Common use of No Changes Clause in Contracts

No Changes. Except for the transactions contemplated by this Agreement and as disclosed in Section 5.9 of the Disclosure Schedule or in the SEC Reports filed prior to the date of this Agreement, since December 30, 2000 there has been no material adverse change in the business, assets, condition (financial or otherwise), operations or results of operations of the Company and the Subsidiaries, taken as a whole, and neither the Company nor any Subsidiary has: (a) incurred any material debts, obligations or liabilities, absolute, accrued or contingent and whether due or to become due, except current liabilities incurred in the ordinary course of business and the debt evidenced by the Demand Note; (b) paid any material obligation or liability other than, or discharged or satisfied any material liens or encumbrances other than those securing, current liabilities, in each case in the ordinary course of business; (c) declared or made any payment or distribution to its shareholders as such, or purchased or redeemed any of its shares of capital stock or other securities, or obligated itself to do so; (d) mortgaged, pledged or subjected to lien, charge, security interest or other encumbrance any of its material assets, tangible or intangible, except for Permitted Liens (as hereinafter defined) arising in the ordinary course of business and liens securing the Demand Note; (e) sold, transferred or leased any of its material assets, except for sales of inventory and obsolete or worn-out equipment in the ordinary course of business; (f) cancelled or compromised any material debt or claim, or waived or released any right of material value; (g) suffered any physical damage, destruction or loss (whether or not covered by insurance) materially and adversely affecting, individually or in the aggregate, the business, assets, condition (financial or otherwise), operations or results of operations of the Company and the Subsidiaries, taken as a whole; (h) entered into any material transaction other than in the ordinary course of business; (i) encountered any material labor difficulties or labor union organizing activities; (j) issued or sold any shares of capital stock or other securities (other than shares of Common Stock issued upon the exercise or conversion of options, warrants or convertible securities outstanding on December 30, 2000 or granted thereafter and disclosed on Schedule 5.9 hereto) or granted any options, warrants, convertible securities or other purchase rights with respect thereto; (k) made any acquisition or disposition of any material assets or become involved in any other material transaction, other than for fair value in the ordinary course of business; (l) increased substantially any compensation or benefits payable to any officers, directors or employees of the Company or any Subsidiary other than consistent with past practices; or (m) agreed to do any of the foregoing.

No Changes. Except for Since the transactions contemplated by this Agreement and as disclosed in Section 5.9 of the Disclosure Schedule or in the SEC Reports filed prior to the date of this AgreementBalance Sheet Date, since December 30, 2000 there has been no material adverse change in the business, assets, condition (financial or otherwise), operations or results of operations of the Company and the Subsidiaries, taken as a whole, and neither the Company nor any Subsidiary has: (a) incurred any material debts, obligations or liabilities, absolute, accrued or contingent and whether due or to become due, except current liabilities incurred has conducted its business in the ordinary course of business and in a manner consistent with past practice, and there has not been any Material Adverse Change or event or change (whether alone or with any other event or change) that has had or is reasonably likely to have a Material Adverse Effect. Since the debt evidenced by Balance Sheet Date, the Demand Note; Company has not (ba) paid suffered any material obligation damage or liability other thandestruction to, or discharged or satisfied any material liens or encumbrances other than those securingloss of, current liabilities, in each case in the ordinary course of business; (c) declared or made any payment or distribution to its shareholders as such, or purchased or redeemed any of its shares of capital stock assets or other securities, or obligated itself to do so; (d) mortgaged, pledged or subjected to lien, charge, security interest or other encumbrance any of its material assets, tangible or intangible, except for Permitted Liens (as hereinafter defined) arising in the ordinary course of business and liens securing the Demand Note; (e) sold, transferred or leased any of its material assets, except for sales of inventory and obsolete or worn-out equipment in the ordinary course of business; (f) cancelled or compromised any material debt or claim, or waived or released any right of material value; (g) suffered any physical damage, destruction or loss properties (whether or not covered by insurance) materially individually or in the aggregate in excess of $25,000; (b) permitted the imposition of a Lien (other than Permitted Liens) on, or disposed of, leased, transferred, mortgaged or assigned any of its assets; (c) terminated, modified or entered into any Material Contract or canceled, compromised, knowingly waived or released any right or claim (or series of related rights and adversely affectingclaims) under any Material Contract; (d) cancelled, waived, released or otherwise compromised any trade debt, receivable, right or claim exceeding $25,000 individually or in the aggregate, the business, assets, condition (financial or otherwise), operations or results of operations of the Company and the Subsidiaries, taken as a whole; (he) made or committed (in a binding manner) to make any capital expenditures or capital additions or betterments in excess of $25,000 individually or in the aggregate; (f) entered into, adopted, amended (except as may be required by Law and except for immaterial amendments) or terminated any bonus, profit sharing, compensation, termination, stock option, stock appreciation right, restricted stock, performance unit, pension, retirement, deferred compensation, employment, severance or other employee benefit agreements, trusts, plans, funds or other arrangements for the benefit or welfare of any director, officer or employee, or increased in any manner the compensation or fringe benefits of any director, officer or employee or paid any benefit not required by any existing plan and arrangement (except for normal salary increases consistent with past practice) or entered into any material transaction other than in the ordinary course of business; (i) encountered any material labor difficulties contract, agreement, commitment or labor union organizing activities; (j) issued or sold any shares of capital stock or other securities (other than shares of Common Stock issued upon the exercise or conversion of options, warrants or convertible securities outstanding on December 30, 2000 or granted thereafter and disclosed on Schedule 5.9 hereto) or granted any options, warrants, convertible securities or other purchase rights with respect thereto; (k) made any acquisition or disposition of any material assets or become involved in any other material transaction, other than for fair value in the ordinary course of business; (l) increased substantially any compensation or benefits payable to any officers, directors or employees of the Company or any Subsidiary other than consistent with past practices; or (m) agreed arrangement to do any of the foregoing; (g) disposed of or permitted the lapse in registration of any Intellectual Property; (h) experienced any Material Adverse Change in its Receivables or its accounts payable; (i) changed its accounting methods, systems, policies, principles or practices; (j) incurred, assumed, guaranteed or discharged any Debt; (k) modified the Company Charter Documents; (l) issued, sold or otherwise permitted to become outstanding any capital stock, or split, combined, reclassified, repurchased or redeemed any shares of its capital stock; (m) made any capital investment in, any loan to, or any acquisition of the securities or assets of any other Person other than acquisitions of inventory and supplies in the ordinary course of business consistent with past practice; (n) failed to maintain in full force and effect insurance policies on its properties providing coverage and amounts of coverage comparable to the coverage and amounts of coverage provided under its policies of insurance in effect on the Balance Sheet Date; (o) encountered any labor union organizing activity or had any actual or overtly threatened employee strikes, work stoppages, slowdowns or lockouts; (p) materially modified or changed its business organization or materially and adversely modified or changed its relationship with its suppliers, customers and others having business relations with it; (q) entered into any Contract outside the ordinary course of business that is or would be a Material Contract; (r) adopted a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization, or other material reorganization; or (s) authorized, agreed, resolved or committed to any of the foregoing.

No Changes. Except for the transactions contemplated by this Agreement and as disclosed in Section 5.9 of the Disclosure listed on Schedule or in the SEC Reports filed prior to the date of this Agreement3.5, since December 3031, 2000 there 2011, no Company Entity has been no material adverse change in the business, assets, condition (financial or otherwise), operations or results of operations of the Company and the Subsidiaries, taken as a whole, and neither the Company nor any Subsidiary has: (a) incurred suffered any material debts, obligations damage or liabilities, absolute, accrued or contingent and whether due or to become due, except current liabilities incurred in the ordinary course of business and the debt evidenced by the Demand Note; (b) paid any material obligation or liability other thandestruction to, or discharged or satisfied any material liens or encumbrances other than those securingloss of, current liabilities, in each case in the ordinary course of business; (c) declared or made any payment or distribution to its shareholders as such, or purchased or redeemed any of its shares of capital stock assets or other securities, or obligated itself to do so; (d) mortgaged, pledged or subjected to lien, charge, security interest or other encumbrance any of its material assets, tangible or intangible, except for Permitted Liens (as hereinafter defined) arising in the ordinary course of business and liens securing the Demand Note; (e) sold, transferred or leased any of its material assets, except for sales of inventory and obsolete or worn-out equipment in the ordinary course of business; (f) cancelled or compromised any material debt or claim, or waived or released any right of material value; (g) suffered any physical damage, destruction or loss properties (whether or not covered by insurance) materially and adversely affectingindividually or in the aggregate in excess of $10,000; (b) permitted the imposition of a Lien (other than Permitted Exceptions) on, or disposed of, any of its assets; (c) terminated or entered into any Material Contract; (d) cancelled, waived, released or otherwise compromised any trade debt, receivable or claim exceeding $10,000 individually or in the aggregate, the business, assets, condition (financial or otherwise), operations or results of operations of the Company and the Subsidiaries, taken as a whole; (he) made or committed (in a binding manner) to make any capital expenditures or capital additions or betterments in excess of $10,000 individually or in the aggregate; (f) entered into, adopted, amended (except as may be required by Law and except for immaterial amendments) or terminated any bonus, profit sharing, compensation, termination, stock option, stock appreciation right, restricted stock, performance unit, pension, retirement, deferred compensation, employment, severance or other employee benefit agreements, trusts, plans, funds or other arrangements for the benefit or welfare of any director, officer or employee, or increased in any manner the compensation or fringe benefits of any director, officer or employee or paid any benefit not required by any existing plan and arrangement (except for normal salary increases consistent with past practice) or entered into any material transaction other than in the ordinary course of business; (i) encountered any material labor difficulties contract, agreement, commitment or labor union organizing activities; (j) issued or sold any shares of capital stock or other securities (other than shares of Common Stock issued upon the exercise or conversion of options, warrants or convertible securities outstanding on December 30, 2000 or granted thereafter and disclosed on Schedule 5.9 hereto) or granted any options, warrants, convertible securities or other purchase rights with respect thereto; (k) made any acquisition or disposition of any material assets or become involved in any other material transaction, other than for fair value in the ordinary course of business; (l) increased substantially any compensation or benefits payable to any officers, directors or employees of the Company or any Subsidiary other than consistent with past practices; or (m) agreed arrangement to do any of the foregoing; (g) disposed of or permitted the lapse in registration of any Intellectual Property; (h) experienced any material adverse change in its Receivables or its accounts payable; (i) changed its accounting methods, systems, policies, principles or practices; (j) incurred indebtedness (other than trade payables in the ordinary course of business consistent with past practice); or (k) experienced a Material Adverse Change.

No Changes. Except for Since the transactions contemplated by this Agreement and as disclosed in Section 5.9 of the Disclosure Schedule or in the SEC Reports filed prior to the date of this AgreementBalance Sheet Date, since December 30, 2000 there has been no material adverse change in the business, assets, condition (financial or otherwise), operations or results of operations of the Company and the Subsidiaries, taken as a whole, and neither the Company nor any Subsidiary has: (a) incurred any material debts, obligations or liabilities, absolute, accrued or contingent and whether due or to become due, except current liabilities incurred has conducted its business in the ordinary course of business and in a manner consistent with past practice, and there has not been any Material Adverse Change or event or change (whether alone or with any other event or change) that has had or is reasonably likely to have a Material Adverse Effect. Since the debt evidenced by Balance Sheet Date, the Demand Note; Company has not (ba) paid suffered any material obligation damage or liability other thandestruction to, or discharged or satisfied any material liens or encumbrances other than those securingloss of, current liabilities, in each case in the ordinary course of business; (c) declared or made any payment or distribution to its shareholders as such, or purchased or redeemed any of its shares of capital stock assets or other securities, or obligated itself to do so; (d) mortgaged, pledged or subjected to lien, charge, security interest or other encumbrance any of its material assets, tangible or intangible, except for Permitted Liens (as hereinafter defined) arising in the ordinary course of business and liens securing the Demand Note; (e) sold, transferred or leased any of its material assets, except for sales of inventory and obsolete or worn-out equipment in the ordinary course of business; (f) cancelled or compromised any material debt or claim, or waived or released any right of material value; (g) suffered any physical damage, destruction or loss properties (whether or not covered by insurance) materially individually or in the aggregate in excess of $25,000; (b) permitted the imposition of a Lien (other than Permitted Liens) on, or disposed of, leased, transferred, mortgaged or assigned any of its assets; (c) terminated, modified or entered into any Material Contract or canceled, compromised, knowingly waived or released any right or claim (or series of related rights and adversely affectingclaims) under any Material Contract; (d) cancelled, waived, released or otherwise compromised any trade debt, receivable, right or claim exceeding $25,000 individually or in the aggregate, the business, assets, condition (financial or otherwise), operations or results of operations of the Company and the Subsidiaries, taken as a whole; (he) made or committed (in a binding manner) to make any capital expenditures or capital additions or betterments in excess of $25,000 individually or in the aggregate; (f) entered into, adopted, amended (except as may be required by Law and except for immaterial amendments) or terminated any bonus, profit sharing, compensation, termination, stock option, stock appreciation right, restricted stock, performance unit, pension, retirement, deferred compensation, employment, severance or other employee benefit agreements, trusts, plans, funds or other arrangements for the benefit or welfare of any director, officer or employee, or increased in any manner the compensation or fringe benefits of any director, officer or employee or paid any benefit not required by any existing plan and arrangement (except for normal salary increases consistent with past practice) or entered into any material transaction other than in the ordinary course of business; (i) encountered any material labor difficulties contract, agreement, commitment or labor union organizing activities; (j) issued or sold any shares of capital stock or other securities (other than shares of Common Stock issued upon the exercise or conversion of options, warrants or convertible securities outstanding on December 30, 2000 or granted thereafter and disclosed on Schedule 5.9 hereto) or granted any options, warrants, convertible securities or other purchase rights with respect thereto; (k) made any acquisition or disposition of any material assets or become involved in any other material transaction, other than for fair value in the ordinary course of business; (l) increased substantially any compensation or benefits payable to any officers, directors or employees of the Company or any Subsidiary other than consistent with past practices; or (m) agreed arrangement to do any of the foregoing; (g) disposed of or permitted the lapse in registration of any Intellectual Property; (h) experienced any Material Adverse Change in its Receivables or its accounts payable; (i) changed its accounting methods, systems, policies, principles or practices; (j) incurred, assumed, guaranteed or discharged any Debt outside the ordinary course of business consistent with past practice; (k) modified the Company Charter Documents; (l) issued, sold or otherwise permitted to become outstanding any capital stock, or split, combined, reclassified, repurchased or redeemed any shares of its capital stock; (m) made any capital investment in, any loan to, or any acquisition of the securities or assets of any other Person other than acquisitions of inventory and supplies in the ordinary course of business consistent with past practice; (n) failed to maintain in full force and effect insurance policies on its properties providing coverage and amounts of coverage comparable to the coverage and amounts of coverage provided under its policies of insurance in effect on the Balance Sheet Date; (o) encountered any labor union organizing activity or had any actual or overtly threatened employee strikes, work stoppages, slowdowns or lockouts; (p) materially modified or changed its business organization or materially and adversely modified or changed its relationship with its suppliers, customers and others having business relations with it; (q) entered into any Contract outside the ordinary course of business that is or would be a Material Contract; (r) adopted a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization, or other material reorganization; or (s) authorized, agreed, resolved or committed to any of the foregoing.

No Changes. Except for the transactions contemplated by this Agreement and as disclosed in Section 5.9 of the Disclosure Schedule or in the SEC Reports filed prior to Since the date of this Agreement, since December 30, 2000 GSCI Balance Sheet there has been no material adverse change in the businessnot, assets, condition (financial occurred or otherwise), operations or results of operations of the Company and the Subsidiaries, taken as a whole, and neither the Company nor any Subsidiary hasarisen any: (a) incurred any material debts, obligations or liabilities, absolute, accrued or contingent and whether due or to become due, transaction by GSCI except current liabilities incurred in the ordinary course of business and as conducted on that date; capital expenditure by GSCI, either individually or in the debt evidenced by the Demand Noteaggregate, exceeding $25,000; (b) paid any material obligation or liability other thandestruction, damage to, or discharged loss of any assets (including without limitation intangible assets) of GSCI (whether or satisfied not covered by insurance), either individually or in the aggregate, exceeding $10,000; labor trouble or claim of wrongful discharge or other unlawful labor practice or action; change in accounting methods or practices (including any material liens change in depreciation or encumbrances amortization policies or rates, any change in policies in making or reversing accruals, or any change in capitalization of software development costs) by GSCI; declaration, setting aside, or payment of a dividend or other than those securingdistribution in respect to the shares of GSCI, current liabilitiesor any direct or indirect redemption, purchase or other acquisition by GSCI of any of its shares; increase in each case the salary or other compensation payable or to become payable by GSCI to any of its officers, directors or employees, or the declaration, payment, or commitment or obligation of any kind for the payment, by GSCI, of a bonus or other additional salary or compensation to any such person; acquisition, sale or transfer of any asset of GSCI except in the ordinary course of business; (c) declared formation, amendment or made termination of any payment distribution agreement or distribution any material contract, agreement or license to its shareholders as suchwhich GSCI is a party, other than termination by GSCI pursuant to the terms thereof; loan by GSCI to any person or entity, or purchased or redeemed guaranty by GSCI of any of its shares of capital stock or other securities, or obligated itself to do so; (d) mortgaged, pledged or subjected to lien, charge, security interest or other encumbrance any of its material assets, tangible or intangible, loan except for Permitted Liens (as hereinafter defined) arising expense advances in the ordinary course of business and liens securing consistent with past practice; waiver or release of any material right or claim of GSCI, including any write-off or other compromise of any account receivable of GSCI; the Demand Notecommencement or notice or, to GSCI's knowledge, threat of commencement of any governmental proceeding against or investigation of GSCI or its affairs; (e) soldother event or condition of any character that has or would, transferred in GSCI's reasonable judgment, be expected to have a Material Adverse Effect on GSCI; issuance, sale or leased redemption by GSCI of any of its material assets, shares or of any other of its securities other than issuances of shares of Common Stock pursuant to outstanding options and warrants; change in pricing or royalties set or charged by GSCI except for sales of inventory and obsolete or worn-out equipment discounts extended in the ordinary course of business; (f) cancelled or compromised any material debt or claim, or waived or released any right of material value; (g) suffered any physical damage, destruction or loss (whether or not covered by insurance) materially and adversely affecting, individually or in the aggregate, the business, assets, condition (financial or otherwise), operations or results of operations of the Company and the Subsidiaries, taken as a whole; (h) entered into any material transaction other than in the ordinary course of business; (i) encountered any material labor difficulties or labor union organizing activities; (j) issued or sold any shares of capital stock or other securities (other than shares of Common Stock issued upon the exercise or conversion of options, warrants or convertible securities outstanding on December 30, 2000 or granted thereafter and disclosed on Schedule 5.9 hereto) or granted any options, warrants, convertible securities or other purchase rights with respect thereto; (k) made any acquisition or disposition of any material assets or become involved in any other material transaction, other than for fair value in the ordinary course of business; (l) increased substantially any compensation or benefits payable to any officers, directors or employees of the Company or any Subsidiary other than business consistent with past practicespractice; or (m) agreed negotiation or agreement by GSCI to do any of the foregoingthings described in the preceding clauses 3.1 through 3.8 (other than negotiations with TIGI and its representatives regarding the transactions contemplated by this Agreement).

No Changes. Except for the transactions contemplated by this Agreement and as disclosed in Section 5.9 of the Disclosure Schedule or in the SEC Reports filed prior to the date of this AgreementSince December 31, since December 302013, 2000 there has been no material adverse change in the business, assets, condition (financial or otherwise), operations or results of operations of the Company and its Subsidiaries have conducted their respective businesses in the Subsidiariesordinary course of business consistent with past practice and there has not been, taken as a whole, and neither the Company nor any Subsidiary has: occurred or arisen any: (a) incurred modifications, amendments or changes to the Charter Documents or the organizational documents of any material debtsSubsidiary; (b) expenditure, obligations transaction or liabilitiescommitment exceeding $75,000 individually or $150,000 in the aggregate; (c) payment, absolutedischarge, accrued waiver or contingent and whether due satisfaction in any amount in excess of $75,000 or $150,000 in the aggregate of any Liability, other than payments, discharges or satisfactions in the ordinary course of business consistent with past practice of Liabilities reflected or reserved against in the Current Balance Sheet or with respect to become due, except current liabilities Liabilities incurred in the ordinary course of business and consistent with past practice since the debt evidenced by the Demand Note; Balance Sheet Date; (bd) paid destruction of, damage to, or loss of any material obligation tangible assets of the Company or liability other than, or discharged or satisfied any material liens or encumbrances other than those securing, current liabilities, in each case in the ordinary course of business; (c) declared or made any payment or distribution to its shareholders as such, or purchased or redeemed any of its shares of capital stock or other securities, or obligated itself to do so; (d) mortgaged, pledged or subjected to lien, charge, security interest or other encumbrance any of its material assets, tangible or intangible, except for Permitted Liens (as hereinafter defined) arising in the ordinary course of business and liens securing the Demand Note; (e) sold, transferred or leased any of its material assets, except for sales of inventory and obsolete or worn-out equipment in the ordinary course of business; (f) cancelled or compromised any material debt or claim, or waived or released any right of material value; (g) suffered any physical damage, destruction or loss Subsidiaries (whether or not covered by insurance), or the loss of any material business or material customer; (e) materially employment claims, charges, grievances or matters raised by any individual, Governmental Entity, works council, employee or workers’ representatives, group of employees, bargaining unit, union or other labor organization regarding, claiming or alleging an unfair labor practice, wrongful discharge or any other unlawful employment or labor practice or action with respect to the Company or any of its Subsidiaries; (f) adoption or change in accounting methods or practices (including any change in depreciation or amortization policies or rates) by the Company or any of its Subsidiaries; (g) adoption of or change in any Tax election or accounting method, entry into any Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement, agreement or settlement of any claim or assessment in respect of Taxes, or extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; (h) revaluation by the Company or any of its Subsidiaries of any of their respective assets (whether tangible or intangible), including writing down the value of inventory or writing off notes or accounts receivable; (i) declaration, setting aside or payment of a dividend or other distribution (whether in cash, stock or property) in respect of any Company Capital Stock, any split, combination or reclassification in respect of any shares of Company Capital Stock, or any issuance or authorization of any issuance of any other securities in respect of, in lieu of or in substitution for shares of Company Capital Stock, or any direct or indirect repurchase, redemption, or other acquisition by the Company of any shares of Company Capital Stock (or options, warrants or other rights convertible into, exercisable or exchangeable therefor); (i) other than in the ordinary course of business consistent with past practice, increase in, decrease in or other change to the salary, wage rates, bonuses or fringe benefits or other compensation (including equity based compensation) payable or to become payable to any Employee; (ii) declaration, payment or commitment or obligation of any kind for the payment (whether in cash or equity or otherwise) by the Company or any of its Subsidiaries of a severance payment, change of control payment, termination payment, bonus, special remuneration or other additional salary or compensation (including equity based compensation), in each case to any of its Employees; or (iii) promise to pay any special bonus or special remuneration (whether payable in cash, equity or otherwise) to any Employee; (k) any termination, extension, amendment or modification of the terms of any Material Contract to which the Company or any of its Subsidiaries is a party or by which it or any of their respective assets are bound; (l) sale, lease, license or other disposition of any of the assets (whether tangible or intangible) or properties of the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice, including the sale of any accounts receivable of the Company or any of its Subsidiaries or any creation of any security interest in such assets or properties; (m) loan by the Company or any of its Subsidiaries to any Person (except for reasonable advances to current employees for travel and adversely affectingbusiness expenses in the ordinary course of business consistent with past practice), forgiveness by the Company or any of its Subsidiaries of any loan to any Person, purchase by the Company or any of its Subsidiaries of any debt securities of any Person or amendment to the terms of any outstanding loan agreement relating to any loan from the Company or any of its Subsidiaries to any Person; (n) except for the Promissory Note, incurrence by the Company of any Indebtedness, amendment of the terms of any outstanding loan agreement, guaranteeing by the Company or any of its Subsidiaries of any Indebtedness, issuance or sale of any debt securities of the Company or any of its Subsidiaries or guaranteeing of any debt securities of others, except for obligations to reimburse employees for travel and business expenses incurred in the ordinary course of business consistent with past practices; (o) waiver or release of any material right or claim of the Company or any of its Subsidiaries, including any waiver, release or other compromise of any account receivable of the Company by the Company or any of its Subsidiaries; (p) commencement or settlement of any lawsuit by the Company or any of its Subsidiaries, or commencement, settlement, notice or, to the Knowledge of the Company, threat of any lawsuit or proceeding or other investigation against the Company or any of its Subsidiaries or relating to any of their respective businesses, properties or assets; (q) notice of any claim or potential claim of ownership, interest or right by any Person other than the Company or one of its Subsidiaries of the Company Intellectual Property or of infringement by the Company or any of its Subsidiaries of any Intellectual Property owned, developed or created by an third Person; (r) issuance, grant, delivery, sale or purchase, or proposal or Contract to issue, grant, deliver, sell or purchase, by the Company or any of its Subsidiaries, of (i) any shares of Company Capital Stock or securities convertible into, or exercisable or exchangeable for, shares of Company Capital Stock; or (ii) any subscriptions, warrants, options, rights or securities to acquire any of the foregoing, except for issuances of Company Options or Company Capital Stock upon the exercise of Company Options issued under the Plan and set forth in Section 3.2(d) of the Disclosure Schedule; (s) (i) sale, lease, license or transfer of any Company Intellectual Property (or the execution, modification or amendment of any agreement with respect to the sale, lease, license or transfer of any Company Intellectual Property) other than non-exclusive end user licenses granted in the ordinary course of business consistent with past practice; (ii) purchase or license of any Intellectual Property by the Company or any of its Subsidiaries, or execution, modification or amendment of any agreement to which the Company or any of its Subsidiaries is a party with respect to any Intellectual Property owned by or developed or created by any third Person other than licenses for Shrink-Wrap Code; or (iii) material change in pricing or royalties set or charged by (A) the Company or any of its Subsidiaries to its customers or licensees; or (B) Persons who have licensed any Intellectual Property to the Company or any of its Subsidiaries; (t) agreement or modification to any Contract pursuant to which any other party is or was granted marketing, distribution, development, delivery, manufacturing or similar rights of any type or scope with respect to any Company Products or Company Intellectual Property; (u) a Company Material Adverse Effect; (v) purchase or sale of any interest in real property, granting of any security interest in any real property, entry into or renewal, amendment or modification of any lease, license, sublease or other occupancy of any Real Property or other real property by the Company or any of its Subsidiaries; (w) acquisition by the Company or any of its Subsidiaries of, or agreement by the Company or any of its Subsidiaries to acquire by merging or consolidating with, or by purchasing any assets or equity securities of, or by any other manner, any business or corporation, partnership, association or other business organization or division thereof, or other acquisition or agreement to acquire any assets or any equity securities that are material, individually or in the aggregate, the business, assets, condition (financial or otherwise), operations or results of operations of to the Company and the its Subsidiaries, taken as a whole; (x) adoption, termination or amendment of any Company Employee Plan or collective bargaining agreement or other arrangement with any works council, union, employee or workers’ representatives, group of employees or other labor organization; (y) increase in the rights to indemnification of any Employees; (z) waiver of any stock repurchase rights or rights of first refusal, acceleration, amendment or change to the period of exercisability of options, restricted stock or any other equity or similar incentive awards (including any long term incentive awards), or repricing options granted under any employee, consultant, director or other stock plans or the authorization of any cash or equity exchange for any options granted under any of such plans; (aa) execution, termination or amendment of any Employee Agreement (other than the execution of the Company’s standard at-will offer letter and proprietary information and invention assignment agreement, the forms of which have been made available to Parent); (bb) execution of any strategic alliance, affiliate or joint marketing arrangement or agreement by the Company or any of its Subsidiaries; (cc) any action to accelerate the vesting schedule or extend the post-termination exercise period of any Company Options or any Company Common Stock or any similar equity awards; (hdd) entered into hiring (including any material transaction change of status from an independent contractor to an employee), promotion, demotion or termination or any other than change to the employment status or title of any Employees, excluding independent contractors who ceased performing services for the Company or any of its Subsidiaries in the ordinary course of business; (i) encountered any material labor difficulties or labor union organizing activities; (j) issued or sold any shares of capital stock or other securities (other than shares of Common Stock issued upon the exercise or conversion of options, warrants or convertible securities outstanding on December 30, 2000 or granted thereafter and disclosed on Schedule 5.9 hereto) or granted any options, warrants, convertible securities or other purchase rights with respect thereto; (k) made any acquisition or disposition of any material assets or become involved in any other material transaction, other than for fair value in the ordinary course of business; (l) increased substantially any compensation or benefits payable to any officers, directors or employees of the Company or any Subsidiary other than business consistent with past practices; or (m) agreed to do any of the foregoing.practice;

No Changes. Except for the transactions contemplated by this Agreement and as Unless otherwise disclosed in Section 5.9 of the Disclosure Schedule or in the SEC Reports filed prior Schedules to the date of this Agreement, since December 3031, 2000 2021, the Business has been carried on in the Ordinary Course and in compliance with all Applicable Laws and Seller and each of the DXP Affiliates has at all times continued to be duly licensed, registered or qualified, and continues to duly possess all Permits to carry on business in all applicable jurisdictions, and such Permits are valid and subsisting and in good standing and with regards to the Business there has been no material adverse change in the businessnot been, assets, condition (financial occurred or otherwise), operations or results of operations of the Company and the Subsidiaries, taken as a whole, and neither the Company nor any Subsidiary has: arisen any: (a) incurred Material Adverse Change in the Business, or the Acquired Assets, or the Assumed Liabilities, which is not appropriately and clearly reflected in the Financial Statements or the representations of Seller explicitly disclosed herein, including, without limitation: (i) any damage, destruction or loss, whether or not covered by insurance, materially and adversely affecting the Acquired Assets, the Assumed Liabilities or the Business; (ii) any waiver by Seller of a valuable right or of a material debt owed to it with respect to the Acquired Assets or Assumed Liabilities; (iii) any satisfaction or discharge of any material debtsLien, obligations material claim or liabilitiesmaterial encumbrance or payment of any material obligation by Seller with respect to the Acquired Assets or Assumed Liabilities; (iv) any change or amendment to an Assumed Contract or arrangement by which Seller or any of the Acquired Assets is bound or subject; (v) any sale, absolutetransfer or lease of, accrued or contingent and whether due mortgage or pledge or imposition of Lien on, any of the Acquired Assets; (b) material breach, or breach of any material term, of any Applicable Laws; (c) claims or anticipated claims, against Seller or any DXP Affiliate; (d) labour trouble or claim of wrongful discharge, wrongful dismissal, unfair dismissal or other unlawful labour practice or action; (e) change in accounting methods or practices (including any change in depreciation or amortization, policies or rates); (f) revaluation for accounting purposes of any of the Acquired Assets; (g) any Tax election to settle or compromise any tax liability material to Seller; (h) increase in the salary or other compensation payable or to become duepayable to any SNCR Employee, or the declaration, payment or commitment or obligation of any kind for the payment of a bonus, incentive, or other additional salary or compensation to any SNCR Employee without the express consent of Purchaser, except current liabilities incurred for any increases in salary (but not any bonus, incentive or other compensation, or declaration, commitment or obligation) made in the ordinary course Ordinary Course as a result of business Seller’s annual compensation and the debt evidenced by the Demand Note; performance reviews; (bi) paid any material obligation acquisition, sale, lease, licence, transfer or liability other than, or discharged or satisfied any material liens or encumbrances other than those securing, current liabilitiesassignment, in each case in the ordinary course one or more transactions, of business; (c) declared or made any payment or distribution to its shareholders as such, or purchased or redeemed any of its shares of capital stock or other securities, or obligated itself to do so; (d) mortgaged, pledged or subjected to lien, charge, security interest or other encumbrance any of its material assets, tangible or intangible, Related to the Business, except for Permitted Liens (as hereinafter defined) arising in the ordinary course Ordinary Course; (j) material breach, default, modification, acceleration, amendment, termination or threatened termination of business any Contract, Permit or licence Related to the Business, except such amendments or terminations as may have been made in the Ordinary Course and liens securing on a reasonable commercial basis; (k) waiver or release of any right or claim Related to the Demand Note; Business, including any write-off or other compromise of any Receivable; (el) sold, transferred commencement or leased notice or threat of commencement of any lawsuit or proceeding against or investigation involving Seller or any DXP Affiliate or their respective affairs; (m) notice of any claim of ownership by any Person other than Seller of any of its material assetsthe Business Intellectual Property or of infringement by Seller or any Affiliate thereof of any third party’s intellectual property rights; or (n) to Seller’s Knowledge, except for sales of inventory and obsolete or worn-out equipment in the ordinary course of business; (f) cancelled or compromised any material debt or claimoccurrence, change, or waived circumstance of any character that has or released any right of material value; (g) suffered any physical damage, destruction or loss (whether or not covered by insurance) materially and adversely affectingcould be reasonably expected to have a Material Adverse Effect, individually or in the aggregate, on the business, assets, condition (financial or otherwise), operations or results of operations of the Company and the Subsidiaries, taken as a whole; (h) entered into any material transaction other than in the ordinary course of business; (i) encountered any material labor difficulties or labor union organizing activities; (j) issued or sold any shares of capital stock or other securities (other than shares of Common Stock issued upon the exercise or conversion of options, warrants or convertible securities outstanding on December 30, 2000 or granted thereafter and disclosed on Schedule 5.9 hereto) or granted any options, warrants, convertible securities or other purchase rights with respect thereto; (k) made any acquisition or disposition of any material assets or become involved in any other material transaction, other than for fair value in the ordinary course of business; (l) increased substantially any compensation or benefits payable to any officers, directors or employees of the Company or any Subsidiary other than consistent with past practices; or (m) agreed to do any of the foregoingBusiness.

No Changes. Except for the transactions contemplated by this Agreement as set forth in Schedule 3.9, between March 31, 2002 and as disclosed in Section 5.9 of the Disclosure Schedule or in the SEC Reports filed prior to the date of this Agreement, since December 30, 2000 Agreement there has been no material adverse change not been, occurred or arisen any: (a) transaction by SMI or any Subsidiary except in the businessordinary course of business and consistent with past practice (other than signing of the term sheet providing for this transaction); (b) amendments or changes to the Articles of Incorporation or Bylaws of SMI or Subsidiary; (c) capital expenditures or capital expenditure commitments by SMI or any Subsidiary exceeding US$25,000 individually or US$100,000 in the aggregate; (d) payment, assetsdischarge or satisfaction, condition in any amount in excess of US$100,000 in any one case, or US$100,000 in the aggregate, of any claim, liability or obligation (financial absolute, accrued, asserted or unasserted, contingent or otherwise), operations other than payment, discharge or results satisfaction in the ordinary course of business of liabilities reflected or reserved against in the Current Balance Sheet; (e) destruction of, damage to or loss of any material assets (whether tangible or intangible) or material business or loss of any material customer of SMI or any Subsidiary (whether or not covered by insurance); (f) labor dispute, organizational effort by any union, unfair labor practice charge, wrongful termination charge or employment discrimination charge, or institution or threatened institution of any effort, complaint or other proceeding in connection therewith, involving SMI or any Subsidiary or affecting the operations of the Company and the Subsidiaries, taken as a whole, and neither the Company nor SMI or such Subsidiary; (g) change in accounting methods or practices (including any change in depreciation or amortization policies or rates) by SMI or any Subsidiary has: other than as required by GAAP; (ah) incurred change in any election in respect of Taxes, adoption or change in any accounting method in respect of Taxes, agreement or settlement of any claim or assessment in respect of Taxes, or extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; (i) revaluation by SMI or any Subsidiary of any of their respective assets, whether tangible or intangible, except as required by GAAP and as reflected on the Current Balance Sheet; (j) declaration, setting aside or payment of a dividend or other distribution (whether in cash, stock or property) in respect of any SMI Common Stock or SMI Preferred Stock (excluding repurchase of SMI Warrants), or any split, combination or reclassification in respect of any shares of SMI Common Stock or SMI Preferred Stock, or any issuance or authorization of any issuance of any other securities in respect of, in lieu of or in substitution for shares of SMI Common Stock or SMI Preferred Stock, or any direct or indirect repurchase, redemption, or other acquisition by SMI of any shares of SMI Common Stock or SMI Preferred Stock (or options, warrants or other rights convertible into, exercisable or exchangeable therefor) (excluding repurchase of SMI Warrants), except in accordance with the agreements evidencing SMI Options or as contemplated by the transaction set forth in this Agreement; (k) material debts, obligations increase in the salary or liabilities, absolute, accrued or contingent and whether due other compensation payable or to become duepayable by SMI or any Subsidiary to any of their respective officers, except current liabilities directors, employees or advisors, or the declaration, payment or commitment or obligation of any kind for the payment by SMI or any Subsidiary of a severance payment, termination payment, bonus or other additional salary or compensation to any such person; (l) sale, lease or other disposition of any of the material assets or material properties of SMI or any Subsidiary or any creation of any security interest in such material assets or material properties; (m) loan by SMI or any Subsidiary to any person or entity, incurring by SMI of any indebtedness (other than trade payables incurred in the ordinary course of business and the consistent with past practice), guaranteeing by SMI or any Subsidiary of any indebtedness, issuance or sale of any debt evidenced by the Demand Note; (b) paid securities of SMI or any material obligation Subsidiary or liability other than, or discharged or satisfied guaranteeing of any material liens or encumbrances other than those securing, current liabilities, in each case in the ordinary course debt securities of business; (c) declared or made any payment or distribution to its shareholders as such, or purchased or redeemed any of its shares of capital stock or other securities, or obligated itself to do so; (d) mortgaged, pledged or subjected to lien, charge, security interest or other encumbrance any of its material assets, tangible or intangibleothers, except for Permitted Liens (as hereinafter defined) arising advances to employees for travel and business expenses in the ordinary course of business and liens securing consistent with past practices; (n) affirmative or knowing waiver or release of any right or claim of SMI or any Subsidiary, including any write-off or other compromise of any account receivable of SMI or any Subsidiary; (o) the Demand Note; (e) soldcommencement, transferred settlement, notice or leased threat of any lawsuit or proceeding or other investigation against SMI or any Subsidiary or their affairs, or any reasonable basis for any of its material assets, except for sales the foregoing; (p) event or condition of inventory and obsolete any character that has been or worn-out equipment in the ordinary course of business; (f) cancelled or compromised any material debt or claim, or waived or released any right of material value; (g) suffered any physical damage, destruction or loss (whether or not covered by insurance) is reasonably likely to be materially and adversely affecting, individually or in the aggregate, adverse to the business, assets, condition assets (financial whether tangible or otherwiseintangible), operations or financial condition, results of operations or capitalization of the Company SMI and the its Subsidiaries, taken as a whole; or (hq) entered into agreement by SMI, any material transaction other than in the ordinary course of business; (i) encountered any material labor difficulties or labor union organizing activities; (j) issued or sold any shares of capital stock or other securities (other than shares of Common Stock issued upon the exercise or conversion of options, warrants or convertible securities outstanding on December 30, 2000 or granted thereafter and disclosed on Schedule 5.9 hereto) or granted any options, warrants, convertible securities or other purchase rights with respect thereto; (k) made any acquisition or disposition of any material assets or become involved in any other material transaction, other than for fair value in the ordinary course of business; (l) increased substantially any compensation or benefits payable to any officers, directors or employees of the Company Subsidiary or any officer or employee on behalf of SMI or such Subsidiary other than consistent with past practices; or (m) agreed to do any of the foregoingthings described in the preceding clauses (a) through (p) of this Section 3.9 (other than negotiations with Feiya and its representatives regarding the transactions contemplated by this Agreement).

No Changes. Except for the transactions as expressly contemplated by this Agreement and as disclosed in Section 5.9 of the Disclosure Schedule or in the SEC Reports filed prior to the date of this Agreement, since December 30the Balance Sheet Date and the Termination Right Lapse Date, 2000 the Company has primarily been operated for the purpose of assisting Acquiror in obtaining the US Approval. Except for transactions specifically contemplated in this Agreement or as expressly set forth in Section 2.9 of the Disclosure Schedule, since the Balance Sheet Date; (1) there has not been any Material Adverse Effect, and no event has occurred or circumstance has arisen that, in combination with any other events or circumstances, could reasonably be expected to have or result in a Material Adverse Effect; (2) there has not been any material adverse change loss, damage or destruction to, or any material interruption in the businessuse of, assets, condition (financial or otherwise), operations or results any of operations the material assets of the Company and the Subsidiaries, taken as a whole, and neither the Company nor any Subsidiary has: (a) incurred any material debts, obligations or liabilities, absolute, accrued or contingent and whether due or to become due, except current liabilities incurred in the ordinary course of business and the debt evidenced by the Demand Note; (b) paid any material obligation or liability other than, or discharged or satisfied any material liens or encumbrances other than those securing, current liabilities, in each case in the ordinary course of business; (c) declared or made any payment or distribution to its shareholders as such, or purchased or redeemed any of its shares of capital stock or other securities, or obligated itself to do so; (d) mortgaged, pledged or subjected to lien, charge, security interest or other encumbrance any of its material assets, tangible or intangible, except for Permitted Liens (as hereinafter defined) arising in the ordinary course of business and liens securing the Demand Note; (e) sold, transferred or leased any of its material assets, except for sales of inventory and obsolete or worn-out equipment in the ordinary course of business; (f) cancelled or compromised any material debt or claim, or waived or released any right of material value; (g) suffered any physical damage, destruction or loss (whether or not covered by insurance); and (3) materially neither the Company nor any of its officers, directors, employees, partners, accountants, auditors, attorneys, advisors, representatives and adversely affectingother agents (on behalf of the Company) has: (a) taken any action or entered into or agreed to enter into any transaction, agreement or commitment other than in the Ordinary Course of Business; (b) forgiven or canceled any indebtedness or waived any claims or rights (including any indebtedness owing by any Company Securityholder, officer, director, employee or Affiliate of the Company); (c) granted any increase in the compensation of directors, officers, employees or consultants (including any such increase pursuant to any employment agreement or bonus, pension, profit-sharing, lease payment or other plan or commitment) or any increase in the compensation payable or to become payable to any director, officer, employee or consultant, except in such case as granted to employees in the Ordinary Course of Business; (d) borrowed or agreed to borrow any funds, or, incurred or become subject to, whether directly or by way of assumption or guarantee or otherwise, any indebtedness for borrowed money in excess of $[*] individually or in excess of $[*] in the aggregate, except liabilities that are incurred in the businessOrdinary Course of Business, assetsor increased, condition or experienced any change in any assumptions underlying or methods of calculating, any bad debt, contingency or other reserves; (financial e) paid, discharged or otherwisesatisfied any material claims or liabilities other than the payment, discharge or satisfaction in the Ordinary Course of Business of claims and liabilities reflected or reserved against in the Financial Statements or incurred in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement since * Confidential treatment requested. the Balance Sheet Date, or prepaid any obligation having a fixed maturity of more than ninety (90) days from the date such obligation was issued or incurred; (f) permitted or allowed any of its property or assets to be subjected to any Lien or Encumbrance (other than Permitted Encumbrances), operations except in the Ordinary Course of Business; (g) purchased or results sold, transferred or otherwise disposed of operations any of the Company and the Subsidiaries, taken as a whole; (h) entered into any its material transaction properties or assets other than in the ordinary course Ordinary Course of business; Business; (h) disposed of or permitted to lapse any rights to the use of any Proprietary Right, disposed of any Proprietary Right or disclosed a Proprietary Right to any Person without obtaining a commercially reasonable confidentiality agreement from such Person with respect to any trade secret, formula, process or know-how not theretofore a matter of public knowledge; (i) encountered made any material labor difficulties single capital expenditure or labor union organizing activities; commitment in excess of $[*] for additions to property, plant, equipment or intangible capital assets or made aggregate capital expenditures in excess of $[*] for additions to property, plant, equipment or intangible capital assets; (j) made any change in accounting methods or practices or internal control procedures or become aware of any material misstatements or significant deficiencies or material weaknesses in internal control; (k) other than pursuant to the exercise of Company Options, issued or sold any shares of capital stock or other securities (other than shares of Common Stock issued upon the exercise or conversion of options, warrants or convertible securities outstanding on December 30, 2000 or granted thereafter and disclosed on Schedule 5.9 hereto) or granted any options, warrants, convertible securities securities, subscriptions, stock appreciation rights, phantom stock plans, stock equivalents, rights of first refusal or offer, preemptive rights or other purchase rights with respect thereto; rights, agreements, arrangements or commitments (kcontingent or otherwise and whether or not immediately exercisable) made any acquisition or disposition of any material assets character issued, granted, authorized or become involved assumed by the Company or by which the Company is bound relating to all or any portion of the issued or unissued capital stock of the Company or obligating the Company to issue or grant, authorize or sell any shares of capital stock of, or options, warrants, convertible securities, subscriptions or other equity interests or similar interests in, the Company, (l) declared, paid or set aside for payment any dividend or other distribution in respect of Company Capital Stock, or redeemed, purchased or otherwise acquired, directly or indirectly, any shares of Company Capital Stock, Company Options, Company Warrants or other material transactionsecurities of the Company, or otherwise permitted the withdrawal by any of the holders of Company Capital Stock of any cash or other assets, in compensation or reimbursement of expenses, indebtedness or otherwise, other than for fair value pursuant to the exercise of Company Options and payments of compensation or reimbursement of expenses in the ordinary course Ordinary Course of business; Business; (lm) increased substantially paid, loaned or advanced any compensation amount to, or benefits payable to sold, transferred or leased any properties or assets to, any of stockholders of the Company, any Affiliate thereof or the officers, directors or employees of the Company or any Subsidiary other than Company, except compensation paid to directors, officers and employees in the Ordinary Course of Business consistent with past practicespractice and except for * Confidential treatment requested. advances and reimbursements for travel and other business-related expenses incurred in the Ordinary Course of Business consistent with past practice; or or (mn) agreed or committed, whether in writing or otherwise, to do take any of the foregoingaction described in this Section 2.9.

No Changes. Except for the transactions contemplated by this Agreement and as disclosed in Section 5.9 of the Disclosure set forth on Schedule or in the SEC Reports filed prior to the date of this Agreement5.8, since December 3031, 2000 there has been no material adverse change in the business2008, assets, condition (financial or otherwise), operations or results of operations of the Company and the Subsidiaries, taken as a whole, and neither the Company nor any Subsidiary has: (a) incurred any material debts, obligations or liabilities, absolute, accrued or contingent and whether due or to become due, except current liabilities incurred each Seller has been operated only in the ordinary course of business consistent with past practice, and has not suffered any Material Adverse Effect, and no condition or event, change or development has occurred which, individually or in the debt evidenced by the Demand Note; aggregate, would reasonably be expected to result in such a Material Adverse Effect, and (b) no Seller has entered into or committed to enter into any transaction directly or indirectly related to or impacting such Seller, outside the ordinary course of business consistent with past practices; and, in particular and without limitation, each Seller during such period has not: (i) granted to any Business Employee, officer, director or independent contractor any increase in compensation, severance or termination pay or paid any material obligation bonus thereto, (ii) entered into or liability modified any collective bargaining Contract or any employment, severance or termination agreement with any such Person, (iii) increased or established any bonus, insurance, deferred compensation, pension, retirement, profit-sharing, option (including the granting of options, appreciation rights, performance awards or restricted awards or the amendment of any existing options, appreciation rights, performance awards or restricted awards), purchase or other thanemployee benefit plan or agreement or arrangement, or (iv) suffered or received threats of any labor strike, dispute, slowdown or work stoppage; or (v) amended any other terms of employment or engagement of such Persons; (ii) sold, leased or transferred any of its properties or assets except for inventory in the ordinary course of business consistent with past practice, or licensed, sold, transferred, pledged, modified, disclosed, disposed of or permitted to lapse any Intangible Property rights, except in the ordinary course of business consistent with past practice, or permitted or allowed any of its properties or other assets to be subjected to any Liens, or discharged or satisfied any material liens or encumbrances other than those securing, current liabilities, in each case in the ordinary course of business; (c) declared or made any payment or distribution to its shareholders as such, or purchased or redeemed Lien on any of its shares of capital stock assets or paid any other securities, material liability; (iii) made any payments (or obligated itself to do so; (ddelayed any payments) mortgaged, pledged or subjected to lien, charge, security interest or other encumbrance any in respect of its material assets, tangible liabilities or intangible, received or attempted to collect any revenues except for Permitted Liens (as hereinafter defined) arising in the ordinary course of business and liens securing the Demand Note; consistent with past practice; (eiv) sold, transferred incurred any obligations or leased liabilities (including any indebtedness) or entered into any transaction or series of its material assets, transactions except for sales of inventory and obsolete or worn-out equipment in the ordinary course of business; business consistent with past practice and except for this Agreement and the transactions contemplated hereby; (f) cancelled or compromised any material debt or claim, or waived or released any right of material value; (gv) suffered any physical theft, damage, destruction or loss casualty loss, or extraordinary losses (whether or not covered by insurance); (vi) materially waived, cancelled, compromised, released or suffered the termination of any rights or contracts having material value, or waived or released any restrictive covenant of a former Business Employee that would otherwise still be in effect; (vii) made or adopted any change in its methodologies, accounting practices or policies, or made any adjustment to its books and adversely affectingrecords, individually or in revalued any asset; (viii) entered into, modified or terminated any transaction or arrangement with (or for the aggregate, the business, assets, condition benefit of) any Affiliate (financial or otherwiseAssociate thereof), operations or results of operations of the Company and the Subsidiariesmade any payment or transferred any assets to any Affiliate; or made any loan to, taken as a whole; (h) or entered into any material other transaction other than with, any of its directors, officers, and/or employees or any of their Affiliates or “Associates” (as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended) (whether or not in the ordinary course of business; business consistent with past practice); (ix) amended, renegotiated or terminated (other than by completion thereof) any Contract (nor has any other Person amended, renegotiated or terminated any Contract), or failed to comply with any Contract or any Permit or other authorization from any Governmental Authority or other laws to which such Seller is subject; (x) permitted the imposition of any Lien on any asset; (xi) suffered or been subject to any event, condition or circumstance, or entered into any transaction, which could reasonably be expected to adversely impact the Business, Sellers or any Contracts, or performed any services other than in accordance with its Contracts or in a manner which could give rise to any claim under any Contracts; (i) encountered declared, set aside or paid any material labor difficulties dividend or labor union organizing activities; (j) issued made any other actual, constructive or sold deemed distribution with respect to any of its capital shares of capital stock or other securities or otherwise made any payments to its equity holders in their capacities as such; (ii) redeemed, purchased or otherwise acquired any of its capital shares or any other than shares of Common Stock issued upon the exercise securities or conversion of optionsany rights, warrants or convertible options to acquire any such capital shares or other securities; (iii) split, combined or reclassified any of its capital shares or other securities outstanding on December 30or issued or authorized the issuance of, 2000 or granted thereafter and disclosed on Schedule 5.9 hereto) or granted any options, warrants, convertible securities or other purchase registration rights with respect theretoto, any capital shares or any other securities in respect of, in lieu of or in substitution for any of its capital shares or other securities, or otherwise; (xiii) amended any of its organizational documents (including, but not limited to, formation documents or the operating agreement); or altered through merger, liquidation, reorganization, restructuring or in any other fashion its organizational structure or ownership; (kxiv) made any acquisition capital expenditure or disposition series of any material capital expenditures in excess of $12,500 individually or $50,000 in the aggregate; (xv) acquired or agreed to acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of, or become involved in by any other material transactionmanner, any business or any corporation, partnership, joint venture, association or other business organization or division, operating unit or product line thereof or made a capital investment in or a loan to such entity; (xvi) entered into any agreement, contract, lease, or license either (A) involving more than for fair value $12,500 individually or $50,000 in the aggregate, (B) having a term greater than 12 months and (C) outside the ordinary course of business; (l) increased substantially any compensation or benefits payable to any officers, directors or employees of the Company or any Subsidiary other than business consistent with past practices; practice; (xvii) canceled, compromised, waived, or released any right or claim either involving more than $50,000 in the aggregate; (xviii) made or pledged to make any charitable or other capital contribution; (xix) received notice of any key employee of any Seller terminating or re-negotiating such employee’s employment with such Seller; (xx) made any tax election, changed any annual tax accounting period, amended any tax return, settled or compromised any income tax liability, entered into any closing agreement, settled any tax claim or assessment, surrendered any right to claim a tax refund or failed to make the payments or consent to any extension or waiver of the limitations period applicable to any tax claim or assessment; (xxi) pursuant to, or within the meaning of, any bankruptcy or creditors’ rights or similar law, (i) commenced a voluntary case, (ii) consented to the entry of an order for relief against it in an involuntary case, (iii) consented to the appointment of a custodian of it or for all or substantially all of its property, or (miv) made a general assignment for the benefit of its creditors; (xxii) purchased any real property or entered into any real estate lease; (xxiii) settled any litigation, arbitration or claim; (xxiv) altered in any way the nature or extent (by revenue generated) of any relationship with any Seller’s customers; or (xxv) agreed to do or authorized any of the foregoing.

No Changes. Except for the transactions as contemplated by this Agreement and as disclosed in Section 5.9 of the Disclosure Schedule or in the SEC Reports filed prior to the date of this Agreement, since December 30the date of the Current Balance Sheet, 2000 there has been no material adverse change in the businessnot been, assets, condition (financial occurred or otherwise), operations or results of operations of the Company and the Subsidiaries, taken as a whole, and neither the Company nor any Subsidiary has: arisen any: (a) incurred any material debts, obligations or liabilities, absolute, accrued or contingent and whether due or to become duetransaction by the Company, except current liabilities incurred in the ordinary course of business as conducted on that date and the debt evidenced by the Demand Note; consistent with past practices; (b) paid amendments or changes to the articles of incorporation or bylaws of the Company or any material obligation or liability other thanof its Subsidiaries, or discharged or satisfied any material liens or encumbrances other than those securing, current liabilities, in each case in the ordinary course of business; except as expressly contemplated by this Agreement; (c) declared capital expenditure or made any payment commitment by the Company exceeding $10,000 individually or distribution $25,000 in the aggregate, excluding up to its shareholders $85,000 for the build-out of that certain building identified as such000 X.X. 0xx Xxxxxx, or purchased or redeemed any of its shares of capital stock or other securitiesXxxxxxxxxxx, or obligated itself to do so; XX, 00000; (d) mortgagedpayment, pledged discharge or subjected to liensatisfaction, chargein any amount in excess of $10,000 in any one case, security interest or $25,000 in the aggregate, of any claim, liability or obligation (whether fixed or accrued, absolute or contingent, matured or unmatured, determined or determinable, known or unknown, or otherwise), other encumbrance any of its material assetsthan payment, tangible discharge or intangible, except for Permitted Liens (as hereinafter defined) arising satisfaction in the ordinary course of business and liens securing of liabilities reflected on or reserved against in the Demand Note; Current Balance Sheet; (e) solddestruction of, transferred damage to, or leased any loss of its material assets, except for sales of inventory and obsolete or worn-out equipment in the ordinary course of business; (f) cancelled or compromised any material debt assets (whether tangible or claimintangible), material business or waived or released any right material customer of material value; (g) suffered any physical damage, destruction or loss the Company (whether or not covered by insurance); (f) materially and adversely affectingchange in accounting policies or procedures (including any change in reserves for excess or obsolete inventory, individually doubtful accounts or other reserves, or depreciation or amortization policies or rates) by the Company other than as required by GAAP; (g) change in the aggregateany material election in respect of Taxes, the businessadoption or change in any accounting method in respect of Taxes, assetsagreement or settlement of any claim or assessment in respect of Taxes, condition (financial or otherwise), operations extension or results of operations waiver of the Company and the Subsidiaries, taken as a whole; limitation period applicable to any claim or assessment in respect of Taxes; (h) entered into revaluation by the Company of any of its assets (whether tangible or intangible); (i) declaration, setting aside or payment of a dividend or other distribution (whether in cash, stock or property) in respect of any Company Capital Stock, or any split, combination or reclassification in respect of any shares of Company Capital Stock, or any issuance or authorization of any issuance of any other securities in respect of, in lieu of or in substitution for shares of Company Capital Stock, or any direct or indirect repurchase, redemption, or other acquisition by the Company of any shares of Company Capital Stock (or options, warrants or other rights convertible into, exercisable or exchangeable therefor); (j) increase in the salary or other compensation payable or to become payable by the Company to any of its officers, directors, employees or advisors, or the declaration, payment or commitment or obligation of any kind for the payment by the Company of a severance payment, termination payment, bonus or other additional salary or compensation to any such Person; (k) any termination or extension, or any material transaction amendment, waiver or modification of the terms, of any Contract, other than in the ordinary course of business; business consistent with past practice, except where such termination, extension, material amendment, waiver or modification would cause or is reasonably likely to cause the Company to incur additional liability or obligations under the applicable Contract; (il) encountered any material labor difficulties or labor union organizing activities; (j) issued or sold any shares of capital stock sale, lease, sublease, license or other securities disposition of any of the material assets (whether tangible or intangible) or material properties of the Company, including the sale of any accounts receivable of the Company, or any creation of any Lien (other than shares of Common Stock issued upon the exercise or conversion of options, warrants or convertible securities outstanding on December 30, 2000 or granted thereafter and disclosed on Schedule 5.9 heretoa Permitted Lien) or granted any options, warrants, convertible securities or other purchase rights with respect thereto; (k) made any acquisition or disposition of any in such material assets or become involved in material properties; (m) loan by the Company to any other material transactionPerson, other than incurring by the Company of any indebtedness for fair value borrowed money, guaranteeing by the Company of any indebtedness for borrowed money, issuance or sale of any debt securities of the Company or guaranteeing of any debt securities of others, except for advances to employees for travel and business expenses in the ordinary course of business; (l) increased substantially any compensation or benefits payable to any officers, directors or employees of the Company or any Subsidiary other than business consistent with past practices; ; (n) waiver or release of any material right or claim, including any material write-off, discount or other compromise of any account receivable; (o) the commencement, settlement, notice or, to the Knowledge of the Company, threat of any lawsuit or proceeding or other investigation against the Company or its affairs; (p) notice of any claim or potential claim of ownership by any Person other than the Company of the Company Intellectual Property owned by or developed or created by the Company or of infringement by the Company of any other Person’s Intellectual Property Rights; (q) issuance or sale, or Contract to issue or sell, by the Company of any shares of Company Capital Stock or securities convertible into, or exercisable or exchangeable for, shares of Company Capital Stock, or any securities, warrants, options or rights to purchase any of the foregoing; (r) (i) sale or license of any Company Intellectual Property or execution of any agreement with respect to the Company Intellectual Property with any Person or with respect to the Intellectual Property Rights of any Person (other than the sale or license of the Company’s products in the ordinary course of business consistent with past practices pursuant to the Company’s standard form agreements, which have been provided to Parent), or (mii) agreed purchase or license of any Intellectual Property Rights or execution of any agreement with respect to the Intellectual Property Rights of any Person, (iii) agreement with respect to the development of any Intellectual Property Rights with a third party, or (iv) change in pricing or royalties set or charged by the Company to its customers or licensees or in pricing or royalties set or charged by Persons who have licensed Intellectual Property Rights to the Company; (s) circumstance, change, event or effect of any character that has had or is reasonably likely to have a Company Material Adverse Effect; or (t) written or oral agreement by the Company, or any officer or employee on behalf of the Company, to do any of the foregoingthings described in the preceding clauses (a) through (s), inclusive, of this Section 3.9 (other than negotiations with Parent and its representatives regarding the transactions contemplated by this Agreement).

No Changes. Except for the transactions as set forth on Schedule 3.6 or as contemplated by this Agreement and as disclosed in Section 5.9 of the Disclosure Schedule or in the SEC Reports filed prior to the date of this Agreement, since December 30, 2000 the Balance Sheet Date the Group has conducted the Business only in the ordinary course and there has been no material adverse not been: (i) any change in the business, assets, financial condition (financial or otherwise), operations or results of operations assets of the Company and Group which has had, individually or in the Subsidiariesaggregate with other such changes, taken as a wholeMaterial Adverse Effect; (ii) any damage or destruction to or loss of any asset of the Group, and neither whether or not covered by insurance, that has had, individually or in the Company nor any Subsidiary has: aggregate with other such damages, destruction or losses, a Material Adverse Effect; (aiii) incurred any material debtsincrease in the salary, obligations wage or liabilities, absolute, accrued or contingent and whether due or bonus payable by any Member to become dueany managerial employee of the Group whose cash compensation as of the Balance Sheet Date exceeded $150,000 annually, except current liabilities in the ordinary course of business and consistent with past business practices; (iv) any material change in any method of accounting, other than as required by GAAP; (v) any sale, lease or other disposition of any material assets of the Group (other than inventory in the ordinary course of business) other than for fair value, or any condemnation or expropriation or other taking of any assets of the Group by any Governmental Body; (vi) any issuance, sale or disposition of capital stock or any other securities or grant of any options, warrants or other rights to subscribe for or purchase any capital stock or any other securities of any Member; (vii) any declaration or payment of any dividend or distribution with respect to the capital stock of any Member or any redemption, purchase or acquisition of the capital stock of any Member other than dividends or distributions to other Members; (viii) any write-offs, write-downs or write-ups of the value of any of the inventory or other assets of the Group outside the ordinary course of business; (ix) any mortgage or pledge of any material assets of the Group, except for Permitted Encumbrances arising in the ordinary course of business; (x) any creation or assumption of any Debt Obligation for borrowed money, except for Debt Obligations incurred in the ordinary course of business and or pursuant to Contracts disclosed on Schedule 3.16 or entered into in the debt evidenced by ordinary course of business; (xi) any guarantee of any liability (whether directly, contingently or otherwise) for the Demand Note; obligations of any other Person (b) paid any material obligation or liability other than, or discharged or satisfied any material liens or encumbrances other than those securing, current liabilities, another Member) except in each case the ordinary course of business and except for the endorsement of negotiable instruments by any Member in the ordinary course of business; or (cxii) declared any agreement or made any payment or distribution to its shareholders as such, or purchased or redeemed any of its shares of capital stock or other securities, or obligated itself to do so; (d) mortgaged, pledged or subjected to lien, charge, security interest or other encumbrance any of its material assets, tangible or intangible, except for Permitted Liens (as hereinafter defined) arising in the ordinary course of business and liens securing the Demand Note; (e) sold, transferred or leased any of its material assets, except for sales of inventory and obsolete or worn-out equipment in the ordinary course of business; (f) cancelled or compromised any material debt or claim, or waived or released any right of material value; (g) suffered any physical damage, destruction or loss (whether or not covered by insurance) materially and adversely affecting, individually or in the aggregate, the business, assets, condition (financial or otherwise), operations or results of operations of the Company and the Subsidiaries, taken as a whole; (h) entered into any material transaction other than in the ordinary course of business; (i) encountered any material labor difficulties or labor union organizing activities; (j) issued or sold any shares of capital stock or other securities (other than shares of Common Stock issued upon the exercise or conversion of options, warrants or convertible securities outstanding on December 30, 2000 or granted thereafter and disclosed on Schedule 5.9 hereto) or granted any options, warrants, convertible securities or other purchase rights with respect thereto; (k) made any acquisition or disposition of any material assets or become involved in any other material transaction, other than for fair value in the ordinary course of business; (l) increased substantially any compensation or benefits payable to any officers, directors or employees of the Company or any Subsidiary other than consistent with past practices; or (m) agreed commitment to do any of the foregoing.

No Changes. Except for the transactions contemplated by this Agreement and as disclosed in Section 5.9 of the Disclosure Schedule or in the SEC Reports filed prior to Since the date of this Agreement, since December 30, 2000 NetWorth's Financial Statements there has been no material adverse change in the businessnot been, assets, condition occurred or arisen any: (financial or otherwise), operations or results of operations of the Company and the Subsidiaries, taken as a whole, and neither the Company nor any Subsidiary has: (aA) incurred any material debts, obligations or liabilities, absolute, accrued or contingent and whether due or to become due, Transaction by NetWorth except current liabilities incurred in the ordinary course of business as conducted on that date, and except for any legal or accounting fees that may be incurred relating to this Reorganization ; (B) Capital expenditure by NetWorth, either individually or in the debt evidenced by the Demand Note; aggregate, exceeding $5,000; (bC) paid any material obligation or liability other thanDestruction, damage to, or discharged or satisfied loss of any material liens or encumbrances other than those securing, current liabilities, in each case in the ordinary course assets (including without limitation intangible assets) of business; (c) declared or made any payment or distribution to its shareholders as such, or purchased or redeemed any of its shares of capital stock or other securities, or obligated itself to do so; (d) mortgaged, pledged or subjected to lien, charge, security interest or other encumbrance any of its material assets, tangible or intangible, except for Permitted Liens (as hereinafter defined) arising in the ordinary course of business and liens securing the Demand Note; (e) sold, transferred or leased any of its material assets, except for sales of inventory and obsolete or worn-out equipment in the ordinary course of business; (f) cancelled or compromised any material debt or claim, or waived or released any right of material value; (g) suffered any physical damage, destruction or loss NetWorth (whether or not covered by insurance) materially and adversely affecting), either individually or in the aggregate, exceeding $5,000; (D) Labor trouble or claim of wrongful discharge, sexual harassment or other unlawful labor practice or action; (E) Change in accounting methods or practices (including any change in depreciation or amortization policies or rates, any change in policies in making or reversing accruals, or any change in capitalization of software development costs) by NetWorth; (F) Declaration, setting aside, or payment of a dividend or other distribution with respect to the businessshares of NetWorth, assetsor any direct or indirect redemption, condition purchase or other acquisition by NetWorth of any of its shares; (financial G) Increase in the salary or otherwise)other compensation payable or to become payable by NetWorth to any of its officers, operations directors or results employees, or the declaration, payment, or commitment or obligation of operations any kind for the payment, by NetWorth, of the Company and the Subsidiariesa bonus or other additional salary or compensation to any such person; (H) Acquisition, taken as a whole; (h) entered into sale or transfer of any material transaction other than asset of NetWorth except in the ordinary course of business; ; (iI) encountered Formation, amendment or termination of any distribution agreement or any material labor difficulties contract, agreement or labor union organizing activities; (j) issued or sold any shares of capital stock or other securities (other than shares of Common Stock issued upon the exercise or conversion of options, warrants or convertible securities outstanding on December 30, 2000 or granted thereafter and disclosed on Schedule 5.9 hereto) or granted any options, warrants, convertible securities or other purchase rights with respect thereto; (k) made any acquisition or disposition of any material assets or become involved in any other material transactionlicense to which NetWorth is a party, other than termination by NetWorth pursuant to the terms thereof; (J) Loan by NetWorth to any person or entity, or guaranty by NetWorth of any loan except for fair value expense advances in the ordinary course of business; (l) increased substantially any compensation or benefits payable to any officers, directors or employees of the Company or any Subsidiary other than business consistent with past practicespractice; (K) Waiver or release of any material right or claim of NetWorth, including any write-off or other compromise of any material account receivable of NetWorth; (L) The notice or, to NetWorth's Knowledge, commencement or threat of commencement of any governmental proceeding against or investigation of NetWorth or its affairs; (M) Other event or condition of any character that has or would, in NetWorth's reasonable judgment, be expected to have a Material Adverse Effect on NetWorth; (N) Issuance, sale or redemption by NetWorth of any of its shares or of any other of its securities other than issuances of shares of common stock pursuant to outstanding Options and Warrants; (O) Change in pricing or royalties set or charged by NetWorth except for discounts extended in the ordinary course of business consistent with past practice; (P) Any event that if occurring or undertaken during the interim between the execution of this Agreement and its Closing or earlier termination, would have required disclosure to Colmena pursuant to Section 4.1; or (Q) Negotiation or (m) agreed agreement by NetWorth to do any of the foregoingthings described in the preceding clauses (A) through (P) (other than negotiations with Colmena and its representatives regarding the transactions contemplated by this Agreement).

No Changes. Except for Since the transactions contemplated by this Agreement and Balance Sheet Date. Since the Balance Sheet Date except as disclosed in Section 5.9 specifically stated on Schedule 3.23 neither the Company nor any of the Disclosure Schedule its Subsidiaries has (i) incurred any liability or in the SEC Reports filed prior to the date obligation of this Agreementany nature (whether accrued, since December 30absolute, 2000 there has been no material adverse change in the business, assets, condition (financial contingent or otherwise), operations except in the ordinary course of business, (ii) permitted any of its assets to be subjected to any lien, (iii) sold, transferred or results otherwise disposed of operations any assets except in the ordinary course of business, (iv) made any capital expenditure or commitment therefor which individually or in the aggregate exceeded $20,000, (v) declared or paid any dividends or made any distributions on any shares of its capital stock, or redeemed, purchased or otherwise acquired any shares of its capital stock or any option, warrant or other right to purchase or acquire any such shares, (vi) made any bonus or profit sharing distribution, (vii) increased or prepaid its indebtedness for borrowed money, except current borrowings under credit lines listed on Schedule 3.8 from banks in the ordinary course of business or made any loan to any Person, (viii) written down the value of any work-in-process, or written off as uncollectible any notes or accounts receivable, except write-downs and writeoffs in the ordinary course of business, none of which individually or in the aggregate, is material to the Company and the its Subsidiaries, taken as a whole, and neither (ix) except as set forth on Schedule 3.22, granted any increase in the rate of wages, salaries, bonuses or other remuneration of any employee who, whether as a result of such increase or prior thereto, receives aggregate compensation from the Company nor or any Subsidiary has: (a) incurred any material debtsof its Subsidiaries at an annual rate of USD $40,000 or more, obligations or liabilities, absolute, accrued or contingent and whether due or to become due, except current liabilities incurred in the ordinary course of business to any other employees, (x) canceled or waived any claims or rights of material value, (xi) made any change in any method of accounting procedures, (xii) otherwise conducted its business or entered into any transaction, except in the usual and the debt evidenced by the Demand Note; (b) paid any material obligation or liability other than, or discharged or satisfied any material liens or encumbrances other than those securing, current liabilities, in each case ordinary manner and in the ordinary course of its business; , (cxiii) declared amended in any material respect or made terminated any payment or distribution agreement which is material to its shareholders as suchbusiness, (xiv) renewed, extended or purchased modified any lease of real property or redeemed any of its shares of capital stock or other securities, or obligated itself to do so; (d) mortgaged, pledged or subjected to lien, charge, security interest or other encumbrance any of its material assets, tangible or intangible, except for Permitted Liens (as hereinafter defined) arising in the ordinary course of business and liens securing the Demand Note; any lease of personal property, (exv) soldadopted, transferred amended or leased terminated any of its material assetsPlan or (xvi) agreed, except for sales of inventory and obsolete or worn-out equipment in the ordinary course of business; (f) cancelled or compromised any material debt or claim, or waived or released any right of material value; (g) suffered any physical damage, destruction or loss (whether or not covered by insurance) materially and adversely affectingin writing, individually or in the aggregate, the business, assets, condition (financial or otherwise), operations or results of operations of the Company and the Subsidiaries, taken as a whole; (h) entered into any material transaction other than in the ordinary course of business; (i) encountered any material labor difficulties or labor union organizing activities; (j) issued or sold any shares of capital stock or other securities (other than shares of Common Stock issued upon the exercise or conversion of options, warrants or convertible securities outstanding on December 30, 2000 or granted thereafter and disclosed on Schedule 5.9 hereto) or granted any options, warrants, convertible securities or other purchase rights with respect thereto; (k) made any acquisition or disposition of any material assets or become involved in any other material transaction, other than for fair value in the ordinary course of business; (l) increased substantially any compensation or benefits payable to any officers, directors or employees of the Company or any Subsidiary other than consistent with past practices; or (m) agreed to do any of the foregoing.

No Changes. Except for the transactions contemplated by this Agreement and as disclosed described in Section 5.9 of the Disclosure Schedule or in the SEC Reports filed prior to the date of this AgreementSection 2.9, ---------- since December June 30, 2000 there has been no material adverse change in the business, assets, condition (financial or otherwise), operations or results of operations of the Company and the Subsidiaries, taken as a whole, and neither the Company nor any Subsidiary has: 1997: (a) incurred there has not been any event or occurrence that has had any Material Adverse Effect; (b) the Company has not engaged in any material debtstransaction or activity, obligations nor entered into any contract or liabilitiescommitment, absolutein any case other than in the ordinary course of business; (c) the Company has not received any indication or notice of termination or nonrenewal of any material contract, accrued lease or contingent and other agreement to which the Company is a party, or suffered any loss, damage, destruction or other casualty adversely affecting any of its properties, assets or business, whether due or to not covered by insurance; (d) the Company has not incurred, assumed or become duesubject to, whether directly or by way of guarantee or otherwise, any Liability, including indebtedness for money borrowed or purchase money indebtedness, except current liabilities for trade or business obligations incurred in the ordinary course of business and in an amount that is not material to the debt evidenced by Company and consistent with past practice in connection with the Demand Note; purchase of goods and services and except as otherwise reflected on the face of the Balance Sheet; (be) paid any material obligation or liability other thanthe Company has not paid, or discharged or satisfied any material liens Encumbrance or encumbrances any claim or Liability, other than those securingthe payment, current liabilities, in each case in the ordinary course of business; (c) declared discharge or made any payment or distribution to its shareholders as such, or purchased or redeemed any of its shares of capital stock or other securities, or obligated itself to do so; (d) mortgaged, pledged or subjected to lien, charge, security interest or other encumbrance any of its material assets, tangible or intangible, except for Permitted Liens (as hereinafter defined) arising satisfaction in the ordinary course of business and liens securing in an amount that is not material to the Demand Note; (e) sold, transferred Company and consistent with past practice of Encumbrances or leased any Liabilities fully reflected or reserved against on the face of its material assets, except for sales of inventory and obsolete or worn-out equipment the balance sheets included in the ordinary course of business; Financial Statements; (f) cancelled the Company has not sold, transferred, leased or compromised otherwise disposed of any material debt properties or claimassets (real, personal or mixed, tangible, or waived or released any right of material value; (gintangible) suffered any physical damage, destruction or loss (whether or not covered by insurance) materially and adversely affecting, individually or in the aggregate, the business, assets, condition (financial or otherwise), operations or results of operations of the Company and the Subsidiaries, taken as a whole; (h) entered into any material transaction other than in the ordinary course of businessbusiness and consistent with past practice and in an amount that is not material to the Company, or permitted or allowed any of its properties or assets (real, personal or mixed, tangible or intangible) to be subject to any Encumbrance of any kind; (g) the Company has not adopted or amended any bonus; pension; retirement; profit-sharing; deferred, contingent, incentive or other compensation; vacation pay; stock purchase, stock ownership, stock option or other equity-based plan; severance or other termination pay; health, life insurance, death benefit, disability or other fringe benefit; or other employee welfare benefit or employee pension benefit plan, program, agreement, trust, fund or other arrangement (collectively, "COMPENSATION PLANS"), or granted or paid, or became obligated to grant or pay, any increase in the compensation of or bonus, pension, severance or vacation pay to any director, officer, employee, distributor, salesperson or agent of the Company (including any such increase made pursuant to any Compensation Plan), instituted any new Compensation Plan or entered into new agreements or arrangements under existing Compensation Plans, made any change in any Compensation Plan or existing agreements or arrangements thereunder, or entered into any employment or similar agreement or arrangement with any director, officer, employee or agent of the Company; (h) the Company has not made any capital expenditure or commitment for additions to its property, facilities or equipment individually or in the aggregate in excess of $50,000; (i) encountered the Company has not declared or made any material labor difficulties distributions in respect of ownership interests in the Company (including its capital stock), or labor union organizing activities; directly or indirectly redeemed, purchased or otherwise acquired any such interests in the Company (including its capital stock); (j) the Company has not made any change in any method of its accounting or accounting practice or any change in its depreciation or amortization policies or rates theretofore adopted or revalued any of its assets; (k) the Company has not paid, lent or advanced any amount to, or sold, transferred or leased any properties or assets (real, personal or mixed, tangible or intangible) to, or entered into any agreement or arrangement with, or released from any claim or liability, any of its shareholders, officers, directors, Affiliates or Associates or Persons who are Affiliates or Associates of any shareholder, officer or director of the Selling Shareholder; (l) neither the Selling Shareholder nor the Company has issued or sold any shares of capital stock of the Company or other any securities (other than convertible into or exchangeable for any such shares of Common Stock issued upon the exercise or conversion of any options, warrants or convertible securities outstanding on December 30rights calling for or permitting the issuance, 2000 transfer, sale or granted thereafter delivery of any such securities, and disclosed on Schedule 5.9 hereto) or granted the Company has not acquired any options, warrants, convertible securities capital stock or other purchase rights with respect thereto; (k) securities of any corporation or any interest in any business enterprise, or otherwise made any acquisition loan or disposition advance to or investment in any Person; (m) neither any of the Selling Shareholder nor the Company has instituted, settled or agreed to settle any Action relating to the Company or any of the Company's business, properties or assets (real, personal or mixed, tangible or intangible); (n) the Company has not materially amended or terminated any distribution agreement or any material contract, commitment, agreement or license to which the Company is a party or by which it or its assets or become involved in any other material transactionproperties are bound, other than for fair value any amendment or termination by the Company in the ordinary course of business; business in accordance with the terms of any such contract, commitment, agreement or license; (lo) increased substantially the Company has not made any compensation or benefits payable loan to any officersPerson, directors or employees of the Company or any Subsidiary other than advances to employees for travel and business expenses in the ordinary course of business and consistent with past practicespractices and in an amount that is not material to the Company, nor has the Company guaranteed any material Liabilities, including indebtedness and debt securities, of any Person; and (p) Neither the Selling Shareholder nor the Company has agreed, whether in writing or (m) agreed otherwise, to do take any of the foregoingaction described in this Section 2.9.

No Changes. Except for Since the transactions contemplated by this Agreement and Balance Sheet Date. Since the Balance Sheet Date except as disclosed in Section 5.9 specifically stated on Schedule 3.23 or the January 31, 1999 balance sheet, the Company has not (i) incurred any liability or obligation of the Disclosure Schedule or in the SEC Reports filed prior to the date of this Agreementany nature (whether accrued, since December 30absolute, 2000 there has been no material adverse change in the business, assets, condition (financial contingent or otherwise), operations except in the ordinary course of business, (ii) permitted any of its assets to be subjected to any Lien, (iii) sold, transferred or results otherwise disposed of operations any assets except in the ordinary course of business, (iv) made any capital expenditure or commitment therefor which individually or in the Company and the Subsidiariesaggregate exceeded $10,000, taken as a whole(v) declared or paid any dividends or made any distributions on any shares of its capital stock or equivalent thereof, and neither the Company nor or redeemed, purchased or otherwise acquired any Subsidiary has: shares of its capital stock or equivalent thereof or granted any option, warrant or other right to purchase or acquire any such shares or equivalent, (avi) made any bonus or profit sharing distribution, (vii) created or incurred any material debts, obligations indebtedness for borrowed money; (viii) increased or liabilities, absolute, accrued or contingent and whether due or to become dueprepaid its indebtedness for borrowed money, except current liabilities incurred borrowings under credit lines listed on Schedule 3.8 from banks in the ordinary course of business and or made any loan to any Person, (ix) written down the debt evidenced by the Demand Note; (b) paid value of any material obligation or liability other thanwork-in-process, or discharged written off as uncollectible any notes or satisfied any material liens or encumbrances other than those securingaccounts receivable, current liabilities, in each case except write-downs and writeoffs in the ordinary course of business; , none of which individually or in the aggregate, is material to the Company, (cx) declared granted any increase in the rate of wages, salaries, bonuses or other remuneration of any employee, (xi) canceled or waived any claims or rights of material value, (xii) made any payment change in any method of accounting procedures, (xiii) otherwise conducted its business or distribution to its shareholders as such, or purchased or redeemed entered into any of its shares of capital stock or other securities, or obligated itself to do so; (d) mortgaged, pledged or subjected to lien, charge, security interest or other encumbrance any of its material assets, tangible or intangibletransaction, except for Permitted Liens (as hereinafter defined) arising in the usual and ordinary manner and in the ordinary course of its business and liens securing the Demand Note; consistent with past practice, (exiv) soldamended or terminated any agreement which is material to its business, transferred (xv) renewed, extended or leased modified any lease of its material assetsreal property, or except for sales of inventory and obsolete or worn-out equipment in the ordinary course of business; , any lease of personal property, (fxvi) cancelled adopted, amended or compromised terminated any material debt Plan or claim(xvii) agreed, or waived or released any right of material value; (g) suffered any physical damage, destruction or loss (whether or not covered by insurance) materially and adversely affectingin writing, individually or in the aggregate, the business, assets, condition (financial or otherwise), operations or results of operations of the Company and the Subsidiaries, taken as a whole; (h) entered into any material transaction other than in the ordinary course of business; (i) encountered any material labor difficulties or labor union organizing activities; (j) issued or sold any shares of capital stock or other securities (other than shares of Common Stock issued upon the exercise or conversion of options, warrants or convertible securities outstanding on December 30, 2000 or granted thereafter and disclosed on Schedule 5.9 hereto) or granted any options, warrants, convertible securities or other purchase rights with respect thereto; (k) made any acquisition or disposition of any material assets or become involved in any other material transaction, other than for fair value in the ordinary course of business; (l) increased substantially any compensation or benefits payable to any officers, directors or employees of the Company or any Subsidiary other than consistent with past practices; or (m) agreed to do any of the foregoing.

No Changes. Except for as set forth in Schedule 4.27, since the transactions contemplated by this Agreement Latest Year-End Balance Sheet Date, the Company and as disclosed each Subsidiary have conducted their businesses only in Section 5.9 the ordinary course consistent with past practice. Without limiting the generality of the Disclosure foregoing sentence, except as set forth in Schedule 4.27, since the Latest Year-End Balance Sheet Date, there has not been: (A) any event, condition, or state of facts, which, individually or in the SEC Reports filed prior aggregate, has been or will be materially adverse to the date Company or any Subsidiary (B) any change in the financial condition, assets, liabilities, prospects, net worth, earning power or business of this Agreementthe Company or any Subsidiary, since December 30except changes in the ordinary course of business, 2000 there none of which, individually or in the aggregate, has been no or will be materially adverse to the Company or any Subsidiary; (C) any damage, destruction or loss, whether or not covered by insurance, materially adversely affecting the properties, business or prospects of the Company or any Subsidiary, or any material deterioration in the operating condition of the Company's or any Subsidiary's assets; (D) any mortgage, pledge or subjection to lien, charge or encumbrance of any kind of any of the Company's or any Subsidiary's assets, tangible or intangible; (E) any strike, walkout, labor trouble or any other new or continued event, development or condition of any character which has or could materially adversely affect the business, properties or prospects of the Company or any Subsidiary; (F) any declaration, setting aside or payment of a dividend or other distribution in respect of any of the capital stock of the Company or any Subsidiary, or any direct or indirect redemption, purchase or other acquisition of any capital stock of the Company or any Subsidiary or any rights to purchase such capital stock or securities convertible into or exchangeable for such capital stock. (G) any increase in the salaries or other compensation payable or to become payable to, or any advance (excluding advances for ordinary business expenses) or loan to, any officer, director, employee or shareholder of the Company or any Subsidiary (except normal annual merit increases made in the ordinary course of business and consistent with past practice), or any increase in, or any addition to, other benefits (including without limitation any bonus, profit-sharing, pension or other plan) to which any of its or their officers, directors, employees or shareholders may be entitled, or any payments to any pension, retirement, profit-sharing, bonus or similar plan except payments in the ordinary course of business and consistent with past practice made pursuant to the employee benefit plans described in Schedule 4.23, or any other payment of any kind to or on behalf of any such officer, director, employee or shareholder (other than payment of base compensation and reimbursement for reasonable business expenses in the ordinary course of business), or any adoption of or change in any Employee Benefit Plans defined) or labor policy; (H) any making or authorization of any capital expenditures in excess of $10,000; (I) any cancellation or waiver of any right material to the operation of the Company's or any Subsidiary's business or any cancellation or waiver of any debts or claims of substantial value or any cancellation or waiver of any debts or claims against any related party; (J) any sale, transfer, lease or other disposition of any assets of the Company or any Subsidiary, except sales of assets in the ordinary course of business; (K) any payment, discharge or satisfaction of any liability or obligation (whether accrued, absolute, contingent or otherwise) by the Company or any Subsidiary, other than the payment, discharge or satisfaction, in the ordinary course of business, of liabilities or obligations shown or reflected on the Latest Year-End Balance Sheet or incurred in the ordinary course of business since the Latest Year-End Balance Sheet Date; (L) any adverse change or any threat of any adverse change in the businessCompany's or any Subsidiary's relations with, assetsor any loss or threat of loss of, condition the Company or any Subsidiary suppliers, clients or customers which, individually or in the aggregate, has been or will be materially adverse to the Company or any Subsidiary; (financial M) any write-offs as uncollectible of any notes or otherwise), operations or results of operations accounts receivable of the Company and or any Subsidiary or write-downs of the Subsidiaries, taken as a whole, and neither value of any assets or inventory by the Company nor or any Subsidiary has: other than in immaterial amounts or in the ordinary course of business consistent with past practice and at a rate no greater than during the twelve months ended on the Latest Year-End Balance Sheet Date; (aN) incurred any material debtschange by the Company or any Subsidiary in any method of accounting or keeping its books of account or accounting practices; (O) any creation, incurrence, assumption or guarantee by the Company or any Subsidiary of any obligations or liabilities, liabilities (whether absolute, accrued accrued, contingent or contingent otherwise and whether due or to become due), except current liabilities incurred in the ordinary course of business and the debt evidenced by the Demand Note; (b) paid any material obligation or liability other than, or discharged or satisfied any material liens or encumbrances other than those securing, current liabilities, in each case in the ordinary course of business; (c) declared or made any payment or distribution to its shareholders as such, or purchased any creation, incurrence, assumption or redeemed any of its shares of capital stock or other securities, or obligated itself to do so; (d) mortgaged, pledged or subjected to lien, charge, security interest or other encumbrance any of its material assets, tangible or intangible, except for Permitted Liens (as hereinafter defined) arising in the ordinary course of business and liens securing the Demand Note; (e) sold, transferred or leased any of its material assets, except for sales of inventory and obsolete or worn-out equipment in the ordinary course of business; (f) cancelled or compromised any material debt or claim, or waived or released any right of material value; (g) suffered any physical damage, destruction or loss (whether or not covered guarantee by insurance) materially and adversely affecting, individually or in the aggregate, the business, assets, condition (financial or otherwise), operations or results of operations of the Company and the Subsidiaries, taken as a whole; (h) entered into any material transaction other than in the ordinary course of business; (i) encountered any material labor difficulties or labor union organizing activities; (j) issued or sold any shares of capital stock or other securities (other than shares of Common Stock issued upon the exercise or conversion of options, warrants or convertible securities outstanding on December 30, 2000 or granted thereafter and disclosed on Schedule 5.9 hereto) or granted any options, warrants, convertible securities or other purchase rights with respect thereto; (k) made any acquisition or disposition of any material assets or become involved in any other material transaction, other than for fair value in the ordinary course of business; (l) increased substantially any compensation or benefits payable to any officers, directors or employees of the Company or any Subsidiary other than consistent with past practices; of any indebtedness for money borrowed; (P) any payment, loan or advance of any amount to or in respect of, or the sale, transfer or lease of any properties or assets (mwhether real, personal or mixed, tangible or intangible) agreed to, or entering into of any agreement, arrangement or transaction with, any "Related Party" (as hereinafter defined), except for (i) directors' fees and (ii) compensation to do the officers and employees of any Company or any Subsidiary at rates not exceeding the rates of the foregoing.compensation disclosed on Schedule 4.17

No Changes. Except for the transactions contemplated by this Agreement and as disclosed in Section 5.9 of the Disclosure Schedule or in the SEC Reports filed prior to Since the date of this Agreement, since December 30, 2000 Lorilei's Financial Statements there has been no material adverse change in the businessnot been, assets, condition occurred or arisen any: (financial or otherwise), operations or results of operations of the Company and the Subsidiaries, taken as a whole, and neither the Company nor any Subsidiary has: (aA) incurred any material debts, obligations or liabilities, absolute, accrued or contingent and whether due or to become due, Transaction by Xxxxxxx except current liabilities incurred in the ordinary course of business and as conducted on that date; (B) Capital expenditure by Xxxxxxx, either individually or in the debt evidenced by the Demand Note; aggregate exceeding $5,000; (bC) paid any material obligation or liability other thanDestruction, damage to, or discharged or satisfied loss of any material liens or encumbrances other than those securing, current liabilities, in each case in the ordinary course assets (including without limitation intangible assets) of business; (c) declared or made any payment or distribution to its shareholders as such, or purchased or redeemed any of its shares of capital stock or other securities, or obligated itself to do so; (d) mortgaged, pledged or subjected to lien, charge, security interest or other encumbrance any of its material assets, tangible or intangible, except for Permitted Liens (as hereinafter defined) arising in the ordinary course of business and liens securing the Demand Note; (e) sold, transferred or leased any of its material assets, except for sales of inventory and obsolete or worn-out equipment in the ordinary course of business; (f) cancelled or compromised any material debt or claim, or waived or released any right of material value; (g) suffered any physical damage, destruction or loss Xxxxxxx (whether or not covered by insurance) materially and adversely affecting), either individually or in the aggregate, exceeding $5,000; (D) Labor trouble or claim of wrongful discharge, sexual harassment or other unlawful labor practice or action; (E) Change in accounting methods or practices (including any change in depreciation or amortization policies or rates, any change in policies in making or reversing accruals, or any change in capitalization of software development costs) by Xxxxxxx; (F) Declaration, setting aside, or payment of a dividend or other distribution in respect to the businessshares of Xxxxxxx, assetsor any direct or indirect redemption, condition purchase or other acquisition by Xxxxxxx of any of its shares; (financial G) Increase in the salary or otherwise)other compensation payable or to become payable by Xxxxxxx to any of its officers, operations directors or results employees, or the declaration, payment, or commitment or obligation of operations any kind for the payment, by Xxxxxxx, of the Company and the Subsidiariesa bonus or other additional salary or compensation to any such person; (H) Acquisition, taken as a whole; (h) entered into sale or transfer of any material transaction other than asset of Xxxxxxx except in the ordinary course of business; ; (iI) encountered Formation, amendment or termination of any distribution agreement or any material labor difficulties contract, agreement or labor union organizing activities; (j) issued or sold any shares of capital stock or other securities (other than shares of Common Stock issued upon the exercise or conversion of options, warrants or convertible securities outstanding on December 30, 2000 or granted thereafter and disclosed on Schedule 5.9 hereto) or granted any options, warrants, convertible securities or other purchase rights with respect thereto; (k) made any acquisition or disposition of any material assets or become involved in any other material transactionlicense to which Xxxxxxx is a party, other than termination by Xxxxxxx pursuant to the terms thereof; (J) Loan by Xxxxxxx to any person or entity, or guaranty by Xxxxxxx of any loan except for fair value expense advances in the ordinary course of business; (l) increased substantially any compensation or benefits payable to any officers, directors or employees of the Company or any Subsidiary other than business consistent with past practicespractice; (K) Waiver or release of any material right or claim of Xxxxxxx, including any write-off or other compromise of any material account receivable of Xxxxxxx; (L) The notice or, to Lorilei's Knowledge, commencement or threat of commencement of any governmental proceeding against or investigation of Xxxxxxx or its affairs; (M) Other event or condition of any character that has or would, in Lorilei's reasonable judgment, be expected to have a Material Adverse Effect on Xxxxxxx; (N) Issuance, sale or redemption by Xxxxxxx of any of its shares or of any other of its securities other than issuances of shares of common stock pursuant to outstanding Options and Warrants; (O) Change in pricing or royalties set or charged by Xxxxxxx except for discounts extended in the ordinary course of business consistent with past practice; (P) Any event that if occurring or undertaken during the interim between the execution of this Agreement and its Closing or earlier termination, would have required disclosure to AmeriNet pursuant to Section 4.1; or (Q) Negotiation or (m) agreed agreement by Xxxxxxx to do any of the foregoingthings described in the preceding clauses (A) through (Q) (other than negotiations with AmeriNet and its representatives regarding the transactions contemplated by this Agreement).

No Changes. Except for the transactions contemplated by this Agreement and as disclosed in Section 5.9 of the Disclosure Schedule or in the SEC Reports filed prior to the date of this AgreementSCHEDULE 2.9, since December 3031, 2000 there has 1999: (1) There has, at no time, been no a material adverse change in the financial condition, results of operations, business, properties, assets, condition (financial or otherwise), operations or results of operations of the Company and the Subsidiaries, taken as a whole, and neither the Company nor any Subsidiary has: (a) incurred any material debts, obligations or liabilities, absoluteor future prospects of Margate; (2) Margate has not authorized, accrued declared, paid, effected or contingent and whether due set aside any dividend or to become dueliquidating or other distribution in respect of its capital stock or any direct or indirect redemption, purchase, or other acquisition of any of its capital stock, except current liabilities incurred as contemplated in Section 4.4; (3) The operations and business of Margate have been conducted, in all respects, only in the ordinary course in accordance and consistent with past practices; (4) Margate has not suffered any loss of business and the debt evidenced by the Demand Note; (b) paid or damage to any material obligation or liability other than, or discharged or satisfied any material liens or encumbrances other than those securing, current liabilities, in each case in the ordinary course of business; (c) declared or made any payment or distribution to its shareholders as such, or purchased or redeemed any of its shares of capital stock or other securities, or obligated itself to do so; (d) mortgaged, pledged or subjected to lien, charge, security interest or other encumbrance any of its material assets, tangible or intangible, except for Permitted Liens (as hereinafter defined) arising in the ordinary course of business and liens securing the Demand Note; (e) sold, transferred or leased any of its material assets, except for sales of inventory and obsolete or worn-out equipment in the ordinary course of business; (f) cancelled or compromised any material debt or claim, or waived or released any right of material value; (g) suffered any physical damage, destruction or loss assets (whether or not covered by insurance) materially and adversely affecting, individually or in the aggregate, the business, assets, condition (financial or otherwise), operations business or results customers, or waived any right of operations of the Company and the Subsidiariesmaterial value; (5) Margate has not, taken as a whole; (h) entered into any material transaction other than in the ordinary course of business; (i) encountered , sold, assigned, transferred, conveyed, leased or otherwise disposed of, or agreed to sell, lease or otherwise dispose of, any material labor difficulties or labor union organizing activities; (j) issued or sold any shares of capital stock or other securities (other than shares of Common Stock issued upon the exercise or conversion of options, warrants or convertible securities outstanding on December 30, 2000 or granted thereafter and disclosed on Schedule 5.9 hereto) or granted any options, warrants, convertible securities or other purchase rights with respect thereto; (k) made any acquisition or disposition of any material its assets or become involved entered into any other transaction, contract or commitment or incurred any obligation or commitment; (6) Margate has not engaged in any other material transactiontransaction involving more than $50,000 in the aggregate, other than for fair value except in the ordinary course of business; (l) increased substantially any compensation or benefits payable to any officers, directors or employees of the Company or any Subsidiary other than business and consistent with past practices; ; (7) Margate has not made any amendments or changes to its Articles of Incorporation or Bylaws or to the terms of any outstanding securities; (m8) Margate has not made any capital expenditure or commitment, either individually or in the aggregate, exceeding $50,000; (9) agreed There has not been any change in accounting methods or practices (including any change in depreciation or amortization policies or rates) by Margate; (10) There has not been any increase in the salary or other compensation payable or to become payable by Margate to any of its officers, directors, employees or advisors, or the declaration, payment, or commitment or obligation of any kind for the payment by Margate of, a bonus or other additional salary or compensation to any such person; (11) There has not been any termination, extension, amendment or modification to the terms of any material agreement, contract, covenant, instrument, lease, license or commitment to which Margate is a party or by which it or any of its assets are bound; (12) There has not been any sale, lease, license or other disposition of any of the material assets or properties of the Margate, or the creation of any security interest in such assets or properties; (13) Margate has not waived or released any right or claim, including any write-off or other compromise of any account receivable of Margate exceeding $50,000 in the aggregate; (14) There has not been any material change in the pricing charged by Margate to its customers or in the pricing charged by any suppliers or other entities from which Margate purchases products or services; (15) There is not and has not been issuance or sale, or contract to issue or sell, by Margate of any of its Common Stock, or securities exchangeable, convertible or exercisable therefor, or any securities, warrants, options or rights to purchase any of the foregoing; (16) There has not occurred any event or condition of any character that has or would reasonably be expected to have a Material Adverse Effect on Margate; (17) There has not occurred any negotiation or agreement by Margate or any officer or employee thereof to do any of the foregoingthings described in the preceding clauses (other than negotiations with B2B and its representatives regarding the transactions contemplated by this Agreement); and (18) Margate has not entered into any agreement or commitment to do any of the things described in the preceding clauses (1) through (17).

No Changes. Except for the transactions as expressly contemplated by this Agreement and Agreement, or other than as disclosed set forth in Section 5.9 2.11 of the Disclosure Schedule or in the SEC Reports filed prior to the date of this Agreement, since December 30the Balance Sheet Date, 2000 Seller has operated the Business only in the ordinary course and there has been no material adverse change in the businessnot been, assets, condition (financial occurred or otherwise), operations or results of operations of the Company and the Subsidiaries, taken as a whole, and neither the Company nor any Subsidiary has: arisen any: (a) incurred any material debts, obligations or liabilities, absolute, accrued or contingent and whether due or to become due, transaction by Seller except current liabilities incurred in the ordinary course of business as conducted on that date and the debt evidenced by the Demand Note; consistent with past practices; (b) paid any material obligation amendment or liability other than, or discharged or satisfied any material liens or encumbrances other than those securing, current liabilities, in each case in change to the ordinary course of business; Charter Documents; (c) declared or made amendment of any payment or distribution to its shareholders as such, or purchased or redeemed term of any outstanding security of its shares of capital stock or other securities, or obligated itself to do so; Seller; (d) mortgagedexpenditure, pledged transaction or subjected commitment by Seller exceeding $10,000 individually or $50,000 in the aggregate with respect to lienany single Person; (e) payment, chargedischarge, security interest waiver or satisfaction of any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise of Seller), other encumbrance any of its material assetsthan payments, tangible discharges, waivers or intangible, except for Permitted Liens (as hereinafter defined) arising satisfactions in the ordinary course of business and liens securing the Demand Note; (e) sold, transferred of liabilities reflected or leased any of its material assets, except for sales of inventory and obsolete or worn-out equipment reserved against in the ordinary course of business; Current Balance Sheet; (f) cancelled destruction of, damage to, or compromised loss of any material debt assets (whether tangible or claimintangible), material business or waived or released any right material customer of material value; (g) suffered any physical damage, destruction or loss Seller (whether or not covered by insurance); (g) materially and adversely affectingmaterial employment dispute, individually including but not limited to, claims or in the aggregatematters raised by any individuals or any workers’ representative organization, the business, assets, condition (financial bargaining unit or otherwise), operations union regarding labor trouble or results claim of operations of the Company and the Subsidiaries, taken as a whole; wrongful discharge or other unlawful employment or labor practice or action with respect to Seller; (h) entered into change in accounting methods or practices (including any change in depreciation or amortization policies or rates) by Seller other than as required by GAAP; (i) change in any material transaction election in respect of Taxes (as defined in Section 2.13(a) hereof), adoption or change in any accounting method in respect of Taxes, agreement or settlement of any claim or assessment in respect of Taxes, or extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; (j) revaluation by Seller of any of its material assets (whether tangible or intangible), including without limitation, writing down the value of inventory or writing off notes or accounts receivable; (k) declaration, setting aside or payment of a dividend or other pre-Closing distribution (whether in cash, equity or property) in respect of any Seller equity, or any split, combination or reclassification in respect of any units of Seller Membership Interests, or any issuance or authorization of any issuance of any other securities in respect of, in lieu of or in substitution for shares of Seller’s membership interest, or any direct or indirect repurchase, redemption, or other acquisition by Seller of any units of Seller Membership Equity (or options, warrants or other rights convertible into, exercisable or exchangeable therefor); (l) increase in or other change to the salary or other compensation payable or to become payable by Seller to any of its officers, directors, employees or advisors, or the declaration, payment or commitment or obligation of any kind for the payment (whether in cash or equity) by Seller of a severance payment, termination payment, bonus or other additional salary or compensation to any such person; (m) agreement, contract, covenant, instrument, lease, license or commitment to which Seller is a party or by which they or any of their assets (whether tangible or intangible) are bound or any termination, extension, amendment or modification of the terms of any agreement, contract, covenant, instrument, lease, license or commitment to which Seller is a party or by which they or any of their assets are bound, other than in the ordinary course of business; ; (in) encountered any material labor difficulties or labor union organizing activities; (j) issued or sold any shares of capital stock sale, lease, license or other securities (other than shares of Common Stock issued upon the exercise or conversion of options, warrants or convertible securities outstanding on December 30, 2000 or granted thereafter and disclosed on Schedule 5.9 hereto) or granted any options, warrants, convertible securities or other purchase rights with respect thereto; (k) made any acquisition or disposition of any material of the assets (whether tangible or intangible) or properties of Seller, including, but not limited to, the sale of any accounts receivable of Seller, or any creation of any security interest in such assets or become involved in any other material transactionproperties, other than for fair value non exclusive licenses of Seller Products by Seller in the ordinary course of business; ; (lo) increased substantially any compensation or benefits payable loan by Seller to any officersPerson, directors purchase by Seller of any debt securities of any Person, or employees capital contributions to investment in any Person; (p) creation or other incurrence by Seller of any Lien on any of its assets, except for Liens for Taxes not yet due and payable; (q) incurring by Seller of any Indebtedness, amendment of the Company terms of any outstanding loan agreement, guaranteeing by Seller of any Indebtedness, issuance or sale of any debt securities of Seller or guaranteeing of any debt securities of others; (r) waiver or release of any right or claim of Seller, including any write off or other compromise of any account receivable of Seller, other than in the ordinary course of business; (s) commencement or settlement of any lawsuit by Seller, the commencement, settlement, notice or written threat of any lawsuit or proceeding or other investigation against Seller or its affairs; (t) notice of any claim or potential claim of ownership, interest or right by any person other than Seller in or to the Intellectual Property (as defined below) owned by Seller or of infringement by Seller of any other Person’s Intellectual Property (as defined below); (u) issuance, grant, delivery or sale by Seller of any units of Seller Membership Interests or securities convertible into, or exercisable or exchangeable for, shares of Seller Membership Interests, or any Subsidiary other than consistent securities, warrants, options or rights to purchase any of the foregoing; (v) (i) sale or license of any Intellectual Property owned by Seller or execution of any agreement with past practices; respect to Intellectual Property owned or exclusively licensed by Seller with any Person, (ii) purchase or license of any Intellectual Property or execution of any agreement with respect to the Intellectual Property of any Person, (iii) agreement with respect to the development of any Intellectual Property with a third party, or (miv) agreed material change in pricing or royalties set or charged by Seller to its customers or licensees or in pricing or royalties set or charged by persons who have licensed Intellectual Property to Seller, except in the case of clause (i) or (ii), pursuant to Seller’s End User Agreement, substantially on standard terms and conditions; (w) agreement or modification to any Contract pursuant to which any other party was granted marketing, distribution, development, manufacturing, reseller or similar rights with respect to any Seller Products or Seller Intellectual Property; (x) event, occurrence, development, state of circumstances, facts, or condition of any character that has had or would reasonably be expected to have, individually or in the aggregate, a Seller Material Adverse Effect; (y) any agreement to purchase or sell any interest in real property, grant any security interest in any real property, enter into any lease, sublease, license or other occupancy agreement with respect to any real property or alter, amend, modify or terminate any of the terms of any Lease Agreement (as defined in Section 2.15(b)); (z) acquisition or agreement to acquire by merging or consolidating with, or by purchasing any assets or equity securities of, or by any other manner, any business or corporation, partnership, association or other business organization or division thereof, or other acquisition or agreement to acquire any assets or any equity securities that are material, individually or in the aggregate, to the Business; (aa) cancellation, amendment or renewal of any insurance policy; (bb) agreement by Seller, or any officer or employee on behalf of Seller, to do any of the foregoingthings described in the preceding clauses (a) through (aa) of this Section 2.11 (other than negotiations with Buyer and its representatives regarding the transactions contemplated by this Agreement and any Related Agreement).

No Changes. Except for Since the transactions contemplated Balance Sheet Date, except as expressly permitted hereunder, required hereby or specifically consented to by this Agreement Parent pursuant to Section 4.1 or Section 4.3 hereof, there has not been, occurred or arisen any: (a) transaction by the Company except in the ordinary course of business as conducted on that date and as disclosed in Section 5.9 of consistent with past practices; (b) modifications, amendments or changes to the Disclosure Schedule Charter Documents; (c) expenditure, transaction or commitment exceeding $100,000 individually or in the SEC Reports filed prior aggregate other than transaction contemplated in the Company Operating Budget or pursuant to Standard License Agreements; (d) payment, discharge, waiver or satisfaction, in any amount in excess of $25,000 in any one case, or $50,000 in the aggregate, of any claim, liability, right or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise of the Company), other than payments, discharges or satisfactions in the ordinary course of business including (i) in the performance of obligations under Contracts with Company customers entered into in the ordinary course of business (whether entered into before or after the date hereof), (ii) the payment, discharge, waiver or satisfaction of this Agreement, since December 30, 2000 there has been no material adverse change liabilities reflected or reserved against in the Current Balance Sheet, (iii) the payment, discharge, waiver or satisfaction of obligations or liabilities existing on the date hereof or entered into in the ordinary course of business, assetsor (iv) the payment, condition discharge, waiver or satisfaction of obligations or liabilities provided for in the Company Operating Budget; (financial e) destruction of, damage to, or otherwiseloss of any material assets (whether tangible or intangible), operations material business or results of operations material customer of the Company and (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 unlawful employment or labor practice or action with respect to the Subsidiaries, taken as a whole, and neither Company; (g) adoption or change in accounting methods or practices (including any change in depreciation or amortization policies or rates) by the Company nor any Subsidiary has: other than as required by GAAP; (ah) incurred adoption of or change in any material debtselection in respect of Taxes, obligations adoption or liabilitieschange in any accounting method in respect of Taxes, absoluteagreement or settlement of any claim or assessment in respect of Taxes, accrued or contingent and extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; (i) revaluation by the Company of any of its assets (whether due tangible or intangible), including writing down the value of inventory or writing off notes or accounts receivable; (j) declaration, setting aside or payment of a dividend or other distribution (whether in cash, stock or property) in respect of any Company Capital Stock, or any split, combination or reclassification in respect of any shares of Company Capital Stock, or any issuance or authorization of any issuance of any other securities in respect of, in lieu of or in substitution for shares of Company Capital Stock, or any direct or indirect repurchase, redemption, or other acquisition by the Company of any shares of Company Capital Stock (or options, warrants or other rights convertible into, exercisable or exchangeable therefor) except in accordance with the agreements evidencing Company Options or Company Unvested Common Stock; (k) increase in or other change to the salary or other compensation payable or to become duepayable by the Company to any of its officers, directors, employees, consultants or advisors, or the declaration, payment or commitment or obligation of any kind for the payment (whether in cash or equity) by the Company of a severance payment, termination payment, bonus or other additional salary or compensation to any such person, other than the discharge of commitments existing as of the date hereof or for the ordinary course hiring of consultants for amounts that are within the Company Operating Budget; (l) other than pursuant to Standard License Agreements, (i) agreement, contract, covenant, instrument, lease, license or commitment to which the Company is a party or by which it or any of its assets (whether tangible or intangible) are bound or (ii) any termination, extension, amendment or modification of the terms of any agreement, contract, covenant, instrument, lease, license or commitment to which the Company is a party or by which it or any of its assets are bound; (m) sale, lease, license or other disposition of any of the assets (whether tangible or intangible) or properties of the Company, including the sale of any accounts receivable of the Company, or any creation of any security interest in such assets or properties, except current liabilities incurred licenses pursuant to Standard License Agreements executed in the ordinary course of business and the debt evidenced consistent with past practice; (n) loan by the Demand Note; (b) paid Company to any material obligation or liability other thanPerson, or discharged purchase by the Company of any debt securities of any Person, incurring by the Company of any indebtedness, amendment of the terms of any outstanding loan agreement, guaranteeing by the Company of any indebtedness, issuance or satisfied sale of any material liens debt securities of the Company or encumbrances other than those securingguaranteeing of any debt securities of others, current liabilities, in each case except for advances to employees for travel and business expenses in the ordinary course of business consistent with past practices; (o) waiver or release of any right or claim of the Company, including any waiver, release or other compromise of any account receivable of the Company; (p) commencement or settlement of any lawsuit by the Company, the commencement, settlement, notice or, to the Knowledge of the Company, threat of any lawsuit or proceeding or other investigation against the Company or relating its business; (c) declared , properties or made any payment or distribution to its shareholders as suchassets, or purchased or redeemed any reasonable basis for any of its the foregoing; (q) notice of any claim or potential claim of ownership, interest or right by any person other than the Company of the Company Intellectual Property owned by or developed or created by the Company or of infringement by the Company of any other Person’s Intellectual Property; (r) issuance, grant, delivery, sale or purchase, or proposal, contract or agreement to issue, grant, deliver, sell or purchase, by the Company, of any shares of capital stock Company Capital Stock or other securitiessecurities convertible into, or obligated itself exercisable or exchangeable for, shares of Company Capital Stock, or any subscriptions, warrants, options, rights or securities to do so; (d) mortgaged, pledged or subjected to lien, charge, security interest or other encumbrance acquire any of its material assets, tangible or intangiblethe foregoing, except for Permitted Liens (as hereinafter defined) arising issuances of Company Capital Stock upon the exercise of Company Options or Company Warrants or the conversion of Company Preferred Stock or the grant of options to purchase Company Common Stock to employees of the Company under the Plan in the ordinary course of business and liens securing consistent with past practice; (s) (i) except in accordance with the Demand NoteCompany Discount Policy set forth in Section 4.1(o) of the Disclosure Schedule, proposal or consent to any change to pricing or royalties set or charged by the Company to its customers or licensees, or to any increase to the pricing or royalties set or charged by Persons who have licensed Intellectual Property (other than commercially available, off-the-shelf licenses for third party software and related technology) to the Company; or (eii) soldother than pursuant to Standard License Agreements, transferred (A) sale, lease, license or leased transfer to any of its material assets, Person any rights to any Company Intellectual Property or entry into any agreement or modification or amendment to any existing agreement with respect to any Company Intellectual Property with any Person except for sales of inventory and obsolete or worn-out equipment in the ordinary course of business; business consistent with past practice, (fB) cancelled purchase or compromised license any material debt Intellectual Property or claimentry into any agreement or modification or amendment of any existing agreement with respect to the Intellectual Property of any Person other than commercially available off the shelf third party software licenses not in excess of $25,000 individually, or waived $50,000 in the aggregate, or released (C) entry into any right agreement or modification or amendment of material value; any existing agreement with respect to the development of any Intellectual Property with a third party; (gt) suffered other than pursuant to Standard License Agreements, agreement or modification to any physical damageContract pursuant to which any other party is or was granted marketing, destruction distribution, development, manufacturing or loss similar rights of any type or scope with respect to any products or technology of the Company; (whether u) event or not covered condition of any character that has had or is reasonably likely to have a Company Material Adverse Effect; (v) purchase or sale of any interest in real property, granting of any security interest in any real property or lease, license, sublease or other occupancy of any Leased Real Property or other real property by insurancethe Company; (w) materially and adversely affectingacquisition by the Company or agreement by the Company to acquire by merging or consolidating with, or by purchasing any assets or equity securities of, or by any other manner, any business or corporation, partnership, association or other business organization or division thereof, or other acquisition or agreement to acquire any assets or any equity securities that are material, individually or in the aggregate, to the business, assets, condition business of the Company; (financial x) grant by the Company of any severance or termination pay (in cash or otherwise)) to any Employee, operations including any officer, except payments made pursuant to written agreements disclosed in the Disclosure Schedule; (y) adoption or results amendment of operations any Company Employee Plan, execution or amendment of any Employee Agreement, or payment or agreement by the Company and to pay any bonus or special remuneration to any director or Employee, or increase or modify the Subsidiariessalaries, taken as a whole; (h) entered into any material transaction other than in the ordinary course of business; (i) encountered any material labor difficulties or labor union organizing activities; (j) issued or sold any shares of capital stock wage rates or other securities compensation (other than shares including any equity-based compensation) of Common Stock issued upon any Employee; (z) waiver of any stock repurchase rights, acceleration, amendment or change to the exercise or conversion period of exercisability of options, warrants restricted stock or convertible securities outstanding on December 30any other equity or similar incentive awards (including without limitation any long term incentive awards), 2000 or repricing of options granted thereafter and disclosed on Schedule 5.9 hereto) or granted under any optionsemployee, warrantsconsultant, convertible securities director or other purchase rights with respect thereto; stock plans or authorization of cash payments in exchange for any options granted under any of such plans; (kaa) made any acquisition or disposition execution of any material assets strategic alliance, affiliate or become involved in joint marketing agreement by the Company; (bb) any action to accelerate the vesting schedule of any Company Options, Company Unvested Common Stock or Company Common Stock (cc) hiring, promotion, demotion or termination or other material transaction, other than for fair value in change to the ordinary course employment status or title of business; (l) increased substantially any compensation or benefits payable to any officers, directors or employees of the Company or any Subsidiary other than consistent with past practices; or (m) agreed to do any of the foregoing.employees;

No Changes. Except for as set forth in Schedule 2.7 or except as to the transactions contemplated by this Agreement and as disclosed in Section 5.9 ---------- ------------ portion of the Disclosure Schedule or in Business which consists exclusively of the SEC Reports filed prior to the date of this AgreementRetained Assets, since December 30July 1, 2000 1997 there has been no material adverse change in the business, assets, condition (financial or otherwise), operations or results of operations of the Company and the Subsidiaries, taken as a whole, and neither the Company nor any Subsidiary has: (not occurred any: a) incurred any material debts, obligations or liabilities, absolute, accrued or contingent and whether due or to become due, transaction by Genius except current liabilities incurred in the ordinary course of business and the debt evidenced by the Demand Note; (as conducted on that date; b) paid any material obligation capital expenditure or liability other thancapital commitment by Genius, or discharged or satisfied any material liens or encumbrances other than those securing, current liabilities, in each case in the ordinary course of business; (c) declared or made any payment or distribution to its shareholders as such, or purchased or redeemed any of its shares of capital stock or other securities, or obligated itself to do so; (d) mortgaged, pledged or subjected to lien, charge, security interest or other encumbrance any of its material assets, tangible or intangible, except for Permitted Liens (as hereinafter defined) arising in the ordinary course of business and liens securing the Demand Note; (e) sold, transferred or leased any of its material assets, except for sales of inventory and obsolete or worn-out equipment in the ordinary course of business; (f) cancelled or compromised any material debt or claim, or waived or released any right of material value; (g) suffered any physical damage, destruction or loss (whether or not covered by insurance) materially and adversely affecting, either individually or in the aggregate, exceeding US $100,000.00 excluding costs relating in any way to this Agreement, the businessAcquisition, assetsand/or the other transactions that are contemplated hereby; c) destruction of, condition (financial damage to or otherwise)loss of any Genius Assets that constitutes a Material Adverse Effect; d) labor trouble, operations claim of wrongful discharge or results other unlawful labor practice or action, or formation of operations a works council under German labor law; e) declaration, setting aside or payment of a dividend or other distribution with respect to the Company and the Subsidiariescapital stock of Genius, taken as or any direct or indirect redemption, purchase or other acquisition by Genius of any of its capital stock that may constitute a whole; (hMaterial Adverse Effect; f) entered into any material transaction other than in the ordinary course of business; (i) encountered any material labor difficulties or labor union organizing activities; (j) issued or sold any shares of capital stock , increase in the salary or other securities (other than shares compensation payable or to become payable by Genius to any of Common Stock issued upon its officers, directors, employees or advisors, or the exercise declaration, payment or conversion commitment or obligation of optionsany kind for the payment, warrants or convertible securities outstanding on December 30by Genius, 2000 or granted thereafter and disclosed on Schedule 5.9 hereto) or granted any options, warrants, convertible securities of a bonus or other purchase rights additional salary or compensation to any such person (with respect thereto; (kany such increase, declaration, payment, commitment or obligation being required to be material in the case of employees or advisors); g) made any acquisition acquisition, sale or disposition transfer of any material assets or become involved in any other material transaction, other than for fair value Genius Asset except in the ordinary course of business; business as conducted on that date, or any change in ownership of Genius; h) amendment or termination of any material contract, agreement or license to which Genius was/is a party or by which it was/is bound; i) loan by Genius to any person or entity, incurring by Genius of any indebtedness, guaranteeing by Genius of any indebtedness, issuance or sale of any debt securities of Genius or guaranteeing of any debt securities of others (other than short term loans for less than 10.000 DM that have been repaid in their entirety, including loans to cover travel expenses); j) waiver or release of any right or claim of Genius in excess of 5.000 DM, including any write-off or other compromise of any account receivable of Genius; k) the commencement or notice or, to the knowledge of Genius, threat of commencement of any lawsuit or proceeding against or investigation of Genius or its affairs, including the filing of any petition in bankruptcy, assignment for the benefit of creditors, writ of attachment or similar action or process; l) increased substantially notice of any compensation claim of ownership by a third party of Genius' Intellectual Property or benefits payable of infringement by Genius of any third party's Intellectual Property rights; m) issuance or sale by Genius of any of its shares of capital stock, or securities exchangeable, convertible or exercisable therefor, or of any other of its securities; n) commercially significant change in product pricing, discount levels, payment terms or royalties set or charged by Genius; o) any event or condition of any character that has or could be reasonably expected to have a Material Adverse Effect; or p) negotiation or agreement by Genius or any officers, directors officer or employees of the Company or any Subsidiary other than consistent with past practices; or (m) agreed thereof to do any of the foregoingthings described in Sections 2.7 (a) through (o), other than negotiations with Autodesk and its representatives regarding the Acquisition and the other transactions contemplated by this Agreement.

No Changes. Except for the transactions contemplated by this Agreement and as disclosed in Section 5.9 of the Disclosure Schedule or in the SEC Reports filed prior to 2.9 attached hereto and made a part hereof, since the date of this Agreement, since December 30, 2000 the JDA Balance Sheet there has been no material adverse change in the businessnot been, assets, condition (financial occurred or otherwise), operations or results of operations of the Company and the Subsidiaries, taken as a whole, and neither the Company nor any Subsidiary has: arisen any: (a) incurred any material debts, obligations or liabilities, absolute, accrued or contingent and whether due or to become due, transaction by JDA except current liabilities incurred in the ordinary course of business and the debt evidenced by the Demand Note; as conducted on that date; (b) paid any material obligation capital expenditure by JDA, either individually or liability other than, or discharged or satisfied any material liens or encumbrances other than those securing, current liabilities, in each case in the ordinary course of business; aggregate, exceeding $1,000; (c) declared or made any payment or distribution to its shareholders as suchdestruction, damage to, or purchased or redeemed loss of any assets (including without limitation intangible assets) of its shares of capital stock or other securities, or obligated itself to do so; (d) mortgaged, pledged or subjected to lien, charge, security interest or other encumbrance any of its material assets, tangible or intangible, except for Permitted Liens (as hereinafter defined) arising in the ordinary course of business and liens securing the Demand Note; (e) sold, transferred or leased any of its material assets, except for sales of inventory and obsolete or worn-out equipment in the ordinary course of business; (f) cancelled or compromised any material debt or claim, or waived or released any right of material value; (g) suffered any physical damage, destruction or loss JDA (whether or not covered by insurance) materially and adversely affecting), either individually or in the aggregate, exceeding $1,000 (d) labor trouble or claim of wrongful discharge or other unlawful labor practice or action; (e) change in accounting methods or practices (including any change in depreciation or amortization policies or rates, any change in policies in making or reversing accruals, or any change in capitalization of software development costs) by JDA; (f) declaration, setting aside, or payment of a dividend or other distribution in respect to the businessshares of JDA, assetsor any direct or indirect redemption, condition purchase or other acquisition by JDA of any of its shares; (financial g) increase in the salary or otherwise)other compensation payable or to become payable by JDA to any of its officers, operations directors or results employees, or the declaration, payment, or commitment or obligation of operations any kind for the payment, by JDA, of the Company and the Subsidiaries, taken as a whole; bonus or other additional salary or compensation to any such person; (h) entered into acquisition, sale or transfer of any material transaction other than asset of JDA except in the ordinary course of business; ; (i) encountered formation, amendment or termination of any distribution agreement or any material labor difficulties contract, agreement or labor union organizing activities; license to which JDA is a party, other than termination by JDA pursuant to the terms thereof; (j) issued loan by JDA to any person or sold entity, or guaranty by JDA of any shares loan; (k) waiver or release of capital stock any material right or claim of JDA, including any write-off or other compromise of any account receivable of JDA; (l) the commencement or notice or, to the best knowledge of JDA and the Principal Shareholders, threat of commencement of any governmental proceeding against or investigation of JDA or its affairs; (m) other event or condition of any character that has or would, in JDA's reasonable judgment, be expected to have a Material Adverse Effect on JDA; (n) issuance, sale or redemption by JDA of any of its shares or of any other of its securities (other than issuances of shares of Common Stock issued upon the exercise pursuant to outstanding options and warrants; (o) change in pricing or conversion of options, warrants royalties set or convertible securities outstanding on December 30, 2000 or granted thereafter and disclosed on Schedule 5.9 hereto) or granted any options, warrants, convertible securities or other purchase rights with respect thereto; (k) made any acquisition or disposition of any material assets or become involved in any other material transaction, other than charged by JDA except for fair value discounts extended in the ordinary course of business; (l) increased substantially any compensation or benefits payable to any officers, directors or employees of the Company or any Subsidiary other than business consistent with past practicespractice; or (p) change in pricing or royalties set or charged by JDA except for discounts extended in the ordinary course of business consistent with past practice; or (mq) agreed negotiation or agreement by JDA to do any of the foregoingthings described in the preceding clauses (a) through (o) (other than negotiations with BESC and its representatives regarding the transactions contemplated by this Agreement).

No Changes. Except for the transactions as expressly contemplated by this Agreement and as disclosed in Section 5.9 of the Disclosure Schedule or in the SEC Reports filed prior to the date of this Agreement, since December 30the Balance Sheet Date and the Termination Right Lapse Date, 2000 the Company has primarily been operated for the purpose of assisting Acquiror in obtaining the US Approval. Except for transactions specifically contemplated in this Agreement or as expressly set forth in Section 2.9 of the Disclosure Schedule, since the Balance Sheet Date; (1) there has not been any Material Adverse Effect, and no event has occurred or circumstance has arisen that, in combination with any other events or circumstances, could reasonably be expected to have or result in a Material Adverse Effect; (2) there has not been any material adverse change loss, damage or destruction to, or any material [*] Confidential treatment requested. 37 CONFIDENTIAL TREATMENT REQUESTED interruption in the businessuse of, assets, condition (financial or otherwise), operations or results any of operations the material assets of the Company and the Subsidiaries, taken as a whole, and neither the Company nor any Subsidiary has: (a) incurred any material debts, obligations or liabilities, absolute, accrued or contingent and whether due or to become due, except current liabilities incurred in the ordinary course of business and the debt evidenced by the Demand Note; (b) paid any material obligation or liability other than, or discharged or satisfied any material liens or encumbrances other than those securing, current liabilities, in each case in the ordinary course of business; (c) declared or made any payment or distribution to its shareholders as such, or purchased or redeemed any of its shares of capital stock or other securities, or obligated itself to do so; (d) mortgaged, pledged or subjected to lien, charge, security interest or other encumbrance any of its material assets, tangible or intangible, except for Permitted Liens (as hereinafter defined) arising in the ordinary course of business and liens securing the Demand Note; (e) sold, transferred or leased any of its material assets, except for sales of inventory and obsolete or worn-out equipment in the ordinary course of business; (f) cancelled or compromised any material debt or claim, or waived or released any right of material value; (g) suffered any physical damage, destruction or loss (whether or not covered by insurance); and (3) materially neither the Company nor any of its officers, directors, employees, partners, accountants, auditors, attorneys, advisors, representatives and adversely affectingother agents (on behalf of the Company) has: (a) taken any action or entered into or agreed to enter into any transaction, agreement or commitment other than in the Ordinary Course of Business; (b) forgiven or canceled any indebtedness or waived any claims or rights (including any indebtedness owing by any Company Securityholder, officer, director, employee or Affiliate of the Company); (c) granted any increase in the compensation of directors, officers, employees or consultants (including any such increase pursuant to any employment agreement or bonus, pension, profit-sharing, lease payment or other plan or commitment) or any increase in the compensation payable or to become payable to any director, officer, employee or consultant, except in such case as granted to employees in the Ordinary Course of Business; (d) borrowed or agreed to borrow any funds, or, incurred or become subject to, whether directly or by way of assumption or guarantee or otherwise, any indebtedness for borrowed money in excess of $[*] individually or in excess of $[*] in the aggregate, except liabilities that are incurred in the businessOrdinary Course of Business, assetsor increased, condition or experienced any change in any assumptions underlying or methods of calculating, any bad debt, contingency or other reserves; (financial e) paid, discharged or otherwisesatisfied any material claims or liabilities other than the payment, discharge or satisfaction in the Ordinary Course of Business of claims and liabilities reflected or reserved against in the Financial Statements or incurred in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement since the Balance Sheet Date, or prepaid any obligation having a fixed maturity of more than ninety (90) days from the date such obligation was issued or incurred; (f) permitted or allowed any of its property or assets to be subjected to any Lien or Encumbrance (other than Permitted Encumbrances), operations except in the Ordinary Course of Business; (g) purchased or results sold, transferred or otherwise disposed of operations any of the Company and the Subsidiaries, taken as a whole; (h) entered into any its material transaction properties or assets other than in the ordinary course Ordinary Course of business; Business; (h) disposed of or permitted to lapse any rights to the use of any Proprietary Right, disposed of any Proprietary Right or disclosed a Proprietary Right to any Person without obtaining a commercially reasonable confidentiality agreement from such Person with respect to any trade secret, formula, process or know-how not theretofore a matter of public knowledge; (i) encountered made any material labor difficulties single capital expenditure or labor union organizing activitiescommitment in excess of $[*] for additions to property, plant, equipment or intangible capital assets or made aggregate capital expenditures in excess of $[*] for additions to property, plant, equipment or intangible capital assets; [*] Confidential treatment requested. 38 CONFIDENTIAL TREATMENT REQUESTED (j) made any change in accounting methods or practices or internal control procedures or become aware of any material misstatements or significant deficiencies or material weaknesses in internal control; (k) other than pursuant to the exercise of Company Options, issued or sold any shares of capital stock or other securities (other than shares of Common Stock issued upon the exercise or conversion of options, warrants or convertible securities outstanding on December 30, 2000 or granted thereafter and disclosed on Schedule 5.9 hereto) or granted any options, warrants, convertible securities securities, subscriptions, stock appreciation rights, phantom stock plans, stock equivalents, rights of first refusal or offer, preemptive rights or other purchase rights with respect thereto; rights, agreements, arrangements or commitments (kcontingent or otherwise and whether or not immediately exercisable) made any acquisition or disposition of any material assets character issued, granted, authorized or become involved assumed by the Company or by which the Company is bound relating to all or any portion of the issued or unissued capital stock of the Company or obligating the Company to issue or grant, authorize or sell any shares of capital stock of, or options, warrants, convertible securities, subscriptions or other equity interests or similar interests in, the Company, (l) declared, paid or set aside for payment any dividend or other distribution in respect of Company Capital Stock, or redeemed, purchased or otherwise acquired, directly or indirectly, any shares of Company Capital Stock, Company Options, Company Warrants or other material transactionsecurities of the Company, or otherwise permitted the withdrawal by any of the holders of Company Capital Stock of any cash or other assets, in compensation or reimbursement of expenses, indebtedness or otherwise, other than for fair value pursuant to the exercise of Company Options and payments of compensation or reimbursement of expenses in the ordinary course Ordinary Course of business; Business; (lm) increased substantially paid, loaned or advanced any compensation amount to, or benefits payable to sold, transferred or leased any properties or assets to, any of stockholders of the Company, any Affiliate thereof or the officers, directors or employees of the Company or any Subsidiary other than Company, except compensation paid to directors, officers and employees in the Ordinary Course of Business consistent with past practicespractice and except for advances and reimbursements for travel and other business-related expenses incurred in the Ordinary Course of Business consistent with past practice; or or (mn) agreed or committed, whether in writing or otherwise, to do take any of the foregoingaction described in this Section 2.9.

No Changes. Except for the transactions contemplated by this Agreement and as disclosed specified in Section 5.9 3.10 of the Disclosure Schedule or in the SEC Reports filed prior to the date of this AgreementSchedule, since 31 December 302023, 2000 there has been no material adverse change in or have not been, occurred or arisen (or the business, assets, condition (financial or otherwise), operations or results of operations Company has not done) any of the Company and the Subsidiaries, taken as a whole, and neither the Company nor any Subsidiary hasfollowing: (a) incurred any material debts, obligations event or liabilities, absolute, accrued condition of any character that has had or contingent and whether due or could reasonably be expected to become due, except current liabilities incurred in the ordinary course of business and the debt evidenced by the Demand Notehave a Company Material Adverse Effect; (b) paid any loss, damage or destruction to any of the assets that are material obligation or liability other than, or discharged or satisfied any material liens or encumbrances other than those securing, current liabilities, in each case in to the ordinary course of businessCompany; (c) declared any action by the Company that, if taken from and after the execution of this Agreement until the Closing, would be prohibited by Section 6.1 or made any payment or distribution to its shareholders as such, or purchased or redeemed any of its shares of capital stock or other securities, or obligated itself to do soSection 6.2; (d) mortgaged, pledged made or subjected to lien, charge, security interest declared any dividend or other encumbrance any distribution in respect of its material assets, tangible or intangible, except for Permitted Liens (as hereinafter defined) arising in the ordinary course equity securities of business and liens securing the Demand NoteCompany; (e) sold, transferred or leased any of its material assetsassigned, except for sales of inventory and obsolete or worn-out equipment in the ordinary course of business; (f) cancelled or compromised any material debt or claimlicensed, or waived or released any right of material value; (g) suffered any physical damagetransferred, destruction or loss (whether or not covered by insurance) materially and adversely affectingpledged, individually or in the aggregateleased, the business, assets, condition (financial or otherwise), operations or results of operations of the Company and the Subsidiaries, taken as a whole; (h) entered into any material transaction other than in the ordinary course of business; (i) encountered any material labor difficulties or labor union organizing activities; (j) issued or sold any shares of capital stock or other securities (other than shares of Common Stock issued upon the exercise or conversion of options, warrants or convertible securities outstanding on December 30, 2000 or granted thereafter and disclosed on Schedule 5.9 hereto) or granted any options, warrants, convertible securities or other purchase preferential rights with respect thereto; (k) made to, sublicensed, covenant not to assert with respect to, or otherwise disposed of, or incurred any acquisition or disposition of Lien on, any material assets or become involved in any other material transaction, other than for fair value in the ordinary course of business; (l) increased substantially any compensation or benefits payable to any officers, directors or employees of the Company or abandoned, canceled or permitted to lapse or expire any Subsidiary of the Company Intellectual Property (other than with respect to licenses in the Ordinary Course of Business (consistent with past practices; ) all of which are listed on Section 3.10 of the Disclosure Schedule), (f) received, collected, compiled, used, stored, processed, shared, safeguarded, secured (technically, physically or administratively), disposed of, destroyed, disclosed, or transferred (mincluding cross-border) agreed any Personal Information (or failed to do any of the foregoing, as applicable) in violation of any Privacy Requirements; (g) failed to take all actions (or avoid to take actions, as appropriate) reasonably necessary to protect the privacy and confidentiality of, and to protect and secure, any Personal Information in the possession or control of, or processed by or on behalf of, the Company, including by undergoing data security testing and auditing consistent with past practice and expeditiously and fully resolving or remediating all material risks or vulnerabilities identified; (h) amended, supplemented or otherwise modified any Organizational Documents; (i) incurred any Indebtedness that will remain outstanding after the Closing; (j) acquired (including by merger, consolidation or acquisition of shares or assets) any corporation, partnership, or other business organization or any division thereof; (k) created any subsidiary or enter into a partnership, unincorporated joint venture, or other arrangement with any other Person involving the sharing of profits or losses; (l) changed any of the accounting principles or practices used by the Company; (m) entered into any new line of business, or terminated any existing line of business; (n) granted or increased in the base salary or wages, bonus opportunity, or other compensation or benefits, including severance, retention or change in control payments, payable to any current or former employee, director or individual service provider, in each case, except (i) as required by Law, (ii) in the Ordinary Course of Business (consistent with past practices) to current or former employee, director or individual service provider, in each case which are not Executives, or (iii) as required by the terms of any existing Contract; (o) taken any action to accelerate the vesting or payment of any compensation for the benefit of any employee or Company Securityholder; (p) made or authorized capital expenditures in excess of $150,000 in the aggregate; or (q) entered into any agreement or commitment to take any of the actions referred to in clauses (a) through (p) of this Section 3.10.

No Changes. Except Since the date of the Current Balance Sheet (A) the Company has operated in the ordinary course of business consistent with past practice and has paid its debts and Liabilities as they become due, (B) there has not been, occurred or arisen (A) any Effect that has had or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect or (B) except, following the date hereof, as would not be prohibited under, or that is consented to by Parent in writing pursuant to, Article V hereof, any of the following: (a) modifications, amendments or changes to the Charter Documents or any equivalent organizational document of any Subsidiary of the Company; (b) expenditure (including capital expenditure), transaction or commitment by the Company exceeding $25,000 individually or $50,000 in the aggregate; (c) payment, discharge, waiver or satisfaction, in any amount in excess of $25,000 individually or $50,000 in the aggregate, of any claim, right or Liability other than payments, discharges or satisfactions in the ordinary course of business of liabilities reflected or reserved against in the Current Balance Sheet; (d) 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); (e) claims or matters raised by any individual, Governmental Entity, or workers’ representative organization, bargaining unit or union, regarding, claiming or alleging labor trouble, wrongful discharge or any other unlawful employment or labor practice or action with respect to the Company; (f) adoption or change in accounting methods or practices (including any change in depreciation or amortization policies or rates) by the Company other than as required by GAAP; (g) adoption of or change in any election or accounting method in respect of Taxes, agreement or settlement of any claim or assessment in respect of Taxes, extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes or filing of any amended Return; (h) revaluation by the Company of any of its assets (whether tangible or intangible), including writing down the value of inventory or writing off notes or accounts receivable; (i) declaration, setting aside or payment of a dividend or other distribution (whether in cash, stock or property) in respect of any Company Capital Stock, or any split, combination or reclassification in respect of any shares of Company Capital Stock, or any issuance or authorization of any issuance of any other securities in respect of, in lieu of or in substitution for shares of Company Capital Stock, or any direct or indirect repurchase, redemption, or other acquisition by the Company of any shares of Company Capital Stock (or options, warrants or other rights convertible into, exercisable or exchangeable therefor); (j) (i) increase in or other material change to the salary or other compensation (including equity based compensation) payable or to become payable by the Company to any of their to any of its respective officers, directors, employees or consultants, or (ii) grant, declaration, payment or commitment or obligation of any kind for the payment (whether in cash or equity) by the Company of a severance payment, change of control payment, termination payment, retention payment, bonus, special remuneration or other additional salary or compensation (including equity based compensation), in each case to any of its respective officers, directors, employees or consultants; (k) entering into any Material Contract or any termination, extension, amendment or modification of the terms of any Material Contract; (l) sale, lease, license or other disposition of any of the assets (whether tangible or intangible) or properties of the Company, including the sale of any accounts receivable of the Company, or any creation of any security interest in such assets or properties, in each case other than in the ordinary course of business consistent with past practice; (m) loan by the Company to any Person (except for advances to employees for travel and business expenses in the ordinary course of business consistent with past practices), or purchase by the Company of any debt securities of any Person or amendment to the terms of any outstanding loan agreement; (n) incurring by the Company of any Indebtedness or Guarantee (including with respect to the issuance or sale of any debt securities), amendment of the terms of any outstanding loan or guarantee agreement, except for obligations to reimburse employees for travel and business expenses incurred in the ordinary course of business consistent with past practices; (o) waiver or release of any material right or claim of the Company, including any waiver, release or other compromise of any material account receivable of the Company; (p) commencement or settlement of any lawsuit by the Company, the commencement, settlement, notice or, to the Knowledge of the Company, threat of any lawsuit or proceeding or other investigation against the Company or relating to any of their businesses, properties or assets; (q) notice received by or on behalf of the Company or any of its Representatives of any claim or potential claim of ownership, interest or right by any Person other than the Company of the Company Intellectual Property owned by or developed or created by the Company or of infringement by the Company of any other Person’s Intellectual Property Rights; (r) issuance, grant, delivery, sale or purchase of, or proposal, Contract to issue, grant, deliver, sell or purchase, by the Company, of (i) any shares of Company Capital Stock or securities convertible into, or exercisable or exchangeable for, shares of Company Capital Stock, or (ii) any subscriptions, warrants, options, rights or securities to acquire any of the foregoing, except for issuances of Company Capital Stock upon the exercise of Company Options; (s) (i) sale, lease, license or transfer of any Company Intellectual Property or execution, modification or amendment of any Contract with respect to the Company Intellectual Property with any Person (other than non-exclusive licenses of the Company Products to Customers pursuant to written agreements in the ordinary course of business and consistent with past practices that do not materially differ in substance from the Standard Form Agreements and involving aggregate payments to the Company of less than $25,000) or with respect to the Intellectual Property Rights of any Person (other than with respect to Shrink Wrap Code or Open Source Software), (ii) purchase, assignment, or license of any Technology or Intellectual Property Rights or execution, modification or amendment of any agreement with respect to the Intellectual Property Rights of any third Person (other than with respect to Shrink Wrap Code), (iii) agreement or modification or amendment of an existing agreement with a third party with respect to the development of any Technology, or (iv) change in pricing or royalties set or charged by the Company to its customers or licensees or in pricing or royalties set or charged by Persons who have licensed Intellectual Property Rights to the Company; (t) agreement or modification to any Contract pursuant to which any other party is or was granted marketing, distribution, development, delivery, manufacturing or similar rights of any type or scope with respect to any Company Products or Company Intellectual Property; (u) purchase or sale of any interest in real property, granting of any security interest in any real property, entry into or renewal, amendment or modification of any lease, license, sublease or other occupancy of any Leased Real Property or other real property by the Company; (v) acquisition by the Company of, or agreement by the Company to acquire by merging or consolidating with, or by purchasing any assets or equity securities of, or by any other manner, any business or corporation, partnership, association or other business organization or division thereof, or other acquisition or agreement to acquire any assets or any equity securities that are material, individually or in the aggregate, to the business of the Company; (w) adoption or amendment of any Company Employee Plan, or execution or amendment of any Employee Agreement (other than execution of the Company standard at will offer letter); (x) execution of any strategic alliance, affiliate or joint marketing arrangement or Contract by the Company; (y) any action to accelerate the vesting schedule of any Company Options or Company Restricted Stock; (z) hiring, promotion, demotion or termination or other change to the employment status or title of any employees of the Company, hiring or termination of any consultant of the Company, or any change to the status of any officer or director of the Company; (aa) alteration of any interest of the Company in a Subsidiary or any corporation, association, joint venture, partnership or business entity in which the Company directly or indirectly holds any interest; (bb) cancellation, amendment or renewal of any insurance policy of the Company; (cc) issuance or agreement to issue any refunds, credits, allowances or other concessions with customers with respect to amounts collected by or owed to the Company in excess of $10,000 individually or $25,000 in the aggregate; or (dd) agreement by the Company, or any officer or employees on behalf of the Company, to do any of the things described in the preceding clauses (a) through (cc) of this Section 3.8 (other than negotiations with Parent and its representatives regarding the transactions contemplated by this Agreement and as disclosed in Section 5.9 of the Disclosure Schedule or in the SEC Reports filed prior to the date of this Agreement, since December 30, 2000 there has been no material adverse change in the business, assets, condition (financial or otherwiseany Related Agreements), operations or results of operations of the Company and the Subsidiaries, taken as a whole, and neither the Company nor any Subsidiary has: (a) incurred any material debts, obligations or liabilities, absolute, accrued or contingent and whether due or to become due, except current liabilities incurred in the ordinary course of business and the debt evidenced by the Demand Note; (b) paid any material obligation or liability other than, or discharged or satisfied any material liens or encumbrances other than those securing, current liabilities, in each case in the ordinary course of business; (c) declared or made any payment or distribution to its shareholders as such, or purchased or redeemed any of its shares of capital stock or other securities, or obligated itself to do so; (d) mortgaged, pledged or subjected to lien, charge, security interest or other encumbrance any of its material assets, tangible or intangible, except for Permitted Liens (as hereinafter defined) arising in the ordinary course of business and liens securing the Demand Note; (e) sold, transferred or leased any of its material assets, except for sales of inventory and obsolete or worn-out equipment in the ordinary course of business; (f) cancelled or compromised any material debt or claim, or waived or released any right of material value; (g) suffered any physical damage, destruction or loss (whether or not covered by insurance) materially and adversely affecting, individually or in the aggregate, the business, assets, condition (financial or otherwise), operations or results of operations of the Company and the Subsidiaries, taken as a whole; (h) entered into any material transaction other than in the ordinary course of business; (i) encountered any material labor difficulties or labor union organizing activities; (j) issued or sold any shares of capital stock or other securities (other than shares of Common Stock issued upon the exercise or conversion of options, warrants or convertible securities outstanding on December 30, 2000 or granted thereafter and disclosed on Schedule 5.9 hereto) or granted any options, warrants, convertible securities or other purchase rights with respect thereto; (k) made any acquisition or disposition of any material assets or become involved in any other material transaction, other than for fair value in the ordinary course of business; (l) increased substantially any compensation or benefits payable to any officers, directors or employees of the Company or any Subsidiary other than consistent with past practices; or (m) agreed to do any of the foregoing.