accounting or accounting practice or policy (including but not limited procedures with respect to writing down the value payment of inventory or writing off notes or accounts payable and collection of accounts receivable), except as required by GAAP or applicable Law; (viii) the Business has not made, revoked or changed any material Tax election, adopted or changed any material Tax accounting method or period, filed any material amended Tax Return, settled any material Tax claim or assessment or consented to any extension or waiver of the statute of limitations period applicable to any Tax claim or assessment, or surrendered any right to claim a Tax refund, offset or other reduction in Tax liability; or (ix) the Business has not agreed to make any casecapital expenditures, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets (A) as set forth in the Disclosure Statement; (g) there has not been any increase Capital Expenditure Budget attached in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees Section 3.15 of the Company, except for increases in base compensation in Seller Letter (the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or “Cap Ex Budget”) and (hB) there has not been any agreement by the Company to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken capital expenditures made prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrect.

Absence of Changes or Events. Since December Except as set forth on Schedule 2.14, since July 31, 19962005, the business of the Company has been conducted in the ordinary course consistent with past practice and there has not been: (a) there has not been any direct or indirect redemptionevent, purchase violation or other acquisition matter that could, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect; (b) any obligation or liability (whether absolute, accrued, contingent or otherwise, and whether due or to become due) incurred by the Company in excess of $50,000 individually, other than obligations under customer contracts, current obligations and liabilities, in each case incurred in the ordinary course of business and consistent with past practice; (c) any payment, discharge, satisfaction or settlement of any shares of capital stock claim or obligation of the Company, or except in the ordinary course of business and consistent with past practice; (d) any declaration, setting aside or payment of any dividend or other distribution by for any equity securities of the Company in respect or any direct or indirect redemption, purchase or other acquisition of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997any such equity securities; (be) any issuance or sale, or any contract entered into for the issuance or sale, of any membership interests or securities convertible into or exercisable for membership interests; (f) any sale, assignment, pledge, encumbrance, transfer or other disposition of any tangible asset of the Company; (g) any creation of any Lien on any property of the Company except for Liens in existence on the date of this Agreement that have been incurred in the ordinary course of business and consistent with past practice, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a wholeare described on Schedule 2.14(g); (ch) there has not been any material change in the accounting methodscancellation of any debts or claims or any amendment, principles termination or practices waiver of any rights of the Company, except for those that would not have a Company Material Adverse Effect; (di) there has not been any capital expenditure or commitment or addition to property, plant or equipment of the Company in excess of $100,000 individually or $500,000 in the aggregate; (j) any material increase in the compensation of employees of the Company (including any increase pursuant to any written bonus, severance, pension, profit sharing or other benefit or compensation plan, policy or arrangement or commitment) or any declaration, payment or commitment to pay any severance or termination benefit, or any increase in any such compensation or bonus payable to any officer, stockholder, director, consultant or agent of the Company having an annual salary or remuneration in excess of $100,000; (k) any damage, destruction or loss, loss (whether or not covered by insurance, except for such as would not, individually ) affecting any asset or property of the Company resulting in the aggregate, have a Material Adverse Effectliability or loss in excess of $100,000; (el) there has been no any material change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 compensation arrangement or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present employee, officer, director or former directors, officers or key employeessecurity holder; or (hm) there has not been any agreement by the Company to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior labor organization activity related to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectCompany.

Absence of Changes or Events. Since Except as disclosed in the applicable subsection of Schedule 3.9 of the Disclosure Schedules, since December 31, 1996: 2020, (a) there has not been any direct or indirect redemption, purchase or other acquisition of any shares of capital stock of the Company, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of has conducted its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (b) except business only in the ordinary course of business and consistent with past practice, (b) no Event has occurred that, individually or in combination with any other Events, has had or could reasonably be expected to have a Material Adverse Effect, (c) the Company has not incurred suffered any indebtedness for borrowed moneyloss, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) there has not been any material change in the accounting methods, principles or practices of the Company; (d) there has not been any damage, destruction or lossother casualty affecting any of its material properties or assets, whether or not covered by insurance; and (d) the Company has not: (i) amended or otherwise changed the memorandum of association, certificate of incorporation or bylaws or equivalent organizational documents of the Company or altered through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of the Company, or created or formed any Subsidiary; (ii) issued, granted, sold, transferred, delivered, pledged, promised, disposed of or encumbered, or altered or modified (other than acceleration of vesting of equity awards) the rights or obligations of its Equity Securities or any options, warrants, convertible or exchangeable securities or other rights of any kind to acquire its capital stock or any other ownership interests or equity-based rights of the Company; (iii) redeemed, purchased or otherwise acquired, directly or indirectly, any of the Equity Securities of the Company; (iv) declared, set aside or paid any dividend or other distribution in respect of any of Equity Securities of the Company; (v) effected any recapitalization, reclassification, stock split, reverse stock split or like change in the capitalization of the Company; (vi) sold, transferred, delivered, leased, licensed, sublicensed, mortgaged, pledged, encumbered, impaired or otherwise disposed of (in whole or in part), or created, incurred, suffered to exist, assumed or caused to be subjected to any Lien (other than Permitted Liens) on, any of the Assets or rights of the Company (including any Intellectual Property or accounts receivable), except for such as would notany Assets or rights having a value of less than $50,000, individually individually, or $150,000, in the aggregate, have a Material Adverse Effect; (evii) there has been no change in the business(A) acquired (by merger, operationsconsolidation, acquisition of stock or assets or otherwise) or organized any Person, joint venture or any business organization or division thereof, (B) acquired any rights, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, properties other than in the ordinary course of business and consistent with past practice or (C) acquired any Equity Securities of any Person; (viii) (A) incurred, forgiven, guaranteed or modified any Indebtedness (other than draws under revolving lines of credit existing on the date hereof in the ordinary course of business consistent with past practice), (B) entered into any off-balance sheet financing arrangement, or (C) made any loans or advances, except to employees of the Company for expenses incurred in the ordinary course of business consistent with past practice; (ix) made any capital expenditures or entered into any Contract to make capital expenditures outside of the ordinary course of business consistent with past practice or failed to make any capital expenditure reflected in any budget provided or made available to Parent; (x) (A) increased the compensation or fringe benefits of any Service Provider, (B) hired or offered to hire any new Service Providers or terminated or encouraged any Service Provider to resign from the Company (except for new hires made in the ordinary course of business consistent with past practice all of whom shall be “at-will” employees who can be terminated at any time for any reason without any monetary or obligations on the part of the Company), (C) granted any severance or termination pay (in cash or otherwise) to any current or former Service Provider, except pursuant to any Contract or Employee Benefit Plan in effect on the date hereof in connection with the revaluation termination of certain fixed assets as set forth in any such Service Provider or increased severance or termination pay, (D) established, adopted, entered into, amended or terminated (or granted any waiver or consent under) any Employee Benefit Plan, except for any amendments required by ERISA or the Disclosure StatementCode or other applicable Law, or (E) granted any equity or equity-based awards or stock-based rights; (gxi) there has not been entered into or amended any increase in Collective Bargaining Agreement; (xii) except as required by GAAP, changed any accounting policies, procedures, methods or establishment of any bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing, stock option practices (including without limitation with respect to reserves, revenue recognition, inventory control, prepayment of expenses, timing for payments of accounts payable and collection of accounts receivable); (xiii) modified, amended, extended or supplemented in any respect, transferred or terminated or failed to renew any Material Contract listed on Schedule 3.12 of the granting Disclosure Schedules or waived, released or assigned any rights or claims thereto or thereunder; (xiv) (A) made or changed any material Tax election or change any material method of stock optionsTax accounting, stock appreciation rights(B) settled or compromised any Tax Liability or claim, performance awards (C) filed any amended or restricted stock awards)past-due Tax return, stock purchase or other employee benefit plan or (D) entered into any closing agreement or arrangement, or any other increase in the compensation payable or to become payable relating to any present or former directorsTax, officers or key employees (E) agreed to an extension of a statute of limitations in respect of Taxes, (F) surrendered any right to claim a material Tax refund, (G) prepared any material Tax Return in a manner inconsistent with past practices with respect to the Companytreatment of items on prior Tax Returns, except (H) incurred any material liability for increases in base compensation Taxes other than in the ordinary course of business consistent with past practice, (I) filed any material Tax Return in a jurisdiction where the Company did not file a material Tax Return of the same type in the immediately preceding Tax period, or (J) filed a claim for refund of material Taxes; (xv) other than in the ordinary course of business consistent with past practice, paid, discharged, satisfied, settled or otherwise compromised any Proceeding or waived, assigned or released any rights or claims; (xvi) commenced a lawsuit other than (A) in the ordinary course of business consistent with past practice and (B) in such cases where it in good faith determined that failure to commence suit would result in the impairment of a valuable aspect of its business or result in a loss of rights of substantial value; (xvii) engaged in, entered into or modified or amended any agreement, Contract, transaction or other arrangement with, directly or indirectly, any Related Party; (xviii) terminated, amended or failed to renew or preserve any material Permit; (xix) terminated, amended, failed to renew or preserved, or permitted to lapse or enter the public domain, any registered Intellectual Property of the Company, except for amendments to registered or applied for Intellectual Property of the Company completed in the ordinary course of business consistent with past practice; (xx) permitted the lapse of any existing insurance policy relating to the business or Assets; (xxi) made any material changes in the Company’s practices and policies relating to manufacturing, purchasing, inventory management, marketing, selling or pricing; (xxii) took or omitted to take any action (or permit any Affiliate or Representative of the Company or the Company Equityholders to take or omit to take any action) that would, or could reasonably be expected to, result in any of the Company’s representations and warranties set forth in this Agreement or any employmentcertificate delivered in connection with the Closing being or becoming untrue; (xxiii) commenced any proceeding for any voluntary liquidation, consulting dissolution, or severance agreement or arrangement entered into with winding up of the Company, including initiating any such present or former directors, officers or key employeesbankruptcy proceedings on its behalf; or (hxxiv) there has not been authorized any of the foregoing, enter into an agreement by the Company to (i) do any of the things described in foregoing, or agree or enter into any Contract to do any of the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectforegoing.

Absence of Changes or Events. Since December 31Except as set forth on Section 3.8 of the Disclosure Schedule, 1996since June 30, 1998: (a) there has been no material adverse change in the business, operations, condition (financial or other), or assets of either of the Companies; (b) there has not been any direct or indirect redemption, purchase or other acquisition of any shares of capital stock or ownership interests of either of the CompanyCompanies, or any declaration, setting aside or payment of any dividend or other distribution by either of the Company Companies in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997stock or ownership interests; (bc) except in neither of the ordinary course of business and consistent with past practice, the Company Companies has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed guaranteed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, or made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) there has not been any material change in the accounting methods, principles or practices of the Companycorporation; (d) there has not been any damage, destruction or loss, whether or not covered by insurance, except for such as would not, individually or change in the aggregatefinancial or tax accounting methods, have a Material Adverse Effectprinciples or practices of either of the Companies except as required by the Financial Accounting Standards Board in its published statements or by GAAP; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by either of the Company Companies of any of its material their assets, including but not limited to writing down the value of inventory or including, without limitation, writing off notes or accounts receivable; (f) without limiting the generality of the foregoing, there has not been any action or inaction by either of the Companies or any Shareholder the result of which would constitute a violation of the covenants contained in any caseSection 5.1 hereof as if such covenants applied beginning June 30, other than in 1998 (without giving effect to the ordinary course provisions relating to the consent of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement;Delphi); and (g) there has not been any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees by either of the Company, except for increases in base compensation in Companies or the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement by the Company Shareholders to (i) do any of the things described in the preceding clauses (a) through (gf) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrect.

Absence of Changes or Events. Since December 31January 1, 19962020, (a) the Company has not conducted any business operations outside the Ordinary Course of Business, (b) there has occurred no Material Adverse Effect, nor any change, circumstance, development, state of facts, event or effect that would reasonably be expected to result in a Material Adverse Effect, and (c) the Company has not taken any of the following actions: (a) there has not been declared, set aside or paid any direct or indirect redemption, purchase or other acquisition of any shares of capital stock of the Companydividends on, or made any declaration, setting aside or payment of any dividend or other distribution by the Company (whether in cash, stock or property) in respect of, any Company Capital Stock to holders of its capital stock, other than the payment made by the Company with respect Capital Stock from time to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997time outstanding; (b) except with respect to Intellectual Property, other than as necessary or in the ordinary course Ordinary Course of business and consistent with past practiceBusiness, the Company has not incurred any indebtedness for borrowed money(A) sold, or assumedassigned, guaranteedlicensed, endorsed sublicensed, encumbered, impaired, abandoned, transferred or otherwise as an accommodation become responsible for the obligations disposed of any other individualIntellectual Property, firm (B) failed to use commercially reasonable efforts to file and prosecute any pending Patent Right applications or corporation, (C) disclosed or otherwise made available or accessible any loans or advances material confidential Know-How to any other individual, firm or corporation or entered into any commitment or transaction material Person who is not subject to a written agreement to maintain the Company taken as a wholeconfidentiality of such Know-How; (c) there has not been (A) materially increased the amount of any material change in compensation payable or paid, whether conditionally or otherwise, to any Company Personnel, (B) entered into any employment, severance, retention or any other similar agreement with any Company Personnel, (C) terminated, established, adopted, entered into or amended any Company Benefit Plan, (D) granted any Company Stock Options or Restricted Company Common Stock or (E) materially increased the accounting methods, principles or practices of the Companybenefits under any Company Benefit Plan; (d) there has not been sold, licensed, mortgaged, transferred, encumbered, subjected to any damageLien other than a Permitted Lien, destruction or lossotherwise disposed of (A) any properties or assets, whether or not covered by insuranceincluding the Leased Properties, except for such as would notwhich are material, individually or in the aggregate, have a Material Adverse Effect;to the Company (excluding any sale of furniture, fixtures or equipment that does not materially impact the conduct of the Company’s business) or (B) in any case, any Company Intellectual Property (or otherwise abandon, cancel or allow to lapse any Company Intellectual Property); or (e) there has been no change in the business(A) created, operationsincurred or assumed any Indebtedness, assets or financial condition of the Company that has had issued or will have a Material Adverse Effect; (f) there has not been sold, or amended, modified or changed any revaluation by the Company of term of, any of its material assets, including but not limited to writing down the value of inventory debt securities or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 rightswarrants, performance awards or restricted stock awards), stock purchase calls or other employee benefit plan or agreement or arrangement, or rights to acquire any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees debt securities of the Company, except for increases in base compensation in the ordinary course (B) guaranteed or endorsed any Indebtedness of business consistent with past practiceanother Person, (C) made any loans, advances or capital contributions to, or investments in, any employmentPerson other than the Company, consulting or severance agreement or arrangement (D) entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement by Contract having the Company to (i) do economic effect of any of the things described in the preceding clauses foregoing subsections (aA) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectC).

Absence of Changes or Events. Since December 31the Financial Statements Date, 1996Seller has conducted the Business only in the ordinary course and has not taken, or entered into any agreement or made any commitment to take, any of the following actions in connection with the Business: (a) there has not been Incurred any direct obligation or indirect redemption, purchase or other acquisition of any shares of capital stock of the Company, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put liability related to the Company by Valcheck Company on June 30Business, 1997except liabilities (1) for trade or business obligations incurred in the ordinary course of business or (2) which do not materially affect the Business or the Business’ financial condition; (b) Paid any obligation or liability related to the Business other than current liabilities (1) shown on the Financial Statements or (2) incurred since the Financial Statements Date in the ordinary course of business; (c) Subjected any Assets to any Encumbrance, except in the ordinary course of business and consistent with past practice, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a wholebusiness; (cd) there Sold or otherwise disposed of any Assets, except in the ordinary course of business; (e) Cancelled, compromised, waived, or released any material debt, claim, or right related to the Business, except in the ordinary course of business; (f) Received or given notice of termination of any Contract whose termination has not been had, or may have, a material adverse effect on the Business or its financial condition; (g) To its Knowledge, experienced any labor union organizing activity or had any actual or threatened employee strikes, work stoppages, slow-downs, or lock-outs; (h) Had any material change in the accounting methodsterms of agreements with employees, principles agents, customers or practices of the Companysuppliers; (di) there has not been Made or agreed to make any damage, destruction or loss, whether or not covered by insurance, except for such as would not, individually or in the aggregate, have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present manager or former directors, officers or key employees of employee working exclusively for the CompanyBusiness, except for normal periodic bonus accruals and normal periodic increases in base compensation regular compensation; (j) Acquired any capital assets related to the Business which cost in excess of an aggregate of $250,000; (k) Declared any dividends or made any distributions to its shareholders, other than transactions in the ordinary course of business consistent with past practicepractices; (l) Instituted, settled or agreed to settle any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employeesmaterial Proceeding related to the Business; or (hm) there has not been Suffered any agreement by change, event, condition, damage, destruction, or loss having a material adverse affect on the Company to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectBusiness.

Absence of Changes or Events. Since December 31November 30, 19962014, there has not been any event, change, occurrence or circumstance outside the Ordinary Course of Business or that has had or could reasonably be expected to have a Material Adverse Effect on the Company. Without limiting the generality of the foregoing, since November 30, 2014: (a) the Company has not sold, leased, transferred, or assigned any of its assets, tangible or intangible, other than routine purchase orders and other sales made in the Ordinary Course of Business; (b) the Company has not entered into any Contract (or series of related Contracts) involving more than $50,000, other than purchase orders, or outside the Ordinary Course of Business; (c) no Person has accelerated, terminated, modified, or canceled any Contract (or series of related Contracts) to which the Company is a party or by which it is bound either involving more than $50,000 or outside the Ordinary Course of Business; (d) the Company has not agreed to the imposition of any Encumbrance upon any of its assets, tangible or intangible; (e) the Company has not made any capital expenditure (or series of related capital expenditures) either involving more than $50,000 or outside the Ordinary Course of Business; (f) the Company has not issued any note, bond or other debt security or created, incurred, assumed, or guaranteed any Indebtedness; (h) the Company has not delayed or postponed the payment of accounts payable and other Liabilities outside the Ordinary Course of Business; (i) the Company has not canceled, compromised, waived or released any right or claim (or series of related rights and claims) outside the Ordinary Course of Business; (j) 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, as the case may be; (k) the Company has not experienced any damage, destruction or loss (whether or not covered by insurance) to its property in excess of $50,000; (l) the Company has not made any loan to, or entered into any other transaction with, any of its stockholders, directors, officers or employees; (m) the Company has not granted any increase in the compensation of any of its directors, officers, or employees or made any other change in employment terms for any of its directors, officers or employees or in the terms of its agreements with any independent contractors outside the Ordinary Course of Business; (n) the Company has not adopted, amended, modified or terminated any bonus, profit-sharing, incentive, stock option, severance, or other plan, contract, or commitment for the benefit of any of its directors, officers, and employees (or taken any such action with respect to any other employee benefit plan); (o) there has not been any direct change in the Tax or indirect redemptionaccounting principles, purchase methods, practices, elections or other acquisition of any shares of capital stock of the Company, or any declaration, setting aside or payment of any dividend or other distribution procedures followed by the Company in respect connection with the business of its capital stock, other than the payment made Company or any change in the depreciation or amortization policies or rates there­tofore adopted by the Company in connection with respect to 500,000 shares the business of Common Stock put to the Company by Valcheck Company on June 30, 1997;Company; or (bp) except in the ordinary course of business and consistent with past practice, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (c) there has not been any material change in the accounting methods, principles or practices of the Company; (d) there has not been any damage, destruction or lossobligation, whether written or not covered by insuranceoral, except for such as would not, individually or in the aggregate, have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement by the Company to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectforegoing.

Absence of Changes or Events. Since (a) From December 31, 1996: (a) 2011 to the date of this Agreement, there has not been any direct change, effect, event or indirect redemptionoccurrence that has resulted in, purchase or other acquisition could reasonably be expected to result in, a Material Adverse Effect. (b) From December 31, 2011 to the date of this Agreement, the Company has caused the business to be conducted in all material respects in the ordinary course and: (i) neither the Company nor Xxxxx XX has issued or sold any shares of Company Stock, LLC Interest, capital stock or equivalent equity interests of the Company, Company or Xxxxx XX; (ii) neither the Company nor Xxxxx XX has made any declaration, setting aside or payment of any dividend dividend, or other distribution by the Company or capital return in respect of its any Company Stock, LLC Interest, capital stock, other than the payment made by stock or equivalent equity interests of the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997or Xxxxx XX; (biii) except as provided in Section 3.14(b)(iii) of the Company Disclosure Schedule, neither the Company nor Xxxxx XX has granted to any Company Employee any material increase in base salary, wages, bonuses, incentive compensation, pension, severance or termination pay, or entered into any severance agreement, retention agreement or any other long-term commitment with any employee, officer or consultant, or adopted, amended or increased the payments to or benefits under, any Company Benefit Plan; (iv) neither the Company nor Xxxxx XX has sold, leased or otherwise disposed of any material assets of the Company or Xxxxx XX, except for (A) sales of raw materials, work-in-process, finished goods, supplies, parts, spare parts and other inventories, in each case, in the ordinary course of business, (B) assets that were obsolete or no longer used in the operation of the business and consistent with past practice, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations (C) cash dividends and other distributions of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a wholecash; (cv) there neither the Company nor Xxxxx XX has not been any material change in consummated the accounting methodsacquisition of, principles by merging or practices consolidating with, or by purchasing a substantial portion of the Companyassets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division or a substantial portion of the assets thereof (other than inventory); (dvi) there has not been any damage, destruction or loss, whether or not covered by insurance, except for such as would not, individually or in the aggregate, have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of neither the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any casenor Xxxxx XX has, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statementbusiness, incurred any material liability or forgiven, cancelled or waived any material right; (gvii) there neither the Company nor Xxxxx XX has not been commenced or settled any increase in Proceeding; (viii) neither the Company nor Xxxxx XX has defaulted under any material Contract; (ix) neither the Company nor Xxxxx XX has delayed or establishment postponed the payment 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 accounts payable or other employee benefit plan liabilities either involving more than [*****] (individually) or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in outside the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; orbusiness; (hx) there has not been any agreement by neither the Company nor Xxxxx XX has taken any action which, if it had been taken after the date of this Agreement, would have been prohibited or would have required the consent of Purchaser under Section 5.01 of this Agreement; and (xi) neither the Company nor Xxxxx XX, as applicable, has authorized or agreed to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) takedo, whether in writing or otherwise, any action which, if taken prior to of the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectforegoing actions.

Absence of Changes or Events. Since December 31June 30, 1996: 2005 (a) there has not been any direct or indirect redemption, purchase or other acquisition of any shares of capital stock of the Company, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; USCC Material Adverse Effect and (b) except as set forth in the ordinary course Schedule 4.22, none of business and consistent USCC nor any Affiliate thereof has (with past practice, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material respect to the Company taken as a whole; USCC Business): (ci) there has not been discharged or satisfied any material change in the accounting methods, principles Lien or practices of the Company; (d) there has not been paid any damage, destruction or loss, whether or not covered by insurance, except for such as would not, individually or in the aggregate, have a Material Adverse Effect; (e) there has been no change in the business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (f) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, liabilities other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement; (g) there has not been any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees operation of the Company, except for increases in base compensation in the ordinary course of business USCC Business consistent with past practice, or failed to pay or discharge when due any employmentliabilities; (ii) sold, consulting encumbered, assigned, transferred or severance agreement otherwise disposed of any assets or arrangement properties (including rights or interests with respect to such assets or properties) relating to the USCC Business which the USCC Entities, USCC Newco or any Affiliate thereof purported to own as of June 30, 2005 or on any date since such date, except in the ordinary course of the operation of the USCC Business consistent with past practice; (iii) incurred any indebtedness (or made any guaranties in respect thereof) relating to the USCC Business for which ALLTEL or an Affiliate thereof, including USCC Newco, will be liable after the Effective Time or subjected any of the assets or properties relating to the USCC Business owned by a USCC Entity, USCC Newco or an Affiliate thereof to any Lien other than a Permitted Lien; (iv) made or suffered any amendment or termination of (or received notice of another party’s intent to terminate or received written notice of termination from another party with respect to) any USCC System Contract, or canceled, modified or waived any substantial debts or claims held by it or waived any rights of substantial value relating to the USCC Business, except in the ordinary course of the operation of the USCC Business consistent with past practice; (v) changed any of the accounting principles followed by a USCC Entity, USCC Newco or an Affiliate thereof relating to the operation of the USCC System or the methods of applying such principles or made or changed any Tax elections relating to the operation of the USCC System; (vi) entered into any transaction relating to the USCC Business, except in the ordinary course of the operation of the USCC Business consistent with past practice; (vii) made any such present material change in the monetary compensation or former directorsother employment arrangement of any USCC Designated Employee (other than customary annual increases in the monetary compensation of USCC Designated Employees); or (viii) agreed, officers orally or key employees; or (h) there has not been in writing, or granted any agreement by the Company other person an option, to (i) do any of the things described specified in the preceding clauses subparagraphs (ai) through (gvii) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectabove.

Absence of Changes or Events. Since December Except as set forth on PART 3.8 of the Disclosure Schedule, or as permitted or contemplated by this Agreement, since October 31, 1996, there has not been: (a) there has not been any direct material adverse change affecting the business, assets or indirect redemption, purchase or other acquisition of any shares of capital stock financial condition of the CompanyCompany and its Subsidiary, taken as a whole, or any declaration, setting aside or payment material adverse change in the financial performance of any dividend or other distribution by the Company in respect of and its capital stockSubsidiary, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (b) except in the ordinary course of business and consistent with past practice, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole; (cb) there has not been any purchase, lease, sale, abandonment, acquisition or sale by the Company or its Subsidiary of any material change asset or property other than in the accounting methods, principles or practices ordinary course of the Companybusiness; (dc) there has not been any damage, destruction or loss, whether or not covered by insurance, except for such as would not, individually or in the aggregate, have that had a Material Adverse Effect; (e) there has been no change in material adverse effect on the business, operations, assets or financial condition of the Company that has had or will have and its Subsidiary, taken as a Material Adverse Effectwhole; (fd) there has not been any revaluation by the Company of any of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than except in the ordinary course of its business consistent with its past practices, (1) the creation or assumption of any Encumbrance upon any of the business or assets of the Company and its Subsidiary; (2) the incurrence of any obligation by the Company or its Subsidiary; (3) the making of any loan or advance to any Person by the Company or its Subsidiary; (4) the assumption, guarantee or liability for any obligation of any Person by the Company or its Subsidiary; (5) any capital expenditure by the Company or its Subsidiary; (6) any waiver of any right or cancellation of any debt or claim by the Company or its Subsidiary; (7) assumption or entering into any Contract other than this Agreement; (8) any increase or authorization of an increase in, the compensation or benefits paid or provided to any of its directors, officers, employees, salesmen, agents or representatives of the Company or its Subsidiary; or (9) anything else outside the ordinary course of business of the Company or its Subsidiary, whether or not specifically described in connection with any of the revaluation of certain fixed assets as set forth in the Disclosure Statement;foregoing clauses; or (ge) there has not been any increase in 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 or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation Even in the ordinary course of its business consistent with its past practicepractices (other than with respect to customer Contracts), neither the Company nor its Subsidiary has incurred any obligation, made any loan to any Person, acquired or disposed of any business or assets, entered into any Contract or other transaction, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement by the Company to (i) do done any of the other things described in SECTION 3.8(d), involving an amount exceeding $50,000 in any single case or $150,000 in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectaggregate.

Absence of Changes or Events. Since December 31the date of the Latest Balance Sheet, 1996each Seller has conducted its business only in the Ordinary Course of Business, and there has not occurred any event, condition or occurrence that has had, or would reasonably be expected to have, a Material Adverse Effect. Without limiting the foregoing, except as set forth on Schedule 3.19 since the date of the Latest Balance Sheet, each Seller has: (a) there has continued to carry on its business in a good and diligent manner consistent with prior practice and in the Ordinary Course of Business in substantially the same manner as presently conducted, preserve intact its business organization, pay all current costs and expenses in connection with the Business, not been introduce any direct new method of management or indirect redemptionoperation, purchase or other acquisition and use Commercially Reasonable Efforts, consistent with past practices, to preserve the goodwill of any shares and relationships of capital stock of each Seller with its customers, suppliers and others having business relationships with it so that its goodwill as a going concern shall be unimpaired, and keep available the Company, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect services of its capital stock, other than the payment made by the Company with respect to 500,000 shares employees in their present capacities and at their present rates of Common Stock put to the Company by Valcheck Company on June 30, 1997compensation; (b) except in the ordinary course of business and consistent with past practice, the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a wholeamended its Charter Documents; (c) there has not been changed its authorized or issued equity interests or issued or agreed to issue or sell any material change in the accounting methodsequity interests, principles issue any securities convertible into, or practices of the Companyany right to purchase, any equity interests, or issue any other securities; (d) there has not been made any damage, destruction change in any method of accounting or loss, whether accounting practice or not covered policy other than those required by insurance, except for such as would not, individually or in the aggregate, have a Material Adverse EffectGAAP; (e) there has been no change in the businessnot declared, operationsset aside, assets made or financial condition of the Company that has had paid any distributions or will have a Material Adverse Effectdividends to stockholders; (f) there has not been committed to any revaluation by the Company capital expenditures or activities reasonably anticipated to require capital expenditures in excess of any an aggregate of its material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable, in any case, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statement$25,000; (g) there has not been made any increase change affecting compensation to its directors, officers, employees and agents other than normal annual employment period adjustments not greater than in the prior year, not modified or establishment of terminated any bonusemployee benefit plan, insuranceand not paid or declared any bonuses, 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 profit-sharing contributions or other employee benefit plan or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; ornon-salary compensation; (h) there has not been entered into or assumed or permitted to exist any agreement by the Company to Encumbrance upon any of its Assets or created or assumed any Indebtedness; (i) not transferred, sold or otherwise disposed of any assets except for assets disposed of in the Ordinary Course of Business and having an aggregate value not exceeding $25,000; (j) maintained insurance coverage on the Acquired Assets in the amounts and of the types presently in force; (k) maintained all of its Permits and Governmental Approvals; (l) not entered into, modified or terminated any Material Contract; (m) not waived, compromised or settled any material right or claim; (n) duly and timely filed all Tax Returns, collected any withholding Taxes, and promptly paid all Taxes; (o) not made any election or given any consent under the Code or the Tax statutes or regulations of any federal, state, local, foreign or other jurisdiction or made any termination, revocation or cancellation of any such election or any consent or compromised or settled any claim for past or present Taxes due or enter into any other agreement with any Governmental Entity with respect to Taxes; (p) complied in all material respects with all applicable Laws; (q) not filed or commenced, or approved the filing or commencement of, any proceedings related to Sellers under the U.S. Bankruptcy Code or any other insolvency or debtor’s relief act, or for the appointment of a trustee, receiver, liquidator, sequestrator or other similar official, for Sellers or any of their Assets; and (r) not agreed to do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectforegoing.

Absence of Changes or Events. Since December 31the date of the Latest Balance Sheet, 1996: (a) the businesses of the GMACCH Companies have been conducted in the ordinary course in all material respects, and there has not been any direct no change in the GMACCH Companies taken as a whole that has had or indirect redemption, purchase or other acquisition of any shares of capital stock would reasonably be expected to have a Material Adverse Effect. Since the date of the CompanyLatest Balance Sheet, or no GMACCH Company has entered into any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997; (b) except material transaction which is not in the ordinary course of business and consistent with past practicebusiness, nor have the Company has not incurred any indebtedness for borrowed money, or assumed, guaranteed, endorsed or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a whole;GMACCH Companies: (ci) there has not been any material change in the accounting methods, principles or practices of the Company; (d) there has not been suffered any damage, destruction or losslosses of personal or real property owned by a GMACCH Company, whether or not covered by insurance, except for such as would not, individually or in excess of $2,000,000 in the aggregate, have a Material Adverse Effector waived any right of material value; (eii) there has been no other than changes in benefits pursuant to the terms of a Contract disclosed in response on Schedule 5.2(n)(i)(A) or an existing Plan, made, committed to make or formally announced, any changes in the benefits provided to, annual or long-term compensation or severance payable to, or made any advance or loan to (other than business expense advances or draws against commissions in the ordinary course of business), any Company Employee, or any bonus payment or similar arrangement made to or with any of such Company Employees, other than pursuant to normal performance reviews, in connection with a promotion or change in responsibilities or in connection with new hires or retentions, in any such case, in the ordinary course of business, operations, assets or financial condition of the Company that has had or will have a Material Adverse Effect; (fiii) there has not been other than as required by Law or the terms of an existing Plan, announced, agreed to provide or provided any revaluation new pension, retirement or other employment benefits, or increased any existing benefits, for any Company Employees, or established any new Plan or amended, terminated or materially modified, in a manner that would increase the annual cost of providing benefits by a material amount relative to the Company cost of providing benefits in the prior fiscal year as reported on the most recent audited Financial Statements, any existing Plan or otherwise incurred any Liability under any Plan different in nature from the Liabilities incurred during similar periods in prior fiscal years; (iv) incurred any capital expenditure, capital addition or betterment or series of such capital expenditures, capital additions or betterments in excess of $500,000 in any instance; (v) sold, leased or otherwise disposed of any asset or property of its material assets, including but not limited any GMACCH Company having an aggregate book value to writing down the value any GMACCH Company in excess of inventory or writing off notes or accounts receivable, $1,000,000 in any caseinstance or $5,000,000 in the aggregate, other than under Ordinary Course Finance Agreements; (vi) mortgaged, pledged, granted a Lien or otherwise encumbered any material asset of any GMACCH Company, other than Permitted Exceptions, Permitted Liens or under Ordinary Course Finance Agreements; (vii) cancelled or waived any claims or rights of any GMACCH Company with a value to it in excess of $500,000 individually or $2,000,000 in the aggregate, other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure Statementbusiness; (gviii) there has not been made any increase alteration in accounting principles 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 or agreement or arrangementpolicies, or any other increase material alteration in the compensation payable accounting practices, procedures or to become payable methods, used for financial reporting purposes, except as required by a change in GAAP, or with respect to any present Subsidiary, as required by generally accepted accounting principles applicable to such Subsidiary; (ix) made or former directorsrevoked any election or changed any tax accounting practices, officers procedures or key employees methods, relating to any material amount of Taxes of the Company or any Subsidiary of the Company, except or settled or compromised any Legal Proceeding or controversy relating to any material increase or decrease in the amount of Taxes of the Company or any Subsidiary of the Company, other than actions applicable to all members of the Parent Consolidated Group or entered into any agreement to do any of the foregoing, provided that Seller shall disclose on Schedule 5.2(q)(ix) all such actions applicable to the Parent Consolidated Group that would be reasonably expected to have an adverse effect on any of the GMACCH Companies; (x) declared any cash or non-cash dividends or made any distribution in respect of any of its capital stock, other than dividends or distributions (i) to any other GMACCH Company or (ii) made on a pro rata basis to all equityholders in such GMACCH Company; (xi) redeemed, acquired or otherwise repurchased any capital stock or Indebtedness of the Company or any GMACCH Consolidated Subsidiary; (xii) acquired (by merger, share exchange, consolidation, combination or acquisition of equity interests or assets) any corporation, partnership or other business organization or division or line of business thereof (other than acquisitions of portfolio assets not in excess of $75,000,000 in the aggregate for increases in base compensation such acquisition); (xiii) other than as required by Law, (i) entered into any new line of business, (ii) materially modified their mix of businesses or (iii) other than in the ordinary course of business consistent with past practicebusiness, changed in any material respect their lending, investment, underwriting, pricing, risk and asset liability management or other operating policies; (xiv) settled any Legal Proceeding (other than those set forth on Schedule 5.2(p)) that is not covered by insurance where the amount for which any GMACCH Company is, or any employmentthe GMACCH Companies are, consulting or severance agreement or arrangement entered into with any such present or former directorsliable, officers or key employeesexceeds $500,000 in the aggregate; or (h) there has not been any agreement by the Company to (i) do any of the things described in the preceding clauses (a) through (gxv) other than as expressly contemplated required by Law, (i) materially restructured or provided for modified any Material Operating Company’s investment portfolio or gap position, through purchases, sales or otherwise, or the manner in this Agreement which any Material Operating Company’s portfolios are classified, or (ii) take, whether in writing materially altered the credit or otherwise, risk concentration associated with any action which, if taken prior to the date material line of this Agreement, would have made any representation or warranty in this Article III untrue or incorrectbusiness.

Absence of Changes or Events. Since December 31August 29, 19961999, except as disclosed in Schedule 4.6, there has not been, with respect to the Business: (a) there has not been any direct incurrence of indebtedness for borrowed money, any issuance of debt securities or indirect redemptionassumption, purchase grant, guarantee or other acquisition endorsement or otherwise an accommodation through which the Business became responsible for the obligation of any shares of capital stock of the Company, or any declaration, setting aside or payment of any dividend or other distribution by the Company in respect of its capital stock, other than the payment made by the Company with respect to 500,000 shares of Common Stock put to the Company by Valcheck Company on June 30, 1997another Person; (b) except any creation or granting of any Lien with respect to any Acquired Assets, other than (i) Liens for Taxes, the payment of which is not yet delinquent or which are being contested in good faith and by appropriate proceedings with adequate reserves set aside for such Taxes on the books of the Business in accordance with GAAP, (ii) materialmen's, warehousemen's, mechanics' or other Liens arising by operation of law in the ordinary course of business for sums not due and consistent which do not materially detract from the value of such assets or properties or impair the operation of the Business, and (iii) statutory Liens incurred in the ordinary course of business in connection with past practiceworker's compensation, the Company has not incurred any indebtedness for borrowed moneyunemployment insurance, or assumed, guaranteed, endorsed other forms of governmental insurance or otherwise as an accommodation become responsible for the obligations of any other individual, firm or corporation, made any loans or advances to any other individual, firm or corporation or entered into any commitment or transaction material to the Company taken as a wholebenefits; (c) there has not been any material change in the accounting methods, principles or practices of the Company; (d) there has not been any damage, destruction or loss, loss of the Acquired Assets (whether or not covered by insurance) other than any such damage, except for such as would not, destruction or loss in the ordinary course of business which individually or in the aggregate, aggregate has not had or could not reasonably be expected to have a Material Adverse Effect; (ed) there has been no any change in the businessaccounting principles, operationsmethods or practices followed including any change in depreciation or amortization policies or rates; (e) any sale, assets lease, mortgaging, abandonment or financial condition other disposition of any interest in real property, or any sale, assignment, transfer, license or other disposition of any Intellectual Property or any other intangible asset, any machinery, equipment or other operating property, excepting sales, leases or other dispositions of machinery, equipment or other operating property (i) not in excess of $10,000 in the aggregate, or (ii) in the ordinary course of business at a price at least equal to the net book value of the Company that asset; (f) any change in the relationship or course of dealing with any suppliers, customers, lenders or creditors which has had or will have or, to the knowledge of either Seller, could reasonably be expected to have, a Material Adverse Effect; (fg) there has any transactions with any officers, directors, employees of either Seller or any of their Affiliates or any Person related by blood or marriage or controlled by any of the foregoing, other than the payment of salaries or other employee benefits at rates not been higher than those previously in effect; (h) any revaluation by transactions with either Seller or any Affiliate of either Seller other than transactions in the Company ordinary course consistent with past practice; (i) any cancellation or compromise of any debt or claim except for adjustments made with respect to contracts for the purchase of its supplies or for the sale of products in the ordinary course of business which in the aggregate were not material assetsto the Business; (j) any waiver or release of any rights which otherwise would constitute an Acquired Asset of any material value; (k) any transaction, including but not limited to writing down the value of inventory contract or writing off notes or accounts receivable, in any case, commitment other than in the ordinary course of business and in connection with the revaluation of certain fixed assets as set forth in the Disclosure StatementBusiness; (gl) there has not been any increase in contract 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 commitment to purchase or other employee benefit plan make any capital expenditure in excess of $10,000 or agreement or arrangement, or any other increase $25,000 in the compensation payable or to become payable to any present or former directors, officers or key employees of the Company, except for increases in base compensation in the ordinary course of business consistent with past practice, or any employment, consulting or severance agreement or arrangement entered into with any such present or former directors, officers or key employees; or (h) there has not been any agreement by the Company to (i) do any of the things described in the preceding clauses (a) through (g) other than as expressly contemplated or provided for in this Agreement or (ii) take, whether in writing or otherwise, any action which, if taken prior to the date of this Agreement, would have made any representation or warranty in this Article III untrue or incorrect.aggregate;