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.
