Common use of Conduct of Business by the Clause in Contracts

Conduct of Business by the. Company Pending the Effective Time. The Company agrees that, between the date of this Agreement and the Effective Time, except as set forth in Section 6.1 in the Company Disclosure Schedule, as otherwise contemplated by this Agreement, as required by Applicable Law or as consented to in writing by Parent, the Company will, and will cause each Company Subsidiary to, in all material respects (i) conduct the Business substantially in the Ordinary Course of Business and (ii) use commercially reasonable best efforts to preserve the current relationships of the Company and each Company Subsidiary with such of the Customers, Suppliers and other Persons with which the Company or any Company Subsidiary has significant business relations as is reasonably necessary to preserve substantially intact the Business. Without limiting the foregoing, and as an extension thereof, except (1) as set forth in Section 6.1 of the Company Disclosure Schedule, (2) as otherwise contemplated by this Agreement, (3) as required by Applicable Law, (4) in connection with any payments to any holder of an Equity Interest in the Company in order to obtain a consent or release in connection with this Agreement or the Merger, or (5) as consented to in writing by Parent (such consent not to be unreasonably withheld or delayed), the Company shall not, and shall not permit any Company Subsidiary to, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following (provided that with respect to any act taken by the Company under subclauses (2) through (4) above, the Company shall notify Parent thereof): (a) amend or otherwise change the certificate of incorporation or by-laws of the Company or equivalent organizational documents of any Company Subsidiary; (b) except as necessary to comply with the requirements of any Contracts of the Company or a Company Subsidiary existing on the date hereof, issue, deliver, sell, pledge or encumber, or authorize, propose or agree to the issuance, delivery, sale, pledge or encumbrance of, any shares of its capital stock, or securities convertible into or exchangeable for, or Options or rights of any kind to acquire, any shares of any class or series of its capital stock (other than pursuant to the exercise of Options and other contractual rights existing on the date hereof which are disclosed in Section 6.1 of the Company Disclosure Schedule); (c) except as permitted under this Agreement, declare, set aside, make or pay any dividend or other distribution (other than cash distributions) with respect to any of its capital stock (other than dividends paid by a wholly-owned Company Subsidiary to the Company or to any other wholly-owned Company Subsidiary) or enter into any agreement with respect to the voting of capital stock owned by it; (d) reclassify, combine, split or subdivide, directly or indirectly, any of its capital stock or other Equity Interests; (e) acquire (including by merger, consolidation, or acquisition of stock or assets), outside of the Ordinary Course of Business, any interest in any Person or any division thereof or any assets, other than any acquisitions that are in progress on the date hereof and the terms and conditions of which are disclosed in Section 6.1 of the Company Disclosure Schedule; (f) incur any Indebtedness or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any Person (other than a wholly-owned Company Subsidiary) for borrowed money, except for (i) Indebtedness incurred in the Ordinary Course of Business, pursuant to existing credit lines disclosed in Section 6.1 of the Company Disclosure Schedule, (ii) Indebtedness owing by any wholly-owned Company Subsidiary to the Company or any other wholly-owned Company Subsidiary, (iii) Indebtedness incurred with respect to acquisitions permitted pursuant to Section 6.1; and (iv) Indebtedness to pay the MIP Payment and any MIP-Related Taxes; provided, that any such Indebtedness (including any related Taxes) described in (iv) above shall be repaid at the Closing pursuant to Section 3.2.1(c). (g) grant any Lien (other than a Permitted Lien) in any of its material assets to secure any Indebtedness, except in connection with such Indebtedness permitted under the preceding Section 6.1; (h) issue any debt securities or assume, endorse, or otherwise become responsible for, the obligations of any Person, or make any loans or advances (other than advances to employees in the Ordinary Course of Business); (i) authorize, or make any commitment with respect to, any single capital expenditure which is in excess of Twenty-Five Thousand Dollars ($25,000) or capital expenditures which are, in the aggregate, in excess of Fifty Thousand Dollars ($50,000) for the Company and the Company Subsidiaries taken as a whole other than emergency repairs and repairs compelled by legal or safety requirements, and the Company shall consult with Parent in respect of all such items; (j) enter into any new line of business outside of its Business; (k) make investments in Persons other than wholly-owned Subsidiaries, other than in the Ordinary Course of Business; (l) except as set forth in Section 6.1 of the Company Disclosure Schedule, adopt or amend any material Company Benefit Plan, increase in any material manner the compensation or fringe benefits of any director, officer or employee of the Company or pay any material benefit not provided for by any existing Company Benefit Plan, in each case except (i) as reasonably necessary to comply with Applicable Law, (ii) in the Ordinary Course of Business (including without limitation to address the requirements of written agreements or Contracts the Company and each Company Subsidiary has entered into as of the date hereof), (iii) in connection with entering into, with respect to newly hired employees, or extending with respect to existing employees, any employment or other compensatory agreements with individuals or directors of the Company or any Company Subsidiary and other executive personnel) in the Ordinary Course of Business, and comparable to compensatory amounts for individuals of similar responsibility in the Company, (iv) in connection with entering into the retention agreements or programs specified in Section 6.1 of the Company Disclosure Schedule, (v) general annual salary increases in the Ordinary Course of Business and granted and effective not earlier than the dates the Company has historically granted salary increases or (vi) the termination or amendment of any Company Benefit Plan that may be subject to Code Section 409A consistent with Code Section 409A and any guidance issued thereunder; provided, such termination or amendment does not increase the Liability of Company or Parent without the express written consent of Parent. (m) except as otherwise contemplated by this Agreement, including Sections 6.1, or as otherwise required by Applicable Law or Governmental Authority, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any Company Subsidiary (other than the Merger); (n) file any Tax Return taking a position inconsistent with the Company's or any Company Subsidiaries' past practice, except as required by Applicable Law; or (o) knowingly commit or agree to take any of the foregoing actions or take or fail to take any action which would result in any representation or warranty of the Company or the Principal Stockholders contained in this Agreement which is qualified as to materiality (whether by reference to a Material Adverse Effect or otherwise) becoming untrue as of the Effective Time, or any representation or warranty not so qualified becoming untrue in any material respect (whether by reference to a Material Adverse Effect or otherwise) as of the Effective Time.

Conduct of Business by the. Company Pending During the Effective Time. The Company agrees thatSecondary Period Unless Acquiror shall otherwise agree in writing, between during the date of this Agreement and the Effective Time, except as set forth in Section 6.1 in the Company Disclosure Schedule, as otherwise contemplated by this Agreement, as required by Applicable Law or as consented to in writing by ParentSecondary Period, the Company willcovenants and agrees to conduct the Company’s business in and only in, and will cause the Company shall not take any action except in, the ordinary course of business and consistent with past practice and in accordance with applicable Law and the provisions of all Company Contracts, in each Company Subsidiary to, case in all material respects respects. Without limiting the generality of the foregoing, during the Secondary Period, the Company (i1) conduct the Business substantially in the Ordinary Course of Business and (ii) shall use commercially reasonable best efforts consistent with past practice to preserve intact the business organization of the Company, to keep available the services of the current officers, employees and consultants of the Company and to preserve the current relationships of the Company with, and each Company Subsidiary with such of the Customersgoodwill of, Suppliers suppliers, customers, development partners, landlords, creditors, licensors, licensees, key employees and other Persons with which the Company or any Company Subsidiary has significant business relations as is reasonably necessary to preserve substantially intact the Business. Without limiting the foregoing, and as an extension thereof, except (1) as set forth in Section 6.1 of the Company Disclosure Schedulerelations, (2) as otherwise contemplated by this Agreementshall use commercially reasonable efforts to keep in full force all insurance policies referred to in Section 2.18 and, if any such insurance policy is scheduled to expire during the Secondary Period, shall cause such insurance policy to be renewed or replaced (on terms and with coverage substantially equivalent to the terms and coverage of the expiring insurance policy) on or prior to the date of expiration of such insurance policy, (3) shall as promptly as practicable notify Acquiror in writing of (A) any written notice or (to the knowledge of the Company) other communication from any Person alleging that the Consent of such Person is or may be required by Applicable Lawin connection with any of the Contemplated Transactions, and (B) any Legal Proceeding commenced, or, to the knowledge of the Company, threatened against, relating to or involving or otherwise affecting the Company or any of its products or Assets, (4) in connection shall cause its officers to report to Acquiror with any payments to any holder reasonable frequency concerning the status of an Equity Interest in the business of the Company in order to obtain a consent or release in connection with this Agreement or the Merger, or and (5) as consented to shall perform and comply with all of its covenants, agreements and obligations in writing by Parent (such consent the other Operative Documents. By way of amplification and not to be unreasonably withheld or delayed)limitation, the Company shall not, and shall not permit any Company Subsidiary to, between during the date of this Agreement and the Effective TimeSecondary Period, directly or indirectly, indirectly do, or agree propose to do, any of the following (provided that with respect to any act taken by without the Company under subclauses (2) through (4) above, the Company shall notify Parent thereof):prior written consent of Acquiror: (a) amend or otherwise change the certificate Company Certificate of incorporation Incorporation or by-laws of Company Bylaws if such amendment or change would have, or could reasonably be expected to have, an adverse effect on Acquiror or the Company or equivalent organizational documents on the Company’s ability to comply with any of its obligations under this Agreement or under any Company Subsidiaryof the other Operative Documents; (b) except as necessary to comply with (A) for the requirements issuance of any Contracts shares of Company Capital Stock upon the exercise or conversion of Company or a Company Subsidiary existing Stock Options outstanding on the date hereofof this Agreement or the Company Warrant, (B) for the issuance of shares of Company Capital Stock or equity securities (excluding any convertible debt securities) exercisable or convertible solely into shares of Company Capital Stock, or any combination of the foregoing, solely for cash to a Person who becomes a party to a Key Stockholder Agreement in favor of Acquiror contemporaneously with such issuance, (C) for the issuance of Eligible Debt Securities solely for cash to a Person who becomes a party to a Key Stockholder Agreement in favor of Acquiror contemporaneously with such issuance and (D) for the issuance of Company Stock Options with respect to shares of Company Common Stock (to the extent the reservation of such shares for issuance under the Company Option Plan has been approved by the Stockholders prior to the date of this Agreement), issue, deliver, sell, pledge contract to issue or encumbersell, pledge, dispose of, grant, encumber or authorize, propose or agree to authorize the issuance, delivery, sale, pledge pledge, disposition, grant or encumbrance of, Encumbrance of (i) any shares of its capital stockCompany Capital Stock, (ii) any Company Stock Option, (iii) the Company Warrant, (iv) any Company Stock Rights or securities convertible into or exchangeable for, or Options or rights (v) except in the ordinary course of any kind to acquirebusiness and consistent with past practice, any shares of any class or series of its capital stock (other than pursuant to the exercise of Options and other contractual rights existing on the date hereof which are disclosed in Section 6.1 Assets of the Company Disclosure Schedule)Company; (c) except as permitted under this Agreement, declare, set aside, make or pay any dividend or other distribution (distribution, payable in cash, stock or other than cash distributions) securities, property or otherwise, with respect to any shares of its capital stock (Company Capital Stock or other than dividends paid by a wholly-owned Company Subsidiary to the Company securities, or to any other wholly-owned Company Subsidiary) redeem, purchase or enter into any agreement with respect to the voting of capital stock owned by it; (d) reclassify, combine, split or subdivideotherwise acquire, directly or indirectly, any shares of its capital stock Company Capital Stock or other Equity Interestssecurities (except for repurchases from individuals following their termination of service pursuant to the terms of their pre-existing stock option or purchase agreements); (ed) (i) acquire (including by merger, consolidation, consolidation or acquisition of stock or assets)Assets) any corporation, outside of the Ordinary Course of Business, any interest in any Person partnership or any other Entity or business organization or division thereof or (except in the ordinary course of business and consistent with past practice) any assetsmaterial amount of Assets; (ii) except for the issuance of Eligible Debt Securities, incur any indebtedness for borrowed money (other than any acquisitions that are trade payables in progress on the date hereof and ordinary course of business or in connection with the terms and conditions of which are disclosed in Section 6.1 of transactions contemplated by this Agreement or the Company Disclosure Schedule; (fSpecified Litigation) incur any Indebtedness or issue any debt securities or securities; (iii) assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any Person (other than a wholly-owned Company Subsidiary) for borrowed money, except for (i) Indebtedness incurred in the Ordinary Course of Business, pursuant to existing credit lines disclosed in Section 6.1 of the Company Disclosure Schedule, (ii) Indebtedness owing by any wholly-owned Company Subsidiary to the Company or any other wholly-owned Company Subsidiary, (iii) Indebtedness incurred with respect to acquisitions permitted pursuant to Section 6.1; and (iv) Indebtedness to pay the MIP Payment and any MIP-Related Taxes; provided, that any such Indebtedness (including any related Taxes) described in (iv) above shall be repaid at the Closing pursuant to Section 3.2.1(c). (g) grant any Lien (other than a Permitted Lien) in any of its material assets to secure any Indebtedness, except in connection with such Indebtedness permitted under the preceding Section 6.1; (h) issue any debt securities or assume, endorse, or otherwise become responsible for, the obligations of any Person, or make any loans or advances (other than except that the Company may make routine travel advances to employees in the Ordinary Course ordinary course of Businessbusiness and consistent with past practice not in excess of $10,000 in the aggregate); ; (iiv) authorize, or make any commitment with respect to, authorize any single capital expenditure which not included in the Operating Budget that is in excess of Twenty-Five Thousand Dollars ($25,000) 100,000 or capital expenditures which not included in the Operating Budget that are, in the aggregate, in excess of Fifty Thousand Dollars $250,000; or ($50,000) for the Company and the Company Subsidiaries taken as a whole other than emergency repairs and repairs compelled by legal or safety requirements, and the Company shall consult with Parent in respect of all such items; (jv) enter into any new line Contract in which the obligation of business outside of its Businessthe Company exceeds $100,000 or which shall not terminate or be subject to termination for convenience without penalty within 30 days following execution; (ke) make investments in Persons other than wholly-owned Subsidiaries, other than in the Ordinary Course of Business; (li) except as set forth in Section 6.1 of the Company Disclosure Schedule, adopt enter into or amend any material Company Benefit Planemployment, increase consulting or agency Contract, hire any employee or engage any contractor except in order to fill a position vacated after the date of this Agreement, promote any material manner employee except in order to fill a position vacated after the compensation date of this Agreement or fringe benefits of hire any director, officer employee at the Vice President level or employee of the Company or pay any material benefit not provided for by any existing Company Benefit Plan, in each case except (i) as reasonably necessary to comply with Applicable Lawabove, (ii) in materially increase the Ordinary Course of Business (including without limitation wages, salary, bonus, commissions, fringe benefits or other compensation or remuneration payable or to address the requirements of written agreements or Contracts the become payable to any Company and each Company Subsidiary has entered into as of the date hereof)Associates, (iii) in connection with entering into, with respect to newly hired employeesgrant any severance or termination pay to, or extending with respect to existing employees, enter into any employment or other compensatory agreements with individuals severance arrangement with, any Person who is a director or directors officer of the Company or any Company Subsidiary and other executive personnel) in the Ordinary Course of Business, and comparable to compensatory amounts for individuals of similar responsibility in the Company, (iv) in connection enter into any agreement or arrangement with entering into the retention agreements any current or programs specified in Section 6.1 prospective Company Associate that provides for any of the Company Disclosure Scheduletypes of payments or other benefits provided under the Change in Control Agreements, (v) general annual salary increases except for bonuses described in the Ordinary Course of Business and granted and effective not earlier than the dates the Company has historically granted salary increases Annex 6.2(e), pay any bonus or make any discretionary profit-sharing or similar discretionary payment, or (vi) the termination establish, adopt, enter into, amend or amendment of terminate any Company Employee Benefit Plan that may be subject to Code Section 409A consistent with Code Section 409A and any guidance issued thereunder; provided, such termination or amendment does not increase the Liability of Company or Parent without the express written consent of Parent.except as required by applicable Law; (mf) except as otherwise contemplated by this Agreement, including Sections 6.1, or as otherwise required by Applicable Law or Governmental Authority, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization amend any Change in Control Agreement in any manner favorable to the employee of the Company who is a party to such Change in Control Agreement in respect of the Contemplated Transactions, or amend or waive any of its rights under, or exercise discretion to accelerate the vesting under, any provision of the Company Option Plan, any provision of any Contract evidencing any outstanding Company Stock Option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding Company Subsidiary Stock Option, the Company Warrant or any other security or any related Contract, or fail to exercise any repurchase right with respect to any shares of Company Capital Stock (other than unless Acquiror consents in writing to the MergerCompany failing to exercise any such repurchase right); (ng) file take any Tax Return taking a position inconsistent action, other than reasonable and usual actions in the ordinary course of business and consistent with the Company's or any Company Subsidiaries' past practice, except as required by Applicable Law; orwith respect to accounting methods, policies or procedures (including procedures with respect to the payment of accounts payable and collection of accounts receivable); (oh) knowingly commit incur any Tax Liability other than in the normal course of business, or agree make any material Tax election or settle or compromise any Tax Liability; (i) pay, discharge or satisfy any Liability, other than the payment, discharge or satisfaction of Liabilities (i) incurred in the ordinary course of business and consistent with past practice, (ii) required to take any of be incurred in connection with the foregoing actions transactions contemplated by this Agreement or (iii) incurred in connection with the Specified Litigation; (j) take or fail to take any action which would that could reasonably be expected to result in any representation of the representations or warranty warranties of the Company or the Principal Stockholders contained set forth in this Agreement which is qualified as to materiality (whether by reference to a Material Adverse Effect or otherwise) becoming untrue as any of the Effective Time, or any representation or warranty not so qualified becoming other Operative Documents being untrue in any material respect, or in any obligation, agreement or covenant of the Company set forth in this Agreement or any of the other Operative Documents being breached, or in any of the conditions to the Merger specified in Articles IV and V not being satisfied; (k) form any Subsidiary or acquire any equity interest or other interest in any other Entity; (l) purchase, dispose of, license, relinquish or otherwise give up any right with respect to any material Intellectual Property or Intellectual Property Right; (whether m) enter into or become bound by, or permit any of the Assets owned or used by reference it to become bound by, any Material Contract, or amend or terminate, or waive or exercise any material right or remedy under, any Material Contract; (n) make any discretionary filing or fail to make any required material filing with any Governmental Entity; (o) change in any material respect any of its personnel policies or other business policies, or any of its methods of accounting or accounting practices in any respect; (p) enter into or amend any lease, sublease, rental agreement, contract of sale, tenancy, license or other Contract relating to any real property; (q) voluntarily file any petition under the United States Bankruptcy Code or make any similar filing or commence any proceeding under any state Law respecting insolvency, or cooperate in any way with or fail to vigorously opposed any such petition, filing or proceeding made, filed or commenced by any third party; (r) commence or settle any Legal Proceeding (except that the Company may settle the Specified Litigation if (i) such settlement is a Material Adverse Effect Lump Sum Settlement or (ii) Acquiror and the Company have agreed as to the Lump Sum Equivalent Amount of such settlement); (s) indemnify, or reimburse any expense of, any Company Associate or agent, in connection with the Specified Litigation or otherwise, except to the extent legally or contractually required pursuant to the Company Certificate of Incorporation, the Company Bylaws or any individual agreements identified in Annex 6.13(a) as in effect on the date of this Agreement; (t) make any expenditure with respect to any item included in any of the Effective Time“Major Categories” of the Operating Budget that causes the total expenditures made by the Company with respect to such Major Category to exceed 110% of the amount budgeted for such Major Category in the Operating Budget for any fiscal quarter; or (u) agree or commit to do any of the foregoing.

Conduct of Business by the. Company Pending the Effective TimeMerger. The Company agrees that, between Between the date of this Agreement and the earliest to occur of the Effective TimeTime and the date, if any, on which this Agreement is terminated pursuant to Section 8.1, except (a) as set forth may be required by Law, (b) as may be agreed in Section 6.1 in the Company Disclosure Schedulewriting by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (c) as otherwise contemplated by required pursuant to this Agreement, as required by Applicable Law or as consented to in writing by Parent, the Company will, and will cause each Company Subsidiary to, in all material respects (i) conduct the Business substantially in the Ordinary Course of Business and (ii) use commercially reasonable best efforts to preserve the current relationships of the Company and each Company Subsidiary with such of the Customers, Suppliers and other Persons with which the Company or any Company Subsidiary has significant business relations as is reasonably necessary to preserve substantially intact the Business. Without limiting the foregoing, and as an extension thereof, except (1d) as set forth in Section 6.1 of the Company Disclosure ScheduleLetter, (2x) as otherwise contemplated by this Agreementthe Company shall, (3) as required by Applicable Lawand shall cause each of its Subsidiaries to, (4) carry on its business in connection with any payments to any holder of an Equity Interest all material respects in the Company ordinary course and, subject to the proviso in order to obtain a consent or release in connection with this Agreement or the Merger, or (5) as consented to in writing by Parent (such consent not to be unreasonably withheld or delayedSection 6.3(a), to the extent consistent therewith, use commercially reasonable efforts to preserve substantially intact its current business organizations, to keep available the services of its current officers and employees and to preserve its relationships with significant Governmental Authorities (including applicable Gaming Authorities), customers, suppliers, licensors, licensees, distributors, wholesalers, lessors and others having significant business dealings with it, and to preserve the goodwill of and maintain satisfactory relationships with those Persons having business relationships with the Company or any of its Subsidiaries; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of this Section 6.1 shall be deemed a breach of clause (x) unless such action would constitute a breach of such specific provision; and (y) the Company shall not, not and shall not permit any Company Subsidiary of its Subsidiaries to, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following (provided that with respect to any act taken by the Company under subclauses (2) through (4) above, the Company shall notify Parent thereof):: (a) amend or otherwise change the certificate of incorporation Charter or bythe By-laws of the Company or (or, in any material respect, such equivalent organizational or governing documents of any Company Subsidiaryof the Subsidiaries of the Company); (b) except for transactions among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, or as necessary to comply with otherwise contemplated in Section 6.1(e) and Section 6.1(e) of the requirements Company Disclosure Letter, issue, sell, pledge, dispose, encumber or grant any shares of any Contracts capital stock (or other equity interests) of the Company or a Company Subsidiary existing on the date hereof, issue, deliver, sell, pledge or encumberany of its Subsidiaries, or authorizeany options, propose warrants, convertible securities or agree to the issuance, delivery, sale, pledge or encumbrance of, any shares of its capital stock, or securities convertible into or exchangeable for, or Options or other rights of any kind to acquire, acquire any such shares of any class or series of its capital stock (or other than pursuant to equity interests) or rights settled in cash or other property based in whole or in part on the value of such shares of capital stock (or other equity interests); provided, however that the Company may issue shares of Company Common Stock (i) upon the exercise of Options any outstanding Company Option or Company Warrant or the vesting and other contractual rights existing on settlement of any outstanding Performance Unit or Company Restricted Share Unit, in each case, issued prior to the date hereof which are disclosed in Section 6.1 of the and (ii) pursuant to employment agreements, offer letters and Company Disclosure Schedule)Plans; (c) except as permitted under this Agreement, (i) declare, set asideauthorize, make or pay any dividend or other distribution (other than cash distributions) distribution, payable in cash, stock, property or otherwise, with respect to the Company’s or any of its Subsidiaries’ capital stock (or other equity interests), other than dividends paid by a wholly-owned any Subsidiary of the Company Subsidiary to the Company or to any other wholly-wholly owned Company SubsidiarySubsidiary of the Company; (ii) split, combine, reclassify or enter into amend the terms of any agreement with respect to the voting shares of capital stock owned by itor other equity interests of the Company or any of its Subsidiaries; or (iii) redeem, purchase or otherwise acquire any shares of the Company’s capital stock or other equity interests or securities except for repurchases of Company Common Stock of an employee prior to the lapse of any vesting period upon termination of such employee’s employment or any other repurchases, in each case, to the extent required under any Company Plan; (d) reclassifyexcept as and to the extent required pursuant to the Company Benefit Plans in effect as of the date hereof or as otherwise required by Law, combine(i) increase the compensation or other benefits payable or to become payable to employees (other than any such increase that is not material, split individually or subdividein the aggregate), directly directors or indirectly, executive officers of the Company or any of its capital stock Subsidiaries or grant any new, or amend any existing short or long term incentive compensation awards or accelerate the time of vesting, funding or payment of any amounts except for (A) merit or promotion-based increases in base salary for employees, other than executive officers as part of the normal review process conducted each year, (B) the determination of the level of achievement and payment in cash of annual bonuses in respect of the Company’s fiscal year ending June 30, 2013, and (C) setting of performance criteria for annual bonuses in respect of the Company’s fiscal year ending June 30, 2014, in the case of each of (A),(B) and (C), with such determinations to be made in the ordinary course of business consistent with past practice, including in respect of the timing of any such determinations and payments, and in respect of each of (B) and (C), in accordance with the parameters set forth in Section 6.1(e) of the Company Disclosure Letter, (ii) grant any severance or termination pay to, or enter into any severance agreement with, any employee, director or executive officer of the Company or any of its Subsidiaries, except that the Company may pay severance in the ordinary course of business consistent with past practice as reflected on Section 6.1(d) of the Company Disclosure Letter up to a maximum aggregate monthly amount of $500,000 to employees other than employees who are at the level of vice president or above or have annual base salary of more than $250,000, (iii) enter into any employment agreement other than (A) customary employment agreements and offer letters for internationally located new hires in the ordinary course of business or as customary in the applicable jurisdiction or as required by applicable Law, (B) offer letters and employment agreements with new hires in the United States (x) for individuals who would not be members of the executive committee or receive annual base salary of $250,000 or less, to the extent necessary to (I) replace a departing employee and providing for compensation and benefits consistent with that provided to the departing employee or (II) to fill a newly created position that is required for legitimate business purposes and providing compensation and benefits which would generally be provided to similarly-situated employees of the Company, or (y) for offer letters to new hires or employment agreements providing for employment terminable on less than thirty (30) days’ notice without penalty or except as required by applicable Law, and (C) for extension of employment agreements, other than employment agreements with executive officers, in the ordinary course of business consistent with past practice, (iv) establish, adopt, enter into or amend any Company Benefit Plan (or arrangement that would be a Company Benefit Plan were it effective as of the date hereof) or other Equity Interestsplan, trust, fund, policy or arrangement maintained for the benefit of any current or former directors, officers or employees or any of their beneficiaries, except, in each case, (A) as would not result in a material increase to the Company in the cost of maintaining such plan, trust, fund, policy or arrangement and does not result in a disproportionate increase in the compensation or benefits to which any executive officer is entitled, (B) for health plans in the United States, as would not result in (x) a material increase to the Company in the cost of maintaining those health plans or (y) a material increase in the compensation or benefits to which employees of the Company or its Subsidiaries are entitled, including not disproportionately affecting the compensation or benefits of the Company’s executive officers, or (C) as may be required by applicable Law, or (v) enter into any new, or amend any existing, collective bargaining agreement, except as may be required by applicable Law; (e) grant, confer or award, or accelerate the vesting or settlement of, options, convertible securities, restricted stock, restricted stock units or other rights to acquire any capital stock of the Company or any of its Subsidiaries or any equity-based award based in whole or in part on the capital stock of the Company or any of its Subsidiaries, whether settled in cash, securities or other property, or take any action not otherwise contemplated by this Agreement to cause to be exercisable any otherwise unexercisable option under any existing stock plan (except as otherwise permitted to be granted in accordance with the parameters set forth on Section 6.1(e) of the Company Disclosure Letter); (f) acquire (including by merger, consolidation, or acquisition of stock or assets), outside of the Ordinary Course of Business, any interest ownership interests in any Person corporation, partnership, limited liability company, other business organization or any division thereof or any assets, other than any acquisitions that are in progress on the date hereof and the terms and conditions material amount of which are disclosed in Section 6.1 of the Company Disclosure Schedule; (f) incur any Indebtedness or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any Person (other than a wholly-owned Company Subsidiary) for borrowed moneyassets thereof, except for (i) Indebtedness incurred in the Ordinary Course of Business, pursuant to existing credit lines disclosed in Section 6.1 of the Company Disclosure Schedule, (ii) Indebtedness owing by any wholly-owned Company Subsidiary to the Company or any other wholly-owned Company Subsidiary, (iii) Indebtedness incurred with respect to acquisitions permitted pursuant to Section 6.1; and (iv) Indebtedness to pay of majority interests in any corporation, partnership, limited liability company, other business organization or any division or material amount of assets with collective purchase prices not exceeding $20,000,000 in the MIP Payment and any MIP-Related Taxes; provided, that any such Indebtedness (including any related Taxes) described in (iv) above shall be repaid at the Closing pursuant to Section 3.2.1(c).aggregate; (g) grant dispose of, transfer, lease, license, mortgage, pledge or encumber any Lien material assets of the Company and its Subsidiaries (other than Company Owned IP or Licensed IP Rights), taken as a Permitted Lien) whole, other than in any the ordinary course of its material assets business consistent with past practice or pursuant to secure any Indebtedness, except Contracts in connection with such Indebtedness permitted under effect as of the preceding Section 6.1date hereof; (h) issue dispose of, transfer, lease, license, covenant not to xxx, mortgage or pledge any debt securities Patents included in Company Owned IP or assume, endorse, any other material Company Owned IP or otherwise become responsible for, the obligations of any Person, or make any loans or advances material Licensed IP Rights (other than advances (i) grants of non-exclusive licenses or covenants not to employees xxx in the Ordinary Course ordinary course of Businessbusiness consistent with past practice and (ii) exclusive licenses that may be terminated on 90 days’ or less notice); (i) authorize(i) include any Company Owned IP in any patent pool or subject any Company Owned IP to a license or covenant not to xxx, or make an obligation to grant a license or covenant not to xxx, as part of a patent pool or (ii) otherwise include any commitment Company Owned IP in any arrangement with respect toa competitor of the Company or any of its Subsidiaries under which Company Owned IP may be licensed (including by means of a covenant not to xxx) to Third Parties together with any Intellectual Property owned by such competitor; provided, that, the Company shall be permitted to enter into such arrangements (A) in connection with its interactive business or (B) to the extent such arrangements do not extend the scope of such arrangements in any single capital expenditure which is significant means, or extend the existing term of such arrangements by more than twelve (12) months beyond the maturity date (as of the date hereof) of such arrangements; (j) abandon, allow to lapse or fail to maintain any Company Registered IP, except in excess the ordinary course of Twenty-Five Thousand Dollars business consistent with past practice; ($25,000k) other than in the ordinary course of business consistent with past practice, enter into any exclusive supply or capital expenditures which arelicense arrangement that would be material to the Company and its Subsidiaries, taken as a whole, that would have a term extending beyond July 31, 2014; (l) incur any Indebtedness or guarantee any Indebtedness for any Person, except for Indebtedness (i) incurred under the Credit Facility in a principal amount such that, in the aggregate, not more than $115,000,000 is at any one time outstanding under the Credit Facility, or (ii) incurred under letters of credit in excess the ordinary course of Fifty Thousand Dollars business consistent with past practice; (m) (i) loan (other than customer financing in an amount not to exceed $50,0005,000,000, in the aggregate), advance, invest or make a capital contribution to or in any Person, other than a Subsidiary of the Company, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the Company and obligations of any other Person (other than support arrangements for Subsidiaries of the Company Subsidiaries taken as a whole other than emergency repairs and repairs compelled by legal or safety requirementsconsistent with past practice), and the Company shall consult with Parent in respect of all such items; (j) enter into any new line of business outside of its Business; (kiii) make investments in Persons other than wholly-owned Subsidiaries, other than in or agree to make any capital expenditures except to the Ordinary Course of Business; (l) except as extent set forth in Section 6.1 of the Company Disclosure Schedule, adopt or amend any material Company Benefit Plan, increase in any material manner the compensation or fringe benefits of any director, officer or employee of the Company or pay any material benefit not provided for by any existing Company Benefit Plan, in each case except (i) as reasonably necessary to comply with Applicable Law, (ii) in the Ordinary Course of Business (including without limitation to address the requirements of written agreements or Contracts the Company and each Company Subsidiary has entered into as of the date hereof), (iii) in connection with entering into, with respect to newly hired employees, or extending with respect to existing employees, any employment or other compensatory agreements with individuals or directors of the Company or any Company Subsidiary and other executive personnel) in the Ordinary Course of Business, and comparable to compensatory amounts for individuals of similar responsibility in the CompanyLetter, (iv) cash payments made pursuant to new, amended or extended Brand/IP License Agreements except to the extent set forth in connection with entering into the retention agreements or programs specified in paragraph 24 of Section 6.1 of the Company Disclosure ScheduleLetter, or (v) general annual salary increases enter into any material new line of business outside of its existing business or engage in the Ordinary Course conduct of Business business that would require the receipt of any additional consents, approvals or authorizations of a Governmental Authority (including a Gaming Authority) in connection with the consummation of the Merger and the transactions contemplated hereby; (n) materially modify, amend, cancel or terminate or waive, release or assign any material rights or claims with respect to, any Company Material Contract or enter into any Contract which, if entered into prior to the date hereof, would be a Company Material Contract, in each case, other than (i) in the ordinary course of business consistent with past practice, (ii) which would be a Brand/IP License Agreement or (iii) Contracts entered into in compliance with Section 6.1(f); (o) materially modify, amend, or terminate any material Brand/IP License Agreement (other than with respect to licenses for commercially available software or hardware or granted and effective not earlier in the ordinary course of business consistent with past practice); (p) make any material change in accounting in effect at June 30, 2012, except (i) as required by GAAP (or any interpretation or enforcement thereof), Regulation S-X of the Exchange Act or a Governmental Authority or quasi-Governmental Authority (including the Financial Accounting Standards Board or any similar organization), or (ii) as required by a change in applicable Law; (q) waive, release, assign, settle or compromise any (X) governmental complaint or Proceeding or (Y) claims, liabilities or obligations arising out of, related to or in connection with litigation (other than litigation concerning this Agreement) or other Proceedings other than settlements of, or compromises for, any such litigation or other Proceedings where the dates amounts paid or to be paid are (A) funded, subject to payment of a deductible, by insurance coverage maintained by the Company has historically granted salary increases or and its Subsidiaries without any material increase in the premiums due under such policies and (viB) otherwise less than $10,000,000 in the termination or amendment of any Company Benefit Plan that may be subject to Code Section 409A consistent with Code Section 409A and any guidance issued thereunder; providedaggregate and, in each case, such termination settlement or amendment compromise does not increase the Liability of Company or Parent without the express written consent of Parent.include any material non-monetary remedies; (mr) except as otherwise contemplated required by this Agreementapplicable Law or the published interpretation or enforcement thereof, including Sections 6.1make or rescind any material Tax election, change any material Tax method, file any amended Tax Return that is material, or settle or compromise any material federal, state, provincial, local or foreign income Tax liability, other than in the ordinary course of business; (s) fail to maintain insurance consistent with past practice for the business of the Company and its Subsidiaries, taken as otherwise required by Applicable Law or Governmental Authority, a whole; (t) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any Company Subsidiary (other than the Merger); (n) file any Tax Return taking a position inconsistent with the Company's or any Company Subsidiaries' past practice, except as required by Applicable Law; or (ou) knowingly commit or agree enter into any written agreement to take do any of the foregoing actions or take or fail to take any action which would result in any representation or warranty of the Company or the Principal Stockholders contained in this Agreement which is qualified as to materiality (whether by reference to a Material Adverse Effect or otherwise) becoming untrue as of the Effective Time, or any representation or warranty not so qualified becoming untrue in any material respect (whether by reference to a Material Adverse Effect or otherwise) as of the Effective Timeforegoing.

Conduct of Business by the. Company Pending the Effective TimeMerger. The Company agrees that, between Between the date of this Agreement and the earliest to occur of the Effective TimeTime and the date, if any, on which this Agreement is terminated pursuant to Section 8.1, except as set forth in Section 6.1 in the Company Disclosure Schedule, as otherwise contemplated by this Agreement, as (a) may be required by Applicable Law or as consented to Law, (b) may be expressly agreed in writing by ParentParent (which agreement shall not be unreasonably withheld, the Company will, and will cause each Company Subsidiary to, in all material respects conditioned or delayed) or (ic) conduct the Business substantially in the Ordinary Course of Business and (ii) use commercially reasonable best efforts to preserve the current relationships of the Company and each Company Subsidiary with such of the Customers, Suppliers and other Persons with which the Company or any Company Subsidiary has significant business relations as is reasonably necessary to preserve substantially intact the Business. Without limiting the foregoing, and as an extension thereof, except (1) as set forth in on Section 6.1 of 6.1of the Company Disclosure Schedule, (2i) other than as otherwise contemplated expressly required by this AgreementAgreement and subject to clause (ii) below, (3) as required by Applicable Lawthe Company shall, (4) in connection with any payments to any holder and shall cause each of an Equity Interest its Subsidiaries to, carry on its business in the ordinary course consistent with past practice and, to the extent consistent therewith, use reasonable best efforts to preserve substantially intact its current business organizations, to keep available the services of its current officers and employees and to preserve its relationships with significant Governmental Authorities, joint venture partners, customers, suppliers, licensors, licensees, distributors, wholesalers, lessors and similar Persons, in each case, having significant business dealings or other material relationships with the Company in order or any of its Subsidiaries and to obtain a consent preserve the goodwill and maintain satisfactory relationships with Persons having material business relationships with the Company or release in connection with this Agreement or any of its Subsidiaries and (ii) without limiting the Merger, or generality of the foregoing clause (5) as consented to in writing by Parent (such consent not to be unreasonably withheld or delayedi), the Company shall not, not and shall not permit any Company Subsidiary toof its Subsidiaries to and, between only to the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following (provided that with respect to any act taken by extent the Company under subclauses (2) through (4) abovehas any right or ability to cause, the Company shall notify Parent thereof):use reasonable best efforts to exercise such right or ability to cause PELSA and its Subsidiaries not to: (a) amend or otherwise change modify the certificate Memorandum of incorporation Association or by-laws the Articles of the Company or Association (or, in any material respect, such equivalent organizational or governing documents of any Company Subsidiaryof the Subsidiaries of the Company), other than as contemplated by this Agreement; (b) except as necessary to comply with the requirements of any Contracts of for transactions among the Company and its wholly-owned Subsidiaries or a Company Subsidiary existing on among the date hereofCompany’s wholly-owned Subsidiaries, issue, deliver, sell, pledge pledge, dispose, encumber or encumbergrant any shares, or authorizeany options, propose warrants, convertible securities or agree to the issuance, delivery, sale, pledge or encumbrance of, any shares of its capital stock, or securities convertible into or exchangeable for, or Options or other rights of any kind to acquire, acquire any such shares of any class or series of its capital stock (rights settled in cash or other than pursuant to the exercise of Options and other contractual rights existing property based in whole or in part on the date hereof which are disclosed in Section 6.1 value of the Company Disclosure Schedule)such shares; (c) except as permitted under this Agreement, (i) declare, set asideauthorize, make or pay any dividend or other distribution (other than cash distributions) with respect to any of its capital stock (distribution, payable in cash, stock, property or otherwise, other than dividends paid by a PELSA, any wholly-owned Subsidiary of the Company Subsidiary to the Company or to any other wholly-owned Company SubsidiarySubsidiary of the Company; (ii) split, combine or enter into reclassify any agreement with respect to the voting shares of capital stock owned by it; or other Equity Interests; or (diii) reclassifyredeem, combine, split purchase or subdivide, directly or indirectly, otherwise acquire any shares of its capital stock or other Equity Interests; (d) except in the ordinary course of business or as required pursuant to the Company Benefit Plans in effect as of the date hereof or as otherwise required by Law, (i) increase the compensation or other benefits payable or to become payable to employees, directors or executive officers or grant any new short or long term incentive compensation awards, (ii) grant any severance or termination pay to, or enter into any severance agreement with, any employee, director or executive officer, (iii) enter into, terminate or amend any employment agreement with any employee or executive officer, (iv) terminate, establish, adopt, enter into or amend or terminate any Company Benefit Plan (or arrangement that would be a Company Benefit Plan were it effective as of the date hereof) or (v) enter into any new, or amend any existing, collective bargaining agreement; (e) terminate the employment of any employee of the Company or its Subsidiaries who is a party to any employment agreement and who makes in excess of $50,000 annually, other than as a direct result of such employee’s (i) willful failure to perform the duties or responsibilities of his employment, (ii) engaging in serious misconduct, or (iii) being convicted of or entering a plea of guilty to any crime; (f) forgive any loans to employees, officers or directors or any of their respective affiliates; (g) grant, accelerate the vesting of, confer or award options, convertible securities, restricted stock, restricted stock units, performance stock units, stock appreciation rights or other rights to acquire any capital stock or any equity-based award based in whole or in part on capital stock, whether settled in cash, securities or other property, or take any action not otherwise contemplated by this Agreement to cause to be exercisable any otherwise unexercisable option or other equity-based award under any existing plan; (h) acquire (including by merger, consolidation, or acquisition of stock or assets), outside of the Ordinary Course of Business, ) any interest ownership interests in any Person corporation, partnership, limited liability company, other business organization or any division or material amount of assets thereof other than acquisitions of assets up to an aggregate amount of $100,000, supplies, dealer accounts and inventory, in each case, in the ordinary course of business consistent with past practice; (i) dispose of, transfer, lease, license, mortgage, pledge, encumber or subject to a Lien any material assets of the Company or any assetsof its Subsidiaries, other than (i) Company Owned IP, to the extent permitted in (j) below, (ii) sales of inventory made in the ordinary course of business consistent with past practice or (iii) in connection with any acquisitions that are transaction solely between the Company and any wholly-owned Subsidiary of the Company or among any wholly-owned Subsidiaries of the Company; (j) dispose of, transfer, lease, license, mortgage, pledge or encumber any material Company Owned IP (other than non-exclusive licenses granted to end users in progress on connection with sales of finished products in the date hereof ordinary course of business); (k) abandon, allow to lapse or fail to maintain any material Intellectual Property Rights in the Company Owned IP; (l) incur any Indebtedness or guarantee any Indebtedness for any Person other than incurrences of or guarantees for unsecured Indebtedness in an aggregate amount not to exceed $100,000 and in the terms and conditions ordinary course of which are disclosed business consistent with past practice; (m) adopt any budget, work program or operating plan or otherwise authorize, make any commitment with respect to any capital expenditure or amend or make any capital expenditure not contemplated by the capital expenditure budget set forth in Section 6.1 6.1(m) of the Company Disclosure Schedule; (fn) incur (i) amend, terminate, cancel or materially modify or waive, release or assign any Indebtedness material rights or issue claims with respect to any debt securities Company Material Contract other than in the ordinary course of business or assume(ii) enter into any new Contract that if entered into prior to the date hereof, guarantee would have been required to be listed in Section 4.16 of the Company Disclosure Schedule as a Company Material Contract or endorse, (iii) take any action that results in any breach of or otherwise as an accommodation become responsible for, constitutes a default under or results in the obligations cancellation of any Person Company Material Contract; (o) invest the cash of the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practice; provided that the Company and its Subsidiaries shall take the actions set forth on Section 6.1(o) of the Company Disclosure Schedule; (p) loan, advance, invest or make a capital contribution to or in any Person, other than a wholly-owned Company SubsidiarySubsidiary of the Company; (q) for borrowed moneywaive, except for release, assign, settle or compromise any (i) Indebtedness incurred in the Ordinary Course of Business, pursuant to existing credit lines disclosed in Section 6.1 of the Company Disclosure Schedule, governmental complaint or (ii) Indebtedness owing by claims, liabilities or obligations arising out of, related to or in connection with litigation other than for compromises, settlements or agreements that (x) involve only the payment of monetary damages not in excess of $100,000 in any wholly-owned Company Subsidiary to single instance and $250,000 in the aggregate and in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company or any other wholly-owned Company Subsidiary, (iii) Indebtedness incurred with respect to acquisitions permitted pursuant to Section 6.1; and (iv) Indebtedness to pay the MIP Payment and any MIP-Related Taxes; provided, that any such Indebtedness (including any related Taxes) described in (iv) above shall be repaid at the Closing pursuant to Section 3.2.1(c). (g) grant any Lien (other than a Permitted Lien) in any of its material assets to secure any Indebtedness, except in connection with such Indebtedness Subsidiaries or (y) are permitted under the preceding Section 6.16.10; (hr) issue any debt securities or assume, endorse, or otherwise become responsible for, the obligations of any Person, or make any loans material change in accounting principles, policies, practices, procedures or advances (other than advances to employees methods in the Ordinary Course of Business); (i) authorizeeffect at December 31, or make any commitment with respect to2013, any single capital expenditure which is in excess of Twenty-Five Thousand Dollars ($25,000) or capital expenditures which are, in the aggregate, in excess of Fifty Thousand Dollars ($50,000) for the Company and the Company Subsidiaries taken as a whole other than emergency repairs and repairs compelled by legal or safety requirements, and the Company shall consult with Parent in respect of all such items; (j) enter into any new line of business outside of its Business; (k) make investments in Persons other than wholly-owned Subsidiaries, other than in the Ordinary Course of Business; (l) except as set forth in Section 6.1 of the Company Disclosure Schedule, adopt or amend any material Company Benefit Plan, increase in any material manner the compensation or fringe benefits of any director, officer or employee of the Company or pay any material benefit not provided for by any existing Company Benefit Plan, in each case except (i) as reasonably necessary to comply with Applicable Lawrequired by GAAP (or any interpretation or enforcement thereof) or Regulation S-X of the Exchange Act or other rule or regulation promulgated by the SEC, or (ii) as required by applicable Law; (s) except as required by Law or the published interpretation or enforcement thereof, make or rescind any material Tax election, change any material Tax method, file any amended Tax Return that is material, or settle or compromise any material federal, state, provincial, local or foreign income Tax liability; (t) fail to maintain in the Ordinary Course of Business (including without limitation to address the requirements of written agreements or Contracts full force and effect insurance policies covering the Company and each Company Subsidiary has entered into as of the date hereof)its Subsidiaries and their respective properties, (iii) assets and businesses in connection with entering into, with respect to newly hired employees, or extending with respect to existing employees, any employment or other compensatory agreements with individuals or directors of the Company or any Company Subsidiary a form and other executive personnel) in the Ordinary Course of Business, and comparable to compensatory amounts for individuals of similar responsibility in the Company, (iv) in connection with entering into the retention agreements or programs specified in Section 6.1 of the Company Disclosure Schedule, (v) general annual salary increases in the Ordinary Course of Business and granted and effective not earlier than the dates the Company has historically granted salary increases or (vi) the termination or amendment of any Company Benefit Plan that may be subject to Code Section 409A amount consistent with Code Section 409A and any guidance issued thereunder; provided, such termination or amendment does not increase the Liability of Company or Parent without the express written consent of Parent.past practice; (mu) except as otherwise contemplated by this Agreement, including Sections 6.1, or as otherwise required by Applicable Law or Governmental Authority, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries; (v) convene any regular or special meeting (or any adjournment thereof) of the Company Subsidiary Shareholders (other than the Merger)Shareholders’ Meeting and, not prior to March 31, 2015, the annual Shareholders meeting of the Company) or enter into any Contract or understanding or arrangement with respect to the voting or registration of the Company Shares or any other Equity Interests of the Company; (nw) file enter into any Tax Return taking a position inconsistent with new line of business outside the Company's ’s existing business segments; (x) enter into, modify or terminate any Company Subsidiaries' past practice, except as required by Applicable Lawtransactions or Contracts with any Affiliate of the Company; (y) amend or modify in any material respect the engagement letter of any of the Company’s financial advisors; or (oz) knowingly commit or agree enter into any Contract to take do any of the foregoing actions or take or fail to take any action which would result in any representation or warranty of the Company or the Principal Stockholders contained in this Agreement which is qualified as to materiality (whether by reference to a Material Adverse Effect or otherwise) becoming untrue as of the Effective Time, or any representation or warranty not so qualified becoming untrue in any material respect (whether by reference to a Material Adverse Effect or otherwise) as of the Effective Timeforegoing.

Conduct of Business by the. Company Pending the Effective TimeClosing. The Company Covance covenants and agrees that, between the date of this Agreement and the Effective TimeClosing, except as set forth in Section 6.1 in 6.01 of the Company Disclosure Schedule, Schedule or as otherwise contemplated by any other provision of this Agreement, as required by Applicable Law or as consented to unless the Purchaser shall otherwise agree in writing by Parent, writing: (a) Covance shall cause the Company will, and will cause each Company Subsidiary to, in all material respects (i) to conduct the Business substantially in the Ordinary Course of Business ordinary course and (ii) use commercially reasonable best efforts to preserve the current relationships of the Company and each Company Subsidiary consistent with such of the Customers, Suppliers and other Persons with which the Company or any Company Subsidiary has significant business relations as is reasonably necessary to preserve substantially intact the Businesspast practice. Without limiting the foregoing, and as an extension thereof, except (1) as set forth in Section 6.1 generality of the Company Disclosure Schedule, (2) as otherwise contemplated by this Agreement, (3) as required by Applicable Law, (4) in connection with any payments to any holder of an Equity Interest in the Company in order to obtain a consent or release in connection with this Agreement or the Merger, or (5) as consented to in writing by Parent (such consent not to be unreasonably withheld or delayed), the Company shall not, and shall not permit any Company Subsidiary toforegoing, between the date of this Agreement and the Effective TimeClosing, directly or indirectlyCovance shall cause the Company to use commercially reasonable efforts to: (i) preserve substantially intact the business organization and preserve its relationships with its customers, dosuppliers, employees and others having business relations with the Company and to preserve the goodwill of the business of the Company; (ii) keep available the services of its present officers and employees, provided that neither Covance nor the Company shall be required to increase the compensation of, or agree to doprovide any other retention incentive to, any such officers or employees beyond that currently provided; (iii) perform in all material respects all of its obligations under all Material Contracts (except those being contested in good faith); (iv) maintain in full force and effect and in the following same amounts insurance policies comparable in amount and scope of coverage to that now maintained by the Company, and provide copies to the Purchaser of all current and historical occurrence-based insurance policies of or providing benefit to the Company for any occurrences prior to the Closing Date (provided that the Purchaser shall reimburse Covance for the reasonable out-of-pocket expenses it incurs in providing such copies); and (v) deliver all notices required to be delivered, and obtain all consents required to be obtained, in connection with the consummation of the transactions contemplated by this Agreement under the terms of any Material Contract, provided, however, Covance and the Company shall not be required to pay any consideration in connection therewith; provided, however, that no action by the Company with respect to matters specifically addressed by any act taken by provision of Section 6.01(b) shall be deemed a breach of this Section 6.01(a) unless such action would constitute a breach of any such provision of Section 6.01(b); and (b) Covance shall cause the Company under subclauses to not (2) through (4) above, the Company shall notify Parent thereofexcept as contemplated by any other provision of this Agreement): (ai) amend the Certificate of Incorporation or otherwise change the certificate of incorporation or byBy-laws of the Company or equivalent organizational documents take any action with respect to liquidation or dissolution of any Company Subsidiarythe Company; (bii) except as necessary to comply with the requirements of issue or sell any Contracts additional shares of the Company or a Company Subsidiary existing on the date hereof, issue, deliver, sell, pledge or encumbercapital stock of, or authorizeother equity interests in, propose or agree to the issuance, delivery, sale, pledge or encumbrance of, any shares of its capital stockCompany, or securities convertible into or exchangeable for, for such shares or Options or rights of any kind to acquire, any shares of any class or series of its capital stock (other than pursuant to the exercise of Options and other contractual rights existing on the date hereof which are disclosed in Section 6.1 of the Company Disclosure Schedule)equity interests; (ciii) except as permitted under this Agreementin the ordinary course of business consistent with past practice, declaresell, set asideassign, make transfer, lease or pay any dividend otherwise dispose of or other distribution (other than cash distributions) with respect agree to sell, assign, transfer, lease or otherwise dispose of any of its capital stock (other than dividends paid by a wholly-owned Company Subsidiary to the Company material assets or to any other wholly-owned Company Subsidiary) or enter into any agreement with respect to properties of the voting of capital stock owned by itCompany; (d) reclassify, combine, split or subdivide, directly or indirectly, any of its capital stock or other Equity Interests; (e) acquire (including by merger, consolidation, or acquisition of stock or assets), outside of the Ordinary Course of Business, any interest in any Person or any division thereof or any assets, other than any acquisitions that are in progress on the date hereof and the terms and conditions of which are disclosed in Section 6.1 of the Company Disclosure Schedule; (fiv) incur any Indebtedness or issue any debt securities or (other than Intercompany Indebtedness), or, except in the ordinary course of business consistent with past practice, assume, guarantee or endorse, or otherwise as an make any accommodation become responsible for, the obligations of any Person (other than a wholly-owned Company Subsidiary) for borrowed money, except for (i) Indebtedness incurred in the Ordinary Course of Business, pursuant to existing credit lines disclosed in Section 6.1 of the Company Disclosure Schedule, (ii) Indebtedness owing by any wholly-owned Company Subsidiary to the Company or any other wholly-owned Company Subsidiary, (iii) Indebtedness incurred with respect to acquisitions permitted pursuant to Section 6.1; and (iv) Indebtedness to pay the MIP Payment and any MIP-Related Taxes; provided, that any such Indebtedness (including any related Taxes) described in (iv) above shall be repaid at the Closing pursuant to Section 3.2.1(c). (g) grant any Lien (other than a Permitted Lien) in any of its material assets to secure any Indebtedness, except in connection with such Indebtedness permitted under the preceding Section 6.1; (h) issue any debt securities or assume, endorse, or otherwise become responsible for, the obligations of any Person, or make any loans or advances (other than advances to employees in the Ordinary Course of Business)advances; (iv) authorizetake any action to create any Encumbrance on any of the material assets or properties of the Company, or make any commitment with respect to, any single capital expenditure which is in excess of Twenty-Five Thousand Dollars ($25,000) or capital expenditures which are, in the aggregate, in excess of Fifty Thousand Dollars ($50,000) for the Company and the Company Subsidiaries taken as a whole other than emergency repairs and repairs compelled by legal or safety requirements, and the Company shall consult with Parent in respect of all such itemsPermitted Encumbrances; (jvi) enter into acquire (including, without limitation, by merger, consolidation or acquisition of stock or assets or partnership or limited liability company interests) any new line of business outside of its Businessor any Person or any division thereof or interest therein; (kvii) make investments in Persons other except for expenditures or commitments involving amounts less than wholly-owned Subsidiaries$100,000, other than or except as provided in the Ordinary Course of Business; (l) except Company's budget for the year 2001 as set forth in Section 6.1 6.01(b)(vii) of the Company Disclosure Schedule, adopt or amend make any material commitment for any capital expenditures (provided however, that notwithstanding the foregoing, the Company Benefit Planshall not, increase in any material manner the compensation or fringe benefits of event, make any director, officer or employee of the Company or pay any material benefit not provided for by any existing Company Benefit Plan, in each case except (i) as reasonably necessary to comply with Applicable Law, (ii) in the Ordinary Course of Business (including without limitation to address the requirements of written agreements or Contracts the Company and each Company Subsidiary has entered into as of the date hereof), (iii) in connection with entering into, commitments with respect to newly hired employees(1) any material additions to the Company's purification capacity, or extending with respect to existing employees, (2) any employment or other compensatory agreements with individuals or directors expansion of the Company or any Company Subsidiary and other executive personnel) in the Ordinary Course of Business, and comparable to compensatory amounts for individuals of similar responsibility in the Company, (iv) in connection with entering into the retention agreements or programs specified in Section 6.1 square footage of the Company Disclosure Schedule, (v) general annual salary increases in the Ordinary Course of Business and granted and effective not earlier than the dates the Company has historically granted salary increases Facility or (vi3) the termination or amendment leasing of any Company Benefit Plan that may be subject to Code Section 409A consistent with Code Section 409A and any guidance issued thereunder; provided, such termination or amendment does not increase the Liability of Company or Parent a new process development facility without the express prior written consent of Parent. (m) except as otherwise contemplated by this Agreement, including Sections 6.1, or as otherwise required by Applicable Law or Governmental Authority, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any Company Subsidiary (other than the MergerPurchaser); (nviii) file amend, terminate, cancel, settle or compromise any Tax Return taking a position inconsistent with material claim of the Company's ; (ix) permit a change in its methods of maintaining its books, accounts or any Company Subsidiaries' past practicebusiness records or, except as required by Applicable LawU.S. GAAP (in which event prior notice shall be given to the Purchaser), change any of its accounting principles or the methods by which such principles are applied for tax or financial reporting purposes; (x) except as otherwise provided in this Agreement, enter into any agreement, arrangement or transaction with Covance or any Affiliate of Covance (other than the Company) or any Minority Shareholder under which the Company will have any liability or obligation on or after the Closing Date; (xi) except in the ordinary course of business consistent with past practice, amend, modify or supplement any Material Contract; (xii) declare, pay or set aside for payment any dividend or other distribution in respect of the capital stock of the Company and not redeem, combine, split, subdivide, purchase or otherwise acquire any shares of the capital stock or other securities of the Company or rights or obligations convertible into or exchangeable for any shares of the capital stock or other securities of the Company or obligations convertible into such, or any options, warrants or other rights to purchase or subscribe to any of the foregoing; (xiii) enter into, modify or extend in any manner the terms of any employment, severance or similar agreements with officers and directors nor grant any increase in the compensation of officers, directors or employees, whether now or hereafter payable (except for compensation increases in the ordinary course of business and consistent with past practice with respect to employees other than executive officers and directors), including any such increase pursuant to any option, bonus, stock purchase, pension, profit-sharing, deferred compensation, retirement or other plan, arrangement, contract or commitment; (xiv) waive any rights under any Material Contract or under any confidentiality, nonsolicitation or noncompetition agreement or any agreement with any party relating to the sale or possible sale of the Company; (xv) enter into, amend or terminate any contract, agreement, commitment or arrangement relating to the acquisition, disposition or leasing of real property; or (oxvi) knowingly commit enter into or agree amend any contract, agreement, commitment or arrangement with respect to take any of the foregoing actions or take or fail to take any action which would result matter set forth in any representation or warranty of the Company or the Principal Stockholders contained in this Agreement which is qualified as to materiality (whether by reference to a Material Adverse Effect or otherwise) becoming untrue as of the Effective Time, or any representation or warranty not so qualified becoming untrue in any material respect (whether by reference to a Material Adverse Effect or otherwise) as of the Effective TimeSection 6.01(b).

Conduct of Business by the. Company Pending the Effective TimeMerger. The Company covenants and agrees that, between the date of this Agreement and the earlier of the Effective TimeTime and the date, if any, on which this Agreement is terminated pursuant to Section 8.1, except (a) as set forth in Section 6.1 in may be required by Law, (b) with the Company Disclosure Scheduleprior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (c) as otherwise contemplated by may be expressly required or permitted pursuant to this Agreement, as required by Applicable Law or as consented to in writing by Parent, the Company will, and will cause each Company Subsidiary to, in all material respects (i) conduct the Business substantially in the Ordinary Course of Business and (ii) use commercially reasonable best efforts to preserve the current relationships of the Company and each Company Subsidiary with such of the Customers, Suppliers and other Persons with which the Company or any Company Subsidiary has significant business relations as is reasonably necessary to preserve substantially intact the Business. Without limiting the foregoing, and as an extension thereof, except (1d) as set forth in Section 6.1 of the Company Disclosure ScheduleLetter, (2x) as otherwise contemplated by this Agreement, (3) as required by Applicable Law, (4) in connection with any payments to any holder the business of an Equity Interest the Company and its Subsidiaries shall be conducted in the ordinary course of business, and to the extent consistent therewith, the Company shall use its commercially reasonable efforts to preserve substantially intact the material components of their current business organization, taken as a whole, and to preserve in order all material respects their present relationships with their employees, and the key customers and suppliers with which they have material business relations, taken as a whole (provided, however, that no action by the Company or any of its Subsidiaries, as applicable, with respect to obtain matters specifically addressed by any provision of the immediately succeeding clause (y) shall be deemed a consent or release in connection with this Agreement or breach of the Merger, or foregoing unless such action would constitute a breach of such provision of the immediately succeeding clause (5y)); and (y) as consented to in writing by Parent (such consent not to be unreasonably withheld or delayed), the Company shall not, and shall not permit any Company Subsidiary of its Subsidiaries to, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following (provided that with respect to any act taken by the Company under subclauses (2) through (4) above, the Company shall notify Parent thereof):: (a) amend or otherwise change the certificate of incorporation or by-laws of change, in any material respect, the Company Charter or equivalent the Company Bylaws, the organizational or governing documents of any Company SubsidiarySubsidiary or any JV Documentation; (b) except as necessary to comply with split, combine, reclassify, redeem, repurchase or otherwise acquire or amend the requirements terms of any Contracts of the Company capital stock or a Company Subsidiary existing on the date hereof, other equity interests or rights; (c) issue, deliver, sell, pledge pledge, dispose, encumber or encumber, or authorize, propose or agree to the issuance, delivery, sale, pledge or encumbrance of, grant any shares of its or its Subsidiaries’ capital stock, or securities any options, warrants, convertible into or exchangeable for, securities or Options or other rights of any kind to acquire, acquire any shares of any class its or series of its Subsidiaries’ capital stock (other than pursuant to the exercise of Options and other contractual or any phantom stock plan or stock appreciation rights existing on the date hereof which are disclosed in Section 6.1 of except for transactions among the Company Disclosure Schedule)and its direct or indirect wholly owned Subsidiaries or among the Company’s direct or indirect wholly owned Subsidiaries; (cd) except as permitted under this Agreement, declare, set asideauthorize, make or pay any dividend or other distribution (other than cash distributions) distribution, payable in cash, stock, property or otherwise, with respect to the Company’s or any of its Subsidiaries’ capital stock (or other equity interests, other than (i) dividends paid by a wholly-owned any Subsidiary of the Company Subsidiary to the Company or to any other wholly-wholly owned Company SubsidiarySubsidiary of the Company, and (ii) or enter into any agreement cash dividends with respect to the voting of capital stock owned by it; (d) reclassify, combine, split or subdivide, directly or indirectly, any of its Company’s capital stock or other Equity Interestsequity interests; provided that, after giving effect to any cash dividends, Company Cash is at least $20,000,000; (e) except in the ordinary course of business or as required under the existing terms of any Company Benefit Plan, (i) grant any material increase in the wages, salary, bonus or other compensation, remuneration or benefits of any current or former director, officer or employee of the Company or (ii) establish, adopt, enter into, materially amend or terminate any Company Benefit Plan (or any arrangement which if in existence as of the date hereof would constitute a Company Benefit Plan), except to the extent such action does not increase the annual costs of the Company and its Subsidiaries with respect to such Company Benefit Plans and arrangements by more than $1,000,000 in the aggregate; (f) acquire (including by merger, consolidation, or acquisition of stock or assets), outside except in respect of any merger, consolidation, business combination among the Ordinary Course of BusinessCompany and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, any interest corporation or other business entity, business or division of any Third Party (i) having aggregate purchase prices (including liabilities assumed) in excess of $10,000,000 or (ii) could reasonably be expected to result in an impediment to obtaining all Consents under any Person or any division thereof or any assets, other than any acquisitions that are in progress on the date hereof and the terms and conditions of which are disclosed in Section 6.1 of the Company Disclosure ScheduleAntitrust Laws; (fg) incur any Indebtedness or issue amend in any debt securities or assumematerial respect the terms of, guarantee or endorseany indebtedness for borrowed money, or otherwise as an accommodation become responsible for, the obligations of assume or guarantee any such indebtedness for any Person (other than a wholly-owned Company Subsidiary) for borrowed money), except for indebtedness incurred (i) Indebtedness incurred in under the Ordinary Course of Business, pursuant to Company’s existing credit lines disclosed in Section 6.1 of the Company Disclosure Schedulefacilities or incurred to replace, renew, extend, refinance or refund any existing indebtedness on market terms and conditions, (ii) Indebtedness owing by any wholly-owned Company Subsidiary pursuant to agreements in effect prior to the Company or any other wholly-owned Company Subsidiaryexecution of this Agreement, (iii) Indebtedness incurred with respect to acquisitions permitted pursuant to Section 6.1; and under letters of credit issued in the ordinary course of business or (iv) Indebtedness to pay as otherwise required in the MIP Payment and any MIP-Related Taxes; providedordinary course of business consistent with past practice, provided that any such Indebtedness (including any related Taxes) described in (iv) above shall be repaid at all cases total indebtedness for borrowed money as of the Closing pursuant to Section 3.2.1(c). (g) grant any Lien (other than a Permitted Lien) in any of its material assets to secure any Indebtedness, except in connection with such Indebtedness permitted under the preceding Section 6.1Effective Time will not exceed $45,000,000; (h) issue enter into, modify or amend any debt securities Company Material Contract with a term longer than one (1) year and which cannot be terminated without material penalty upon notice of one-hundred and eighty (180) days or assumeless, endorse, or otherwise become responsible for, the obligations of any Person, or make any loans or advances (other than advances to employees (i) in the Ordinary Course ordinary course of Businessbusiness or (ii) in respect of matters or transactions permitted by Section 6.1(f), Section 6.1(g), Section 6.1(i) or Section 6.1(n); (i) authorize, make or commit to make any commitment with respect tocapital expenditures, other than (i) capital expenditures as set forth in Section 6.1(i) of the Company Disclosure Letter or (ii) any single other capital expenditure which is expenditures not in excess of Twenty-Five Thousand Dollars ($25,000) or 20,000,000, provided that, no capital expenditures which are, in the aggregate, in excess of Fifty Thousand Dollars shall be made under this subclause ($50,000ii) for the Company and the Company Subsidiaries taken as a whole other than emergency repairs and repairs compelled by legal or safety requirements, and the Company shall consult with Parent in respect of all such itemsany greenfield project or greenfield opportunity that is not already committed as of the date hereof; (j) enter into make any new line material change to its methods of business outside accounting in effect at December 31, 2016, except (i) as required by GAAP (or any interpretation thereof), a Governmental Authority or a quasi-Governmental Authority (including the Financial Accounting Standards Board or any similar organization), (ii) to permit the audit of its Businessthe Company’s financial statements in compliance with GAAP or (iii) as required by a change in applicable Law; (k) make investments in Persons other than wholly-owned Subsidiaries, other than in the Ordinary Course of Business; (l) except as set forth in Section 6.1 of the Company Disclosure Schedule, adopt or amend any material Company Benefit Plan, increase in any material manner the compensation or fringe benefits of any director, officer or employee of the Company or pay any material benefit not provided for by any existing Company Benefit Plan, in each case except (i) as reasonably necessary to comply with Applicable Law, (ii) in the Ordinary Course of Business (including without limitation to address the requirements of written agreements or Contracts the Company and each Company Subsidiary has entered into as of the date hereof), (iii) in connection with entering into, with respect to newly hired employees, or extending with respect to existing employees, any employment or other compensatory agreements with individuals or directors of the Company or any Company Subsidiary and other executive personnel) in the Ordinary Course of Business, and comparable to compensatory amounts for individuals of similar responsibility in the Company, (iv) in connection with entering into the retention agreements or programs specified in Section 6.1 of the Company Disclosure Schedule, (v) general annual salary increases in the Ordinary Course of Business and granted and effective not earlier than the dates the Company has historically granted salary increases or (vi) the termination or amendment of any Company Benefit Plan that may be subject to Code Section 409A consistent with Code Section 409A and any guidance issued thereunder; provided, such termination or amendment does not increase the Liability of Company or Parent without the express written consent of Parent. (m) except as otherwise contemplated by this Agreement, including Sections 6.1, solely with respect to the Company or as otherwise required by Applicable Law or Governmental Authorityany non-wholly owned Subsidiary, adopt or enter into a plan of complete or partial liquidationliquidation or dissolution; (l) except with respect to Taxes (which are governed by Section 6.1(m)), dissolution, merger, consolidation, restructuring, recapitalization settle or compromise any litigation other reorganization than (i) in the ordinary course of business consistent with past practice or (ii) settlements or compromises of litigation where the amount paid (less the amount reserved for such matters by the Company on the most recent balance sheet in the Company Financial Statements or any otherwise covered by insurance) in settlement or compromise, in each case, that is not material to the Company Subsidiary and its Subsidiaries, taken as a whole; (m) other than the Merger)consistent with past practice, make or change any material Tax election, change any material method of Tax accounting, settle or compromise any material Tax liability, enter into any closing agreement with any Governmental Authority with respect to any material Tax or surrender any right to claim a refund for a material amount of Tax; (n) file other than in the ordinary course of business or consistent with past practice (i) sell, transfer, license, mortgage, encumber or otherwise dispose of any Tax Return taking a position inconsistent with of its or their material properties or assets to any Person, other than any sale or other disposition for cash of any of the assets set forth on Section 6.1(n) of the Company Disclosure Letter, the Investment Portfolio or Liens securing obligations under existing credit facilities, or (ii) cancel, release or assign any indebtedness of any Person owed to it or any claims held by it against any Person, in each case, except for transactions among the Company and its direct or indirect wholly owned Subsidiaries or among the Company's ’s direct or any Company indirect wholly owned Subsidiaries' past practice, except as required by Applicable Law; or (o) knowingly commit or agree enter into any agreement to take do any of the foregoing actions or take or fail to take any action which would result in any representation or warranty of the Company or the Principal Stockholders contained in this Agreement which is qualified as to materiality (whether by reference to a Material Adverse Effect or otherwise) becoming untrue as of the Effective Time, or any representation or warranty not so qualified becoming untrue in any material respect (whether by reference to a Material Adverse Effect or otherwise) as of the Effective Timeforegoing.