Common use of Interim Conduct of Business Clause in Contracts

Interim Conduct of Business. Except as otherwise contemplated by this Agreement, and as reflected in the Interim Financial Statements, between October 31, 1999 and the date of signing of this Agreement, the Company has not: (a) sold, assigned, leased, exchanged, transferred or otherwise disposed of any portion of its assets or property, except for sales of Inventory and cash applied in the payment of the Company's Liabilities in the usual and ordinary course of business in accordance with the Company's past practices; (b) written off any asset which has a net book value which exceeds $10,000 individually or $50,000 in the aggregate in value, or suffered any casualty, damage, destruction or loss, or interruption in use, of any material asset, property or portion of Inventory (whether or not covered by insurance), on account of fire, flood, riot, strike or other hazard or Act of God; (c) waived any material right arising out of the conduct of, or with respect to, its business; (d) made (or committed to make) capital expenditures in an amount which exceeds $10,000 for any item or $50,000 in the aggregate; (e) made any change in accounting methods or principles; (f) borrowed any money or issued any bonds, debentures, notes or other corporate securities (other than equity securities), including without limitation, those evidencing borrowed money; (g) entered into any transaction with, or made any payment to, or incurred any liability to, any Related Party (as defined herein) in an amount which exceeds $25,000 or $100,000 in the aggregate (except for payment of salary and other customary expense reimbursements made in the ordinary course of business to Related Parties who are employees of the Company); (h) increased the compensation payable to any employee, except for normal pay increases in the ordinary course of business consistent with past practices; (i) made any payments or distributions to its employees, officers or directors except such amounts as constitute currently effective compensation for services rendered, or reimbursement for reasonable ordinary and necessary out-of-pocket business expenses; (j) paid or incurred any management or consulting fees, or engaged any consultants, except in the ordinary course of business; (k) hired any employee who has an annual salary in excess of $50,000, or employees with aggregate annual salaries or wages in excess of $100,000; (l) terminated any employee having an annual salary or wages in excess of $100,000 or employees with aggregate annual salaries or wages in excess of $100,000; (m) adopted any new Plan, Welfare Plan or Employee Benefit Plan; (n) issued or sold any securities of any class, except for the grant or exercise of options to purchase Company Common Stock under the Company Stock Option Plan; (o) paid, declared or set aside any dividend or other distribution on its securities of any class, except as contemplated by this Agreement with respect to the Preferred Stock, or purchased, exchanged or redeemed any of its securities of any class; or (p) without limitation by the enumeration of any of the foregoing, entered into any transaction other than in the usual and ordinary course of business in accordance with past practices. Notwithstanding the foregoing, the Company shall not be deemed to have breached the terms of this Section 4.24 by entering into this Agreement or by consummating the transactions contemplated hereby.

Interim Conduct of Business. Except as otherwise contemplated by this Agreement, and as reflected in the Interim Financial Statements, between October since December 31, 1999 and the date of signing of this Agreement, neither the Company has notnor any of its Subsidiaries has: (a) sold, assigned, leased, exchanged, transferred or otherwise disposed of any portion of its assets or property, except for sales of Inventory and cash applied in the payment of the Company's Liabilities or its Subsidiaries' liabilities in the usual and ordinary course of business in accordance with the Company's or its Subsidiaries' past practices; (b) written off any asset outside the ordinary course of business which has a net book value which exceeds $10,000 individually or $50,000 25,000 in the aggregate in value, or written off any amounts in the ordinary course of business in excess of reserves which have been established for such purpose, which reserves are adequate in accordance with GAAP applied on a consistent basis; (c) suffered any casualty, damage, destruction or loss, or interruption in use, of any material asset, property or portion of Inventory (whether or not covered by insurance), on account of fire, flood, riot, strike or other hazard or Act of God; (cd) waived any material right arising out of any agreement other than in the conduct of, or with respect to, its ordinary course of business; (de) made (or committed to make) capital expenditures in an amount which exceeds $10,000 100,000 for any item or $50,000 225,000 in the aggregate; (ef) made any change in accounting methods or principlesprinciples which are required to be disclosed in the Company's financial statements in accordance with GAAP; (fg) borrowed any money or issued any bonds, debentures, notes or other corporate securities (other than equity securities), including without limitation, those evidencing borrowed money; (gh) except as described in the Disclosure Statement, entered into any transaction with, or made any payment to, or incurred any liability to, any Related Party (as defined herein) in an amount which exceeds $25,000 or $100,000 in the aggregate (except for payment of salary and other customary expense reimbursements made in the ordinary course of business to Related Parties who are employees of the CompanyCompany or its Subsidiaries); (hi) increased the compensation payable to any employee, except for normal pay increases in the ordinary course of business consistent with past practices; (ij) made any payments or distributions to its employees, officers or directors except such amounts as constitute currently effective compensation for services rendered, or reimbursement for reasonable ordinary and necessary out-of-pocket business expenses; (jk) paid or incurred any management or consulting fees, or engaged any consultants, except in the ordinary course of business; (kl) hired any employee who has an annual salary in excess of $50,000, or employees with aggregate annual salaries or wages in excess of $100,00075,000; (lm) terminated any employee having an annual salary or wages in excess of $100,000 or employees with aggregate annual salaries or wages in excess of $100,00050,000; (mn) adopted any new Plan, Welfare Plan or Employee Benefit Plan; (no) issued or sold any securities of any class, except for the grant or exercise of options to purchase Company Common Stock under the Company Stock Option PlanPlans; (op) paid, declared or set aside any dividend or other distribution on its securities of any class, except as contemplated by this Agreement with respect to the Preferred Stock, or purchased, exchanged or redeemed any of its securities of any class; or (pq) without limitation by the enumeration of any of the foregoing, entered into any transaction other than in the usual and ordinary course of business in accordance with past practices. Notwithstanding the foregoing, the Company shall not be deemed to have breached the terms of this Section 4.24 4.25 by entering into this Agreement or by consummating the transactions contemplated hereby.

Interim Conduct of Business. Except as otherwise contemplated by this Agreement, and as reflected in the Interim Financial Statements, between October since December 31, 1999 and the date of signing of this Agreement2000, the Company has and the Subsidiaries have not: (a) sold, assigned, leased, exchanged, transferred or otherwise disposed of any portion of its assets or propertyproperty that is material to the Company and the Subsidiaries taken as a whole, except for sales of Inventory assets or inventory in the ordinary course of business and sales or dispositions of obsolete or worthless assets and except for cash applied in the payment of the Company's Liabilities ’s or any Subsidiary’s liabilities in the usual and ordinary course of business in accordance with the Company's ’s and/or the Subsidiaries’ past practices; (b) written off any asset which has a net book value which exceeds $10,000 25,000 individually or $50,000 100,000 in the aggregate in valueaggregate, or suffered any casualty, damage, destruction or loss, or interruption in use, of any material asset, property or portion of Inventory (whether or not covered by insurance), on account of fire, flood, riot, strike or other hazard or Act of God; (c) waived any material right arising out of the conduct of, or with respect to, its business; (d) made (or committed to make) capital expenditures in an amount which exceeds $10,000 100,000 for any item or $50,000 600,000 in the aggregate; (e) made any change in accounting methods or principles; (f) borrowed any money other than in the ordinary course of business pursuant to its existing credit facilities or issued any bonds, debentures, notes or other corporate securities (other than equity securities), including without limitation, those evidencing borrowed money; (g) entered into any transaction with, or made any payment to, or incurred any liability to, any Related Party (as defined herein) in an amount which exceeds $25,000 or $100,000 in the aggregate (except for payment of salary and other customary expense reimbursements made in the ordinary course of business to Related Parties who are employees of the Company); (h) increased the compensation payable to any employee, except for normal pay increases in the ordinary course of business consistent with past practices; (ih) made any payments or distributions to its employees, officers or directors directors, except such amounts as constitute currently effective compensation for services rendered, or reimbursement for reasonable and ordinary and necessary out-of-pocket business expenses; (j) paid or incurred any management or consulting fees, or engaged any consultants, except in the ordinary course of business; (k) hired any employee who has an annual salary in excess of $50,000, or employees with aggregate annual salaries or wages in excess of $100,000; (l) terminated any employee having an annual salary or wages in excess of $100,000 or employees with aggregate annual salaries or wages in excess of $100,000; (mi) adopted any new Pension Plan, Welfare Plan or Employee other Benefit Plan; (nj) issued or sold any of its securities of any class, class except for the grant or exercise issuance of options to purchase Company Common Stock under upon the Company Stock Option Planexercise of stock options; (ok) paid, declared or set aside any dividend or other distribution on its securities of any class, except as contemplated by this Agreement with respect to the Preferred Stock, or purchased, exchanged or redeemed any of its securities of any class; (l) suffered or been affected by any condition, event or occurrence which would be reasonably expected to have a Material Adverse Effect; or (pm) without limitation by the enumeration made or changed any Tax election or method of accounting with respect to Taxes, or filed any of the foregoingamended Tax return, entered into or settled or compromised any transaction other than in the usual and ordinary course of business in accordance examination or proceeding with past practicesrespect to any material Tax liability. Notwithstanding the foregoing, the Company shall not be deemed to have breached the terms of this Section 4.24 4.13 by entering into this Agreement or by consummating the transactions contemplated hereby.

Interim Conduct of Business. Except as otherwise contemplated by this Agreement, and as reflected in the Interim Financial Statementssince June 30, between October 311998, 1999 and the date of signing of this Agreement, neither the Company has notnor any of its Subsidiaries has: (a) sold, assigned, leased, exchanged, transferred or otherwise disposed of any material portion of its assets or property, except for sales of Inventory and cash applied in the payment of the Company's Liabilities in the usual and ordinary course of business in accordance with the Company's or its Subsidiaries' past practices; (b) written off any asset which has a net book value which exceeds $10,000 25,000 individually or $50,000 100,000 in the aggregate in value, or suffered any casualty, damage, destruction or loss, or interruption in use, loss of any material asset, property or portion of Inventory (whether or not covered by insurance), on account of fire, flood, riot, strike or other hazard or Act of God; (c) waived any material right arising out of the conduct of, or with respect to, its business; (d) made (or committed to make) capital expenditures in an amount which exceeds $10,000 50,000 for any item or $50,000 100,000 in the aggregate; (e) made any change in accounting methods or principlesprinciples or voluntarily elected to alter the manner of keeping its books, accounts and records; (f) borrowed any money or issued any bonds, debentures, notes or other corporate securities (other than equity securities)) or guaranteed the debt of any other Person, including without limitation, those evidencing borrowed money; (g) entered into any transaction with, or made any payment to, or incurred any liability to, any Related Party (as defined herein) in an amount which exceeds $25,000 or $100,000 in the aggregate (except for payment of salary and other customary expense reimbursements made in the ordinary course of business to Related Parties who are employees of the Company); (h) increased the compensation payable to to, or entered into or amended any employment agreement with, any employee, except for normal pay increases in the ordinary course of business consistent with past practices, but in no event, in an amount in excess of five percent (5%) of the annual salary of each such employee as set forth in the Disclosure Statement; (i) made any payments or distributions to its employees, officers or directors except such amounts as constitute currently effective compensation for services rendered, or reimbursement for reasonable ordinary and necessary out-of-pocket business expenses; (jh) paid or incurred any management or consulting fees, or engaged any consultants, except in the ordinary course of businessbusiness consistent with past practices; (ki) hired any employee who has an annual salary in excess of $50,000, or employees with aggregate annual salaries or wages in excess of $100,00075,000; (lj) terminated any employee having an annual salary or wages in excess of $100,000 or employees with aggregate annual salaries or wages in excess of $100,00075,000; (mk) adopted any new Plan, Welfare Benefit Plan or Employee amended any existing Benefit PlanPlan in any material respect; (nl) issued or sold any securities of any class, except for the grant or exercise of options to purchase Company Common Stock under the Company Option Plans or the issuance of Company Common Stock Option Planunder the Company's stock purchase plan; (m) discharged any material liability except in the usual and ordinary course of business in accordance with past practices, or prepaid any liability; (n) not settled or initiated any litigation or threatened litigation with any Person with an amount in controversy in excess of $50,000 individually or $100,000 in the aggregate; or (o) paid, declared or set aside any dividend or other distribution on its securities of any classclass or other ownership interests, except as contemplated by this Agreement with respect to the Preferred Stockor, directly or indirectly, purchased, exchanged exchanged, redeemed or redeemed otherwise acquired any of its securities of any class; or (p) without limitation by the enumeration of class or made any of the foregoing, entered into commitment for any transaction other than in the usual and ordinary course of business in accordance with past practicessuch action. Notwithstanding the foregoing, the Company shall not be deemed to have breached the terms of this Section 4.24 4.28 by entering into this Agreement or by consummating the transactions contemplated hereby.

Interim Conduct of Business. Except as otherwise contemplated by this Agreement, and Agreement or as reflected provided in the Interim Financial StatementsCompany Disclosure Statement, between October since December 31, 1999 and the date of signing of this Agreement1998, the Company has and the Controlled Entities have not: : (a) sold, assigned, leased, exchanged, transferred or otherwise disposed of any portion of its assets or propertyproperty that is material to the Company and its Controlled Entities taken as a whole, except for sales of Inventory and cash applied in the payment of the Company's Liabilities liabilities in the usual and ordinary course of business in accordance with the Company's or its Controlled Entities' past practices; ; (b) written off any asset which has a net book value which exceeds $10,000 25,000 individually or $50,000 125,000 in the aggregate in valueaggregate, or suffered any casualty, damage, destruction or loss, or interruption in use, of any material asset, property or portion of Inventory (whether or not covered by insurance), on account of fire, flood, riot, strike or other hazard or Act of God; ; (c) waived any material right arising out of the conduct of, or with respect to, its business; ; (d) made (or committed to make) capital expenditures in an amount which exceeds $10,000 250,000 for any item or $50,000 2,500,000 in the aggregate; ; (e) made any change in accounting methods or principles; ; (f) borrowed any money other than in the ordinary course of business pursuant to its existing credit facilities or issued any bonds, debentures, notes or other corporate securities (other than equity securities), including without limitation, those evidencing borrowed money; money or to make acquisitions referred to in the Company Disclosure Statement or to satisfy commitments to purchase entities referred to in the Company Disclosure Statement; 13 18 (g) entered into any transaction with, or made any payment to, or incurred any liability to, any Related Party (as defined herein) in an amount which exceeds $25,000 or $100,000 in the aggregate (except for payment of salary and other customary expense reimbursements made in the ordinary course of business to Related Parties who are employees of the Company); (h) increased the compensation payable to any employee, except for normal pay increases in the ordinary course of business consistent with past practices; ; (ih) made any payments or distributions to its employees, officers or directors directors, except such amounts as constitute currently effective compensation for services rendered, or reimbursement for reasonable ordinary and necessary out-of-pocket business expenses; ; (j) paid or incurred any management or consulting fees, or engaged any consultants, except in the ordinary course of business; (k) hired any employee who has an annual salary in excess of $50,000, or employees with aggregate annual salaries or wages in excess of $100,000; (l) terminated any employee having an annual salary or wages in excess of $100,000 or employees with aggregate annual salaries or wages in excess of $100,000; (mi) adopted any new Pension Plan, Welfare Plan or Employee other Benefit Plan; ; (nj) issued or sold any of its securities of any class, except for the grant or exercise of options to purchase Company Common Stock under the Company Stock Option Plan; ; (ok) paid, declared or set aside any dividend or other distribution on its securities of any class, except as contemplated by this Agreement with respect to the Preferred Stock, or purchased, exchanged or redeemed any of its securities of any class; or (pl) without limitation suffered or been affected by any condition, event or occurrence which would be reasonably likely to have a Material Adverse Effect on the enumeration Company; or (m) made or changed any Tax election or method of accounting with respect to Taxes, or filed any of the foregoingamended Tax return, entered into or settled or compromised any transaction other than in the usual and ordinary course of business in accordance examination or proceeding with past practicesrespect to any material Tax liability. Notwithstanding the foregoing, the Company shall not be deemed to have breached the terms of this Section 4.24 5.14 by entering into this Agreement or by consummating the transactions contemplated hereby.

Interim Conduct of Business. Except as otherwise contemplated by this Agreement, and as reflected in the Interim Financial Statements, between October since December 31, 1999 and the date of signing of this Agreement2000, the Company has and the Subsidiary have not: (a) sold, assigned, leased, exchanged, transferred or otherwise disposed of any portion of its or its Subsidiary's assets or propertyproperty that is material to the Company and the Subsidiary taken as a whole, except for sales of Inventory assets or inventory in the ordinary course of business and sales or dispositions of obsolete or worthless assets and except for cash applied in the payment of the Company's Liabilities or its Subsidiary's liabilities in the usual and ordinary course of business in accordance with the Company's and/or the Subsidiary's past practices; (b) written off any asset which has a net book value which exceeds $10,000 25,000 individually or $50,000 100,000 in the aggregate in valueaggregate, or suffered any casualty, damage, destruction or loss, or interruption in use, of any material asset, property or portion of Inventory (whether or not covered by insurance), on account of fire, flood, riot, strike or other hazard or Act of God; (c) waived any material right arising out of the conduct of, or with respect to, its business; (d) made (or committed to make) capital expenditures in an amount which exceeds $10,000 100,000 for any item or $50,000 600,000 in the aggregate; (e) made any change in accounting methods or principles; (f) borrowed any money other than in the ordinary course of business pursuant to its existing credit facilities or issued any bonds, debentures, notes or other corporate securities (other than equity securities), including without limitation, those evidencing borrowed money; (g) entered into any transaction with, or made any payment to, or incurred any liability to, any Related Party (as defined herein) in an amount which exceeds $25,000 or $100,000 in the aggregate (except for payment of salary and other customary expense reimbursements made in the ordinary course of business to Related Parties who are employees of the Company); (h) increased the compensation payable to any employee, except for normal pay increases in the ordinary course of business consistent with past practices; (ih) made any payments or distributions to its employees, officers or directors directors, except such amounts as constitute currently effective compensation for services rendered, or reimbursement for reasonable and ordinary and necessary out-of-pocket business expenses; (j) paid or incurred any management or consulting fees, or engaged any consultants, except in the ordinary course of business; (k) hired any employee who has an annual salary in excess of $50,000, or employees with aggregate annual salaries or wages in excess of $100,000; (l) terminated any employee having an annual salary or wages in excess of $100,000 or employees with aggregate annual salaries or wages in excess of $100,000; (mi) adopted any new Pension Plan, Welfare Plan, Incentive Plan, Severance Plan, Bonus Plan or other Benefit Plan, or amended or modified any existing Pension Plan, Welfare Plan or Employee other Benefit Plan; (nj) issued or sold any of its securities of any class, class except for the grant or exercise issuance of options to purchase Company Common Stock under upon the Company exercise of stock options or pursuant to the Company's Employee Stock Option Purchase Plan; (ok) paid, declared or set aside any dividend or other distribution on its securities of any class, except as contemplated by this Agreement with respect to the Preferred Stock, or purchased, exchanged or redeemed any of its securities of any class; (l) suffered or been affected by any condition, event or occurrence that, in combination with any other events or circumstances, has had or would be reasonably expected to have a Material Adverse Effect; (m) entered into, terminated or materially amended, waived any rights under, or failed to give any required notice under, any Material Contract (as defined below) (including any insurance policies) or entered into any transaction outside the ordinary course of business; or (pn) without limitation by the enumeration made or changed any Tax election or method of accounting with respect to Taxes, or filed any of the foregoingamended Tax return, entered into or settled or compromised any transaction other than in the usual and ordinary course of business in accordance examination or proceeding with past practicesrespect to any material Tax liability. Notwithstanding the foregoing, the Company shall not be deemed to have breached the terms of this Section 4.24 4.14 by entering into this Agreement or by consummating the transactions contemplated herebyhereby or by entering into the Agreement and Plan of Merger dated as of October 25, 2001 by and among SG Merger Corp., the Company, Wilburn W. Smith and Allan J. Gardner (the "Prior Merger Agreement") ox xx xxxxxxxx xxto thx Xxxxxxxxx xxx Waiver to Agreement and Plan of Merger, dated as of January 25, 2002, by and among SG Merger Corp., the Company, Wilburn W. Smith and Allan J. Gardner (the "Prior Merger Agreement Amexxxxxx").

Interim Conduct of Business. Except as otherwise contemplated by this Agreement, and as reflected in the Interim Financial Statementssince September 30, between October 311996, 1999 and the date of signing of this Agreement, neither the Company has notnor any of its Subsidiaries has: (a) sold, assigned, leased, exchanged, transferred or otherwise disposed of any material portion of its assets or property, except for sales of Inventory and cash applied in the payment of the Company's Liabilities or its Subsidiaries' liabilities in the usual and ordinary course of business in accordance with the Company's or its Subsidiaries' past practices; (b) written off any asset which has a net book value which exceeds $10,000 25,000 individually or $50,000 in the aggregate in value, or suffered any casualty, damage, destruction or loss, or interruption in use, of any material asset, property or portion of Inventory (whether or not covered by insurance), on account of fire, flood, riot, strike or other hazard or Act of God; (c) waived any material right arising out of the conduct of, or with respect to, its business; (d) made (or committed to make) capital expenditures in an amount which exceeds $10,000 25,000 for any item or $50,000 100,000 in the aggregate; (e) made any change in accounting methods or principles; (f) borrowed any money or issued any bonds, debentures, notes or other corporate securities (other than equity securities), including without limitation, those evidencing borrowed money; (g) entered into any transaction with, or made any payment to, or incurred any liability to, any Related Party (as defined herein) in an amount which exceeds $25,000 15,000 or $100,000 50,000 in the aggregate (except for payment of salary and other customary expense reimbursements made in the ordinary course of business to Related Parties who are employees of the CompanyCompany or its Subsidiaries); (h) increased the compensation payable to any employee, except for normal pay increases in the ordinary course of business consistent with past practices; (i) made any payments or distributions to its employees, officers or directors except such amounts as constitute currently effective compensation for services rendered, or reimbursement for reasonable ordinary and necessary out-of-pocket business expenses; (j) paid or incurred any management or consulting fees, or engaged any consultants, except in the ordinary course of business; (k) hired any employee who has an annual salary in excess of $50,000, or employees with aggregate annual salaries or wages in excess of $100,000; (l) terminated any employee having an annual salary or wages in excess of $100,000 or employees with aggregate annual salaries or wages in excess of $100,000; (m) adopted any new Plan, Welfare Plan or Employee Benefit Plan; (n) issued or sold any securities of any class, except for the grant or exercise of options to purchase Company Common Stock under the Company Stock Option Plan; (o) paid, declared or set aside any dividend or other distribution on its securities of any class, except as contemplated by this Agreement with respect to the Preferred Stock, or purchased, exchanged or redeemed any of its securities of any class; or (p) without limitation by the enumeration of any of the foregoing, entered into any transaction other than in the usual and ordinary course of business in accordance with past practices. Notwithstanding the foregoing, the Company shall not be deemed to have breached the terms of this Section 4.24 by entering into this Agreement or by consummating the transactions contemplated hereby.

Interim Conduct of Business. Except as otherwise contemplated by this Agreement, and as reflected in the Interim Financial Statementssince September 30, between October 311996, 1999 and the date of signing of this Agreement, neither the Company has not: nor any of its Subsidiaries has: (a) sold, assigned, leased, exchanged, transferred or otherwise disposed of any material portion of its assets or property, except for sales of Inventory and cash applied in the payment of the Company's Liabilities or its Subsidiaries' liabilities in the usual and ordinary course of business in accordance with the Company's or its Subsidiaries' past practices; ; (b) written off any asset which has a net book value which exceeds $10,000 25,000 individually or $50,000 in the aggregate in value, or suffered any casualty, damage, destruction or loss, or interruption in use, of any material asset, property or portion of Inventory (whether or not covered by insurance), on account of fire, flood, riot, strike or other hazard or Act of God; ; (c) waived any material right arising out of the conduct of, or with respect to, its business; ; (d) made (or committed to make) capital expenditures in an amount which exceeds $10,000 25,000 for any item or $50,000 100,000 in the aggregate; ; (e) made any change in accounting methods or principles; ; (f) borrowed any money or issued any bonds, debentures, notes or other corporate securities (other than equity securities), including without limitation, those evidencing borrowed money; ; (g) entered into any transaction with, or made any payment to, or incurred any liability to, any Related Party (as defined herein) in an amount which exceeds $25,000 15,000 or $100,000 50,000 in the aggregate (except for payment of salary and other customary expense reimbursements made in the ordinary course of business to Related Parties who are employees of the CompanyCompany or its Subsidiaries); ; (h) increased the compensation payable to any employee, except for normal pay increases in the ordinary course of business consistent with past practices; ; (i) made any payments or distributions to its employees, officers or directors except such amounts as constitute currently effective compensation for services rendered, or reimbursement for reasonable ordinary and necessary out-of-pocket business expenses; ; (j) paid or incurred any management or consulting fees, or engaged any consultants, except in the ordinary course of business; (k) hired any employee who has an annual salary in excess of $50,000, or employees with aggregate annual salaries or wages in excess of $100,000; (l) terminated any employee having an annual salary or wages in excess of $100,000 or employees with aggregate annual salaries or wages in excess of $100,000; (m) adopted any new Plan, Welfare Plan or Employee Benefit Plan; (n) issued or sold any securities of any class, except for the grant or exercise of options to purchase Company Common Stock under the Company Stock Option Plan; (o) paid, declared or set aside any dividend or other distribution on its securities of any class, except as contemplated by this Agreement with respect to the Preferred Stock, or purchased, exchanged or redeemed any of its securities of any class; or (p) without limitation by the enumeration of any of the foregoing, entered into any transaction other than in the usual and ordinary course of business in accordance with past practices. Notwithstanding the foregoing, the Company shall not be deemed to have breached the terms of this Section 4.24 by entering into this Agreement or by consummating the transactions contemplated hereby.A-23 24

Interim Conduct of Business. Except as otherwise contemplated by this Agreement, and as reflected in the Interim Financial Statements, between October 31since June 30, 1999 and the date of signing of this Agreement1996, the Company has not: (a) sold, assigned, leased, exchanged, transferred or otherwise disposed of any portion of its assets or property, except for sales of Inventory and cash applied in the payment of the Company's Liabilities in the usual and ordinary course of business in accordance with the Company's past practices; (b) written off any asset which has a net book value which exceeds $10,000 50,000 individually or $50,000 100,000 in the aggregate in value, or suffered any casualty, damage, destruction or loss, or interruption in use, of any material asset, property or portion of Inventory (whether or not covered by insurance), on account of fire, flood, riot, strike or other hazard or Act of God; (c) waived any material right arising out of the conduct of, or with respect to, its business; (d) made (or committed to make) capital expenditures in an amount which exceeds $10,000 50,000 for any item or $50,000 200,000 in the aggregate; (e) made any change in accounting methods or principles; (f) borrowed any money or issued any bonds, debentures, notes or other corporate securities (other than equity securities), including without limitation, those evidencing borrowed money; (g) entered into any transaction with, or made any payment to, or incurred any liability to, any Related Party (as defined herein) in an amount which exceeds $25,000 or $100,000 in the aggregate (except for payment of salary and other customary expense reimbursements made in the ordinary course of business to Related Parties who are employees of the Company); (h) increased the compensation payable to any employee, except for normal pay increases in the ordinary course of business consistent with past practices; (i) made any payments or distributions to its employees, officers or directors except such amounts as constitute currently effective compensation for services rendered, or reimbursement for reasonable ordinary and necessary out-of-pocket business expenses; (j) paid or incurred any management or consulting fees, or engaged any consultants, except in the ordinary course of business; (k) hired any employee who has an annual salary in excess of $50,000, or employees with aggregate annual salaries or wages in excess of $100,000; (l) terminated any employee having an annual salary or wages in excess of $100,000 or employees with aggregate annual salaries or wages in excess of $100,000; (m) adopted any new Plan, Welfare Plan or Employee Benefit Plan; (n) issued or sold any securities of any class, except for the grant or exercise of options to purchase Company Common Stock under the Company Stock Option Plan; (o) paid, declared or set aside any dividend or other distribution on its securities of any class, except as contemplated by this Agreement with respect to the Preferred Stock, or purchased, exchanged or redeemed any of its securities of any class; or (p) without limitation by the enumeration of any of the foregoing, entered into any transaction other than in the usual and ordinary course of business in accordance with past practices. Notwithstanding the foregoing, the Company shall not be deemed to have breached the terms of this Section 4.24 by entering into this Agreement or by consummating the transactions contemplated hereby.

Interim Conduct of Business. Except as otherwise contemplated by this Agreement, and as reflected in the Interim Financial Statements, between October since December 31, 1999 and the date of signing of this Agreement1996, neither the Company has notnor any of its Subsidiaries has: (a) sold, assigned, leased, exchanged, transferred or otherwise disposed of any material portion of its assets or property, except for sales of Inventory and cash applied in the payment of the Company's Liabilities or its Subsidiaries' liabilities in the usual and ordinary course of business in accordance with the Company's or its Subsidiaries' past practices; (b) written off any asset which has a net book value which exceeds $10,000 25,000 individually or $50,000 in the aggregate in value, or suffered any casualty, damage, destruction or loss, or interruption in use, of any material asset, property or portion of Inventory (whether or not covered by insurance), on account of fire, flood, riot, strike or other hazard or Act of God; (c) waived any material right arising out of the conduct of, or with respect to, its business; (d) made (or committed to make) capital expenditures, except for such capital expenditures as are in the ordinary course of business, which expenditures in an amount which exceeds the aggregate do not exceed $10,000 for any item or $50,000 in the aggregate100,000; (e) made any material change in accounting methods or principles; (f) borrowed any money or issued any bonds, debentures, notes or other corporate securities (other than equity securities)) in excess of $25,000 individually or $50,000 in the aggregate, including without limitation, those evidencing borrowed money; (g) entered into any transaction with, or made any payment to, or incurred any liability to, any Related Party (as defined herein) in an amount which exceeds $25,000 or $100,000 in the aggregate (except for payment of salary and other customary expense reimbursements made in the ordinary course of business to Related Parties who are employees of the Company); (h) increased the compensation payable to any employee, except for normal pay increases in the ordinary course of business consistent with past practices, but in any event, not granted any increase to any employee in excess of five percent (5%) per annum; (ih) made any payments or distributions to its employees, officers or directors except such amounts as constitute currently effective compensation for services rendered, amounts paid pursuant to the Plans or reimbursement for reasonable ordinary and necessary out-of-pocket business expenses; (ji) paid or incurred any management or consulting fees, or engaged any consultants, except in the ordinary course of businessbusiness consistent with past practices; (kj) hired any employee who has an annual salary in excess of $50,000, or employees with aggregate annual salaries or wages in excess of $100,000; (lk) terminated any employee having an annual salary or wages in excess of $100,000 or employees with aggregate annual salaries or wages in excess of $100,00050,000; (ml) adopted any new Plan, Welfare Plan or Employee Benefit Plan; (nm) issued or sold any securities of any class, except for the grant or exercise of options to purchase Company Common Stock under the Company Stock Option Plan;; or (on) paid, declared or set aside any dividend or other distribution on its securities of any class, except as contemplated by this Agreement with respect to the Preferred Stock, or purchased, exchanged or redeemed any of its securities of any class; or (p) without limitation by the enumeration of any of the foregoing, entered into any transaction other than in the usual and ordinary course of business in accordance with past practices. Notwithstanding the foregoing, the Company shall not be deemed to have breached the terms of this Section 4.24 3.27 by entering into this Agreement or by consummating the transactions contemplated hereby.