Common use of Conduct of Business by Company Pending the Closing Clause in Contracts

Conduct of Business by Company Pending the Closing. Company agrees that, between the date of this Agreement and the Effective Time, unless Parent shall otherwise agree in writing, (x) the respective businesses of Company and the Company Subsidiaries shall be conducted only in, and Company and the Company Subsidiaries shall not take any action except in, the ordinary course of business consistent with past practice and (y) Company shall use all reasonable efforts to keep available the services of such of the current officers, significant employees and consultants of Company and the Company Subsidiaries and to preserve the current relationships of Company and the Company Subsidiaries with such of the corporate partners, customers, suppliers and other persons with which Company or any Company Subsidiary has significant business relations in order to preserve substantially intact its business organization. By way of amplification and not limitation, neither Company nor any Company Subsidiary shall, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following without the prior written consent of Parent: (a) amend or otherwise change its certificate of incorporation or bylaws or equivalent organizational documents; (b) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license or encumbrance of, (i) any shares of capital stock of Company or any Company Subsidiary of any class, or securities convertible into or exchangeable or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of Company or any Company Subsidiary, other than (x) the issuance of shares of Company Common Stock pursuant to the exercise of warrants or stock options therefor outstanding as of the date of this Agreement, or (y) the issuance in the ordinary course of business consistent with past practice of up to an additional 500,000 shares of Company Common Stock under Company's Stock Plans pursuant to new grants of options or share purchase rights or (ii) any property or assets of Company or any Company Subsidiary except sales of inventory in the ordinary course of business consistent with past practice; (i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest in any corporation, partnership, other business organization or person or any division thereof (other than in connection with the formation of foreign subsidiaries and the capitalization thereof with no more than $500,000); (ii) incur any indebtedness for borrowed money (other than in de minimus amounts) or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person for borrowed money or make any loans or advances material to the business, assets, liabilities, financial condition or results of operations of Company and the Company Subsidiaries, taken as a whole; (iii) terminate, cancel or request any material change in, or agree to any material change in, any Company Material Contract or other material License Agreement (other than as described in Section 6.01(c)(iii) of the Company Disclosure Schedule); (iv) make or authorize any capital expenditure, other than capital expenditures in the ordinary course of business that have been described in the Disclosure Schedule and that are not, in the aggregate, in excess of $4,000,000 for Company and the Company Subsidiaries taken as a whole; or (v) enter into or amend any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 6.01(c); (d) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except that any Company Subsidiary may pay dividends or make other distributions to Company or any other Company Subsidiary; (e) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee pursuant to stock option or purchase agreements in effect on the date hereof; (f) amend or change the period (or permit any acceleration, amendment or change) of exercisability of options granted under the Company Stock Plans or authorize cash payments in exchange for any Company Stock Options granted under any of such plans, except pursuant to existing arrangements disclosed to Parent prior to the date hereof; (g) amend the terms of, repurchase, redeem or otherwise acquire, or permit any Company Subsidiary to repurchase, redeem or otherwise acquire, any of its securities or any securities of any Company Subsidiary or propose to do any of the foregoing; (h) other than pursuant to existing agreements of Company previously provided to Parent, increase the compensation payable or to become payable to its directors, officers, consultants or employees (other than any such increases for non-officers that are made in the ordinary course of business consistent with past practice), grant any rights to severance or termination pay to, or enter into any employment or severance agreement which provides benefits upon a change in control of Company that would be triggered by the Merger with, any director, officer, consultant or other employee of Company or any Company Subsidiary who is not currently entitled to such benefits from the Merger, establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer, consultant or employee of Company or any Company Subsidiary (except as allowed under Section 6.01(b)), except to the extent required by applicable Law or the terms of a collective bargaining agreement, or enter into or amend any contract, agreement, commitment or arrangement between Company or any Company Subsidiary and any of Company's directors, officers, consultants or employees (except as allowed under Section 6.01(b)); (i) except as permitted under Section 6.01(c), pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities (A) reflected or reserved against on the consolidated balance sheet of Company and the consolidated the Company Subsidiaries dated as of March 31, 1999 included in Company's quarterly report on Form 10-Q for the period then ended (the "COMPANY BALANCE SHEET") and only to the extent of such reserves or (B) that are both immaterial in amount and incurred in the ordinary course of business consistent with past practice after the date of the Company Balance Sheet; (j) make any change with respect to Company's accounting policies, principles, methods or procedures, including, without limitation, revenue recognition policies, other than as required by U.S. GAAP; (k) make any material Tax election or settle or compromise any material Tax liability; or (l) authorize or enter into any formal or informal agreement or otherwise make any commitment to do any of the foregoing or to take any action which would make any of the representations or warranties of Company contained in this Agreement untrue or incorrect in any material respect or result in any of the conditions to the Merger set forth herein not being satisfied, except as specifically permitted hereunder.

Conduct of Business by Company Pending the Closing. Company covenants and agrees that, during the period from the date of this Agreement to the Effective Time, except as expressly required or permitted by this Agreement, as set forth on Schedule 4.01, or otherwise with the prior written consent of Parent, the business of Company and Subsidiaries shall be conducted in the usual and ordinary course of business consistent in all material respects with past practices, and Company shall use its commercially reasonable efforts to (a) preserve substantially intact its current business organizations, material insurance policies and goodwill; (b) preserve in all material respects its present relationships with suppliers, lessors, employees, customers, and other Persons with which it has significant business relations; and (c) comply in all material respects with all Laws applicable to it or any of its properties, assets or business. Without limiting the generality of the foregoing, Company shall not, and it shall cause Subsidiaries not to, between the date of this Agreement and the Effective Time, unless Parent shall otherwise agree in writing, (x) the respective businesses of Company and the Company Subsidiaries shall be conducted only in, and Company and the Company Subsidiaries shall not take any action except in, the ordinary course of business consistent with past practice and (y) Company shall use all reasonable efforts to keep available the services of such of the current officers, significant employees and consultants of Company and the Company Subsidiaries and to preserve the current relationships of Company and the Company Subsidiaries with such of the corporate partners, customers, suppliers and other persons with which Company as expressly required or any Company Subsidiary has significant business relations in order to preserve substantially intact its business organization. By way of amplification and not limitation, neither Company nor any Company Subsidiary shall, between the date of permitted by this Agreement and the Effective TimeAgreement, directly or indirectly, do, or agree commit to do, any of the following without the prior written consent of Parent, which shall not be unreasonably withheld: (ai) amend Amend or otherwise change its certificate Certificate of incorporation Incorporation or bylaws By-Laws or the equivalent organizational documents, or amend or grant any waiver under the Rights Agreement; (bii) issue, sell, pledgeSell, dispose of, granttransfer, further pledge or further encumber any stock owned by Company in any of its Subsidiaries; (iii) Issue, reissue, sell, transfer, leasedeliver, license, guarantee or encumberpledge, or authorize the issuance, sale, pledge, disposition, grantreissuance, transfer, leasedelivery, license pledge or encumbrance of, (i) sale of any shares of capital stock of Company or any Company Subsidiary of any class, any Voting Debt or securities convertible into or exchangeable or exercisable for any shares of such capital stockother voting securities, or any options, warrants warrants, convertible or exchangeable securities or other rights of any kind to acquire any shares of such capital stock, Voting Debt, voting securities, convertible or exchangeable securities or any other ownership interest (including, without limitationbut not limited to, any stock appreciation rights, phantom interest)stock, phantom stock rights, or stock-based performance units) of Company or any Company Subsidiary, other than Subsidiary (x) except for the issuance of shares of Company Common Stock Shares required to be issued pursuant to the exercise terms of warrants or stock options therefor the Options outstanding as of the date of this Agreement, hereof) or (y) the issuance make any other changes in the ordinary course of business consistent with past practice of up to an additional 500,000 shares of Company Common Stock under Company's Stock Plans pursuant to new grants of options or share purchase rights or (ii) any property or assets of Company or any Company Subsidiary except sales of inventory in the ordinary course of business consistent with past practiceits capital structure; (i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest in any corporation, partnership, other business organization or person or any division thereof (other than in connection with the formation of foreign subsidiaries and the capitalization thereof with no more than $500,000); (ii) incur any indebtedness for borrowed money (other than in de minimus amounts) or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person for borrowed money or make any loans or advances material to the business, assets, liabilities, financial condition or results of operations of Company and the Company Subsidiaries, taken as a whole; (iii) terminate, cancel or request any material change in, or agree to any material change in, any Company Material Contract or other material License Agreement (other than as described in Section 6.01(c)(iii) of the Company Disclosure Schedule); (iv) make or authorize any capital expenditure, other than capital expenditures in the ordinary course of business that have been described in the Disclosure Schedule and that are not, in the aggregate, in excess of $4,000,000 for Company and the Company Subsidiaries taken as a whole; or (v) enter into or amend any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 6.01(c); (d) declareDeclare, set aside, make or pay any dividend or other distribution, whether payable in cash, stock, property or otherwise, with respect to any of its capital stock, except that any Company Subsidiary may pay stock (other than dividends or make other distributions by any wholly owned Subsidiary to Company or any other Company Subsidiaryits parent); (ev) reclassifyReclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any shares of capital stock of Company or any Subsidiary or any securities convertible into or exercisable for any such shares of its capital stock or securities, except repurchases of unvested shares at cost for payments in connection with the termination respect of the employment relationship with any employee pursuant cancellation of outstanding Options to stock option or purchase agreements in effect the extent and subject to the terms and conditions set forth on the date hereofSchedule 4.01; (fvi) amend Acquire any shares or change equity interests in any corporation, partnership, Person or other business organization or division thereof, or a substantial portion of the period (or permit any acceleration, amendment or change) of exercisability of options granted under the Company Stock Plans or authorize cash payments in exchange for any Company Stock Options granted under any of such plans, except pursuant to existing arrangements disclosed to Parent prior to the date hereofassets thereof; (gvii) amend the terms ofIncur, repurchase, redeem create or otherwise acquire, or permit assume any Company Subsidiary to repurchase, redeem or otherwise acquire, any Indebtedness (including by issuance of its securities or any securities of any Company Subsidiary or propose to do any of the foregoing; (hdebt securities) other than pursuant to existing agreements of Company previously provided to Parent, increase the compensation payable or to become payable to its directors, officers, consultants or employees (other than any such increases for non-officers that are made borrowings in the ordinary course of business consistent with past practice), grant practices under Company's existing credit facilities or issue any debt securities or warrants or other rights to severance or termination pay to, or enter into acquire any employment or severance agreement which provides benefits upon a change in control of Company that would be triggered by the Merger with, any director, officer, consultant or other employee debt securities of Company or any Subsidiary, or assume, guarantee or endorse (other than for collection or deposit in the ordinary course of business consistent with past practices or for guarantees of Subsidiary obligations to the extent permitted under Company's applicable credit agreements), or otherwise as an accommodation become responsible for, the obligations or Indebtedness of any Person, or make any loans or advances or make any capital contributions to, or investments in, any other Person; (viii) Enter into, or modify, amend or terminate any Material Contract; (ix) (A) Increase the compensation or fringe benefits of, or pay any benefit not required by any contract, plan or arrangement in effect as of the date hereof to, any of its directors, officers or employees (including any bonus), except (1) as required by contractual obligations existing as of the date of this Agreement and disclosed in writing to Parent prior to the date hereof and (2) for increases in salary or wages in connection with (i) a promotion or change in position, or (ii) annual increases not in excess of 5%, granted to employees (other than executive officers) of Company or a Subsidiary who in the ordinary course of business consistent with past practices, or (B) except as set forth on Schedule 4.13 or as is not currently entitled to such benefits from the Mergerrequired by Law, establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer, consultant or employee of Company or any Company Subsidiary (except as allowed under Section 6.01(b)), except to the extent required by applicable Law or the terms of a collective bargaining agreementterminate, or enter into take any action to accelerate or amend increase any contractrights or benefits under, agreementor grant any awards under, commitment or arrangement between Company or make any Company Subsidiary and any of Company's directors, officers, consultants or employees (except as allowed under Section 6.01(b)); (i) except as permitted under Section 6.01(c), pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities (A) reflected or reserved against on the consolidated balance sheet of Company and the consolidated the Company Subsidiaries dated as of March 31, 1999 included in Company's quarterly report on Form 10-Q for the period then ended (the "COMPANY BALANCE SHEET") and only to the extent of such reserves or (B) that are both immaterial in amount and incurred material determination not in the ordinary course of business consistent with past practice after practices under, any Employee Benefit Plan; (x) Hire or agree to hire a significant number of new or additional employees not in the ordinary course of business consistent with past practices; (xi) Terminate or lay off any significant number of employees; (xii) Disclose any of its material trade secrets; (xiii) Except as may be required as a result of a change in Law or in GAAP or audit practices, make any material change to any of the financial or tax accounting methods, practices or principles used by it; (xiv) Adopt or authorize a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Company or any Subsidiary (other than the Merger); (xv) Sell, lease or sublease (as lessor or sublessor), license, assign or otherwise dispose of or subject to any Lien any material properties or assets, except (a) sales of inventory or obsolete assets in the ordinary course of business consistent with past practices, (b) pursuant to existing Contracts disclosed in writing to Parent prior to the date of the Company Balance Sheetthis Agreement, and (c) Permitted Liens; (jxvi) make Enter into any change transaction, agreement, arrangement or understanding between (i) Company or any Subsidiary, on the one hand, and (ii) any Affiliate of Company (other than the Subsidiaries), on the other hand, of the type that would be required to be disclosed under Item 404 of Regulation S-K; (xvii) Settle or dismiss any Litigation threatened against, relating to or involving Company and any Subsidiary in connection with respect to Company's accounting policiesany business, principles, methods asset or procedures, including, without limitation, revenue recognition policiesproperty of Company and any Subsidiary, other than in the ordinary course of business consistent with past practices but not, in any individual case, in excess of $100,000 or in a manner that would prohibit or materially restrict Company from operating as required by U.S. GAAPit has historically (including as of the date of this Agreement); (kA) make Make any material Tax election or settle election, (B) enter into any settlement or compromise of any material Tax liability, (C) file any amended Tax Return with respect to any material Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a material Tax refund; or (lxix) authorize Make or enter into any formal or informal agreement or otherwise agree to make any commitment new capital expenditure or expenditures (other than expenditures related to do routine maintenance of existing operations in the ordinary course of business consistent with past practices) that, individually, is in excess of $25,000 or, in the aggregate during any calendar month, are in excess of the foregoing or to take any action which would make any of the representations or warranties of Company contained in this Agreement untrue or incorrect in any material respect or result in any of the conditions to the Merger set forth herein not being satisfied, except as specifically permitted hereunder$50,000.

Conduct of Business by Company Pending the Closing. Company agrees thatFrom the date of this Agreement to the Closing Date, except as set forth on Schedule 6.01 or as expressly required or permitted by this Agreement or otherwise with the prior written consent of Buyer, each Entity shall, and Parent shall cause, directly or indirectly, each Entity to, (a) carry on its business in the ordinary course consistent in all material respects with past practice, (b) use commercially reasonable efforts to preserve intact in all material respects its assets, properties and current business organizations and keep available the services of its current executive officers, (c) use commercially reasonable efforts to preserve in all material respects its relationships with principal customers and suppliers with which it has business dealings and (d) comply in all material respects with all applicable Laws material to it or any of its properties, assets or business. Without limiting the generality of the foregoing, no Entity shall, and Parent shall cause each Entity not to, between the date of this Agreement and the Effective TimeClosing Date, unless Parent shall otherwise agree in writing, (x) the respective businesses of Company and the Company Subsidiaries shall be conducted only in, and Company and the Company Subsidiaries shall not take any action except in, the ordinary course of business consistent with past practice and (y) Company shall use all reasonable efforts to keep available the services of such of the current officers, significant employees and consultants of Company and the Company Subsidiaries and to preserve the current relationships of Company and the Company Subsidiaries with such of the corporate partners, customers, suppliers and other persons with which Company as expressly required or any Company Subsidiary has significant business relations in order to preserve substantially intact its business organization. By way of amplification and not limitation, neither Company nor any Company Subsidiary shall, between the date of permitted by this Agreement and the Effective TimeAgreement, directly or indirectly, do, or agree commit to do, any of the following without the prior written consent of ParentBuyer: (ai) amend Amend or otherwise change its certificate of incorporation or bylaws or equivalent organizational documentsOrganizational Documents; (bii) issueSell, pledge or encumber any stock owned by Company in any Subsidiary of Company; (iii) Issue, reissue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee pledge or encumber, encumber or authorize the issuance, reissuance, sale, pledge, disposition, grant, transfer, lease, license pledge or encumbrance of, (i) of any shares of capital stock of Company or any Company Subsidiary of any class, or securities convertible into or exchangeable or exercisable for any shares of such capital stock, or any options, warrants warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitationbut not limited to, any stock appreciation rights, phantom interest), stock or stock-based performance units) of Company or any Company Subsidiary, other than (x) the issuance of shares of Company Common Stock pursuant to the exercise of warrants or stock options therefor outstanding as of the date of this Agreement, or (y) the issuance in the ordinary course of business consistent with past practice of up to an additional 500,000 shares of Company Common Stock under Company's Stock Plans pursuant to new grants of options or share purchase rights or (ii) any property or assets Subsidiary of Company or make any Company Subsidiary except sales of inventory other changes in the ordinary course of business consistent with past practiceits capital structure; (i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest in any corporation, partnership, other business organization or person or any division thereof (other than in connection with the formation of foreign subsidiaries and the capitalization thereof with no more than $500,000); (ii) incur any indebtedness for borrowed money (other than in de minimus amounts) or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person for borrowed money or make any loans or advances material to the business, assets, liabilities, financial condition or results of operations of Company and the Company Subsidiaries, taken as a whole; (iii) terminate, cancel or request any material change in, or agree to any material change in, any Company Material Contract or other material License Agreement (other than as described in Section 6.01(c)(iii) of the Company Disclosure Schedule); (iv) make or authorize any capital expenditure, other than capital expenditures in the ordinary course of business that have been described in the Disclosure Schedule and that are not, in the aggregate, in excess of $4,000,000 for Company and the Company Subsidiaries taken as a whole; or (v) enter into or amend any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 6.01(c); (d) declareDeclare, set aside, make or pay any dividend or other distribution, whether payable in cash, stock, property or otherwise, with respect to any of its capital stock, except that any Company Subsidiary may pay dividends or make other than cash distributions to Company Parent or any other Company SubsidiaryShareholder in the Ordinary Course of Business and consistent with past practice; (ev) reclassifyReclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any shares of capital stock of Company or any Subsidiary of Company or any securities convertible into or exercisable for any such shares of its capital stock except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee pursuant to stock option or purchase agreements in effect on the date hereofsecurities; (fvi) amend Consolidate or change the period merge with any other Person or acquire (by merger, consolidation, or permit acquisition of stock or assets), any accelerationcorporation, amendment partnership or change) of exercisability of options granted under the Company Stock Plans other business organization or authorize cash payments in exchange for any Company Stock Options granted under any of such plans, except pursuant to existing arrangements disclosed to Parent prior to the date hereofdivision thereof; (gvii) amend the terms of, repurchase, redeem or otherwise acquire, or permit Incur any Company Subsidiary to repurchase, redeem or otherwise acquire, any indebtedness for borrowed money (including by issuance of its securities or any securities of any Company Subsidiary or propose to do any of the foregoing; (hdebt securities) other than pursuant to existing agreements of Company previously provided to Parent, increase the compensation payable or to become payable to its directors, officers, consultants or employees (other than any such increases for non-officers that are made borrowings in the ordinary course Ordinary Course of business consistent Business under Company’s existing credit arrangements with past practice), grant Parent or issue any debt securities or warrants or other rights to severance or termination pay to, or enter into acquire any employment or severance agreement which provides benefits upon a change in control of Company that would be triggered by the Merger with, any director, officer, consultant or other employee debt securities of Company or any Subsidiary of Company, or assume, guarantee or endorse (other than for collection or deposit in the Ordinary Course of Business), or otherwise as an accommodation become responsible for, the obligations of any Person, or make any loans or advances or make any capital contributions to, or investments in, any other Person; (viii) (A) Enter into, or modify, accelerate or waive any rights under, amend or terminate or renegotiate, any Material Contract other than in the Ordinary Course of Business; (B) modify, accelerate or waive any rights under, amend or terminate or renegotiate, any Material Contract with any of the Company’s top ten (10) customers (determined by reference to revenue received for the nine-month period ended September 24, 2006) other than in the Ordinary Course of Business, provided that the Company shall not take any actions or omit to take any actions that would be inconsistent with long-standing and consistently applied Company practices and that would have the effect of increasing short-term cash earnings or cash flows to the material detriment of long-term cash earnings or cash flows; or (C) except as contemplated by Section 6.12, modify, accelerate or waive any rights under, amend or terminate the Collective Bargaining Agreement; (A) Materially increase the compensation or fringe benefits of any of its directors, officers or employees, except as required by contractual obligations existing as of the date hereof and except for increases in salary or wages in connection with a promotion or change in position granted to employees of Company or a Subsidiary who of Company in the Ordinary Course of Business in accordance with past practice, (B) except as is not currently entitled to such benefits from the Mergerrequired by Law, establish, adopt, enter into or amend or terminate, or take any collective bargainingaction to accelerate any rights or benefits under, bonusor make any material determination not in the Ordinary Course of Business consistent with past practice under, profit sharingany Employee Benefit Plan, thrift(C) make any contribution to any Employee Benefit Plan other than regularly scheduled contributions and contributions required pursuant to the terms thereof, compensationincluding matching contributions, stock option, restricted stock, pension, retirementor (D) enter into any employment, deferred compensation, employment, terminationconsulting, severance or other plansimilar agreement with any current or former director or officer, employee of Company or its Subsidiary; (x) Except as may be required as a result of a change in Law or in GAAP or audit practices, change any of the accounting methods, practices or principles used by it; (xi) Adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Company or any Subsidiary of Company (other than the transactions contemplated hereby); (xii) Make or change any Tax election, adopt or change any method of Tax accounting or Tax accounting periods, file any amended Tax Returns (unless such election, accounting method or period, or amended Tax Returns relate to Income Taxes), enter into any closing agreement, trustsettle any material Tax claim or assessment relating to Company, fundsurrender any right to claim a refund of Taxes, policy consent to any extension or arrangement waiver of the statue of limitations applicable to any Tax claim or assessment relating to Company, or fail to timely file all Tax Returns required to be filed and timely pay all Taxes due; (xiii) Settle any claims, actions, arbitrations, disputes or other proceedings that would involve amounts in excess of $250,000 or that would preclude or restrict the Entities from operating their businesses in substantially the same manner as the date hereof within the network footprint of the Entities as such footprint exists on the date hereof; (xiv) Sell, lease (as lessor), license or otherwise dispose of any of Company’s Dark Fiber; (xv) Permit any of its assets to become subjected to any Lien other Permitted Liens; (xvi) Put into effect or promise to put into effect a bonus plan for Company’s senior level executives for calendar year 2007; (xvii) Fail to terminate by Closing all guarantees given by an Entity for the benefit of any director, officer, consultant or employee of Company or any Company Subsidiary (except as allowed under Section 6.01(b)), except to the extent required by applicable Law or the terms of a collective bargaining agreement, or enter into or amend any contract, agreement, commitment or arrangement between Company or any Company Subsidiary and any of Company's directors, officers, consultants or employees (except as allowed under Section 6.01(b)); (i) except as permitted under Section 6.01(c), pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities (A) reflected or reserved against on the consolidated balance sheet of Company and the consolidated the Company Subsidiaries dated as of March 31, 1999 included in Company's quarterly report on Form 10-Q for the period then ended (the "COMPANY BALANCE SHEET") and only to the extent of such reserves or (B) that are both immaterial in amount and incurred in the ordinary course of business consistent with past practice after the date of the Company Balance Sheet; (j) make any change with respect to Company's accounting policies, principles, methods or procedures, including, without limitation, revenue recognition policies, other than as required by U.S. GAAP; (k) make any material Tax election or settle or compromise any material Tax liabilityits Affiliates; or (lxviii) authorize Take, or enter into any formal propose to take, or informal agreement agree to take in writing or otherwise make any commitment to do otherwise, any of the foregoing or to take any action which would make any of the representations or warranties of Company contained actions described in this Agreement untrue or incorrect in any material respect or result in any of the conditions to the Merger set forth herein not being satisfied, except as specifically permitted hereunderSection 6.01.

Conduct of Business by Company Pending the Closing. Except as contemplated by this Agreement, the Company agrees that, between the date of this Agreement and the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, unless Parent Acquirer shall otherwise agree in writing, (x) the respective businesses of the Company and the Company Subsidiaries shall be conducted only in, and the Company and the Company Subsidiaries shall not take any action except in, the ordinary course of business consistent with past practice and (y) the Company shall use all reasonable efforts to keep available the services of such of the current officers, significant key employees and consultants of the Company and the Company Subsidiaries and to preserve the current business relationships of Company and the Company Subsidiaries with such of the its corporate partners, customers, suppliers and other persons with which Company or any Company Subsidiary has significant business relations Persons in order to preserve substantially intact its business organization. By way of amplification and not limitationWithout limiting the foregoing, neither the Company nor any Company Subsidiary shall, except as contemplated by this Agreement, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following without the prior written consent of ParentAcquirer: (a) amend or otherwise change its certificate of incorporation or bylaws or equivalent organizational documents; (b) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license or encumbrance of, (i) any shares of capital stock of the Company or any Company Subsidiary of any class, or securities convertible into or exchangeable or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Company Subsidiary, other than (x) the issuance of shares of Company Common Stock pursuant to the exercise of warrants or stock options therefor outstanding as of the date of this Agreement, or (y) the issuance in the ordinary course of business consistent with past practice of up to an additional 500,000 shares of Company Common Stock under Company's Stock Plans pursuant to new grants of options or share purchase rights Options or (ii) any material property or assets of the Company or any Company Subsidiary except sales of inventory (A) transactions pursuant to existing contracts and (B) transactions in the ordinary course of business consistent with past practice; (i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest in any corporation, partnership, other business organization or person Person or any division thereof (thereof, other than the purchase of assets in connection the ordinary course of business consistent with the formation of foreign subsidiaries and the capitalization thereof with no more than $500,000)past practice; (ii) incur any indebtedness for borrowed money (other than indebtedness with respect to working capital in de minimus amounts) amounts consistent with past practice), including borrowing an amount in excess of the amount currently outstanding pursuant to that certain Accounts Receivable Financing Agreement, dated as of April 27, 2000, between the Company and Silicon Valley Bank, or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person Person (other than a Subsidiary) for borrowed money or make any loans or advances material to the business, assets, liabilities, financial condition or results of operations of the Company and the Company its Subsidiaries, taken as a whole; (iii) terminate, cancel or request any material change in, or agree to any material adverse change in, any Company Material Contract or other material License Agreement (other than as described in Section 6.01(c)(iii) of the Company Disclosure Schedule)License; (iv) make or authorize any capital expenditure, other than capital expenditures in the ordinary course of business that have been described in consistent with past practice or committed to prior to the date of this Agreement and identified on Schedule 5.1(c) to the Company Disclosure Schedule and that are not, in the aggregate, in excess of $4,000,000 100,000 for the Company and the Company Subsidiaries taken as a whole; or (v) enter into or amend any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 6.01(c)5.1; (d) except as otherwise provided in this Agreement, declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except that any Company Subsidiary may pay dividends or make other distributions to Company or any other Company Subsidiarythe Company; (e) except as otherwise provided in this Agreement, reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock except repurchases stock, other than pursuant to the right to repurchase shares of unvested shares at cost in connection with Company Common Stock upon the termination of the Company employees' employment relationship with any employee pursuant to stock option or purchase agreements in effect existing on the date hereofof this Agreement; (f) except as otherwise provided in this Agreement, amend or change any terms of any Company Stock Option, including the period (or including, without limitation, permit any acceleration, amendment or change) of or exercisability of options granted under the Company Stock Plans or any other outstanding options or authorize cash payments in exchange for any Company Stock Options granted under any of such plans, except pursuant to existing arrangements disclosed to Parent prior to the date hereofCompany Stock Plans or any other outstanding options; (g) amend the terms of, repurchase, redeem or otherwise acquire, or permit any Company Subsidiary to repurchase, redeem or otherwise acquire, any of its securities or any securities of any Subsidiary, other than pursuant to the right to repurchase shares of Company Subsidiary or propose to do any Common Stock upon the termination of Company employees' employment existing on the foregoingdate of this Agreement; (h) other than pursuant to existing agreements of Company previously provided to Parent, increase the compensation payable or to become payable to its directors, officers, consultants or employees (other than any such increases for non-officers that are made in the ordinary course of business consistent with past practice)employees, grant any rights to severance or termination pay to, or enter into any employment or severance agreement agreement, except as required by the terms of this Agreement, which provides benefits upon a change in control of the Company that would be triggered by the Merger with, any director, officer, consultant or other employee of the Company or any Company Subsidiary who is not currently entitled to such benefits from the Merger, establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer, consultant or employee of the Company or any Company Subsidiary (except as allowed under Section 6.01(b))Subsidiary, except to the extent required by applicable Law or the terms of a collective bargaining agreement, or enter into or amend any contract, agreement, commitment or arrangement (including, without limitation, any loan agreement) between the Company or any Company Subsidiary and any of the Company's directors, officers, consultants or employees (employees, except as allowed under Section 6.01(b))for increases in compensation paid and bonuses payable to Persons who are not directors of the Company in the ordinary course of business consistent with past practice; (i) except as permitted under Section 6.01(c), pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of claims, liabilities or obligations in the ordinary course of business and consistent with past practice of liabilities (A) reflected or reserved against on the consolidated balance sheet of Company and the consolidated the Company Subsidiaries dated as of March 31, 1999 included in Company's quarterly report on Form 10-Q for the period then ended (the "COMPANY BALANCE SHEET") and only to the extent of such reserves or (B) that are both immaterial in amount and incurred in the ordinary course of business consistent with past practice after the date of the Company Balance Sheetpractice; (j) except as required by any Governmental Entity, make any material change with respect to the Company's accounting policies, principles, methods or procedures, including, without limitation, revenue recognition policies, other than as required by U.S. GAAP; (k) make any material Tax election or settle or compromise any material Tax liability, other than the payment of Taxes which are due and payable; or (l) authorize or enter into any formal or informal agreement or otherwise make any commitment to do any of the foregoing or to take any action which would make any of the representations or warranties of the Company contained in this Agreement herein untrue or incorrect in any material respect or prevent the Company from performing or cause the Company not to perform its covenants hereunder in any material respect or result in any of the conditions to the Merger set forth herein not being satisfied, except as specifically permitted hereundersatisfied in any material respect.

Conduct of Business by Company Pending the Closing. Company agrees that, between the date of this Agreement and the Effective Time, unless Parent shall otherwise agree in writing, (x) the respective businesses business of Company and the Company Subsidiaries shall be conducted only in, and Company and the Company Subsidiaries shall not take any action except in, the ordinary course of business consistent with past practice and (y) Company shall use all reasonable efforts to keep available the services of such of the current officers, significant employees and consultants of Company and the Company Subsidiaries and to preserve the current relationships of Company and the Company Subsidiaries with such of the corporate partners, customers, suppliers and other persons with which Company or any Company Subsidiary has significant business relations in order to preserve substantially intact its business organization. By way of amplification and not Without limitation, neither Company nor any Company Subsidiary shallshall not, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following without the prior written consent of Parent: (a) amend or otherwise change its certificate Restated Articles of incorporation Incorporation or bylaws Bylaws or equivalent organizational documents; (b) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license or encumbrance of, of (i) any shares of capital stock of Company or any Company Subsidiary Capital Stock of any class, or securities convertible into or exchangeable or exercisable for any shares of such capital stockCompany Capital Stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of Company or any Company SubsidiaryCompany, other than (x) the issuance of shares of Company Common Stock or Company Series E Stock pursuant to the exercise of warrants or stock options or warrants therefor outstanding as of the date of this Agreement, or (y) the issuance in the ordinary course of business consistent with past practice of up to an additional 500,000 shares of Company Common Stock under Company's Stock Plans pursuant to new grants of options or share purchase rights ; or (ii) any material property or assets of Company except (A) transactions pursuant to existing Contracts and (B) dispositions, leases or any Company Subsidiary except sales licenses of inventory in the ordinary course of business consistent with past practice; (i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest in any corporation, partnership, other business organization or person Person or any division thereof (thereof, other than the purchase of assets in connection the ordinary course of business consistent with the formation of foreign subsidiaries and the capitalization thereof with no more than $500,000)past practice; (ii) incur any indebtedness for borrowed money (other than indebtedness with respect to working capital in de minimus amountsamounts consistent with past practice) or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person Person for borrowed money or make any loans or advances material to the business, assets, liabilities, financial condition or results of operations of Company and the Company Subsidiaries, taken as a wholeCompany; (iii) terminate, cancel or request any material change in, or agree to any material change in, any Company of Company's Material Contract or other material License Agreement (Contracts, in each case other than as described in Section 6.01(c)(iii) the ordinary course of the Company Disclosure Schedule)business consistent with past practice; (iv) make or authorize any capital expenditure, other than capital expenditures in the ordinary course of business consistent with past practice that have been described budgeted for fiscal year 2000 and disclosed in the Disclosure Schedule writing to Parent and that are not, in the aggregate, in excess of $4,000,000 for Company and the Company Subsidiaries taken as a whole100,000; or (v) enter into or amend any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 6.01(c6.1(c); (d) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except that any Company Subsidiary may pay dividends or make other distributions to Company or any other Company Subsidiary; (e) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee pursuant to stock option or purchase agreements in effect on the date hereof; (f) amend or change the period (or permit any acceleration, amendment or change) of exercisability of options granted under the Company Stock Plans or authorize cash payments in exchange for any Company Stock Options granted under any of such plans, except pursuant to existing arrangements disclosed to Parent prior to the date hereof; (g) amend the terms of, repurchase, redeem or otherwise acquire, or permit any Company Subsidiary to repurchase, redeem or otherwise acquire, any of its securities or any securities of any Company Subsidiary or propose to do any of the foregoingsecurities; (h) other than pursuant to existing agreements of Company previously provided to Parent, increase the compensation payable or to become payable to its directors, officers, consultants or employees (other than any such increases for non-officers that are made in the ordinary course of business consistent with past practice)employees, grant any rights to severance or termination pay to, or enter into any employment or severance agreement which provides benefits upon a change in control of Company that would be triggered by the Merger with, any director, officer, consultant or other employee of Company or any Company Subsidiary who is not currently entitled to such benefits from the Merger, establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer, consultant or employee of Company or any Company Subsidiary (except as allowed under Section 6.01(b))Company, except to the extent required by applicable Law or the terms of a collective bargaining agreement, or enter into or amend any contract, agreement, commitment or arrangement between Company or any Company Subsidiary and any of Company's directors, officers, consultants or employees (except as allowed under Section 6.01(b))employees; (i) except as permitted under Section 6.01(c), pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of claims, liabilities or obligations (A) in the ordinary course of business and consistent with past practice of or (B) claims, liabilities (A) or obligations reflected or reserved against on the consolidated balance sheet of Company and the consolidated the Company Subsidiaries dated as of March 31November 1999 Balance Sheet, 1999 included in Company's quarterly report on Form 10-Q for the period then ended (the "COMPANY BALANCE SHEET") and only to the extent of such reserves or (B) that are both immaterial in amount and incurred in the ordinary course of business consistent with past practice after the date of the Company Balance Sheetreserves; (j) except as required by any Governmental Entity, make any material change with respect to Company's accounting policies, principles, methods or procedures, including, without limitation, revenue recognition policies, other than as required by U.S. GAAP; (k) make any material Tax election or settle or compromise any material Tax liability; or; (l) authorize or enter into any formal or informal agreement or otherwise make any commitment to do any of the foregoing or to take any action which would make any of the representations or warranties of Company contained in this Agreement untrue or incorrect in any material respect or prevent Company from performing or cause Company not to perform its covenants hereunder or result in any of the conditions to the Merger set forth herein not being satisfied; or (m) together with its directors, except officers, agents, employees, stockholders and other holders of equity interests in the Company, shall not trade in, or otherwise obtain or dispose of, Parent Common Stock; PROVIDED, FURTHER, that Company shall (i) advise such Persons in writing of the foregoing obligation as disclosure of this transaction becomes necessary and authorized under this Agreement, and (ii) specifically permitted hereunderstate that such trading is prohibited under Dutch and English Laws and regulations.

Conduct of Business by Company Pending the Closing. Company covenants and agrees that, during the period from the date of this Agreement to the Effective Time, except as expressly required or permitted by this Agreement, as set forth on Schedule 4.01, or otherwise with the prior written consent of Parent, the Business of Company and Subsidiaries, and the use, operation, maintenance and repair of the Owned Real Property and the Leased Real Property, the conduct of the audit of Company’s consolidated financial statements, and the ordering of goods and services sufficient for the operation of the Business as currently conducted shall be conducted in the usual and ordinary course of business consistent in all material respects with past practices, and Company shall use its commercially reasonable efforts to (a) preserve substantially intact its current business organizations, material insurance policies and Trade Rights and goodwill; (b) preserve in all material respects its present relationships with suppliers, lessors, employees, customers, liaisons, licensees, wholesalers, franchisees and other Persons with which it has significant business relations; and (c) comply in all material respects with all Laws applicable to it or any of its properties, assets or Business. Without limiting the generality of the foregoing, Company shall not, and it shall cause Subsidiaries not to, between the date of this Agreement and the Effective Time, unless Parent shall otherwise agree in writing, (x) the respective businesses of Company and the Company Subsidiaries shall be conducted only in, and Company and the Company Subsidiaries shall not take any action except in, the ordinary course of business consistent with past practice and (y) Company shall use all reasonable efforts to keep available the services of such of the current officers, significant employees and consultants of Company and the Company Subsidiaries and to preserve the current relationships of Company and the Company Subsidiaries with such of the corporate partners, customers, suppliers and other persons with which Company as expressly required or any Company Subsidiary has significant business relations in order to preserve substantially intact its business organization. By way of amplification and not limitation, neither Company nor any Company Subsidiary shall, between the date of permitted by this Agreement and the Effective TimeAgreement, directly or indirectly, do, or agree commit to do, any of the following without the prior written consent of Parent: (ai) amend Amend or otherwise change its certificate Articles of incorporation Incorporation or bylaws By-Laws or the equivalent organizational documentsdocuments or amend or grant any waiver under the Rights Agreement; (bii) issue, sell, pledgeSell, dispose of, granttransfer, further pledge or further encumber any stock owned by Company in any of Subsidiaries; (iii) Issue, reissue, sell, transfer, leasedeliver, license, guarantee or encumberpledge, or authorize the issuance, sale, pledge, disposition, grantreissuance, transfer, leasedelivery, license pledge or encumbrance of, (i) sale of any shares of capital stock of Company or any Company Subsidiary of any class, any Voting Debt or securities convertible into or exchangeable or exercisable for any shares of such capital stockother voting securities, or any options, warrants warrants, convertible or exchangeable securities or other rights of any kind to acquire any shares of such capital stock, Voting Debt, voting securities, convertible or exchangeable securities or any other ownership interest (including, without limitationbut not limited to, any stock appreciation rights, phantom interest)stock, phantom stock rights, or stock-based performance units) of Company or any Company Subsidiary, other than Subsidiary (x) except for the issuance of shares of Company Common Stock Shares required to be issued pursuant to the exercise terms of warrants or stock options therefor the Options outstanding as of the date of this Agreement, hereof) or (y) the issuance make any other changes in the ordinary course of business consistent with past practice of up to an additional 500,000 shares of Company Common Stock under Company's Stock Plans pursuant to new grants of options or share purchase rights or (ii) any property or assets of Company or any Company Subsidiary except sales of inventory in the ordinary course of business consistent with past practiceits capital structure; (i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest in any corporation, partnership, other business organization or person or any division thereof (other than in connection with the formation of foreign subsidiaries and the capitalization thereof with no more than $500,000); (ii) incur any indebtedness for borrowed money (other than in de minimus amounts) or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person for borrowed money or make any loans or advances material to the business, assets, liabilities, financial condition or results of operations of Company and the Company Subsidiaries, taken as a whole; (iii) terminate, cancel or request any material change in, or agree to any material change in, any Company Material Contract or other material License Agreement (other than as described in Section 6.01(c)(iii) of the Company Disclosure Schedule); (iv) make or authorize any capital expenditure, other than capital expenditures in the ordinary course of business that have been described in the Disclosure Schedule and that are not, in the aggregate, in excess of $4,000,000 for Company and the Company Subsidiaries taken as a whole; or (v) enter into or amend any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 6.01(c); (d) declareDeclare, set aside, make or pay any dividend or other distribution, whether payable in cash, stock, property or otherwise, with respect to any of its capital stock, except that any Company Subsidiary may pay stock (other than dividends or make other distributions by any wholly owned Subsidiary to Company or any other Company Subsidiaryits parent); (ev) reclassifyReclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any shares of capital stock of Company or any Subsidiary or any securities convertible into or exercisable for any such shares of its capital stock or securities, except repurchases of unvested shares at cost for payments in connection with the termination respect of the employment relationship with any employee pursuant cancellation of outstanding Options to stock option or purchase agreements in effect the extent and subject to the terms and conditions set forth on the date hereofSchedule 4.01; (fvi) Acquire (by merger, consolidation, or acquisition of stock or assets, by purchasing an equity interest in, by forming a partnership, joint venture or similar transaction with, or in any other manner, but without giving retroactive effect to FIN 46 with respect to actions prior to the date of this Agreement), any corporation, partnership, Person or other business organization or division thereof, or a substantial portion of the assets thereof; (vii) Incur, create or assume any Indebtedness (including by issuance of debt securities) other than borrowings in the ordinary course of business under Company’s existing credit facility or issue any debt securities or warrants or other rights to acquire any debt securities of Company or any Subsidiary, or assume, guarantee or endorse (other than for collection or deposit in the ordinary course of business or for guarantees of franchisee obligations to the extent permitted under Company’s applicable credit agreements), or otherwise as an accommodation become responsible for, the obligations or Indebtedness of any Person, or make any loans or advances or make any capital contributions to, or investments in, any other Person; (viii) Enter into, or modify, amend or change terminate any Material Contract; (ix) (A) Increase the period (compensation or permit fringe benefits of, or pay any accelerationbenefit not required by any contract, amendment plan or change) arrangement in effect as of exercisability of options granted under the Company Stock Plans or authorize cash payments in exchange for any Company Stock Options granted under date hereof to, any of such plansits directors, officers or employees (including, without limitation, any bonus), except pursuant to (1) as required by contractual obligations existing arrangements as of the date hereof and disclosed in writing to Parent prior to the date hereof; hereof and (g2) amend the terms of, repurchase, redeem for increases in salary or otherwise acquire, wages in connection with a promotion or permit any Company Subsidiary change in position granted to repurchase, redeem or otherwise acquire, any of its securities or any securities of any Company Subsidiary or propose to do any of the foregoing; (h) other than pursuant to existing agreements of Company previously provided to Parent, increase the compensation payable or to become payable to its directors, officers, consultants or employees (other than any such increases for non-officers that are made officers) of Company or a Subsidiary in the ordinary course of business consistent in accordance with past practice), grant any rights to severance or termination pay to, or enter into any employment or severance agreement which provides benefits upon a change in control of Company that would be triggered (B) except as is required by the Merger with, any director, officer, consultant or other employee of Company or any Company Subsidiary who is not currently entitled to such benefits from the MergerLaw, establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer, consultant or employee of Company or any Company Subsidiary (except as allowed under Section 6.01(b)), except to the extent required by applicable Law or the terms of a collective bargaining agreementterminate, or enter into take any action to accelerate or amend increase any contractrights or benefits under, agreementor grant any awards under, commitment or arrangement between Company or make any Company Subsidiary and any of Company's directors, officers, consultants or employees (except as allowed under Section 6.01(b)); (i) except as permitted under Section 6.01(c), pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities (A) reflected or reserved against on the consolidated balance sheet of Company and the consolidated the Company Subsidiaries dated as of March 31, 1999 included in Company's quarterly report on Form 10-Q for the period then ended (the "COMPANY BALANCE SHEET") and only to the extent of such reserves or (B) that are both immaterial in amount and incurred material determination not in the ordinary course of business consistent with past practice after under, any Employee Benefit Plan, any other employee benefit plan or agreement, plan or policy between Company or a Subsidiary and one or more of its directors, officers or employees, or (C) increase the date compensation of, or financial arrangements with, or pay or agree to pay any benefit not required by any oral or written contract or arrangement in effect as of the Company Balance Sheetexecution and delivery hereof, to Company’s Financial Advisor or Company’s legal counsel; (jx) make Except as may be required as a result of a change in Law or in generally accepted accounting principles or audit practices, change any change with respect of the financial or tax accounting methods, practices or principles used by it; (xi) Adopt or authorize a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Company or any Subsidiary (other than the Merger); (xii) Sell, lease or sublease (as lessor or sublessor), license, assign or otherwise dispose of or subject to Company's accounting policies, principles, methods any Lien any properties or procedures, assets (including, without limitation, revenue recognition policiesstores), except (a) sales of inventory or obsolete assets in the ordinary course consistent in all material respects with past practice, (b) pursuant to existing Contracts disclosed in writing to Parent prior to the date of this Agreement, and (c) Permitted Liens; (xiii) Enter into any transaction, agreement, arrangement or understanding between (i) Company or any Subsidiary, on the one hand, and (ii) any Affiliate of Company (other than the Subsidiaries), on the other hand, of the type that would be required to be disclosed under Item 404 of Regulation S-K; (xiv) Settle or dismiss any Litigation threatened against, relating to or involving Company and any Subsidiary in connection with any business, asset or property of Company and any Subsidiary, other than in the ordinary course of business but not, in any individual case, in excess of $25,000 or in a manner that would prohibit or materially restrict Company from operating as required by U.S. GAAPit has historically; (ki) make Make any material Tax election or settle election, (ii) enter into any settlement or compromise of any material Tax liability, (iii) file any amended Tax Return with respect to any material Tax, (iv) change any annual Tax accounting period, (v) enter into any closing agreement relating to any material Tax or (vi) surrender any right to claim a material Tax refund; (xvi) Make or agree to make any new capital expenditure or expenditures (other than expenditures related to routine maintenance of existing operations in the ordinary course of business consistent with past practices) that, individually, is in excess of $10,000 or, in the aggregate during any calendar month, are in excess of $25,000; (xvii) Conduct its business in a method or manner that differs materially from the method and manner in which it conducts business as of the date hereof (including, without limitation, the addition of fuel sales capability at any location in which such fuel sales are not presently made, including the acquisition of any equipment, the entry into any construction arrangement, or other matters incident or preparatory to the provision of such fuel sales); or (lxviii) authorize Take, or enter into any formal propose to take, or informal agreement agree to take in writing or otherwise make any commitment to do otherwise, any of the foregoing or to take actions described in this Section 4.01, any action which would make cause any of the representations representation or warranties of Company contained warranty in this Agreement to become untrue or incorrect in any material respect or result in any of the conditions to the Merger set forth herein in Article V to not being be satisfied, except as specifically permitted hereunder.

Conduct of Business by Company Pending the Closing. Company agrees that, between the date of this Agreement and the Effective Time, unless Parent shall otherwise agree in writing, (x) the respective businesses of Company and the Company Subsidiaries shall be conducted only in, and Company and the Company Subsidiaries shall not take any action except in, the ordinary course of business consistent with past practice and (y) Company shall use all reasonable efforts to keep available the services of such of the current officers, significant employees and consultants of Company and the Company Subsidiaries and to preserve the current relationships of Company and the Company Subsidiaries with such of the corporate partners, customers, suppliers and other persons with which Company or any Company Subsidiary has significant business relations in order to preserve substantially intact its business organization. By way of amplification and not limitation, neither Company nor any Company Subsidiary shall, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following without the prior written consent of Parent: (a) amend or otherwise change its certificate of incorporation or bylaws or equivalent organizational documents; (b) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license or encumbrance of, (i) any shares of capital stock of Company or any Company Subsidiary of any class, or securities convertible into or exchangeable or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of Company or any Company Subsidiary, other than (x) the issuance of shares of Company Common Stock pursuant to the exercise of warrants or stock options therefor outstanding as of the date of this Agreement, Agreement or (y) the issuance in the ordinary course of business consistent with past practice of up to an additional 500,000 shares of Company Common Stock under Company's Stock Plans pursuant to new grants of options or share purchase rights or (ii) any property or assets of Company or any Company Subsidiary except sales of inventory in the ordinary course of business consistent with past practice; (i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest in any corporation, partnership, other business organization or person or any division thereof (other than in connection with the formation of foreign subsidiaries and the capitalization thereof with no more than $500,000); (ii) incur any indebtedness for borrowed money (other than in de minimus amounts) or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person for borrowed money or make any loans or advances material to the business, assets, liabilities, financial condition or results of operations of Company and the Company Subsidiaries, taken as a whole; (iii) terminate, cancel or request any material change in, or agree to any material change in, any Company Material Contract or other material License Agreement (other than as described in Section 6.01(c)(iii) of the Company Disclosure Schedule); (iv) make or authorize any capital expenditure, other than capital expenditures in the ordinary course of business that have been described in the Disclosure Schedule and that are not, in the aggregate, in excess of $4,000,000 for Company and the Company Subsidiaries taken as a whole; or (v) enter into or amend any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 6.01(c); (d) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except that any Company Subsidiary may pay dividends or make other distributions to Company or any other Company Subsidiary; (e) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee pursuant to stock option or purchase agreements in effect on the date hereof; (f) amend or change the period (or permit any acceleration, amendment or change) of exercisability of options granted under the Company Stock Plans or authorize cash payments in exchange for any Company Stock Options granted under any of such plans, except pursuant to existing arrangements disclosed to Parent prior to the date hereof; (g) amend the terms of, repurchase, redeem or otherwise acquire, or permit any Company Subsidiary to repurchase, redeem or otherwise acquire, any of its securities or any securities of any Company Subsidiary or propose to do any of the foregoing; (h) other than pursuant to existing agreements of Company previously provided to Parent, increase the compensation payable or to become payable to its directors, officers, consultants or employees (other than any such increases for non-officers that are made in the ordinary course of business consistent with past practice), grant any rights to severance or termination pay to, or enter into any employment or severance agreement which provides benefits upon a change in control of Company that would be triggered by the Merger with, any director, officer, consultant or other employee of Company or any Company Subsidiary who is not currently entitled to such benefits from the Merger, establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer, consultant or employee of Company or any Company Subsidiary (except as allowed under Section 6.01(b)), except to the extent required by applicable Law or the terms of a collective bargaining agreement, or enter into or amend any contract, agreement, commitment or arrangement between Company or any Company Subsidiary and any of Company's directors, officers, consultants or employees (except as allowed under Section 6.01(b)); (i) except as permitted under Section 6.01(c), pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities (A) reflected or reserved against on the consolidated balance sheet of Company and the consolidated the Company Subsidiaries dated as of March 31, 1999 included in Company's quarterly report on Form 10-Q for the period then ended (the "COMPANY BALANCE SHEET") and only to the extent of such reserves or (B) that are both immaterial in amount and incurred in the ordinary course of business consistent with past practice after the date of the Company Balance Sheet; (j) make any change with respect to Company's accounting policies, principles, methods or procedures, including, without limitation, revenue recognition policies, other than as required by U.S. GAAP; (k) make any material Tax election or settle or compromise any material Tax liability; or (l) authorize or enter into any formal or informal agreement or otherwise make any commitment to do any of the foregoing or to take any action which would make any of the representations or warranties of Company contained in this Agreement untrue or incorrect in any material respect or result in any of the conditions to the Merger set forth herein not being satisfied, except as specifically permitted hereunder.

Conduct of Business by Company Pending the Closing. Company Each of the Management Shareholders covenants and agrees that, between the date of this Agreement and the Effective Time, unless Parent shall otherwise agree in writing, (x) the respective businesses business of Company and the Company Subsidiaries shall be conducted only in, and Company and the Company Subsidiaries shall not take any action except in, the ordinary course of business consistent with past practice and (y) practice. Company shall use all its commercially reasonable efforts to preserve intact Company's business organizations, to keep available the services of such of the its current management/officers, significant employees and consultants of Company and the Company Subsidiaries consultants, and to preserve the current its present relationships of Company and the Company Subsidiaries with such of the corporate partners, customers, suppliers and other persons with which Company or any Company Subsidiary it has significant business relations in order to preserve substantially intact its business organizationrelations. By way of amplification and not limitation, neither except as contemplated by this Agreement, Company nor any Company Subsidiary shallshall not be allowed to, between the date of this Agreement and the Effective Time, directly or indirectly, do, do or propose or agree to do, do any of the following without the prior written consent of Parent: (a) amend or otherwise change its certificate Articles of incorporation or bylaws Incorporation, Bylaws or equivalent organizational documents; (b) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee or encumber, or or, authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license grant or encumbrance of, of (i) any shares of its capital stock of Company or any Company Subsidiary of any class, or securities convertible into or exchangeable or exercisable for any shares of such capital stock, or any options, warrants warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (includinginterest, without limitation, any phantom interest), of Company or any Company Subsidiary, other than (x) the issuance of shares of Company Common Stock pursuant to the exercise of warrants or stock options therefor outstanding as of the date of this Agreement, or (y) the issuance in the ordinary course of business consistent with past practice of up to an additional 500,000 shares of Company Common Stock under Company's Stock Plans pursuant to new grants of options or share purchase rights or (ii) any property of its assets, tangible or assets intangible, except, in the case of Company or any Company Subsidiary except sales of inventory (ii), in the ordinary course of business consistent with past practice; (i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest in any corporation, partnership, other business organization or person or any division thereof (other than in connection with the formation of foreign subsidiaries and the capitalization thereof with no more than $500,000); (ii) incur any indebtedness for borrowed money (other than in de minimus amounts) or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person for borrowed money or make any loans or advances material to the business, assets, liabilities, financial condition or results of operations of Company and the Company Subsidiaries, taken as a whole; (iii) terminate, cancel or request any material change in, or agree to any material change in, any Company Material Contract or other material License Agreement (other than as described in Section 6.01(c)(iii) of the Company Disclosure Schedule); (iv) make or authorize any capital expenditure, other than capital expenditures in the ordinary course of business that have been described in the Disclosure Schedule and that are not, in the aggregate, in excess of $4,000,000 for Company and the Company Subsidiaries taken as a whole; or (v) enter into or amend any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 6.01(c); (dc) declare, set aside, make or pay any dividend or other distribution, payable in cash, stockshares, property or otherwise, with respect to any of its any of its capital stock, except that any Company Subsidiary may make pro rata cash distributions only to the extent necessary to pay dividends or make other distributions for the Shareholders' tax liability for undistributed earnings of Company for all times up to Company or any other Company Subsidiaryand including the Closing Date which have been attributed to such Shareholders for income tax purposes at 39.6%, which is the applicable marginal state and federal tax rates for individuals, and is consistent with past practice in the ordinary course; (ed) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee pursuant to stock option or purchase agreements in effect on the date hereofstock; (fi) amend acquire (including, without limitation, for cash or change the period (shares of stock, by merger, consolidation or permit acquisition of stock or assets) any accelerationinterest in any corporation, amendment partnership or change) other business organization or division thereof or any assets, or make any investment either by purchase of exercisability shares or securities, contributions of options granted under the Company Stock Plans capital or authorize cash payments in exchange for any Company Stock Options granted under any of such plansproperty transfer, or, except pursuant to existing arrangements disclosed to Parent prior to in the date hereofordinary course of business, consistent with past practice, purchase any property or assets of any other Person, (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any Person, or make any loans or advances, or (iii) modify, terminate, or enter into any Contract other than as provided herein or in the ordinary course of business, consistent with past practice; (gi) amend the terms of, repurchase, redeem or otherwise acquire, or permit any Company Subsidiary to repurchase, redeem or otherwise acquire, any of its securities or any securities of any Company Subsidiary or propose to do any of the foregoing; (h) other than pursuant to existing agreements of Company previously provided to Parent, increase the compensation payable or to become payable to its directorsofficers or employees, officersor, consultants or employees (other than any such increases for non-officers that are made in the ordinary course of business consistent with past practice)except as presently bound to do, grant any rights to severance or termination pay to, or enter into any employment or severance agreement which provides benefits upon a change in control of Company that would be triggered by the Merger with, any directorof its directors, officerofficers or employees, consultant or other employee of Company or any Company Subsidiary who is not currently entitled to such benefits from the Merger, (ii) establish, adopt, enter into or amend or take any action to accelerate any rights or benefits which any collective bargaining, bonus, profit sharing, thrifttrust, compensation, stock share option, restricted stockshare, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any Shareholder, director, manager/officer, consultant employee or employee partner, PROVIDED, HOWEVER, that the Company shall be permitted to make its accrued contribution of Company or any Company Subsidiary (except as allowed under Section 6.01(b)), except $157,000 to the extent required by applicable Law or Company's 401(k) Plan for the terms of a collective bargaining agreementyear ended 1997 prior to September 15, 1998, or enter into (iii) make a change in the method or amounts by which bonuses or other payments, compensation or otherwise, are made to any of its managers/officers or salaried employees or amend any contractother terms of employment or engagement of such persons which has not been disclosed in writing to Parent, agreementor (iv) pay, commitment distribute to or arrangement between Company compensate (regardless of when actually paid, distributed or any Company Subsidiary and any compensated) the Shareholders, in an aggregate amount greater than the limitations specified in SECTION 2-9(d) of Company's directors, officers, consultants or employees (except as allowed under Section 6.01(b))EXHIBIT 2 hereto.; (ig) except as permitted under Section 6.01(c), take any action with respect to accounting policies or procedures other than in the ordinary course of business and in a manner consistent with past practices; (h) pay, discharge or satisfy any existing claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of due and consistent with past practice of payable liabilities, as appropriate, or liabilities (A) reflected or reserved against on incurred after the consolidated balance sheet of Company and the consolidated the Company Subsidiaries dated as of March 31, 1999 included in Company's quarterly report on Form 10-Q for the period then ended (the "COMPANY BALANCE SHEET") and only to the extent of such reserves or (B) that are both immaterial in amount and incurred date hereof in the ordinary course of business consistent business; (i) acquire or agree to acquire any capital assets with past practice after the date aggregate purchase prices in excess of the Company Balance Sheet$10,000, excluding inventory acquired in accordance with customary and reasonable practices; (j) make enter into any change transaction with respect to any employee, officer or Shareholder of Company's accounting policies, principles, methods or procedures, including, without limitation, revenue recognition policies, other than except as required by U.S. GAAP;otherwise provided in SECTION 6.8 hereof; or (k) make any material Tax election agree, in writing or settle otherwise, to take or compromise any material Tax liability; or (l) authorize or enter into any formal or informal agreement or otherwise make any commitment to do any of the foregoing actions or to take any action which would make any of the representations representation or warranties of Company contained warranty in this Agreement EXHIBIT 2 untrue or incorrect in any material respect or result in any of the conditions to the Merger set forth herein not being satisfied, except as specifically permitted hereunderrespect.