Common use of Conduct of Business of the Company Clause in Contracts

Conduct of Business of the Company. Except as contemplated ---------------------------------- by this Agreement, during the period commencing on the date hereof and ending at the Effective Time, the Company shall, and shall cause each of its subsidiaries to, conduct its operations according to its ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its subsidiaries to, use all reasonable efforts to preserve intact its business organization and to maintain satisfactory relationships with its customers, suppliers, employees and others having material business relationships with it. Without limiting the generality of the foregoing, and except as otherwise expressly provided in this Agreement, prior to the Effective Time, neither the Company nor any or its subsidiaries will, without the prior written consent of the Parent: (a) amend or propose to amend its certificate of incorporation or by-laws; (b) authorize for issuance, issue, sell, pledge, deliver or agree or commit to issue, sell, pledge or deliver (whether through the issuance or granting of any options, warrants, calls, subscriptions, stock appreciation rights or other rights or other agreements) any capital stock of any class or any securities convertible into or exchangeable for shares of capital stock of any class of the Company, or any other ownership interest (including stock appreciation rights or phantom stock) other than shares of Common Stock issuable upon exercise of Company Stock Options outstanding on the date of this Agreement; (c) split, combine or reclassify any shares of Common Stock or declare, pay or set aside for payment any dividend or other distribution in respect of any Common Stock, or redeem, purchase or otherwise acquire any shares of Common Stock or any other securities of the Company or any rights, warrants or options to acquire any such shares of other securities; (d) enter into any other agreements, commitments or contracts that are material to the Company and its subsidiaries taken as a whole or otherwise make any material change that is adverse to the Company in (i) any existing agreement, commitment or arrangement that is material to the Company and its subsidiaries taken as a whole or (ii) the conduct of the business or operations of the Company and its subsidiaries; (e) sell, pledge, dispose of or encumber any assets of the Company or any of its subsidiaries (except for (i) sales of assets in the ordinary course of business and in a manner consistent with past practice, (ii) dispositions of obsolete or worthless assets, (iii) the dispositions described on, and pursuant to the terms described in, Schedule 6.1(e) and (iv) the sale of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer of the Company shall have certified in writing to Parent that as of the date of this Agreement the twelve months trailing EBITDA (determined on the basis disclosed to Parent prior to the date of this Agreement) associated with such assets is $1,300,000 or less; (i) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, except for the acquisitions described on Schedule 6.1(f); (ii) incur any indebtedness for borrowed money (other than pursuant to the Company's credit facilities as in effect on the date of this Agreement) or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances; (iii) enter into or amend any material contract or agreement other than in the ordinary course of business or enter into any management contract for a facility not cancelable without penalty within 30 days of notice; (iv) authorize or make any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for the Company and its subsidiaries, taken as a whole; provided, however, the Company -------- ------- will give Parent prior notice of the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate any material contract or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder); (g) increase the compensation payable or to become payable to its officers or employees, or grant any severance or termination pay to, or, except as set forth on Schedule 6.10(c), enter into any employment or severance agreement with any director, officer or other employee of the Company or any of its subsidiaries; (h) take any action, other than as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable); (i) make any material Tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign tax liability or agree to an extension of a statute of limitations for any assessment of federal income tax or material state corporate income or franchise tax, except to the extent the amount of any such settlement has been reserved for on the Company's most recent SEC Filings; (j) pay, discharge, settle, or satisfy any lawsuits, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practice; (k) except as may be required by law, take any action to establish, adopt or enter into, or to terminate or amend any Plan; (i) permit any increase in the number of employees of the Company employed by the Company on the date hereof other than pursuant to an employee plan to be agreed to by the Company and Parent as promptly as practicable after the date hereof acting reasonably and in good faith or (ii) terminate any employees of the Company identified on Schedule 6.10

Conduct of Business of the Company. Except as for matters permitted or contemplated ---------------------------------- by this Agreement, during set forth on Section 5.01 of the period commencing on Seller Disclosure Schedule or as required by applicable Law, unless Buyer otherwise agrees in writing, from the date hereof of this Agreement to the Closing, Xx. Xxxxxx and ending at the Effective Time, the Company shall, and Seller shall cause each of its subsidiaries to, Company to conduct its operations according to its business in the ordinary course of business consistent with past practicepractices. In addition, and the Company shall, and shall cause each of its subsidiaries to, use all reasonable efforts to preserve intact its business organization and to maintain satisfactory relationships with its customers, suppliers, employees and others having material business relationships with it. Without without limiting the generality of the foregoing, and except as otherwise expressly provided in for matters permitted or contemplated by this Agreement, prior set forth on Section 5.01 of the Seller Disclosure Schedule or required by applicable Law, from the date of this Agreement to the Effective TimeClosing, neither the Xx. Xxxxxx and the Seller shall not permit either Company nor to do take any or its subsidiaries will, of the following without the prior written consent of the ParentBuyer, such consent not to be unreasonably withheld or delayed or conditioned: (a) amend (i) declare, set aside or propose to amend its certificate of incorporation or by-laws; (b) authorize for issuance, issue, sell, pledge, deliver or agree or commit to issue, sell, pledge or deliver make any distributions (whether through the issuance in cash, stock, property or granting of any options, warrants, calls, subscriptions, stock appreciation rights or other rights or other agreementsotherwise) any capital stock of any class or any securities convertible into or exchangeable for shares of capital stock of any class of the Companyin respect of, or enter into any other ownership interest agreement with respect to the voting of, any membership interests in such Company; (including stock appreciation rights or phantom stock) other than shares of Common Stock issuable upon exercise of Company Stock Options outstanding on the date of this Agreement; (cii) split, combine or reclassify any shares of Common Stock the membership interests in such Company; (iii) issue or declare, pay or set aside for payment authorize the issuance of any dividend or other distribution securities in respect of, in lieu of any Common Stockor in substitution for, membership interests in such Company; or redeem(iv) purchase, purchase redeem or otherwise acquire any shares of Common Stock membership interests in such Company or any other securities of the Company thereof or any rights, options, warrants or options calls to acquire any such shares securities; (b) issue, deliver, sell, grant, pledge, transfer or otherwise encumber or dispose of or subject to any Encumbrance (i) any of such Company’s membership interests, (ii) any of its other voting securities, (iii) any securities convertible into or exchangeable for, or any options, warrants or rights to acquire, any such membership interests or voting securities or convertible or exchangeable securities or (iv) any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units; (c) amend its organizational documents; (d) enter into acquire any stock, other equity interest or assets (including real property) of any other agreements, commitments or contracts that are material to the Company and its subsidiaries taken as Person (in connection with a purchase of such Person’s business whether in whole or otherwise make any material change that is adverse to the Company in (i) any existing agreementpart), commitment whether by purchase of stock, purchase of assets, merger, consolidation, or arrangement that is material to the Company and its subsidiaries taken as a whole or (ii) the conduct of the business or operations of the Company and its subsidiariesotherwise; (e) pledge, transfer, sell, pledgelease, license, otherwise dispose of or encumber subject to any assets Lien, any of the Company Property; (f) enter into any Contract or incur any of its subsidiaries (except for (i) sales of assets in the ordinary course of business and in a manner consistent with past practice, Liability whatsoever or (ii) dispositions of obsolete make any loans, advances or worthless assetscapital contributions to, (iii) the dispositions described on, and pursuant to the terms described or investments in, Schedule 6.1(e) and (iv) the sale of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer of the Company shall have certified in writing to Parent that as of the date of this Agreement the twelve months trailing EBITDA (determined on the basis disclosed to Parent prior to the date of this Agreement) associated with such assets is $1,300,000 or less; (i) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, except for the acquisitions described on Schedule 6.1(f); (ii) incur any indebtedness for borrowed money (other than pursuant to the Company's credit facilities as in effect on the date of this Agreement) or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances; (iii) enter into or amend any material contract or agreement other than in the ordinary course of business or enter into any management contract for a facility not cancelable without penalty within 30 days of notice; (iv) authorize or make any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for the Company and its subsidiaries, taken as a whole; provided, however, the Company -------- ------- will give Parent prior notice of the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate any material contract or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder)Person; (g) increase the compensation payable adopt a plan or to become payable to its officers or employeesagreement of, or grant any severance resolutions providing for or termination pay toauthorizing, orcomplete or partial liquidation, except as set forth on Schedule 6.10(c)dissolution, enter into any employment or severance agreement with any directormerger, officer consolidation, restructuring, recapitalization or other employee reorganization of the Company or any of its subsidiariessuch Company; (h) take institute, settle, or agree to settle any actionProceeding pending or threatened before any arbitrator, court or other than as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable);Governmental Entity; or (i) make any material Tax election inconsistent with past practices or settle or compromise any material federalauthorize, state, local or foreign tax liability commit or agree to an extension of a statute of limitations for take any assessment of federal income tax or material state corporate income or franchise tax, except to the extent the amount of any such settlement has been reserved for on the Company's most recent SEC Filings; (j) pay, discharge, settle, or satisfy any lawsuits, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practice; (k) except as may be required by law, take any action to establish, adopt or enter into, or to terminate or amend any Plan; (i) permit any increase in the number of employees of the Company employed by the Company on the date hereof other than pursuant to an employee plan to be agreed to by the Company and Parent as promptly as practicable after the date hereof acting reasonably and in good faith or (ii) terminate any employees of the Company identified on Schedule 6.10foregoing actions.

Conduct of Business of the Company. Except as contemplated ---------------------------------- by this AgreementAgreement or in connection with the IPO Transaction or as described on Exhibit B or in Section 4.1 of the Company Disclosure Schedule, during the period commencing on from the date hereof and ending at of this Agreement to the Effective Time, the Company shall, will and shall will cause each of its subsidiaries to, to conduct its operations according to its in the ordinary course of business consistent with past practicepractice and, to the extent consistent therewith, with no less diligence and effort than would be applied in the Company shall, and shall cause each absence of its subsidiaries tothis Agreement, use all commercially reasonable efforts to preserve intact its current business organization organizations, keep available the service of its current officers and to maintain satisfactory employees and preserve its relationships with its customers, suppliers, employees distributors, lessors, creditors, employees, contractors and others having material business relationships dealings with itit with the intention that its goodwill and ongoing businesses shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, and except as otherwise expressly provided in this AgreementAgreement and except as contemplated by this Agreement or in connection with the IPO Transaction or as described on Exhibit B or in Section 4.1 of the Company Disclosure Schedule, prior to the Effective Time, neither the Company nor any or of its subsidiaries will, without the prior written consent of the ParentAREP Oil & Gas: (a) amend its Certificate of Incorporation or propose to amend its certificate of incorporation bylaws (or by-lawsother similar governing instrument); (b) authorize for issuance, issue, sell, pledge, deliver or agree or commit to issue, sell, pledge sell or deliver (whether through the issuance or granting of any options, warrants, callscommitments, subscriptions, stock appreciation rights to purchase or other rights or other agreementsotherwise) any capital stock of any class or any other debt or equity securities convertible into or exchangeable for shares of capital stock of any class of the Company, or any other ownership interest equity equivalents (including any stock options or stock appreciation rights or phantom stock) other than shares of Common Stock issuable upon exercise of Company Stock Options outstanding on the date of this Agreementrights); (c) split, combine or reclassify any shares of Common Stock or its capital stock, declare, pay or set aside for payment or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, make any Common Stockother actual, constructive or deemed distribution in respect of its capital stock or otherwise make any payments to stockholders in their capacity as such, or redeem, purchase redeem or otherwise acquire any shares of Common Stock its securities or any other securities of the Company or any rights, warrants or options to acquire any such shares of other securitiesits subsidiaries; (d) enter into any adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other agreements, commitments or contracts that are material to the Company and its subsidiaries taken as a whole or otherwise make any material change that is adverse to the Company in (i) any existing agreement, commitment or arrangement that is material to the Company and its subsidiaries taken as a whole or (ii) the conduct of the business or operations of the Company and its subsidiaries; (e) sell, pledge, dispose of or encumber any assets reorganization of the Company or any of its subsidiaries (except for other than the Merger); (e) alter through merger, liquidation, reorganization, restructuring or any other fashion the corporate structure of any subsidiary; (f) (i) sales incur or assume any long-term or short-term debt or issue any debt securities in each case, except for borrowings under lines of assets credit in the ordinary course of business, or modify or agree to any amendment of the terms of any of the foregoing; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person except for obligations of subsidiaries of the Company incurred in the ordinary course of business; (iii) make any loans, advances or capital contributions to or investments in any other person (other than to subsidiaries of the Company or customary loans or advances to employees in each case in the ordinary course of business and in a manner consistent with past practice, (ii) dispositions of obsolete or worthless assets, (iii) the dispositions described on, and pursuant to the terms described in, Schedule 6.1(e) and ); (iv) the sale pledge or otherwise encumber shares of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer capital stock of the Company shall have certified or any of its subsidiaries; or (v) mortgage or pledge any of its material assets, tangible or intangible, or create or suffer to exist any material Lien thereupon; (g) except as may be required by Applicable Law, enter into, adopt or amend or terminate any bonus, special remuneration, compensation, severance, stock option, stock purchase agreement, retirement, health, life, or disability insurance, severance or other employee benefit plan agreement, trust, fund or other arrangement for the benefit or welfare of any director, officer, employee or consultant in writing to Parent that any manner or increase in any manner the compensation or fringe benefits of any director, officer or employee or pay any benefit not required by any plan and arrangement as in effect as of the date of this Agreement (including the twelve months trailing EBITDA granting of stock appreciation rights or performance units); (determined h) grant any severance or termination pay to any director, officer, employee or consultant, except payments made pursuant to written agreements outstanding on the basis disclosed to Parent prior to the date of this Agreement, the terms of which are in all material respects completely and correctly disclosed on Schedule 4.1(h) associated with such assets is $1,300,000 or lessas required by applicable federal, state or local law or regulations; (i) acquire, sell, lease, license, transfer, distribute or otherwise dispose of any material assets in any single transaction or series of related transactions, other than in the ordinary course of business consistent with past practices; (j) except as may be required as a result of a change in law or in GAAP, materially change any of the accounting principles, practices or methods used by it; (k) acquire (by merger, consolidation, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization entity or division thereof, except for the acquisitions described on Schedule 6.1(f); (ii) incur thereof or any indebtedness for borrowed money (other than pursuant to the Company's credit facilities as in effect on the date of this Agreement) or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances; (iii) enter into or amend any material contract or agreement other than in the ordinary course of business or enter into any management contract for a facility not cancelable without penalty within 30 days of notice; (iv) authorize or make any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for the Company and its subsidiaries, taken as a whole; provided, however, the Company -------- ------- will give Parent prior notice of the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate any material contract or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder)equity interest therein; (g) increase the compensation payable or to become payable to its officers or employees, or grant any severance or termination pay to, or, except as set forth on Schedule 6.10(c), enter into any employment or severance agreement with any director, officer or other employee of the Company or any of its subsidiaries; (h) take any action, other than as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable); (il) make any material Tax tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign income tax liability or agree permit any material insurance policy naming it as a beneficiary or loss-payable to an extension of expire, or to be canceled or terminated, unless a statute of limitations for any assessment of federal income tax or material state corporate income or franchise tax, except comparable insurance policy reasonably acceptable to the extent the amount of any such settlement has been reserved for on the Company's most recent SEC FilingsAREP Oil & Gas is obtained and in effect; (jm) payfail to file any tax returns when due (or, dischargealternatively, settlefail to file for available extensions) or fail to cause such tax returns when filed to be complete and accurate in all material respects; (n) fail to pay any taxes or other material debts when due; (o) settle or compromise any pending or threatened suit, action or satisfy claim that (i) relates to the transactions contemplated hereby or (ii) the settlement or compromise of which would be material to the Company; (p) take any lawsuitsaction or fail to take any action that could reasonably be expected to limit the utilization of any of the net operating losses, claimsbuilt-in losses, liabilities tax credits or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements similar items of the Company or incurred in its subsidiaries under Section 382, 383, 384 or 1502 of the ordinary course of business Code and consistent with past practice;the Treasury Regulations thereunder; or (kq) except as may be required by law, take or agree in writing or otherwise to take any of the actions described in Sections 4.1(a) through 4.1(p) (and it shall use all reasonable efforts not to take any action to establish, adopt that would make any of the representations or enter into, or to terminate or amend any Plan; (i) permit any increase in the number of employees warranties of the Company employed by contained in this Agreement (including the Company on the date hereof other than pursuant to an employee plan to be agreed to by the Company and Parent as promptly as practicable after the date hereof acting reasonably and in good faith exhibits hereto) untrue or (ii) terminate any employees of the Company identified on Schedule 6.10incorrect).

Conduct of Business of the Company. Except as expressly contemplated ---------------------------------- by this Agreement, during the period commencing on from the date hereof and ending at of this Agreement to the Effective Timedate on which a majority of the Company's directors are designees of Parent or Purchaser, the Company shall, will conduct and shall will cause each of its subsidiaries to, Subsidiaries to conduct its operations according to its ordinary and usual course of business and consistent with past practice, and the Company shall, will use and shall will cause each of its subsidiaries to, Subsidiaries to use all its commercially reasonable efforts to preserve intact its business organization organization, to keep available the services of its current officers and employees and to preserve the goodwill of and maintain satisfactory relationships with its customers, suppliers, employees those Persons and others entities having material business relationships with itthe Company and its Subsidiaries, and the Company will promptly advise Parent and Purchaser in writing of any material change in the Company's or any of its Subsidiaries' condition (financial or otherwise), properties, customer or supplier relationships, assets, liabilities, business prospects or results of operations. Without limiting the generality of the foregoing, foregoing and except as otherwise expressly provided in or contemplated by this Agreement, prior to during the Effective Time, neither period specified in the Company nor any or its subsidiaries willpreceding sentence, without the prior written consent of Parent, the ParentCompany will not and will not permit any of its Subsidiaries to: (a) amend issue, sell, grant options or rights to purchase, pledge, or authorize or propose the issuance, sale, grant of options or rights to amend its certificate purchase or pledge of incorporation (i) any Company Securities or by-lawsSubsidiary Securities, or grant or accelerate any right to convert or exchange any Company Securities or Subsidiary Securities, other than Shares issuable upon exercise of the Existing Stock Options or (ii) any other securities in respect of, in lieu of or in substitution for Shares outstanding on the date hereof; (b) authorize for issuanceacquire or redeem, issue, sell, pledge, deliver directly or agree or commit to issue, sell, pledge or deliver (whether through the issuance or granting of any options, warrants, calls, subscriptions, stock appreciation rights or other rights or other agreements) any capital stock of any class or any securities convertible into or exchangeable for shares of capital stock of any class of the Companyindirectly, or amend any other ownership interest (including stock appreciation rights Company Securities or phantom stock) other than shares of Common Stock issuable upon exercise of Company Stock Options outstanding on the date of this AgreementSubsidiary Securities; (c) split, combine or reclassify its capital stock or declare, set aside, make or pay any dividend or distribution (whether in cash, stock or property) on any shares of Common Stock or declare, pay or set aside for payment any dividend or its capital stock (other distribution in respect of any Common Stock, or redeem, purchase or otherwise acquire any shares of Common Stock or any other securities of than cash dividends paid to the Company or any rights, warrants or options by its wholly-owned Subsidiaries with regard to acquire any such shares of other securitiestheir capital stock); (d) enter into any other agreements, commitments or contracts that are material to the Company and its subsidiaries taken as a whole or otherwise make any material change that is adverse to the Company in (i) any existing agreement, commitment or arrangement that is material to the Company and its subsidiaries taken as a whole or (ii) the conduct of the business or operations of the Company and its subsidiaries; (e) sell, pledge, dispose of or encumber any assets of the Company or any of its subsidiaries (except for (i) sales of assets in the ordinary course of business and in a manner consistent with past practice, (ii) dispositions of obsolete or worthless assets, (iii) the dispositions described on, and pursuant to the terms described in, Schedule 6.1(e) and (iv) the sale of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer of the Company shall have certified in writing to Parent that as of the date of this Agreement the twelve months trailing EBITDA (determined on the basis disclosed to Parent prior to the date of this Agreement) associated with such assets is $1,300,000 or less; (i) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, except for the acquisitions described on Schedule 6.1(f); (ii) incur any indebtedness for borrowed money (other than pursuant to the Company's credit facilities as in effect on the date of this Agreement) or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances; (iii) enter into or amend any material contract or agreement other than in the ordinary course of business or enter into any management contract for a facility not cancelable without penalty within 30 days of notice; (iv) authorize or make any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for the Company and its subsidiaries, taken as a whole; provided, however, the Company -------- ------- will give Parent prior notice of the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate any material contract or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder); (g) increase the compensation payable or to become payable to its officers or employees, or grant any severance or termination pay to, or, except as set forth on Schedule 6.10(c), enter into any employment or severance agreement with any director, officer or other employee of the Company or any of its subsidiaries; (h) take any action, other than as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable); (i) make or offer to make any material Tax election inconsistent with past practices or settle or compromise any material federalacquisition, state, local or foreign tax liability or agree to an extension by means of a statute merger or otherwise, of limitations for assets or securities, or any assessment sale, lease, encumbrance or other disposition of federal income tax assets or material state corporate income or franchise taxsecurities, except to the extent the amount for purchases of any such settlement has been reserved for on the Company's most recent SEC Filings; (j) pay, discharge, settle, or satisfy any lawsuits, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction securities made in the ordinary course of business and consistent with past practice or (ii) enter into a Material Contract or amend any Material Contract or grant any release or relinquishment of any rights under any Material Contract; (e) incur or assume any long-term debt or short-term debt except for short-term debt incurred in the ordinary course of business consistent with past practice; (f) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except wholly-owned Subsidiaries of the Company; (g) make any loans, advances or capital contributions to, or investments in, any other Person (other than wholly-owned Subsidiaries of the Company), except in the ordinary course of its business as a registered broker-dealer, consistent with past practice; (h) change any of the accounting principles or practices used by it as of May 31, 2000, except as required by changes in GAAP in consultation with its independent auditors; (i) make any material Tax election or settle or compromise any material federal, state or local income Tax liability; (j) propose or adopt any amendments to its Certificate of Incorporation or Bylaws (or similar documents); (k) grant any stock-related, performance or similar awards or bonuses; (l) forgive any loans to employees, officers or directors or any of their respective affiliates or associates; (m) enter into any new, or amend any existing, employment, change in control, retention, incentive or deferred compensation, severance, consulting or salary continuation agreement, plan or arrangement with or for the benefit of any officer, director or employee, or grant any increases in the compensation or benefits of any officer, director and employee (other than (i) normal increases in base salary or hourly wage rates granted to persons who are not members of the executive committee or directors in the ordinary course of business consistent with past practices and that, in the aggregate, do not result in a material increase in compensation expense of the Company, (ii) the payment of severance compensation to employees whose employment is terminated by the Company prior to the Effective Time Date at the written direction of Parent in such amount as is determined by the Company and approved in writing by Parent and (iii) in connection with fixing, in good faith, new annual guaranteed draw amounts for securities traders and salespersons employed by NDB Capital Markets, L.P., subject, in the case of this clause (iii), to the approval of Parent, which approval shall not be unreasonably withheld); (n) enter into, amend, or extend any collective bargaining or other labor agreement; (o) enter into, implement, adopt, amend or terminate any Plan; (p) settle or agree to settle any suit, action, claim, proceeding or investigation (including any suit, action, claim, proceeding or investigation relating to this Agreement or the transactions contemplated hereby) or pay, discharge or satisfy or agree to pay, discharge or satisfy any claim, liability or obligation (absolute or accrued, asserted or unasserted, contingent or otherwise) other than the payment, discharge or satisfaction of liabilities reflected or reserved against in full in the financial statements of the Company as at May 31, 2000 or incurred in the ordinary course of business subsequent to May 31, 2000 and other than the resolution of disputes or claims over trades settled in the ordinary course of its business consistent with past practice; (kq) except as may be required specifically permitted by lawSection 6.02, take, or agree to commit to take, or fail to take any action that would result or is reasonably likely to establish, adopt result in any of the Offer Conditions or enter intoany of the conditions to the Merger set forth in Article VII not being satisfied, or would make any representation or warranty of the Company contained herein inaccurate in any material respect at, or as of any time prior to, the Effective Time, or that would impair the ability to terminate consummate the Offer or amend any Planthe Merger in accordance with the terms hereof or materially delay such consummation; (ir) permit convene any increase in regular or special meeting (or any adjournment thereof) of the number of employees stockholders of the Company employed by the Company on the date hereof other than pursuant the meeting contemplated by Section 2.08 of this Agreement; or (s) agree in writing or otherwise to an employee plan to be agreed to by the Company and Parent as promptly as practicable after the date hereof acting reasonably and in good faith or (ii) terminate take any employees of the Company identified on Schedule 6.10foregoing actions.

Conduct of Business of the Company. Except as expressly ---------------------------------- contemplated ---------------------------------- by this AgreementAgreement or as set forth on Schedule 6.01 hereto, during the period commencing on from the date hereof and ending at to the Effective Time, the Company shall, and shall cause each of its subsidiaries to, will each conduct its operations according to its ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its subsidiaries to, will each use all its reasonable best efforts to (i) preserve intact its business organization organization, (ii) keep available the services of its officers and to employees, other than those officers and employees identified on Schedule 6.01 hereto, and (iii) maintain satisfactory existing relationships with its customerslenders, suppliers, employees suppliers and others having material business relationships with it. Without limiting the generality of the foregoing, and except as otherwise expressly provided in contemplated by this AgreementAgreement or as set forth on Schedule 6.01 hereto, prior to the Effective Time, neither the Company nor any or of its subsidiaries will, without the prior written consent of the ParentAcquisition: (a) amend or propose to amend its certificate any of their respective certificates or articles of incorporation or by-laws; (b) authorize for issuance, issue, sell, pledge, deliver or agree or commit to issue, sell, pledge pledge, encumber, deliver or deliver otherwise dispose of (whether through the issuance or granting of any options, warrants, callscommitments, subscriptions, stock appreciation rights to purchase or other rights or other agreementsotherwise) any capital stock of any class or any other equity securities convertible into or exchangeable for shares equity equivalents of capital stock the Company or any of its subsidiaries or amend in any material respect any of the terms of any class such securities outstanding as of the Company, or any other ownership interest (including stock appreciation rights or phantom stock) other than shares of Common Stock issuable upon exercise of Company Stock Options outstanding on the date of this Agreementhereof; (c) split, combine or reclassify any shares of Common Stock its capital stock or the capital stock of any of its subsidiaries, declare, pay or set aside for payment or pay any dividend (other than dividends (whether in cash, stock, or property or any combination thereof), if any, paid by wholly-owned subsidiaries to the Company or another wholly-owned subsidiary of the Company) or other distribution in respect of any Common Stock, its capital stock or redeem, purchase repurchase or otherwise acquire any shares of Common Stock its securities or any other securities of the Company its subsidiaries or any rightsoptions, warrants or options other rights to acquire any such shares of its capital stock or adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or other securities; (d) enter into any other agreements, commitments or contracts that are material to the Company and its subsidiaries taken as a whole or otherwise make any material change that is adverse to the Company in (i) any existing agreement, commitment or arrangement that is material to the Company and its subsidiaries taken as a whole or (ii) the conduct of the business or operations of the Company and its subsidiaries; (e) sell, pledge, dispose of or encumber any assets reorganization of the Company or any of its subsidiaries (except for (i) sales of assets in subsidiaries, other than the ordinary course of business and in a manner consistent with past practiceredemption, (ii) dispositions of obsolete repurchase or worthless assets, (iii) the dispositions described on, and pursuant to the terms described in, Schedule 6.1(e) and (iv) the sale other acquisition of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon for a cash purchase price equity securities of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer any subsidiary of the Company shall have certified which is not wholly-owned by the Company for aggregate consideration not in writing to Parent that as excess of the date book value of this Agreement the twelve months trailing EBITDA (determined on the basis disclosed to Parent prior to the date of this Agreement) associated with such assets is $1,300,000 or lesssecurities; (i) acquire except as set forth in clause (by mergere), consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, except for the acquisitions described on Schedule 6.1(f); (ii) incur any additional indebtedness for borrowed money (other than pursuant to the Company's credit facilities as in effect on the date of this Agreement) or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances; (iii) enter into or amend any material contract or agreement other than person except for the obligations of wholly-owned subsidiaries of the Company in the ordinary course of business consistent with past practice; (ii) make any loans, advances or enter into capital contributions to, or investments in, any management contract other person (other than to wholly- owned subsidiaries of the Company and advances to employees for a facility not cancelable without penalty within 30 days travel or other business related expenses in the ordinary course of noticebusiness consistent with past practices); (iii) pledge or otherwise encumber shares of capital stock of the Company or any of its subsidiaries; (iv) authorize mortgage or make pledge any capital expenditures of its material assets, tangible or purchase intangible, or create or suffer to exist any material Lien thereupon; or (v) enter into any contract, agreement, commitment or arrangement to do any of fixed assets the foregoing; (e) incur any advances pursuant to that certain Revolving Credit Agreement, dated as of June 18, 1991, among the Company, various subsidiaries of the Company and Xxxxxx (as successor in interest to HCR Partners), as amended (the "Credit Agreement"), other than advances which areat any time outstanding do not exceed $3,000,000. (f) enter into, adopt or (except as may be required by law) amend or terminate any bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the benefit or welfare of any director, officer or employee, or (except for normal increases in the ordinary course of business consistent with past practice that, in the aggregate, do not result in a material increase in benefits or compensation expense to the Company or an increase in excess of $7,400,000 (exclusive of management information systems expenditures as described 5% in the proviso heretocase of any individual (other than compensation based upon the payment of commissions pursuant to commission schedules previously made available to Parent or Acquisition by the Company)) for increase in any manner the compensation or fringe benefits of any director, officer or employee or pay any benefit not required by any plan or arrangement in effect as of the date hereof (including, without limitation, the granting of stock appreciation rights or performance units) or enter into any contract, agreement, commitment or arrangement to do any of the foregoing; (g) acquire, sell, lease or dispose of any assets outside the ordinary course of business or any assets which in the aggregate are material to the Company and its subsidiaries, taken as a whole; provided, however, the Company -------- ------- will give Parent prior notice or commit or agree to do any of the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate any material contract or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder); (g) increase the compensation payable or to become payable to its officers or employees, or grant any severance or termination pay to, or, except as set forth on Schedule 6.10(c), enter into any employment or severance agreement with any director, officer or other employee of the Company or any of its subsidiariesabove; (h) take any action, other than except as required by GAAP, to change any of the accounting policies principles or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable)practices used by it; (i) make any material Tax tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign income tax liability or agree to an extension of a statute of limitations for any assessment of federal income tax or material state corporate income or franchise tax, except to the extent the amount of any such settlement has been reserved for on the Company's most recent SEC FilingsCompany and its subsidiaries taken as a whole; (j) pay, discharge, settle, discharge or satisfy any lawsuits, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its subsidiaries or incurred in the ordinary course of business consistent with past practice; provided that, in no event shall the Company and its subsidiaries repay any long-term indebtedness except to the extent required by the terms thereof; (i) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof; (ii) enter into or commit to enter into any contract or agreement other than in the ordinary course of business consistent with past practice or which requires the payment of amounts in excess of $100,000 or which gives rise to obligations which extend beyond ninety (90) days from the date hereof other than agreements to provide services to customers of the Company or any of its subsidiaries; (iii) authorize any capital expenditures, other than those as to which the Company or its subsidiaries have committed as set forth on Schedule 6.01 hereto, individually in excess of $100,000, or in the aggregate in excess of $1,000,000, except with the consent of Parent (which shall not be unreasonably withheld); or (iv) enter into or amend any contract, agreement, commitment or arrangement with respect to any of the foregoing; (i) make or enter into any new lease of real property other than any new lease of real property which will replace an existing lease or (ii) extend or amend any existing lease of real property other than in the ordinary course of business consistent with past practice or on terms and conditions no less favorable to the Company or the subsidiary than the existing lease; (m) enter into or commit to enter into any amendment or modification to any contract, agreement or arrangement with any vendor or supplier identified on Schedule 6.01(m) hereto which individually or in the aggregate with all other such amendments and modifications is or could reasonably be expected to be material to such contract, agreement or arrangement; (n) intentionally take or omit to take, or enter into an agreement to take or agree to omit to take, any action that would result in any of the conditions to the Offer set forth in Annex A attached hereto or the conditions to the Merger set forth in Article VII hereof not being timely satisfied; (o) release or relinquish any material contractual rights, other than in the ordinary course of business consistent with past practice; (kp) except settle any pending or threatened material action, suit, claim or proceeding involving the Company or any subsidiary, other than in the ordinary course of business consistent with past practice and other than any settlements which require only the payment of money not in excess of $50,000 individually or $250,000 in the aggregate; (q) enter into or commit to enter into any contract, agreement or arrangement or any amendment or modification to any existing contract, agreement or arrangement with Xxxxxx Holdings, Inc. or any affiliate thereof; or (r) commit or agree in writing or otherwise to take any of the actions described in Sections 6.01(a) through 6.01(q) hereof or any action which would make any of the representations or warranties of the Company contained in this Agreement untrue or incorrect in any material respect as may be required by lawof the date when made or as of the Effective Time, or omit to take or commit or agree to omit to take any action necessary to establish, adopt prevent any such representation or enter into, warranty from being untrue or to terminate or amend incorrect in any Plan; (i) permit material respect in any increase respect at any time which would result in the number of employees any of the Company employed by the Company on the date hereof other than pursuant to an employee plan to be agreed to by the Company and Parent as promptly as practicable after the date hereof acting reasonably and conditions set forth in good faith or (ii) terminate any employees of the Company identified on Schedule 6.10this Agreement not being satisfied.

Conduct of Business of the Company. Except as contemplated otherwise ---------------------------------- expressly provided in this Agreement or consented to by this AgreementParent, during the period commencing on from the date hereof and ending at to the Effective Time, the Company shall, and shall cause each of its subsidiaries to, will each conduct its operations according to its ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its subsidiaries to, will each use all its reasonable best efforts to preserve intact its business organization organization, to keep available the services of its officers and employees and to maintain satisfactory existing relationships with its customerslicensors, licensees, suppliers, employees bankers, insurers, contractors, distributors, customers and others having material business relationships with it. Without limiting the generality of the foregoing, and except as otherwise expressly provided specifically contemplated by this Agreement or disclosed in the SEC Reports filed prior to the date of this Agreement, the 1998 Draft Report or as set forth in Schedule 6.1, prior to the Effective Time, neither the Company nor any or of its subsidiaries will, without the prior written consent of the Parent: (a) amend or propose to amend its certificate or articles of incorporation or by-laws;laws or equivalent organizational documents, (b) authorize for issuance, issue, sell, pledge, deliver or agree or commit to issue, sell, pledge sell or deliver (whether through the issuance or granting of any options, warrants, callscommitments, subscriptions, stock appreciation rights to purchase or other rights or other agreementsotherwise) any capital stock of any class or any other securities convertible into or exchangeable for shares of capital stock of any class of the Companyequity equivalents (including, or any other ownership interest (including without limitation, stock appreciation rights or phantom stock) other than shares and Voting Company Debt), except as required by option agreements as in effect as of Common Stock issuable upon exercise of Company Stock Options outstanding on the date hereof, or except as contemplated by Section 2.8, amend any of this Agreement;the terms of any such securities or agreements outstanding as of the date hereof, (c) effect any reorganization or recapitalization or split, combine or reclassify any shares of Common Stock or its capital stock, declare, pay or set aside for payment or pay any dividend or other distribution (whether in cash, stock, or property or any combination thereof) in respect of any Common Stock, its capital stock or redeem, purchase repurchase or otherwise acquire any shares of Common Stock its securities or any other securities of the Company or any rights, warrants or options to acquire any such shares of other securitiesits subsidiaries; (d) enter into (i) incur any indebtedness for borrowed money (except for short term indebtedness incurred in the ordinary course of business pursuant to existing lines of credit) or issue any debt securities or, except in the ordinary course of business, assume, guarantee or endorse the obligations of any other agreementsperson, commitments or contracts that are material to except for intercompany indebtedness between the Company and its wholly owned subsidiaries taken as a whole or otherwise make between any material change that is adverse to of the Company in (i) any existing agreement, commitment or arrangement that is material to the Company and its subsidiaries taken as a whole or Company's wholly owned subsidiaries; (ii) the conduct make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned subsidiaries of the business Company) except in the ordinary course of business; (iii) pledge or operations otherwise encumber shares of the Company and its subsidiaries; (e) sell, pledge, dispose of or encumber any assets capital stock of the Company or any of its subsidiaries except in the ordinary course of business; (iv) enter into or invest in any Derivative Financial Instruments except for (i) sales of assets in the ordinary course of business and in a manner consistent with past practice, the Company's current investment and risk management policies (ii) dispositions of obsolete or worthless assets, (iii) the dispositions described on, and pursuant to the terms described in, Schedule 6.1(e) and (iv) the sale of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer of it being understood that the Company shall have certified in writing to Parent that as continue its current investment and risk management policies); or (v) mortgage or pledge any of the date of this Agreement the twelve months trailing EBITDA (determined on the basis disclosed to Parent prior to the date of this Agreement) associated with such assets is $1,300,000 its assets, tangible or less; (i) acquire (by merger, consolidationintangible, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, except for the acquisitions described on Schedule 6.1(f); (ii) incur any indebtedness for borrowed money (other than pursuant to the Company's credit facilities as in effect on the date of this Agreement) or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances; (iii) enter into or amend any material contract or agreement other than in the ordinary course of business business, create or enter into suffer to exist any management contract for a facility not cancelable Lien thereupon, provided that, notwithstanding anything to the -------- ---- contrary and without penalty within 30 days limiting the generality of notice; the foregoing, no transaction described in clauses (iv) authorize and (v) shall be permitted without Parent's consent for any such transaction (or make any capital expenditures or purchase series of fixed assets related transactions) the value of which are, in the aggregate, is in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for the Company and its subsidiaries, taken as a whole; provided, however, the Company -------- ------- will give Parent prior notice of the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate any material contract or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder)20 million; (ge) increase the compensation payable enter into, adopt or to become payable to its officers or employees, or grant any severance or termination pay to, or, except as set forth on Schedule 6.10(c), enter into any employment or severance agreement with any director, officer or other employee of the Company or any of its subsidiaries; (h) take any action, other than as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable); (i) make any material Tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign tax liability or agree to an extension of a statute of limitations for any assessment of federal income tax or material state corporate income or franchise tax, except to the extent the amount of any such settlement has been reserved for on the Company's most recent SEC Filings; (j) pay, discharge, settle, or satisfy any lawsuits, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practice; (k) except as may be required by law) amend or terminate any bonus, take profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the benefit or welfare of any action to establishdirector, adopt officer or enter intoemployee, or to terminate (except, in the case of employees who are not officers or amend any Plan; (i) permit any directors, for normal compensation increases in the ordinary course of business that, in the aggregate, do not result in a material increase in benefits or compensation expense to the number Company) increase in any manner the compensation or benefits of employees any director, officer or employee or pay any benefit not required by any plan or arrangement as in effect as of the Company employed by the Company on the date hereof other than pursuant to an employee plan to be agreed to by the Company and Parent as promptly as practicable after the date hereof acting reasonably and in good faith or (ii) terminate any employees of the Company identified on Schedule 6.10including, without limitation, the

Conduct of Business of the Company. Except as From the date of the execution of this Agreement until the date on which STM notifies the Company of its exercise or its waiver of the Preemptive Rights, or the Preemptive Rights expire unexercised by their terms, the Company, unless otherwise expressly contemplated ---------------------------------- by this AgreementAgreement or consented to in writing by the Investors, during the period commencing on the date hereof and ending at the Effective Time, the Company shallwill, and shall will cause each of its subsidiaries Subsidiaries to, conduct its operations according to its ordinary course carry on their respective businesses only in the Ordinary Course of business consistent with past practice, and the Company shall, and shall cause each of its subsidiaries toBusiness, use all their respective reasonable best efforts to preserve intact its their business organization organizations and to assets, retain the services of their officers and employees and maintain satisfactory their relationships with its customers, suppliers, employees licensors, licensees and others having material business relationships dealings with itthem. Without limiting the generality of the foregoing, and except as otherwise expressly provided in from the date of the execution of this AgreementAgreement until the Closing Date, prior to the Effective Time, neither the Company nor any or shall not, and shall not permit its subsidiaries will, without the prior written consent of the ParentSubsidiaries to: (a) amend (i) increase in any manner the compensation or propose fringe benefits of, or pay any bonus to, any director, officer or employee, except for increases or bonuses in the Ordinary Course of Business to amend its certificate of incorporation employees who are not directors or by-laws; officers and except pursuant to existing arrangements previously disclosed to or approved in writing by the Investors; (bii) authorize for issuance, issue, sell, pledge, deliver grant any severance or agree termination pay (other than pursuant to the normal severance practices or commit to issue, sell, pledge or deliver (whether through the issuance or granting of any options, warrants, calls, subscriptions, stock appreciation rights or other rights or other agreements) any capital stock of any class or any securities convertible into or exchangeable for shares of capital stock of any class existing agreements of the Company, Company or any other ownership interest (including stock appreciation rights or phantom stock) other than shares of Common Stock issuable upon exercise of Company Stock Options outstanding its subsidiary in effect on the date of this Agreement) to, or enter into any severance agreement with, any director, officer or employee, or enter into any employment agreement with any director, officer or employee; (iii) establish, adopt, enter into or amend any plan or other arrangement, except as may be required to comply with applicable law; (iv) pay any benefit not provided for under any plan or other arrangement; (v) grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or plan or other arrangement (including the grant of stock options, stock appreciation rights, stock-based or stock-related awards, performance units or restricted stock, or the removal of existing restrictions in any plan or other arrangement or agreement or awards made thereunder), except for grants in the Ordinary Course of Business; (b) declare, set aside or pay any dividend on, or make any other distribution in respect of, outstanding shares of capital stock; (c) split, combine or reclassify any shares of Common Stock or declare, pay or set aside for payment any dividend or other distribution in respect of any Common Stock, or (i) redeem, purchase or otherwise acquire any shares of Common Stock capital stock of the Company or any securities or obligations convertible into or exchangeable for any shares of capital stock of the Company, or any options, warrants or conversion or other rights to acquire any shares of capital stock of the Company or any such securities or obligations, or any other securities thereof, other than redemption and purchases from departing employees in the Ordinary Course of Business; (ii) effect any reorganization or recapitalization; or (iii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, shares of its capital stock; (d) except upon the exercise of Company stock options in accordance with their terms, issue, deliver, award, grant or sell, or authorize the issuance, delivery, award, grant or sale (including the grant of any limitations in voting rights or other encumbrances) of, any shares of any class of its capital stock (including shares held in treasury), any securities convertible into or exercisable or exchangeable for any such shares, or any rights, warrants or options to acquire acquire, any such shares shares, or amend or otherwise modify the terms of other securities; (d) enter into any other agreementssuch rights, commitments warrants or contracts that are material options the effect of which shall be to make such terms more favorable to the Company and its subsidiaries taken as a whole or otherwise make any material change that is adverse to the Company in (i) any existing agreement, commitment or arrangement that is material to the Company and its subsidiaries taken as a whole or (ii) the conduct of the business or operations of the Company and its subsidiariesholders thereof; (e) sellacquire or agree to acquire, pledgeby merging or consolidating with, dispose of by purchasing an equity interest in or encumber any assets of the Company or any of its subsidiaries (except for (i) sales of assets in the ordinary course of business and in a manner consistent with past practice, (ii) dispositions of obsolete or worthless assets, (iii) the dispositions described on, and pursuant to the terms described in, Schedule 6.1(e) and (iv) the sale portion of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer of the Company shall have certified in writing to Parent that as of the date of this Agreement the twelve months trailing EBITDA (determined on the basis disclosed to Parent prior to the date of this Agreement) associated with such assets is $1,300,000 or less; (i) acquire (by merger, consolidationof, or acquisition of stock by any other manner, any business or assets) any corporation, partnership partnership, association or other business organization or division thereof, except for the acquisitions described on Schedule 6.1(f); (ii) incur or otherwise acquire or agree to acquire any indebtedness for borrowed money assets of any other person (other than pursuant to the Company's credit facilities as purchase of assets from suppliers or vendors in effect on the date Ordinary Course of this AgreementBusiness); (f) or issue any debt securities or assumesell, guarantee or endorse lease, exchange, mortgage, pledge, transfer or otherwise as an accommodation become responsible for, the obligations of subject to any personencumbrance or dispose of, or make agree to sell, lease, exchange, mortgage, pledge, transfer or otherwise subject to any loans encumbrance or advances; (iii) enter into or amend any material contract or agreement other than in the ordinary course of business or enter into any management contract for a facility not cancelable without penalty within 30 days of notice; (iv) authorize or make any capital expenditures or purchase of fixed assets which aredispose of, in the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for the Company and its subsidiaries, taken as a whole; provided, however, the Company -------- ------- will give Parent prior notice of the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate any material contract or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder)assets, except for sales, dispositions or transfers in the Ordinary Course of Business; (g) increase the compensation payable or to become payable adopt any amendments to its officers articles or employeescertificate of incorporation, or grant any severance or termination pay to, or, except as set forth on Schedule 6.10(c), enter into any employment or severance agreement with any director, officer bylaws or other employee of the Company comparable charter or any of its subsidiariesorganizational documents; (h) take any action, other than as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable); (i) make any material Tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign tax liability or agree to an extension of a statute of limitations for any assessment of federal income tax or material state corporate income or franchise tax, except to the extent the amount of any such settlement has been reserved for on the Company's most recent SEC Filings; (j) pay, discharge, settle, settle or satisfy any lawsuits, claims, liabilities or obligations (absolutewhether absolute or contingent, accruedmatured or unmatured, asserted known or unasserted, contingent or otherwiseunknown), other than the payment, discharge or satisfaction satisfaction, in the ordinary course Ordinary Course of business and consistent Business or in accordance with past practice their terms, of liabilities reflected or reserved against in in, or contemplated by, the most recent financial statements of the Company statement or incurred in the ordinary course Ordinary Course of business and consistent with past practice; (k) except as may be required by law, take any action to establish, adopt or enter intoBusiness, or waive any material benefits of, or agree to terminate modify in any material respect, any confidentiality, standstill or amend any Plansimilar agreements to which the Company is a party; (i) permit any increase except in the number Ordinary Course of employees Business, waive, release or assign any rights or claims, or modify, amend or terminate any agreement to which the Company is a party; (j) make any change in any method of accounting or accounting practice or policy other than those required by generally accepted accounting principles as applied in the United States or a governmental entity; or (k) authorize, or commit or agree to do any of the Company employed by the Company on the date hereof other than pursuant to an employee plan to be agreed to by the Company and Parent as promptly as practicable after the date hereof acting reasonably and in good faith or (ii) terminate any employees of the Company identified on Schedule 6.10foregoing.

Conduct of Business of the Company. Except as contemplated ---------------------------------- by this Agreement, during the period commencing on from the date hereof and ending at of this Agreement to the Effective Time, the Company shallshall operate, and shall cause each of Subsidiary to operate, its subsidiaries to, conduct its operations according to its business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its subsidiaries to, use all reasonable efforts to preserve intact its business organization and to maintain satisfactory relationships with its customers, suppliers, employees and others having material business relationships with itbusiness. Without limiting the generality of the foregoing, and except as otherwise expressly provided in during the period from the date of this Agreement, prior Agreement to the Effective Time, neither except as expressly contemplated by this Agreement, the Company nor any or its subsidiaries willand the Subsidiaries shall not, without the prior written consent of the Parent: (ai) amend (x) declare, set aside or propose to amend its certificate of incorporation pay any dividends on, or by-laws; (b) authorize for issuance, issue, sell, pledge, deliver or agree or commit to issue, sell, pledge or deliver make any other distributions (whether through the issuance or granting of any options, warrants, calls, subscriptionsin cash, stock appreciation rights or other rights or other agreementsproperty) in respect of, any capital stock of any class or any securities convertible into or exchangeable for shares of capital stock of any class of the Company's outstanding capital stock, or any other ownership interest (including stock appreciation rights or phantom stock) other than shares of Common Stock issuable upon exercise of Company Stock Options outstanding on the date of this Agreement; (cy) split, combine or reclassify any of its outstanding capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of Common Stock or declare, pay or set aside for payment any dividend or other distribution in respect of any Common Stockits outstanding capital stock, or redeem(z) purchase, purchase redeem or otherwise acquire any shares of Common Stock or any other securities of the Company outstanding capital stock or any rights, warrants or options to acquire any such shares of other securitiesshares; (dii) enter into issue, sell, grant, pledge or otherwise encumber any shares of its capital stock, any other agreements, commitments or contracts that are material to the Company and its subsidiaries taken as a whole or otherwise make any material change that is adverse to the Company in (i) any existing agreement, commitment or arrangement that is material to the Company and its subsidiaries taken as a whole or (ii) the conduct of the business or operations of the Company and its subsidiaries; (e) sell, pledge, dispose of or encumber any assets of the Company voting securities or any of its subsidiaries (securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities, including under the ESPP, except for (i) sales the issuance of assets in the ordinary course Shares upon exercise of business and in a manner consistent with past practice, (ii) dispositions of obsolete or worthless assets, (iii) the dispositions described on, and pursuant to the terms described in, Schedule 6.1(e) and (iv) the sale of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer of the Company shall have certified in writing to Parent that as of the date of this Agreement the twelve months trailing EBITDA (determined on the basis disclosed to Parent Stock Options outstanding prior to the date of this AgreementAgreement and disclosed in Section 4.1(c), or take any action that would make the Company's representations and warranties set forth in Section 4.l(c) associated with such assets is $1,300,000 or lessnot true and correct in all material respects; (iiii) amend its Restated Articles of Organization or Restated By-laws or the comparable charter or organizational documents of any of its Subsidiaries; (iv) acquire (by merger, consolidation, any business or acquisition of stock or assets) any corporation, partnership partnership, joint venture, association or other business organization or division thereofthereof (or any interest therein), or form any subsidiaries; (v) sell or otherwise dispose of any of its substantial assets, except in the ordinary course of business; (vi) make any capital expenditures, enter into leases or agreements for new locations, or make other commitments with respect thereto, except capital expenditures, leases, agreements or commitments (i) set forth on Section 5.1(vi) of the acquisitions described on Schedule 6.1(f); Disclosure Schedule, or (ii) not exceeding $100,000 in the aggregate as the Company may, in its discretion, deem appropriate; (vii) (x) incur any indebtedness for borrowed money (or guaranty any such indebtedness of another person, other than pursuant to (A) borrowings in the Company's ordinary course under existing lines of credit facilities as in effect on the date (or under any refinancing of this Agreementsuch existing lines), (B) indebtedness owing to, or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible forguaranties of indebtedness owing to, the obligations of any personCompany or (C) in connection with the Financing, or (y) make any loans or advances; advances to any other person, other than routine advances to employees; (iiiviii) enter into except as disclosed in Section 4.1(f) of the Disclosure Schedule, grant or agree to grant to any employee any increase in wages or bonus, severance, profit sharing, retirement, deferred compensation, insurance or other compensation or benefits, or establish any new compensation or benefit plans or arrangements, or amend or agree to amend any material contract existing Company Plans, except as may be required under existing agreements or agreement other than in the ordinary course of business consistent with past practices; (ix) merge, amalgamate or consolidate with any other person or entity in any transaction, sell all or substantially all of its business or assets, or acquire all or substantially all of the business or assets of any other person or entity; (x) except as disclosed in Section 4.1(f) of the Disclosure Schedule, enter into any management contract for a facility not cancelable without penalty within 30 days of notice; (iv) authorize or make any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for the Company and its subsidiaries, taken as a whole; provided, however, the Company -------- ------- will give Parent prior notice of the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate any material contract or amend any of its material terms (other than amendments employment, consulting, severance or similar agreement with any person or amend the engagement letter with the Financial Advisor referred to existing credit arrangements designed to remedy defaults thereunder)in Section 4.1(l) hereof; (gxi) increase the compensation payable or to become payable to change its officers or employeesaccounting policies in any material respect, or grant any severance or termination pay to, or, except as required by generally accepted accounting principles; (xii) except as set forth on Schedule 6.10(c)in Section 4.1(f) of the Disclosure Schedule, enter into any employment material contract, agreement or severance commitment (other than purchase agreements for food and beverages and restaurant supplies entered into in the ordinary course of business) not otherwise permitted under this Section 5.1, including, without limitation, any contract, agreement with any director, officer or other employee of commitment involving expenditures by the Company or any of its subsidiaries;Subsidiaries in excess of $50,000 or which is not terminable by the Company upon giving 30 days of less prior written notice; or (hxiii) take any action, other than as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable); (i) make any material Tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign tax liability commit or agree to an extension of a statute of limitations for take any assessment of federal income tax or material state corporate income or franchise tax, except to the extent the amount of any such settlement has been reserved for on the Company's most recent SEC Filings; (j) pay, discharge, settle, or satisfy any lawsuits, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practice; (k) except as may be required by law, take any action to establish, adopt or enter into, or to terminate or amend any Plan; (i) permit any increase in the number of employees of the Company employed by the Company on the date hereof other than pursuant to an employee plan to be agreed to by the Company and Parent as promptly as practicable after the date hereof acting reasonably and in good faith or (ii) terminate any employees of the Company identified on Schedule 6.10foregoing actions.

Conduct of Business of the Company. Except as contemplated ---------------------------------- expressly permitted by this AgreementAgreement or as set forth in Section 5.1 of the Disclosure Letter, as required by applicable Law or the regulatory requirements of the New York Stock Exchange or unless Parent shall otherwise consent in writing, during the period commencing on from the date hereof and ending at of this Agreement to the Effective Time, the Company shallwill conduct, and shall will cause each of its subsidiaries toSubsidiaries to conduct, conduct its operations in all material respects according to its ordinary and usual course of business business, consistent with past practice, and the Company shallwill use, and shall will cause each of its subsidiaries toSubsidiaries to use, use all its reasonable best efforts to preserve intact in all material respects its business organization organization, to keep available the services of its current officers and key employees and to preserve the goodwill of and maintain satisfactory relationships with its customers, suppliers, employees customers and others those other Persons having material business relationships with itthe Company or any of its Subsidiaries. Without limiting the generality of the foregoing, foregoing and except as otherwise expressly provided permitted in this AgreementAgreement or as set forth in Section 5.1 of the Disclosure Letter or as required by applicable Law or the regulatory requirements of the New York Stock Exchange, prior to during the Effective Time, neither period specified in the Company nor any or its subsidiaries willpreceding sentence, without the prior written consent of Parent, the ParentCompany will not and will not permit any of its Subsidiaries to: (a) issue, sell, grant options or rights to purchase, pledge, or authorize or propose the issuance, sale, grant of options or rights to purchase or pledge, any Company Securities or Subsidiary Securities, other than (i) to the Company or any wholly-owned Subsidiary of the Company, (ii) the issuance of Shares pursuant to the exercise of Options or SARs or settlement of RSUs or Performance Shares or Deferred Unit Accounts, in each case, that are outstanding as of the date of this Agreement and in accordance with the existing terms of such awards, (iii) the issuance of equity incentive compensation awards under the LTSIP as set forth in Section 5.1 of the Disclosure Letter and (iv) as required under the Company’s existing credit agreements and indentures; (b) amend or propose to amend its otherwise change the Company’s certificate of incorporation or by-lawslaws or other comparable governing documents of the Significant Subsidiaries; (bc) authorize for issuanceacquire or redeem, issuedirectly or indirectly, sellor amend (i) any Company Securities other than in connection with the exercise of outstanding equity awards or (ii) any Subsidiaries Securities other than in the ordinary course of business; (d) split, pledgecombine, deliver redenominate or agree reclassify its capital stock or commit to issuedeclare, sellset aside, pledge make or deliver pay any dividend or distribution (whether through the issuance in cash, stock, property or granting otherwise) on any shares of any its capital stock, options, warrants, calls, subscriptions, stock appreciation rights convertible securities or other rights of any kind to acquire or other agreements) any receive capital stock of the Company (except for any class dividend or distribution by a Subsidiary to the Company or any securities convertible into wholly-owned Subsidiary of the Company or exchangeable for shares to any other Person in proportion to its ownership interest in such Subsidiary); (i) engage in or offer to make any acquisition, by means of capital stock a merger, consolidation or otherwise, of any class business or division thereof or any sale, lease, encumbrance or other disposition of assets or securities, in any case outside the ordinary course of business and involving a transaction value in excess of $10,000,000 (or $30,000,000 in the aggregate), or (ii) except in the ordinary course of business and except in connection with actions expressly permitted pursuant to this Section 5.1, enter into, make any proposal for, renew, extend or amend or modify in any material respect, terminate, cancel, waive, release or assign any right or claim under, a contract or agreement that would be a Material Contract (if it existed as of the date of this Agreement) or amend or terminate any Material Contract or grant any release or relinquishment of any material rights under any Material Contract; (f) except for borrowings under the Company’s existing credit, securitization and factoring facilities in the ordinary course of business, incur, create, assume or otherwise become liable for, or prepay, any indebtedness for borrowed money (including the issuance of any debt security) having an aggregate principal amount at any time outstanding in excess of $50,000,000; (g) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of, or make any loans, advances or capital contributions to; any other Person (other than the Company or any wholly-owned Subsidiary of the Company), or in any other ownership interest case outside the ordinary course of business in an aggregate amount in excess of $10,000,000; (including stock appreciation rights or phantom stockh) other than shares in the ordinary course of Common Stock issuable upon exercise business, enter into or materially increase or decrease the outstanding balances of (i) any intercompany loan or (ii) intercompany debt arrangements, or, except for any of the foregoing actions in connection with the Company’s securitization facilities; (i) mortgage, pledge or otherwise similarly encumber any of its material assets (tangible or intangible), or create, assume or suffer to exist any Liens thereupon, other than Permitted Liens; (j) incur capital expenditures that would result in the Company Stock Options outstanding on materially exceeding or making it reasonably likely it will materially exceed the 2007 capital expenditure forecast publicly disclosed by the Company prior to the date of this Agreement; (ck) splitchange in any material respect any of the accounting, combine reserving, underwriting, claims or reclassify any shares of Common Stock actuarial methods, principles or declare, pay or set aside for payment any dividend or other distribution in respect of any Common Stockpractices used by it, or redeem, purchase or otherwise acquire any shares of Common Stock or any other securities of the Company or any rights, warrants or options to acquire any such shares of other securities; (d) enter into any other agreements, commitments or contracts that are material working capital policies applicable to the Company and its subsidiaries taken Subsidiaries, except as a whole required by Law, GAAP or otherwise make any material change that is adverse to the Company in (i) any existing agreement, commitment or arrangement that is material to the Company and its subsidiaries taken as a whole or (ii) the conduct of the business or operations of the Company and its subsidiariesapplicable statutory accounting principles; (el) sell, pledge, dispose of or encumber any assets of the Company or any of its subsidiaries (except for (i) sales of assets other than in the ordinary course of business and in a manner consistent business, after consultation with past practiceParent, (ii) dispositions make or change any material Tax election, settle or compromise any material Tax liability, agree to an extension of obsolete or worthless assets, (iii) the dispositions described on, and pursuant statute of limitations with respect to the terms described inassessment or determination of material Taxes, Schedule 6.1(e) and (iv) the sale file any amended Tax Return with respect to any material Tax, enter into any closing agreement with respect to any material Tax or surrender any right to claim a material Tax refund or enter into any transaction that could give rise to a disclosure obligation as a “reportable transaction” under Section 6011 of the assets on Schedule 6.1(e) hereto (Code and the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer of the Company shall have certified in writing to Parent that as of the date of this Agreement the twelve months trailing EBITDA (determined on the basis disclosed to Parent prior to the date of this Agreement) associated with such assets is $1,300,000 or lessregulations thereunder; (m) agree to grant or grant any stock-related, cash-based, performance or similar awards or bonuses or any other award that may be settled in Shares, Preferred Shares, or other Company Securities or in Subsidiary Securities; (n) enter into, forgive, renew, or amend in any material respect any loans to officers or directors or any of their respective Affiliates or Associates; (o) except as may be required by Law or any collective bargaining agreement, (i) acquire (by merger, consolidationenter into any new, or acquisition of stock amend, terminate or assets) renew any corporation, partnership or other business organization or division thereof, except for the acquisitions described on Schedule 6.1(f)existing material Plan; (ii) incur grant any indebtedness for borrowed money material increases in the compensation, perquisites or benefits or pay any bonuses to any executive officers or directors (other than pursuant as necessary to implement the Company's credit facilities pension savings plan for salaried employees as previously communicated to such employees); (iii) accelerate the vesting or payment of any compensation payable or the benefits provided or to become payable or provided to any of its current or former directors, officers, employees, independent contractors or service providers (other than any such acceleration required by the terms of the Plans applicable to such individuals as in effect on the date of this Agreement) or issue any debt securities or assume), guarantee or endorse or otherwise pay any amounts not due such individual; or (iv) take any action with respect to salary, compensation, benefits or other terms and conditions of employment that would reasonably be expected to result in the holder of a change in control or similar agreement identified in Section 5.1 of the Disclosure Letter having “good reason” to terminate employment and collect severance payments and benefits pursuant to such agreement; (p) make any deposits or contributions of cash or other property to or take any other action to fund or in any other way secure the payment of compensation or benefits under the Plans or agreement subject to the Plans, other than in the ordinary course consistent with past practice; (q) except as an accommodation become responsible forrequired by Law or in the ordinary course of business, enter into, materially amend or extend any collective bargaining or other labor agreement; (r) renew or enter into any non-compete, exclusivity, non-solicitation or similar agreement that would restrict or limit, in any material respect, the obligations operations of the Company and its Subsidiaries or the Surviving Corporation after the Effective Time; (s) compromise, settle or agree to settle any personsuit, action, claim, proceeding or investigation (including any suit, action, claim, proceeding or investigation relating to this Agreement or the transactions contemplated hereby), or make consent to the same, other than compromises, settlements or agreements in the ordinary course of business following reasonable consultation with and taking into account the views of Parent that involve only the payment of monetary damages not in excess of $5,000,000 individually or $15,000,000 in the aggregate or consistent with the reserves of $18,400,000 reflected in the Company’s balance sheet at December 31, 2006, in any loans case without the imposition of material equitable relief on, or advances; the admission of wrongdoing by, the Company or any of its Subsidiaries; (iiit) enter into any agreement, understanding or amend arrangement with respect to the voting or registration of the Company Securities or the Subsidiary Securities; (u) fail to use reasonable best efforts to keep in force its current material insurance policies or replacement or revised provisions providing reasonable insurance coverage with respect to the assets, operations and activities of the Company and its Subsidiaries; (v) merge or consolidate the Company or any of its Subsidiaries with any Person, other than the Company or any of its Subsidiaries, and other than mergers or consolidations of Subsidiaries in acquisitions that are otherwise permitted by Section 5.1(e); (w) adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any of its Significant Subsidiaries; (x) fail to comply with the Company’s related party transaction policy, a copy of which is attached in Section 5.1(x) of the Disclosure Letter; (y) amend, modify or waive in any material contract respect any of the provisions of the transaction documents, or agreement enter into any new or additional agreements related thereto, in connection with the sale of the Company’s North American interiors business (without the consent of Parent, which shall not be unreasonably withheld); provided, that the foregoing shall not prevent the Company from taking such actions as do not materially and adversely affect the economics of such transactions; (z) other than in the ordinary course of business or enter into any management contract (and not for a facility not cancelable without penalty within 30 days of notice; (iv) authorize or make any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for the Company and its subsidiaries, taken as a whole; provided, however, the Company -------- ------- will give Parent prior notice of the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate any material contract or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder); (g) increase the compensation payable or to become payable to its officers or employees, or grant any severance or termination pay to, or, except as set forth on Schedule 6.10(cspeculative purposes), enter into any employment or severance agreement with contract that involves any directorexchange traded, officer over-the-counter or other employee of the Company swap, cap, floor, collar, futures contract, forward contract, option or any other derivative financial instrument or contract, based on any commodity, security, instrument, asset, rate or index of its subsidiaries;any kind or nature whatsoever, whether tangible or intangible, including commodities, emissions allowances, renewable energy credits, currencies, interest rates, foreign currency and indices; or (haa) take any actionauthorize, other than as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable); (i) make any material Tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign tax liability commit or agree to an extension of a statute of limitations for take any assessment of federal income tax or material state corporate income or franchise tax, except to the extent the amount of any such settlement has been reserved for on the Company's most recent SEC Filings; (j) pay, discharge, settle, or satisfy any lawsuits, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practice; (k) except as may be required by law, take any action to establish, adopt or enter into, or to terminate or amend any Plan; (i) permit any increase in the number of employees of the Company employed by the Company on the date hereof other than pursuant to an employee plan to be agreed to by the Company and Parent as promptly as practicable after the date hereof acting reasonably and in good faith or (ii) terminate any employees of the Company identified on Schedule 6.10foregoing actions.

Conduct of Business of the Company. Except as expressly contemplated ---------------------------------- by this AgreementAgreement or the Related Agreements, during the period commencing on from the date hereof and ending at through the Effective TimeClosing, the Company shall, and shall cause each of its subsidiaries to, will conduct its operations according to its ordinary course of business and consistent with past practice, and the Company shall, and shall cause each of will use its subsidiaries to, use all reasonable best efforts to preserve intact its business organization organization, to keep available the services of its officers and employees and to maintain satisfactory existing relationships with its customers, suppliers, employees customers and others having material business relationships with it. Without limiting the generality of the foregoing, and except as otherwise expressly provided contemplated by this Agreement or the Related Agreements or as set forth in this AgreementSection 5 of the Disclosure Schedule, prior to the Effective TimeClosing, neither the Company nor any or its subsidiaries willwill not, without the prior written consent of the ParentPurchaser: (a) amend its Certificate of Incorporation or propose to amend its certificate of incorporation or byBy-lawsLaws; (bi) except in accordance with the existing terms of the convertible securities, warrants, options and other agreements disclosed on Section 3(c) of the Disclosure Schedule, authorize for issuance, issue, sell, pledge, deliver or agree or commit to issue, sell, pledge sell or deliver (whether through the issuance or granting of any options, warrants, callscommitments, subscriptions, stock appreciation rights to purchase or other rights or other agreementsotherwise) any capital stock securities of any class class, or (ii) amend in any securities convertible into or exchangeable for shares respect any of capital stock the terms of any class such securities outstanding as of the Companydate hereof, or any other ownership interest (including stock appreciation rights or phantom stock) other than shares of Common Stock issuable upon exercise of Company Stock Options outstanding except to the extent required by the express terms on the date hereof of this Agreementsuch securities; (c) split, combine or reclassify any shares of Common Stock or its capital stock, declare, pay or set aside for payment or pay any dividend or other distribution (whether in cash, stock, or property or any combination thereof) in respect of any Common Stockits capital stock (except for dividends on the existing preferred stock in accordance with its terms), or redeem, purchase retire, repurchase or otherwise acquire acquire, directly or indirectly, any shares of Common Stock its securities or any other securities adopt a plan of the Company complete or any rights, warrants partial liquidation or options to acquire resolutions providing for or authorizing any such shares of other securitiesliquidation; (d) enter into incur any additional Indebtedness, except for short-term borrowings or other agreementsIndebtedness incurred in the ordinary course of business, commitments or contracts that are material to the Company and mortgage or pledge any of its subsidiaries taken as a whole assets, tangible or otherwise make any material change that is adverse to the Company in (i) any existing agreement, commitment or arrangement that is material to the Company and its subsidiaries taken as a whole or (ii) the conduct of the business or operations of the Company and its subsidiariesintangible; (e) acquire, sell, pledge, lease or dispose of or encumber any assets of the Company or any of its subsidiaries (except for (i) sales of assets in outside the ordinary course of business and in a manner consistent with past practice, (ii) dispositions of obsolete or worthless assets, (iii) the dispositions described on, and pursuant to the terms described in, Schedule 6.1(e) and (iv) the sale of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer of the Company shall have certified in writing to Parent that as of the date of this Agreement the twelve months trailing EBITDA (determined on the basis disclosed to Parent prior to the date of this Agreement) associated with such assets is $1,300,000 or lessbusiness; (if) make any change in any of the accounting principles or practices, methods or practices or business policies used by it; (g) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, except for the acquisitions described on Schedule 6.1(f); (ii) incur any indebtedness for borrowed money (other than pursuant to the Company's credit facilities as in effect on the date of this Agreement) or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances; (iii) enter into or amend any material contract or agreement other than in the ordinary course of business or enter into any management contract for a facility not cancelable without penalty within 30 days of notice; (iv) authorize or make any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for the Company and its subsidiaries, taken as a whole; provided, however, the Company -------- ------- will give Parent prior notice of the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate any material contract or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder); (g) increase the compensation payable or to become payable to its officers or employees, or grant any severance or termination pay to, or, except as set forth on Schedule 6.10(c), enter into any employment or severance agreement with any director, officer or other employee of the Company or any of its subsidiaries; (h) take any action, other than as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable); (i) make any material Tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign tax liability or agree to an extension of a statute of limitations for any assessment of federal income tax or material state corporate income or franchise tax, except to the extent the amount of any such settlement has been reserved for on the Company's most recent SEC Filings; (j) pay, discharge, settle, discharge or satisfy any lawsuits, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice or, in accordance with their terms, of liabilities reflected or reserved against in the financial statements of September Balance Sheet (or the Company notes thereto) or incurred in the ordinary course of business and consistent with past practice; (ki) increase the compensation payable to the officers and employees of the Company, except as may be required by law, take any action to establish, adopt for increases in salary or enter into, wages (a) in accordance with past practice or to terminate (b) in conjunction with promotions or amend any Planother changes in job status in the ordinary course of business; (ij) permit pay, loan or advance any increase in the number of amounts to, transfer or lease any properties or assets to or enter into any contract or agreement with any officers, directors, employees or shareholders of the Company employed by the Company on the date hereof other than pursuant Company, except with respect to an employee plan directors' fees and compensation to be agreed officers and employees at rates in accordance with past practice, and except with respect to by the Company and Parent as promptly as practicable after the date hereof acting reasonably reimbursable business expenses of a nature and in good faith or (ii) terminate any employees amounts reasonably related to the requirements of the Company identified on Schedule 6.10business of the Company; (k) waive or release any rights of material value or terminate or fail to renew any material contract; or (l) take, or agree in writing or otherwise to take, directly or indirectly, any of the actions described in Sections 5(a) through 5(k).

Conduct of Business of the Company. Except as ---------------------------------- contemplated ---------------------------------- by this AgreementAgreement or as described in Section 4.1 of the Company Disclosure Schedule, during the period commencing on from the date hereof and ending at to the Effective Time, the Company shall, will and shall will cause each of its subsidiaries to, to conduct its operations according to its in the ordinary course of business consistent with past practicepractice and, to the extent consistent therewith, with no less diligence and effort than would be applied in the Company shallabsence of this Agreement seek, and shall cause each of its subsidiaries to, use all reasonable efforts to preserve intact its current business organization organizations, keep available the service of its current officers and to maintain satisfactory employees and preserve its relationships with its customers, suppliers, employees suppliers and others having material business relationships dealings with itit with the intention that its goodwill and ongoing businesses shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, and except as otherwise expressly provided in this AgreementAgreement or as described in Section 4.1 of the Company Disclosure Schedule, prior to the Effective Time, neither the Company nor any or of its subsidiaries will, without the prior written consent of the ParentParent and Acquisition: (a) amend its Certificate or propose to amend its certificate Articles of incorporation Incorporation or by-lawsbylaws (or other similar governing instrument); (b) authorize for issuance, issue, sell, pledge, deliver or agree or commit to issue, sell, pledge issue sell or deliver (whether through the issuance or granting of any options, warrants, callscommitments, subscriptions, stock appreciation rights to purchase or other rights or other agreementsotherwise) any capital stock of any class or any other securities convertible into (except bank loans) or exchangeable for shares of capital stock of any class of the Company, or any other ownership interest equity equivalents (including any stock options or stock appreciation rights or phantom stockrights) other than shares except for the issuance and sale of Common Stock issuable upon exercise of Shares pursuant to options granted under the Company Stock Options outstanding on Plans prior to the date of this Agreementhereof; (c) split, combine or reclassify any shares of Common Stock or its capital stock, declare, pay or set aside for payment or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, make any Common Stockother actual, constructive or deemed distribution in respect of its capital stock or otherwise make any payments to stockholders in their capacity as such, or redeem, purchase redeem or otherwise acquire any shares of Common Stock its securities or any other securities of the Company or any rights, warrants or options to acquire any such shares of other securitiesits subsidiaries; (d) enter into any adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other agreements, commitments or contracts that are material to the Company and its subsidiaries taken as a whole or otherwise make any material change that is adverse to the Company in (i) any existing agreement, commitment or arrangement that is material to the Company and its subsidiaries taken as a whole or (ii) the conduct of the business or operations of the Company and its subsidiaries; (e) sell, pledge, dispose of or encumber any assets reorganization of the Company or any of its subsidiaries (except for other than the Merger); (e) alter through merger, liquidation, reorganization, restructuring or any other fashion the corporate structure of ownership of any subsidiary; (f) (i) sales incur or assume any long-term or short-term debt or issue any debt securities except for borrowings under existing lines of assets credit in the ordinary course of business; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person except for obligations of subsidiaries of the Company incurred in the ordinary course of business; (iii) make any loans, advances or capital contributions to or investments in any other person (other than to subsidiaries of the Company or customary loans or advances to employees in each case in the ordinary course of business and in a manner consistent with past practice, (ii) dispositions of obsolete or worthless assets, (iii) the dispositions described on, and pursuant to the terms described in, Schedule 6.1(e) and ); (iv) the sale pledge or otherwise encumber shares of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer capital stock of the Company shall have certified or any of its subsidiaries; or (v) mortgage or pledge any of its material assets, tangible or intangible, or create or suffer to exist any material Lien thereupon; (g) except as may be required by law, enter into, adopt or amend or terminate any bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase agreement, pension, retirement, deferred compensation, employment, health, life, or disability insurance, dependent care, severance or other employee benefit plan agreement, trust, fund or other arrangement for the benefit or welfare of any director, officer or employee in writing to Parent that any manner or increase in any manner the compensation or fringe benefits of any director, officer or employee or pay any benefit not required by any plan and arrangement as in effect as of the date hereof (including the granting of stock appreciation rights or performance units); provided, however, that this Agreement paragraph (g) shall not prevent the twelve months trailing EBITDA Company or its subsidiaries from increasing annual compensation and/or providing for or amending bonus arrangements for employees for fiscal 1998 in the ordinary course of year-end compensation reviews consistent with past practice (determined on the basis disclosed to Parent prior to the date extent that such compensation increases and new or amended bonus arrangements do not result in a material increase in benefits or compensation expense to the Company or any such subsidiary); (h) acquire, sell, lease or dispose of this Agreementany assets in any single transaction or series of related transactions having a fair market value in excess of One Hundred Thousand Dollars ($100,000) associated in the aggregate, other than sales of its products in the ordinary course of business consistent with such assets is $1,300,000 past practices; (i) except as may be required as a result of a change in law or lessin generally accepted accounting principles, change any of the accounting principles, practices or methods used by it; (j) revalue in any material respect any of its assets, including writing down the value of inventory or writing-off notes or accounts receivable, other than in the ordinary course of business; (i) acquire (by merger, consolidation, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, except for the acquisitions described on Schedule 6.1(f)thereof or any equity interest therein; (ii) incur any indebtedness for borrowed money (other than pursuant to the Company's credit facilities as in effect on the date of this Agreement) or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances; (iii) enter into or amend any material contract or agreement other than in the ordinary course of business or enter into any management contract for a facility not cancelable without penalty within 30 days of notice; (iv) authorize or make any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for consistent with past practice that would be material to the Company and its subsidiaries, taken as a whole; provided(iii) amend, however, the Company -------- ------- will give Parent prior notice of the making modify or the firm commitment of capital expenditure or lease payment in waive any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate right under any material contract or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder); (g) increase the compensation payable or to become payable to its officers or employees, or grant any severance or termination pay to, or, except as set forth on Schedule 6.10(c), enter into any employment or severance agreement with any director, officer or other employee of the Company or any of its subsidiaries; (iv) modify its standard warranty terms for its products or amend or modify any product warranties in effect as of the date hereof in any material manner that is adverse to the Company or any of its subsidiaries; or (v) authorize any new capital expenditure or expenditures that individually is in excess of One Hundred Thousand Dollars ($100,000) or in the aggregate are in excess of Three Hundred Thousand Dollars ($300,000); provided that nothing in the foregoing clause (v) shall limit any capital expenditure required pursuant to existing customer contracts; (h) take any action, other than as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable); (il) make any material Tax tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign income tax liability or agree to an extension of a statute of limitations for any assessment of federal income tax or material state corporate income or franchise tax, except to the extent the amount of any such settlement has been reserved for on the Company's most recent SEC FilingsCompany and its subsidiaries taken as a whole; (jm) paysettle or compromise any pending or threatened suit, discharge, settle, action or satisfy any lawsuits, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practice; (k) except as may be required by law, take any action to establish, adopt or enter into, or to terminate or amend any Plan; claim that (i) permit any increase in relates to the number of employees of the Company employed by the Company on the date hereof other than pursuant to an employee plan to be agreed to by the Company and Parent as promptly as practicable after the date hereof acting reasonably and in good faith transactions contemplated hereby or (ii) the settlement or compromise of which would have a Material Adverse Effect on the Company; (n) commence any material software development project or terminate any employees material software development project that is currently ongoing, in either case except pursuant to the terms of existing contracts with customers or except as contemplated by the Company's project development budget previously provided to Parent; or (o) take or agree in writing or otherwise to take any of the actions described in Sections 4.1(a) through 4.1(n) (and it shall use all reasonable efforts not to take any action that would make any of the representations or warranties of the Company identified on Schedule 6.10contained in this Agreement untrue or incorrect).

Conduct of Business of the Company. Except as contemplated ---------------------------------- by this AgreementAgreement or as set forth on the Company Disclosure Letter, during the period commencing on from the date hereof and ending at of this Agreement to the Effective Time, the Company shall, and shall cause each of its subsidiaries to, will conduct its their business and operations according to its only in the ordinary and usual course of business consistent with past practice, and the Company shall, and shall cause each of its subsidiaries to, use all reasonable efforts to preserve intact its business organization and to maintain satisfactory relationships with its customers, suppliers, employees and others having material business relationships with it. Without limiting the generality of the foregoing, and and, except as otherwise expressly provided contemplated in this AgreementAgreement or as set forth on the Company Disclosure Letter, prior to the Effective Time, without the advance written consent of the Parent (which consent will not be unreasonably withheld with respect to the incurrence of indebtedness by the Company under the revolving facility provided by Wellx Xxxgo pursuant to the Credit Agreement, as currently evidenced by the Promissory Note made by the Company in favor of Wellx Xxxgo, dated as of June 9, 1995, in the original principal amount of $6,758,500 (the "Line of Credit Note") and the Promissory Note made by the Company in favor of Wellx Xxxgo, dated as of August 24, 1995, in the original principal amount of $1,800,000 (the "Bridge Note"), but excluding all of the Company's other indebtedness to Wellx Xxxgo (the "Revolving Line") pursuant to Section 6.01(b)(i)), neither the Company nor any or of its subsidiaries will, without the prior written consent of the Parent: (a) amend Amend its Certificate of Incorporation or propose to amend its certificate of incorporation By-Laws or by-lawssimilar governing documents; (b) authorize (i) Create, incur or assume any indebtedness for issuancemoney borrowed, issue, sell, pledge, deliver or agree or commit to issue, sell, pledge or deliver (whether through the issuance or granting of any options, warrants, calls, subscriptions, stock appreciation rights or other rights or other agreements) any capital stock of any class or any securities convertible into or exchangeable for shares including obligations in respect of capital stock of any class leases, except (A) purchase money mortgages granted in connection with past practice, (B) in the case of the Company, or any other ownership interest (including stock appreciation rights or phantom stock) other than shares of Common Stock issuable upon exercise of Company Stock Options outstanding on the date of this Agreement; (c) split, combine or reclassify any shares of Common Stock or declare, pay or set aside indebtedness for payment any dividend or other distribution in respect of any Common Stock, or redeem, purchase or otherwise acquire any shares of Common Stock or any other securities of the Company or any rights, warrants or options to acquire any such shares of other securities; (d) enter into any other agreements, commitments or contracts that are material to the Company and its subsidiaries taken as a whole or otherwise make any material change that is adverse to the Company in (i) any existing agreement, commitment or arrangement that is material to the Company and its subsidiaries taken as a whole or (ii) the conduct of the business or operations of the Company and its subsidiaries; (e) sell, pledge, dispose of or encumber any assets of the Company or any of its subsidiaries (except for (i) sales of assets borrowed money incurred in the ordinary course of business not aggregating in excess of $7,000,000 outstanding at any time under the Revolving Line, reduced by the net proceeds of any sale of assets by the Company or any subsidiary out of the ordinary course of business, PROVIDED that the proceeds of any borrowing are not distributed to the stockholders of the Company; or (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person; PROVIDED, HOWEVER, that the Company and its subsidiaries may endorse negotiable instruments in a manner the ordinary course of business consistent with past practice; (c) Declare, set aside or pay any dividend or other distribution (iiwhether in cash, stock or property or any combination thereof) dispositions in respect of obsolete the Common Stock of the Company or worthless assetsany capital stock of any subsidiary; (d) Issue, (iii) the dispositions described onsell, and grant, purchase or redeem, or issue or sell any securities convertible into, or options with respect to, or warrants to purchase or rights to subscribe to, or subdivide or in any way reclassify, any Shares, except in any case above pursuant to the terms described in, Schedule 6.1(e) and (iv) the sale of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer of the Company shall have certified in writing to Parent that as of the date of this Agreement the twelve months trailing EBITDA (determined on the basis disclosed to Parent prior to the date of this Agreement) associated with such assets is $1,300,000 or lessStock Option Plans; (i) acquire Increase the aggregate amount of compensation payable or to become payable by the Company or any subsidiary to its directors, officers or employees, whether by salary or bonus, by more than two percent in the aggregate on an annual basis (by mergerexcluding commission-only compensation, consolidation, or acquisition the rate of stock or assets) any corporation, partnership or other business organization or division thereof, except for the acquisitions described on Schedule 6.1(fwhich shall not be increased); or (ii) incur increase the rate or term of, or otherwise alter, any indebtedness for borrowed money bonus (other than pursuant to the Company's credit facilities as in effect on the date any bonus permitted by clause (i) of this AgreementSection 6.01(e)), insurance, pension, severance or other employee benefit plan, payment or arrangement made to, for or with any such directors, officers or employees; (f) Enter into any agreement, commitment or issue transaction (other than borrowings permitted by Section 6.01(b)), except agreements, commitments or transactions in the ordinary course of business consistent with past practice; (g) Sell, transfer, mortgage, pledge, grant any debt securities security interest or assume, guarantee or endorse or otherwise as an accommodation become responsible for, permit the obligations imposition of any person, lien or make other encumbrance on any loans or advances; (iii) enter into or amend any material contract or agreement asset other than in the ordinary course of business consistent with past practice and except (i) pursuant to the Credit Agreement, (ii) in connection with purchase money mortgages permitted by Section 6.01(b) or enter into any management contract for a facility not cancelable without penalty within 30 days of notice; (iv) authorize or make any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso heretoiii) for any lien or other encumbrance as to which the Company and its subsidiaries, taken as has a whole; provided, however, the Company -------- ------- will give Parent prior notice of the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate any material contract or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder); (g) increase the compensation payable or to become payable to its officers or employees, or grant any severance or termination pay to, or, except as set forth on Schedule 6.10(c), enter into any employment or severance agreement with any director, officer or other employee of the Company or any of its subsidiariesvalid defense; (h) take Waive any action, right under any contract or other than as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable)agreement identified on the Company Disclosure Letter if such waiver would have a Material Adverse Effect; (i) Other than as required by any change in generally accepted accounting principles, make any material Tax election inconsistent change in its accounting methods or practices or make any material change in depreciation or amortization policies or rates adopted by it for accounting purposes or, other than normal writedowns or writeoffs consistent with past practices practices, make any writedowns of inventory or settle writeoffs of notes or compromise any material federal, state, local or foreign tax liability or agree to an extension of a statute of limitations for any assessment of federal income tax or material state corporate income or franchise tax, except to the extent the amount of any such settlement has been reserved for on the Company's most recent SEC Filingsaccounts receivable; (j) payMake any loan or advance to any of its stockholders, dischargeofficers, settledirectors, or satisfy any lawsuits, claims, liabilities or obligations employees (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the paymentadvances to field sales personnel, discharge or satisfaction vacation advances, relocation advances and travel advances in each case made in the ordinary course of business and in a manner consistent with past practice of liabilities reflected practice) or reserved against in the financial statements of the Company make any other loan or incurred advance to any other person or group otherwise than in the ordinary course of business and consistent with past practice; (k) except as may be required by lawTerminate or fail to renew, take where such renewal is at the Company's or a subsidiary's option, any action contract or other agreement (excluding customer leases or contracts), the termination or failure of which to establish, adopt or enter into, or to terminate or amend any Planrenew would have a Material Adverse Effect; (il) permit Enter into any increase in the number of employees collective bargaining agreement; (m) Make any addition to or modification of the Company employed by Benefits Plans; (n) Take, agree to take, or do or, with respect to anything within the Company's or its subsidiaries control, knowingly permit to be done or to be taken anything in the conduct of its business which (i) would cause any of the representations of the Company on the date hereof other than pursuant to an employee plan to be agreed to by the Company or become untrue in any material respect, and Parent as promptly as practicable after the date hereof acting reasonably and in good faith or (ii) terminate would reasonably be expected to have a Material Adverse Effect, PROVIDED, HOWEVER,that nothing in this Section 6.01(n) shall affect the generality of any employees provision of Annex A hereto; or (o) Agree to do any of the Company identified on Schedule 6.10foregoing.

Conduct of Business of the Company. Except as contemplated ---------------------------------- by this Agreement, during the period commencing on from the date hereof and ending at to the earlier of the Effective TimeTime and the termination of this Agreement in accordance with its terms, the Company shall, will and shall will cause each of its subsidiaries to, Subsidiary to conduct its operations according to its in the ordinary course of business consistent with past practicepractice and, to the extent consistent therewith, and with no less diligence and effort than would be applied in the Company shallabsence of this Agreement, and shall cause each of its subsidiaries to, use all reasonable efforts seek to preserve intact its current business organization organizations, keep available the service of its current officers and to maintain satisfactory employees and preserve its relationships with customers and suppliers with the intention that its customers, suppliers, employees goodwill and others having material business relationships with itongoing businesses shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, and except as otherwise expressly provided in this Agreement, prior to the Effective Time, neither the Company nor any or its subsidiaries Subsidiary will, without the prior written consent of the ParentParent and Acquisition: (a) amend its Certificate or propose to amend its certificate Articles of incorporation Incorporation or by-lawsBylaws (or other similar governing document); (b) authorize for issuance, issue, sell, pledge, deliver or agree or commit to issue, sell, pledge issue sell or deliver (whether through the issuance or granting of any options, warrants, callscommitments, subscriptions, stock appreciation rights to purchase or other rights or other agreementsotherwise) any capital stock of any class or any other securities convertible into (except bank loans) or exchangeable for shares of capital stock of any class of the Company, or any other ownership interest equity equivalents (including any stock options or stock appreciation rights or phantom stockrights) other than shares except for (i) the issuance and sale of Common Stock issuable upon exercise of Shares pursuant to Company Stock Options outstanding granted under the Company Plans, (ii) the grant of options to purchase Shares to new hires of the Company or any Subsidiary up to an aggregate maximum amount of four hundred thousand (400,000) Shares subject to options, and (iii) the grant of options to purchase Shares to current employees in connection with any adjustments or promotions on a basis consistent with the date past practices of this Agreementthe Company up to an aggregate maximum of two hundred fifty thousand (250,000) Shares subject to options, provided that, with respect to each of clauses (ii) and (iii), no individual may be granted options to purchase more than fifty thousand (50,000) Shares; (c) split, combine or reclassify any shares of Common Stock or its capital stock, declare, pay or set aside for payment or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, make any Common Stockother actual, constructive or deemed distribution in respect of its capital stock or otherwise make any payments to stockholders in their capacity as such, or redeem, purchase redeem or otherwise acquire any shares of Common Stock its securities or any other securities of any Subsidiary (other than the repurchase of restricted stock and cancellation of Company Stock Options following termination of employment with or provision of services to the Company or any rights, warrants or options to acquire any such shares of other securitiesSubsidiary); (d) enter into any adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other agreements, commitments or contracts that are material to reorganization (other than the Company and its subsidiaries taken as a whole or otherwise make any material change that is adverse to the Company in (i) any existing agreement, commitment or arrangement that is material to the Company and its subsidiaries taken as a whole or (ii) the conduct of the business or operations of the Company and its subsidiariesMerger); (e) sellalter through merger, pledgeliquidation, dispose of or encumber any assets of the Company reorganization, restructuring or any other fashion the corporate structure of its subsidiaries ownership of any Subsidiary; (except for f) (i) sales incur, assume or forgive any long-term or short-term debt or issue any debt securities except for borrowings under existing lines of assets credit in the ordinary course of business consistent with past practices or trade payables arising in the ordinary course of business consistent with past practices; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person except for obligations of Subsidiaries incurred in the ordinary course of business consistent with past practices; (iii) make any loans, advances or capital contributions to or investments in any other person (other than to Subsidiaries or customary loans or advances to employees in each case in the ordinary course of business consistent with past practices); (iv) pledge or otherwise encumber shares of capital stock of the Company or any Subsidiary or any of the Other Interests; or (v) mortgage or pledge any of its material properties or assets, tangible or intangible, or create or suffer to exist any material Lien thereupon; (g) except as may be required by law, (1) enter into, adopt, amend in any manner or terminate any bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase agreement, other than offer letters, letter agreements and options to purchase Shares entered into with new hires in the ordinary course of business consistent with past practice and performance bonuses granted to employees on a manner basis consistent with the past practices of the Company, or (2) enter into, adopt, amend or terminate any pension, retirement, deferred compensation, employment, health, life, or disability insurance, dependent care, severance or other employee benefit plan agreement, trust, fund or other arrangement for the benefit or welfare of any director, officer or employee, other than in the ordinary course of the Company's business consistent with past practice, or (ii3) dispositions increase in any manner the compensation or fringe benefits of obsolete any director, officer or worthless assets, (iii) the dispositions described on, employee or consultant or pay any benefit not required by any plan and pursuant to the terms described in, Schedule 6.1(e) and (iv) the sale of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "arrangement as is, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer of the Company shall have certified in writing to Parent that effect as of the date hereof (including the granting of this Agreement stock appreciation rights or performance units), except for normal increases in cash compensation in the twelve months trailing EBITDA ordinary course of business consistent with past practice for employees other than an employee who is party to an Employment Agreement; (determined on i) acquire, sell, lease license or dispose of any assets or properties in any single transaction or series of related transactions having a fair market value in excess of Two Hundred Thousand Dollars ($200,000) in the basis disclosed aggregate, other than sales or licenses of its products in the ordinary course of business consistent with past practices; (ii) enter into any exclusive license, distribution, marketing, sales or other agreement; (iii) enter into a "development services" or other similar agreement pursuant to Parent prior to which the date Company may purchase or otherwise acquire the services of this Agreementanother person, other than in the ordinary course of business consistent with past practices; or (iv) associated acquire, sell, lease, license, transfer or otherwise dispose of any Intellectual Property, other than licenses or sales of its products or services in the ordinary course of business consistent with such past practices; (i) unless required by a change in applicable law or in United States generally accepted accounting principles, change any of the accounting principles, practices or methods used by it; (j) revalue any of its assets is $1,300,000 or lessproperties, including writing down the value of inventory or writing-off notes or accounts receivable, other than in the ordinary course of business consistent with past practices; (i) acquire (by merger, consolidation, consolidation or acquisition of stock or assets) any corporation, limited liability company, partnership or other business organization person or any division thereof, except for the acquisitions described on Schedule 6.1(f)thereof or any equity interest therein; (ii) incur any indebtedness for borrowed money (other than pursuant to the Company's credit facilities as in effect on the date of this Agreement) or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances; (iii) enter into or amend any material contract or agreement Contract other than in the ordinary course of business or enter into any management contract for a facility not cancelable without penalty within 30 days of notice; (iv) authorize or make any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for consistent with past practices that would be material to the Company and its subsidiariesSubsidiaries, taken as a whole; provided(iii) amend, however, the Company -------- ------- will give Parent prior notice of the making modify or the firm commitment of capital expenditure or lease payment in waive any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate any material contract or amend right under any of its material Contracts; (iv) modify its standard warranty terms for its products or services or amend or modify any product or service warranties in effect as of the date hereof in any material manner that is adverse to the Company or any Subsidiary; (other than amendments to existing credit arrangements designed to remedy defaults thereunder); (gv) increase the compensation payable or to become payable to its officers or employees, or grant any severance or termination pay to, or, except as set forth on Schedule 6.10(c), enter into any employment Contract that contains non-competition restrictions, including any restrictions relating to the conduct of the Company's or severance agreement with any directorSubsidiary's business or the sale of the Company's or any Subsidiary's products or any geographic restrictions, officer in any case that would prohibit or other employee restrict the Surviving Company or any of its affiliates from conducting the business of the Company or any of its subsidiaries; Subsidiary as presently conducted; or (hvi) take authorize any action, new capital expenditure other than as required by GAAP, set forth in Schedule 4.1(k) up to change accounting policies or procedures or cash maintenance policies or procedures an aggregate amount equal to Three Million Eight Hundred Thousand Dollars (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable$3,800,000); (il) make or rescind any material Tax express or deemed election inconsistent with past practices relating to Taxes or settle or compromise any material federalTax liability or enter into any closing or other agreement with any Tax authority; or file or cause to be filed any amended Tax Return, statefile or cause to be filed claim for refund of Taxes previously paid, local or foreign tax liability or agree to an extension of a statute of limitations for with respect to the assessment or determination of Taxes; (m) fail to file any assessment Tax Returns when due, fail to cause such Tax Returns when filed to be true, correct and complete, prepare or fail to file any Tax Return of federal income tax the Company in a manner inconsistent with past practices in preparing or material state corporate income filing similar Tax Returns in prior periods or, on any such Tax Return, take any position, make any election, or franchise taxadopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods, in each case, except to the extent the amount of required by applicable law; or fail to pay any such settlement has been reserved for on the Company's most recent SEC FilingsTaxes when due; (jn) paysettle or compromise any pending or threatened suit, discharge, settle, action or satisfy any lawsuits, claims, liabilities claim that (i) relates to the transactions contemplated hereby or obligations (absolute, accrued, asserted ii) the settlement or unasserted, contingent or otherwise), other than compromise of which would require the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements of payment by the Company or incurred any Subsidiary of damages in the ordinary course excess of business and consistent with past practiceTwo Hundred Thousand Dollars ($200,000) or involves any equitable relief; (ko) knowingly take any action that would result in a failure to maintain trading of the Shares on the Nasdaq National Market; (p) take any action that results in the acceleration of vesting of any Company Stock Option, except as may be required by law, take pursuant to any action to establish, adopt or enter into, or to terminate or amend any Planagreement in effect as of the date hereof; (iq) permit allow any increase Insurance Policy to be amended or terminated without replacing such policy with a policy providing at least equal coverage, insuring comparable risks and issued by an insurance company financially comparable to the prior insurance company; or (r) take or agree in the number of employees writing or otherwise to take any of the Company employed by the Company on the date hereof other than pursuant to an employee plan to be agreed to by the Company and Parent as promptly as practicable after the date hereof acting reasonably and actions described in good faith or (iiSections 4.1(a) terminate any employees of the Company identified on Schedule 6.10through 4.1(q).

Conduct of Business of the Company. Except as provided in Section 6.09 hereof or as otherwise contemplated ---------------------------------- by this AgreementAgreement or with the written consent of Parent or as set forth in the Developments or Contracts Schedule, during the period commencing on from the date hereof and ending at of this Agreement to the Effective TimeOffer Purchase Closing, the Company shallwill, and shall will cause each of its subsidiaries Subsidiaries to, conduct its operations according to its only in the ordinary course of business consistent with past practicepractice and will use all reasonable efforts, and the Company shall, and shall will cause each of its subsidiaries to, Subsidiaries to use all reasonable efforts efforts, to preserve intact its the business organization of the Company and each of its Subsidiaries, to keep available the services of its and their present officers and key employees, and to maintain satisfactory relationships with its customers, suppliers, employees and others preserve the good will of those having material business relationships with it. Without limiting the generality of the foregoing, and except as otherwise expressly provided in Section 6.09 hereof, as otherwise contemplated by this AgreementAgreement with respect to the Non-Mining Assets, or with the written consent of Parent or as set forth in the Developments Schedule or Contracts Schedule, the Company will not, and will not permit any of its Subsidiaries to, prior to the Effective Time, neither the Company nor any or its subsidiaries will, without the prior written consent of the Parent: (a) amend or propose Adopt any amendment to amend its certificate of incorporation charter or by-lawslaws or comparable organizational documents; (b) authorize Except for issuanceissuances of capital stock of the Subsidiaries to the Company or a wholly owned subsidiary of the Company, and other than the issuance of Common Shares pursuant to the exercise of Options outstanding on the date hereof, issue, sell, pledge, deliver or agree or commit to issue, sellreissue, pledge or deliver sell, or authorize the issuance, reissuance, pledge or sale of (whether through the issuance or granting of any options, warrants, calls, subscriptions, stock appreciation rights i) additional Common Shares or other rights or other agreements) any capital stock of any class or any securities convertible into or exchangeable for shares of capital stock of any class of the Companyclass, or any other ownership interest (including stock appreciation rights or phantom stock) other than shares of securities convertible into Common Stock issuable upon exercise of Company Stock Options outstanding on the date of this Agreement; (c) split, combine or reclassify any shares of Common Stock or declare, pay or set aside for payment any dividend Shares or other distribution in respect capital stock of any Common Stockclass, or redeem, purchase or otherwise acquire any shares of Common Stock or any other securities of the Company or any rights, warrants or options to acquire any such shares convertible securities or capital stock, or (ii) any other securities in respect of, in lieu of, or in substitution for, Common Shares outstanding on the date hereof; (c) Declare, set aside or pay any dividend or other distribution (whether in cash, securities or property or any combination thereof) in respect of any class or series of its capital stock other securities;than between any of the Company and any of its wholly owned Subsidiaries. (d) enter into Split, combine, subdivide, reclassify or redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any Common Shares or any other agreements, commitments or contracts that are material to the Company and its subsidiaries taken as a whole or otherwise make any material change that is adverse to the Company in (i) any existing agreement, commitment or arrangement that is material to the Company and its subsidiaries taken as a whole or (ii) the conduct of the business or operations of the Company and its subsidiariescapital stock; (e) sellMake any loans, pledgeadvances or capital contributions to, dispose or investments in, any other person in excess of $500,000, except for loans, advances, capital contributions or encumber investments between any assets Subsidiary of the Company and the Company or any another wholly owned subsidiary of its subsidiaries the Company; (f) Fail to (i) maintain (except for (isales or other transactions not constituting a breach of this Agreement) sales of assets in the ordinary course of business and Real Property in a manner consistent with past practice, (ii) dispositions of obsolete pay when due all Taxes, water and sewer rents, assessments and insurance premiums affecting the Real Property, other than those being contested in good faith for which appropriate reserves have been established on the Company's or worthless assetsits Subsidiary's books and records, (iii) the dispositions described on, and pursuant to timely comply with the terms described inand provisions of all Leases (including but not limited to timely payment of all minimum and production royalties, Schedule 6.1(e) and (iv) the sale of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon other than those being contested in good faith for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer of the Company shall which appropriate reserves have certified in writing to Parent that as of the date of this Agreement the twelve months trailing EBITDA (determined been established on the basis disclosed Company's or its Subsidiary's books and records), contracts and agreements relating to Parent prior to or affecting the date of this Agreement) associated with Real Property and the use and operation thereof, in each case, other than such assets is $1,300,000 failures that would not, individually or lessin the aggregate, have a Material Adverse Effect on the Company; (ig) acquire (by mergerEnter into, consolidationestablish, adopt, amend or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, except for the acquisitions described on Schedule 6.1(f); (ii) incur any indebtedness for borrowed money (other than pursuant to the Company's credit facilities as in effect on the date of this Agreement) or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances; (iii) enter into or amend renew any material contract employment, consulting, severance or agreement similar agreements or arrangements with any director, officer or employee; grant any salary or wage increase (other than in the ordinary course of business consistent with past practice or enter into any management contract for a facility not cancelable without penalty within 30 days of notice; (iv) authorize or make any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for the Company and its subsidiaries, taken as a whole; provided, however, the Company -------- ------- will give Parent prior notice of the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000may be required by law); or (v) terminate establish, adopt, amend, or increase benefits under, any material contract pension, retirement, stock option, stock purchase, savings, profit sharing, deferred compensation, consulting, welfare benefit contract, plan or amend any of its material terms arrangement (other than amendments to existing credit arrangements designed to remedy defaults thereunder); (g) increase the compensation payable or to become payable to its officers or employees, or grant any severance or termination pay to, or, except as set forth on Schedule 6.10(c), enter into any employment or severance agreement with any director, officer or other employee of the Company or any of its subsidiaries; (h) take any action, other than as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable); (i) make any material Tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign tax liability or agree to an extension of a statute of limitations for any assessment of federal income tax or material state corporate income or franchise tax, except to the extent the amount of any such settlement has been reserved for on the Company's most recent SEC Filings; (j) pay, discharge, settle, or satisfy any lawsuits, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice or as may be required by law); (h) Enter into any material labor or collective bargaining agreement, memorandum of liabilities reflected understanding, grievance settlement or reserved against in the financial statements of the Company any other agreement or incurred commitment to or relating to any labor union, except in the ordinary course of business and consistent with past practice; (ki) except as may be required by law, take Take any action that, if taken after March 31, 1998 but prior to establishthe date hereof, adopt or enter into, or would have caused the representations and warranties contained in Section 4.08 to terminate or amend be untrue in any Planmaterial respect; (ij) permit Consummate its investment in Louisiana Generating LLC, contemplated by, or waive, modify or terminate in any increase manner adverse to the Company its rights under Section 6 of, that certain Joint Development Agreement, dated September 29, 1996, as amended, among the Company, Southern Electric International, Inc. and NRG Energy Inc. (the "Joint Development Agreement"), in connection with the number transactions contemplated by that certain Asset Purchase and Reorganization Agreement, dated as of employees July 30, 1996, with Xxxxx X. Xxxxx, Trustee in Bankruptcy of Cajun Electric Power Cooperative, Inc. ("Cajun Electric"), for the acquisition of substantially all of the non-nuclear assets of Cajun Electric; (k) Waive, modify, amend or terminate any confidentiality, standstill or other similar agreement (each a "Standstill Agreement") to which the Company or any of its Subsidiaries is a party and which was entered into in connection with the sale process undertaken by the Company to identify a purchaser of the Company employed by that resulted in the execution of this Agreement; or (l) Agree to take any of the foregoing actions prohibited under Section 6.01. Notwithstanding the foregoing, nothing herein shall limit the Company's ability to, nor require the Company to obtain the consent of Parent in order to, sell, convey or otherwise dispose of any of the Non-Mining Assets referred to on the Non-Mining Assets Schedule attached hereto at any time following the date hereof other than pursuant in any transaction approved by the Board; provided that, with respect to any sale of assets, such sale is not to an employee plan to be agreed to by Affiliate of the Company, such assets are sold in an arms-length transaction, and the Company and Parent as promptly as practicable after the date hereof acting reasonably and in good faith or (ii) terminate any employees provides at least three business days prior written notice of the Company identified on Schedule 6.10such sale to Parent.

Conduct of Business of the Company. Except as contemplated ---------------------------------- by set forth in Section 6.1 of the Disclosure Letter and except for matters arising in connection with or as a result of this Agreement, the Transactions or the work of the Special Committee, during the period commencing on from the date hereof and ending at of this Agreement to the earlier of the Effective TimeTime or the date on which this Agreement is terminated in accordance with its terms, the Company shall, and shall cause each of its subsidiaries to, will each conduct its operations according to its in the ordinary course of business consistent with past practice, and and, subject to the foregoing, the Company shall, and shall cause each of its subsidiaries to, will each use all its reasonable best efforts to preserve intact its business organization organization, to keep available the services of its officers and employees and to maintain satisfactory existing relationships with its customerslicensors, licensees, suppliers, employees contractors, distributors, customers and others having material significant business relationships with it. Without limiting the generality of the foregoing, and except as otherwise expressly provided in this Agreement, prior to the Effective Time, Time neither the Company nor any or of its subsidiaries will, without the prior written consent of the ParentAcquisition: (a) amend or propose to amend its certificate of incorporation or by-laws; (b) authorize for issuance, issue, sell, pledge, deliver or agree or to commit to issue, sell, pledge sell or deliver (whether through the issuance or granting of any options, warrants, callscommitments, subscriptions, stock appreciation rights to purchase or other rights or other agreementsotherwise) any capital Shares, any stock of any other class or any other securities convertible into or exchangeable for shares of capital stock of any class of the Companyequity equivalents (including, or any other ownership interest (including without limitation, stock appreciation rights or phantom stock) other than shares of Common Stock issuable upon exercise of Company Stock Options outstanding on rights), except as required by agreements in effect prior to the date of this Agreement;, or amend any of the terms of any such securities or agreements outstanding as of the date of this Agreement; or (cb) split, combine or reclassify any shares of Common Stock or its capital stock, declare, pay or set aside for payment or pay any dividend or other distribution (whether in cash, stock, or property or any combination thereof) in respect of any Common Stockits capital stock, or redeem, purchase repurchase or otherwise acquire any shares of Common Stock its securities or any other securities of its subsidiaries; or (c) take, or agree in writing or otherwise to take, any of the Company actions described above in Section 6.1 or any rights, warrants or options to acquire any such shares of other securities; action which would cause the condition set forth in paragraph (d) enter into any other agreements, commitments or contracts that are material to the Company and its subsidiaries taken as a whole or otherwise make any material change that is adverse to the Company in (i) any existing agreement, commitment or arrangement that is material to the Company and its subsidiaries taken as a whole or (ii) the conduct of the business or operations of the Company and its subsidiaries; (e) sell, pledge, dispose of or encumber any assets of the Company or any of its subsidiaries (except for (i) sales of assets in the ordinary course of business and in a manner consistent with past practice, (ii) dispositions of obsolete or worthless assets, (iii) the dispositions described on, and pursuant to the terms described in, Schedule 6.1(e) and (iv) the sale of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer of the Company shall have certified in writing to Parent that as of the date of this Agreement the twelve months trailing EBITDA (determined on the basis disclosed to Parent prior to the date of this Agreement) associated with such assets is $1,300,000 or less; (i) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, except for the acquisitions described on Schedule 6.1(f); (ii) incur any indebtedness for borrowed money (other than pursuant to the Company's credit facilities as in effect on the date of this Agreement) or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances; (iii) enter into or amend any material contract or agreement other than in the ordinary course of business or enter into any management contract for a facility Annex A not cancelable without penalty within 30 days of notice; (iv) authorize or make any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for the Company and its subsidiaries, taken as a whole; provided, however, the Company -------- ------- will give Parent prior notice of the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate any material contract or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder); (g) increase the compensation payable or to become payable to its officers or employees, or grant any severance or termination pay to, or, except as set forth on Schedule 6.10(c), enter into any employment or severance agreement with any director, officer or other employee of the Company or any of its subsidiaries; (h) take any action, other than as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable); (i) make any material Tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign tax liability or agree to an extension of a statute of limitations for any assessment of federal income tax or material state corporate income or franchise tax, except to the extent the amount of any such settlement has been reserved for on the Company's most recent SEC Filings; (j) pay, discharge, settle, or satisfy any lawsuits, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practice; (k) except as may be required by law, take any action to establish, adopt or enter into, or to terminate or amend any Plan; (i) permit any increase in the number of employees of the Company employed by the Company on the date hereof other than pursuant to an employee plan to be agreed to by the Company and Parent as promptly as practicable after the date hereof acting reasonably and in good faith or (ii) terminate any employees of the Company identified on Schedule 6.10satisfied.

Conduct of Business of the Company. Except as contemplated ---------------------------------- by this Agreement, during the period commencing on from the date hereof and ending at to the Effective TimeClosing Date, the Company shallwill conduct, and shall will cause each of its subsidiaries tothe Subsidiaries to conduct, conduct its operations according to its in the ordinary course of business consistent with past practice, and the Company shallshall use, and shall cause each of its subsidiaries tothe Subsidiaries to use, use all reasonable efforts to preserve substantially intact its business organization organization, to keep available the services of its present officers and key employees and to maintain satisfactory preserve the present commercial relationships with its customers, suppliers, employees and others having material business relationships key persons with itwhom it does business. Without limiting the generality of the foregoing, and except as otherwise expressly provided in this Agreement, prior during the period from the date hereof to the Effective TimeClosing Date, neither the Company nor will not (and will not, to the extent applicable, permit any or its subsidiaries willof the Subsidiaries to), without the prior written consent of the ParentBuyer: (a) amend or propose to amend its certificate of incorporation or by-lawsOrganizational Documents; (b) authorize for issuance, issue, sell, pledge, deliver sell or agree or commit to issue, sell, pledge or deliver issue (whether through the issuance or granting of any options, warrants, callscommitments, subscriptions, stock appreciation rights to purchase or other rights or other agreementsotherwise) any capital stock membership interests of any class or any other equity securities convertible into or exchangeable for shares of capital stock of any class of the Company, or any other ownership interest (including stock appreciation rights or phantom stock) other than shares of Common Stock issuable upon exercise of Company Stock Options outstanding on the date of this Agreementequity equivalents; (c) split, combine or reclassify any shares of Common Stock its membership interests or declare, pay or set aside for payment or pay any dividend dividends or other distribution distributions (whether in cash or otherwise) in respect of its membership interests or other equity interests or repurchase or commit to repurchase any Common Stockmembership interests or other equity interests; provided, however, that, (i) subject to the provisions of Section 5.9, the Company shall distribute at the Closing (at the time described in Section 1.6(b)) to RGHI the $500,000,000 cash amount contemplated by Section 5.9, (ii) the Company shall distribute to RGHI at the Closing (at the time described in Section 1.6(b)) the equity interests of Xxxxxxxxx-Xxxx International Associates LLC, which directly or redeem, purchase or otherwise acquire any shares of Common Stock or any other securities indirectly holds all of the outstanding equity interests of the entities listed on Schedule 5.1(c)(collectively, Xxxxxxxxx-Xxxx International Associates LLC and the entities listed on Schedule 5.1(c) are referred to as the "Asset Manager Entities"), and (iii) the Company may make distributions to RGHI of up to $120,000,000 that was accrued as of February 29, 2004 (provided that not more than $12,000,000 of such $120,000,000 amount is distributed in cash and the remaining distribution does not result in any net distribution of cash but, instead, merely results in a reduction in amounts owed to the Company from one or any rights, warrants or options to acquire any such shares more members of other securitiesthe Company); (d) enter into any except as contemplated by this Agreement and other agreementsthan Customer Financing Indebtedness, commitments or contracts that are material to the Company and its subsidiaries taken as a whole or otherwise make any material change that is adverse to the Company in (i) any existing agreement, commitment incur or arrangement that is material to the Company and its subsidiaries taken as a whole or (ii) the conduct of the business or operations of the Company and its subsidiaries; (e) sell, pledge, dispose of or encumber any assets of the Company or any of its subsidiaries (except for (i) sales of assets in the ordinary course of business and in a manner consistent with past practice, (ii) dispositions of obsolete or worthless assets, (iii) the dispositions described on, and pursuant to the terms described in, Schedule 6.1(e) and (iv) the sale of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer of the Company shall have certified in writing to Parent that as of the date of this Agreement the twelve months trailing EBITDA (determined on the basis disclosed to Parent prior to the date of this Agreement) associated with such assets is $1,300,000 or less; (i) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, except for the acquisitions described on Schedule 6.1(f); (ii) incur assume any indebtedness for borrowed money exceeding $5,000,000 in the aggregate, or (other than pursuant to the Company's credit facilities as in effect on the date of this Agreementii) or issue any debt securities or assume, guarantee or guarantee, endorse or otherwise as an accommodation become liable or responsible for(whether directly, contingently or otherwise) for the obligations of any other person, or make any loans or advances; (iii) enter into or amend any material contract or agreement other than in the ordinary course of business or enter into any management contract except for a facility obligations not cancelable without penalty within 30 days of notice; (iv) authorize or make any capital expenditures or purchase of fixed assets which are, exceeding $5,000,000 in the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for the Company and its subsidiaries, taken as a whole; provided, however, the Company -------- ------- will give Parent prior notice of the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate any material contract or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder); (g) increase the compensation payable or to become payable to its officers or employees, or grant any severance or termination pay to, or, except as set forth on Schedule 6.10(c), enter into any employment or severance agreement with any director, officer or other employee of the Company or any of its subsidiaries; (h) take any action, other than as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable); (i) make any material Tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign tax liability or agree to an extension of a statute of limitations for any assessment of federal income tax or material state corporate income or franchise tax, except to the extent the amount of any such settlement has been reserved for on the Company's most recent SEC Filings; (j) pay, discharge, settle, or satisfy any lawsuits, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practice; (ke) except as may be required by law, take any action to establish(i) enter into, adopt or enter intoamend or terminate any material bonus, profit sharing, compensation, severance, termination, option, appreciation right, restricted unit, performance unit, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the benefit or welfare of any director, officer or employee of the Company in any material manner, (ii) except for normal salary increases and bonus payments in the ordinary course of business consistent with past practice, increase in any material manner the compensation of any director, officer or employee of the Company or (iii) pay any material benefit not required by any plan and arrangement as in effect as of the date hereof; (f) other than sales and acquisitions of securities made in the ordinary course of business by the Company (provided that the Company is not taking any proprietary risk with respect to terminate such sale or amend acquisition) sell, lease or dispose of or acquire any Planassets which have a value in the aggregate in excess of $5,000,000 in the aggregate; provided, however, that the Company (i) may make the distributions expressly permitted by Section 5.1(c) and (ii) may effect the acquisition by the Asset Manager Entities referred to in Section 5.1(k); (g) except as expressly contemplated by this Agreement or as set forth in Schedule 5.1(g), alter through merger, liquidation, reorganization, restructuring or in any other fashion the capital structure of the Company or such Subsidiary; (h) cause or allow the net capital levels of the Company and the Subsidiaries that are subject to such minimum net capital requirements to fall below the minimum level(s) of capital required by the SEC, CFTC, CME or other applicable Governmental Authority or Self-Regulatory Organization. (i) permit effect any increase change in any of its methods of accounting, except as may be required by GAAP; (j) fail to maintain the number of employees status of the Company employed as a partnership for federal income tax purposes; (k) use any funds, other than funds generated by the Asset Manager Entities, to fund the Asset Manager Entities or their operations, except that the Company may contribute up to $5,100,000 to the Asset Manager Entities to permit the Asset Manager Entities to complete the transactions contemplated by the Asset Purchase Agreement, dated April 23, 2004, between Xxxxxxxxx-Xxxx Associates, LLC and Xxxxxxxx Investment Management North America Inc., as amended, as previously disclosed to the Buyer; (l) settle or compromise any Legal Proceeding or governmental investigation (i) for an amount payable by the Company on or any of the date hereof other than pursuant to an employee plan to be agreed to by the Company and Parent as promptly as practicable after the date hereof acting reasonably and Subsidiaries in good faith or excess of $1,000,000, (ii) terminate in a manner that requires the Company or any employees Subsidiary to change its method of operation or of conducting business or (iii) that otherwise is material in amount or nature; (m) effect any acquisition of another Person or business for an amount in excess of $5,000,000 (or for an aggregate amount for all such acquisitions in excess of $10,000,000), or, with the exception of the Company identified on Schedule 6.10acquisition referred to in Section 5.1(k), permit any Asset Manager Entity to effect any acquisition of another Person or business; (n) make or revoke any election relating to Taxes (other than the making of a Section 754 election as contemplated in the last sentence of Section 5.2(a)), settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, except as required by applicable Law, or make any material change to any of its methods of accounting or methods of reporting income or deductions for Tax or accounting practice or policy from those employed in the preparation of its most recently filed federal income Tax Return, or prepare or file any Tax Return (or any amendment thereof) without having provided the Buyer with a copy thereof (together with supporting work papers) at least ten days prior to the due date thereof for Buyer's review and approval; or (o) agree to do any of the foregoing.

Conduct of Business of the Company. Except as contemplated ---------------------------------- by set forth in Schedule 7.1 or as permitted under clauses (a) through (o) of this AgreementSection 7.1, during the period commencing on from the date hereof of this Agreement to the earlier of the Closing Date and ending at the Effective Timetermination of this Agreement in accordance with Article IX, the Company shall, and shall cause each of its subsidiaries the Company Subsidiaries to, conduct its their respective business and operations according to its in the ordinary course of business consistent with past practice, practices and the Company shall, and shall cause each of use its subsidiaries to, use all commercially reasonable efforts to preserve intact its business organization organizations, to retain the services of its officers and key employees and to maintain satisfactory relationships with preserve the goodwill of its customers, material customers and suppliers, employees and others having material business relationships with it. Without limiting the generality of the foregoing, and except as otherwise expressly provided in this Agreement, prior to the Effective Time, neither the Company nor any or its subsidiaries willand, without the prior written consent of the ParentBuyer (which consent shall not be unreasonably withheld, conditioned or delayed), to not undertake any of the following actions: (a) amend issue, sell or pledge, or authorize or propose to amend its certificate of incorporation or by-laws; (b) authorize for the issuance, issue, sell, pledge, deliver sale or agree or commit to issue, sell, pledge or deliver of (whether through the issuance or granting of any options, warrants, calls, subscriptions, stock appreciation rights or other rights or other agreementsi) any capital stock Equity Interests of any class of the Company (including the Shares) or any Company Subsidiary, or securities convertible into or exchangeable for shares of capital stock of any class of the Companysuch Equity Interests, or any other ownership interest (including stock appreciation rights or phantom stock) other than shares of Common Stock issuable upon exercise of Company Stock Options outstanding on the date of this Agreement; (c) split, combine or reclassify any shares of Common Stock or declare, pay or set aside for payment any dividend or other distribution in respect of any Common Stock, or redeem, purchase or otherwise acquire any shares of Common Stock or any other securities of the Company or any rights, warrants or options to acquire any such Equity Interests or other convertible securities of the Company or any Company Subsidiary, other than shares of capital stock issued pursuant to stock options that are outstanding, or which the Company has a binding obligation to issue, on the date hereof and any pledges pursuant to the terms of the Credit Agreement, or (ii) any other securitiessecurities in respect of, in lieu of, or in substitution for Equity Securities of the Company (including the Shares) or any Company Subsidiary outstanding on the date hereof; (b) redeem, purchase or otherwise acquire any outstanding Equity Securities of the Company or any Company Subsidiary; (c) adopt any amendment to the certificate of incorporation, by-laws or other organizational documents of the Company or any Company Subsidiary; (d) enter into incur any other agreementsIndebtedness for borrowed money, commitments or contracts that are material to the Company and its subsidiaries taken as a whole or otherwise make guarantee any material change that is adverse to the Company in such Indebtedness of another Person, except for (i) Indebtedness under the Credit Agreement and (ii) Indebtedness other than for borrowed money in an amount not to exceed $250,000; (e) except as set forth on Schedule 7.1, (i) increase the rate or terms of compensation or benefits of any of its directors, officers or employees, except as may be required under existing agreementemployment agreements or by applicable Law or, commitment or arrangement that is material with respect to non-officer-level employees, in the Company and its subsidiaries taken as a whole ordinary course of business consistent with past practice or (ii) the conduct of the business pay or operations of the agree to pay any pension, retirement allowance or other employee benefit not contemplated by any Company and its subsidiariesBenefit Plan to any director, officer or employee, whether past or present, other than as required by applicable Law or (iii) enter into, adopt or amend any employment, bonus, severance or retirement Contract or adopt any employee benefit plan, other than as required by applicable Law; (ef) (i) grant, extend, waive, amend or modify (except as required in the diligent prosecution of the Intellectual Property Rights), any material rights in or to the Intellectual Property Rights, (ii) fail to diligently prosecute applications for the Intellectual Property Rights, (iii) fail to exercise a right of renewal or extension under any material Intellectual Property Rights licensed from third parties, or (iv) sell, pledge, dispose of of, transfer, lease, license, guarantee, or encumber encumber, or authorize any assets of the Company foregoing of any material Intellectual Property Rights, except in the ordinary course of business consistent with past practice; (g) except in the ordinary course of business (i) sell, lease, transfer or otherwise dispose of, any of its subsidiaries property or assets or (ii) create any Encumbrance (other than a Permitted Encumbrance, and except for in connection with Indebtedness permitted under Section 7.1(d)) on any property or assets; (ih) sales of assets make any loans, advances or capital contributions, except in the ordinary course of business and in a manner consistent with past practice, (ii) dispositions of obsolete or worthless assets, (iii) the dispositions described on, and pursuant to the terms described in, Schedule 6.1(e) and (iv) the sale of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer of the Company shall have certified in writing to Parent that as of the date of this Agreement the twelve months trailing EBITDA (determined on the basis disclosed to Parent prior to the date of this Agreement) associated with such assets is $1,300,000 or less; (i) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, except for the acquisitions described on Schedule 6.1(f); (ii) incur any indebtedness advances for borrowed money (travel and other than pursuant normal business expenses to the Company's credit facilities as in effect on the date of this Agreement) or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances; (iii) enter into or amend any material contract or agreement other than officers and employees in the ordinary course of business consistent with past practices; (i) merge or consolidate with, purchase substantially all the assets of, or otherwise acquire or combine with, any Person; (j) make any change in any method of accounting other than those required by GAAP; (k) (i) make, change or revoke any Tax election, (ii) enter into any management contract “closing agreement” as described in Section 7121 of the Code (or any similar provision of state, local or foreign Law), settle or compromise any Liability with respect to Taxes or surrender any claim for a facility not cancelable without penalty within 30 days refund of notice; Taxes, (iii) file any Tax Return except to the extent required by applicable Law and consistent with the past practices of the Company and the Company Subsidiaries and Section 11.1, or (iv) authorize consent to any extension or make waiver of the limitations period applicable to any capital expenditures claim or purchase assessment with respect of fixed assets which areTaxes, in each case, to the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for the Company and its subsidiaries, taken as a whole; provided, howeverextent such action could materially affect Buyer, the Company, or any Company -------- ------- will give Parent prior notice of Subsidiary in a taxable period (or portion thereof) ending after the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate any material contract or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder)Closing Date; (gl) increase the compensation payable or to become payable to its officers or employees, or grant any severance or termination pay to, or, except as set forth on Schedule 6.10(c)7.1, enter into amend, modify or terminate any employment or severance agreement with any directorMaterial Contracts, officer or other employee of the Company or any of its subsidiaries; except (hi) take any action, other than as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognitionany agreements regarding the Transaction Bonuses, capitalization the Liabilities under which will be treated as Current Liabilities for the purpose of development costscalculating Working Capital, payments and (ii) for any amendments or modifications to the Credit Agreement (including waivers) determined by the Company in good faith to be favorable to the Company (and which would not prevent the repayment of accounts payable all amounts thereunder, and collection of accounts receivablethe termination thereof, as contemplated by this Agreement); (im) make any material Tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign tax liability or agree to an extension of a statute of limitations for any assessment of federal income tax or material state corporate income or franchise tax, capital expenditures except to the extent the amount of any such settlement has been reserved for on the Company's most recent SEC Filings; (j) pay, discharge, settle, or satisfy any lawsuits, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice business, none of liabilities reflected which shall be in excess of $250,000 individually or reserved against $2,000,000 in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practiceaggregate; (kn) except as may be required by lawdeclare, pay or otherwise make any dividend or distribution (in cash or in any other form) to the Sellers; or (o) authorize, propose or agree in writing to take any action to establish, adopt or enter into, or to terminate or amend any Plan; (i) permit any increase in the number of employees of the Company employed by the Company on the date hereof other than pursuant to an employee plan to be agreed to by the Company and Parent as promptly as practicable after the date hereof acting reasonably and in good faith or (ii) terminate any employees of the Company identified on Schedule 6.10foregoing actions.

Conduct of Business of the Company. Except as contemplated ---------------------------------- set forth in the Disclosure Statement and as expressly agreed to in writing by this AgreementParent, during the period commencing on from the date hereof and ending at of this Agreement to the Effective Time, the Company shall, and shall cause each of its subsidiaries to, will conduct its operations according to its ordinary and usual course of business consistent with past practice, and the Company shall, and shall cause each of its subsidiaries to, will use all commercially reasonable efforts to preserve intact its business organization organization, to keep available the services of its officers and employees and to maintain satisfactory relationships with its customers, suppliers, employees distributors, customers and others having material business relationships with itit and will take no action which would adversely affect its ability to consummate the Merger or the other transactions contemplated hereby. Without limiting the generality of the foregoing, and except as otherwise expressly provided in this Agreement or the Asset Purchase Agreement, prior to the Effective Time, neither the Company nor any or its subsidiaries willwill not, without the prior written consent of Parent and except as disclosed in the ParentDisclosure Statement: (a) amend its Restated Certificate of Incorporation (or propose to amend its certificate of incorporation other applicable charter document) or byBy-lawsLaws; (b) authorize for issuance, issue, sell, pledgedeliver, deliver grant any options for, or otherwise agree or commit to issue, sell, pledge sell or deliver (whether through the issuance or granting any shares of any options, warrants, calls, subscriptions, stock appreciation rights or other rights or other agreements) any class of capital stock of any class the Company or any securities convertible into or exchangeable or exercisable for shares of capital stock of any class of the Company, capital stock or any other ownership interest (including including, but not limited to, stock appreciation rights or phantom stock) of the Company, other than shares pursuant to and in accordance with the terms of the Common Stock issuable upon exercise of Company Stock Options Equivalents outstanding on the date of this Agreementhereof and listed on Schedule 3.13; (c) split, combine or reclassify any shares of Common Stock or its capital stock, declare, pay or set aside for payment or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of any Common Stockits capital stock or purchase, or redeem, purchase redeem or otherwise acquire any shares of Common Stock or any other securities of the Company or any rights, warrants or options to acquire any such shares of other securitiesits own capital stock; (d) enter into any other agreements, commitments or contracts that are material to the Company and its subsidiaries taken as a whole or otherwise make any material change that is adverse to the Company in (i) create, incur, assume, maintain or permit to exist any existing agreement, commitment or arrangement that is material to the Company and its subsidiaries taken as a whole or (ii) the conduct of the business or operations of the Company and its subsidiaries; (e) sell, pledge, dispose of or encumber any assets of the Company long-term debt or any short-term debt for borrowed money other than under existing lines of its subsidiaries (credit and except for (i) sales of assets short-term debt incurred in the ordinary course of business and consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person; or (iii) make any loans, advances or capital contributions to, or investments in, any other person in excess of $50,000 in the aggregate (other than investments in marketable securities made in the ordinary course of business of the Company and consistent with past practice); (e) except as may be required by law, enter into, adopt or amend or terminate any bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the benefit or welfare of any current or former director, officer or employee in any manner, or (except for normal increases in salary or wages of employees who are not officers of the Company in the ordinary course of business consistent with past practice that, in the aggregate, do not result in a material increase in benefits or compensation expense to the Company, and as required under existing agreements) increase in any manner the compensation or fringe benefits of any current or former director, officer or employee or grant any severance or termination pay or pay any benefit not required by any plan, agreement, trust, fund, policy and arrangement as in effect as of the date hereof; (f) except for sales of inventory in the ordinary course of business and consistent with past practice, sell, transfer, lease or otherwise dispose of, or encumber, or agree to sell, transfer, lease, or otherwise dispose of or encumber, any assets, properties, real, personal or mixed not in excess of $50,000 individually; (g) enter into any agreements, commitments or contracts, except agreements, commitments or contracts either (i) for the purchase, sale or lease of goods or services in the ordinary course of business and consistent with past practice or (ii) dispositions of obsolete or worthless assetswhich do not, (iii) the dispositions described onindividually, and pursuant relate to the terms described in, Schedule 6.1(e) and (iv) making of payments or the sale provision of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon services for a cash purchase price consideration in excess of $3,000,000 without recourse to 50,000 over the Company ifterm of any such agreement, and only if, five days prior to such sale the chief financial officer of the Company shall have certified in writing to Parent that as of the date of this Agreement the twelve months trailing EBITDA (determined on the basis disclosed to Parent prior to the date of this Agreement) associated with such assets is $1,300,000 commitment or lesscontract; (ih) acquire authorize, recommend, propose or announce an intention to authorize, recommend or propose, or enter into any agreement in principle or an agreement with respect to, any plan of liquidation or dissolution, any acquisition (by merger, consolidation, consolidation or acquisition of stock assets or assetssecurities or any disposition of any assets or securities) of any corporation, partnership or other business organization or division thereof, except for the acquisitions described on Schedule 6.1(f); (ii) incur thereof or any indebtedness for borrowed money (other than pursuant to the Company's credit facilities as change in effect on the date of this Agreement) or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any personits capitalization, or make any loans entry into a material contract or advances; (iii) enter into any amendment or amend modification of any material contract or agreement other than any release or relinquishment of any material contract rights not in the ordinary course of business and consistent with past practice or enter into any management contract for a facility not cancelable without penalty within 30 days of notice; (iv) authorize modify or make any capital expenditures or purchase of fixed assets which are, amend the contracts between the parties referred to in the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for the Company and its subsidiaries, taken as a whole; provided, however, the Company -------- ------- will give Parent prior notice paragraph 15 of the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate any material contract or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder); (g) increase the compensation payable or to become payable to its officers or employees, or grant any severance or termination pay to, or, except as set forth on Schedule 6.10(c), enter into any employment or severance agreement with any director, officer or other employee of the Company or any of its subsidiaries; (h) take any action, other than as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable)Disclosure Letter; (i) except as previously approved by the Board of Directors of the Company prior to the date hereof and as identified to Parent prior to the date hereof, authorize or commit to make capital expenditures in any calendar month in excess of $100,000; PROVIDED, HOWEVER, that amounts not authorized or committed in any calendar month may be carried forward to future calendar months; (j) permit any material insurance policy naming the Company as a beneficiary or a loss payee to be cancelled, terminated or materially altered; (k) maintain its books and records in a manner not in the ordinary course of business and consistent with past practice; (l) enter into any hedging, option, derivative or other similar transaction; (m) change any assumption underlying, or method of calculating, any bad debt, contingency, provision or other reserve; (n) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, contingent or otherwise), other than the payment, discharge or satisfaction of liabilities in the ordinary course of business and consistent with past practice; (o) except as may be required as a result of a change in law or in generally accepted accounting principles, change any of the accounting practices or principles used by it; (p) make any material Tax tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign tax liability or agree to an extension of a statute of limitations for any assessment of federal income tax or material state corporate income or franchise tax, except to the extent the amount of any such settlement has been reserved for on the Company's most recent SEC Filingsliability; (jq) paysettle or compromise any pending or threatened suit, discharge, settle, action or satisfy any lawsuits, claims, liabilities claim which is material; (r) collect receivables or obligations (absolute, accrued, asserted pay payables or unasserted, contingent purchase inventory or otherwise)make shipments to customers, other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practice; (ks) except modify the amount spent on advertising for the Company as may be required a whole and the allocation between each of the check business and the P&C Business from the schedule related thereto previously delivered by law, take the Company to Parent; or (t) agree to do any of the foregoing or any action to establish, adopt which would make any of the representations or enter into, or to terminate or amend any Plan; (i) permit any increase in the number of employees warranties of the Company employed by the Company on contained in this Agreement untrue and incorrect as of the date hereof other than pursuant to an employee plan to be agreed to by the Company and Parent as promptly as practicable after the date hereof acting reasonably and in good faith or (ii) terminate any employees of the Company identified on Schedule 6.10when made if such action had then been taken.

Conduct of Business of the Company. Except (i) as contemplated ---------------------------------- or permitted by this Agreement, (ii) as disclosed in Section 5.1 of the Disclosure Letter or (iii) to the extent that Parent shall otherwise consent in writing, during the period commencing on from the date hereof and ending at to the earlier of the Effective TimeTime and the termination of this Agreement in accordance with its terms, the Company shall, will and shall will cause each of its subsidiaries to, Subsidiary to conduct its operations according to its in the ordinary course of business consistent with past practicepractice and, to the extent consistent therewith, and with no less diligence and effort than would be applied in the Company shallabsence of this Agreement, and shall cause each of its subsidiaries to, use all reasonable efforts seek to preserve intact its current business organization organizations, keep available the service of its current officers and to maintain satisfactory employees and preserve its relationships with customers and suppliers with the intention that its customers, suppliers, employees goodwill and others having material business relationships with itongoing businesses shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, and except (i) as otherwise expressly provided in contemplated or permitted by this Agreement, prior (ii) as disclosed in Section 5.1 of the Disclosure Letter or (iii) to the extent that Parent shall otherwise consent in writing, during the period from the date hereof to the earlier of the Effective TimeTime and the termination of this Agreement in accordance with its terms, neither the Company nor any or its subsidiaries Subsidiary will, without the prior written consent of the Parent: (a) amend its Certificate or propose to amend its certificate Articles of incorporation Incorporation or by-lawsbylaws (or other similar governing document); (b) authorize for issuance, issue, sell, pledge, deliver or agree or commit to issue, sell, pledge sell or deliver (whether through the issuance or granting of any options, warrants, callscommitments, subscriptions, stock appreciation rights to purchase or other rights or other agreementsotherwise) any capital stock of any class or any other securities convertible into (except bank loans) or exchangeable for shares of capital stock of any class of the Company, or any other ownership interest equity equivalents (including any stock options or stock appreciation rights or phantom stock) other than shares rights), except for the issuance and sale of Common Stock issuable upon exercise of Shares pursuant to Company Stock Options outstanding on granted under the date of this AgreementCompany Plans; (c) split, combine or reclassify any shares of Common Stock or its capital stock, declare, pay or set aside for payment or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, make any Common Stockother actual, constructive or deemed distribution in respect of its capital stock or otherwise make any payments to stockholders in their capacity as such, or redeem, purchase redeem or otherwise acquire any shares of Common Stock its securities or any other securities of any Subsidiary (other than the cancellation of Company Stock Options following termination of employment with or provision of services to the Company or any rights, warrants or options to acquire any such shares of other securitiesSubsidiary); (d) enter into any adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other agreements, commitments or contracts that are material to reorganization (other than the Company and its subsidiaries taken as a whole or otherwise make any material change that is adverse to the Company in (i) any existing agreement, commitment or arrangement that is material to the Company and its subsidiaries taken as a whole or (ii) the conduct of the business or operations of the Company and its subsidiariesMerger); (e) sellalter through merger, pledgeliquidation, dispose of or encumber any assets of the Company reorganization, restructuring or any other fashion the corporate structure of its subsidiaries ownership of any Subsidiary; (except for f) (i) sales incur, assume or forgive any long-term or short-term debt or issue any debt securities except for borrowings under existing lines of assets credit in the ordinary course of business consistent with past practices or trade payables arising in the ordinary course of business consistent with past practices; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person except for obligations of the Subsidiaries incurred in the ordinary course of business consistent with past practices; (iii) make any loans, advances or capital contributions to or investments in any other person (other than to the Subsidiaries or customary loans or advances to employees in each case in the ordinary course of business consistent with past practices); (iv) pledge or otherwise encumber shares of capital stock of the Company or any Subsidiary or any of the Other Interests; or (v) mortgage or pledge any of its material properties or assets, tangible or intangible, or create or suffer to exist any material Lien thereupon; (g) except as may be required by law, (i) enter into, adopt, amend in any manner or terminate any bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent or stock purchase agreement, other than offer letters, letter agreements and options to purchase Shares entered into with new hires in the ordinary course of business consistent with past practice and performance bonuses granted to employees on a manner basis consistent with the past practices of the Company; (ii) enter into, adopt, amend or terminate any pension, retirement, deferred compensation, employment, health, life or disability insurance, dependent care, severance or other employee benefit plan agreement, trust, fund or other arrangement for the benefit or welfare of any director, officer or employee, other than in the ordinary course of the Company’s business consistent with past practice, (ii) dispositions of obsolete ; or worthless assets, (iii) increase in any manner the dispositions described oncompensation or fringe benefits of any director, officer, employee or consultant or pay any benefit not required by any plan and pursuant to the terms described in, Schedule 6.1(e) and (iv) the sale of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "arrangement as is, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer of the Company shall have certified in writing to Parent that effect as of the date hereof (including the granting of this Agreement stock appreciation rights or performance units), except for normal increases in cash compensation in the twelve months trailing EBITDA ordinary course of business consistent with past practice for employees other than an employee who is party to an employment agreement; (determined on i) acquire, sell, lease, license or dispose of any assets or properties in any single transaction or series of related transactions having a fair market value in excess of One Hundred Thousand Dollars ($100,000) in the basis disclosed aggregate, other than sales or licenses of its products in the ordinary course of business consistent with past practices; (ii) enter into any exclusive license, distribution, marketing, sales or other agreement; (iii) enter into a “development services” or other similar agreement pursuant to Parent prior to which the date Company may purchase or otherwise acquire the services of this Agreementanother person, other than in the ordinary course of business consistent with past practices; (iv) associated acquire, sell, lease, license, transfer, encumber, enforce or otherwise dispose of any Company Intellectual Property, other than licenses or sales of its products or services in the ordinary course of business consistent with such past practices; or (v) knowingly, willfully or wantonly infringe upon, misappropriate or otherwise violate the rights of any third party intellectual property. (i) unless required by a change in applicable law or in GAAP, change any of the accounting principles, practices or methods used by it; (j) revalue any of its assets is $1,300,000 or lessproperties, including writing down the value of inventory or writing-off notes or accounts receivable, other than in the ordinary course of business consistent with past practices; (i) acquire (by merger, consolidation, consolidation or acquisition of stock or assets) any corporation, limited liability company, partnership or other business organization person or any division thereof, except for the acquisitions described on Schedule 6.1(f)thereof or any equity interest therein; (ii) incur enter into any indebtedness for borrowed money (other than pursuant Contract that would be material to the Company's credit facilities Company and its Subsidiaries, taken as in effect on the date of this Agreement) or issue any debt securities or assumea whole, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances; (iii) enter into or amend any material contract or agreement other than in the ordinary course of business consistent with past practices; (iii) amend, modify or enter into waive any management contract for a facility not cancelable without penalty within 30 days right under any of noticeits Material Contracts; (iv) authorize modify its standard warranty terms for its products or make services or amend or modify any capital expenditures product or purchase service warranties in effect as of fixed assets which are, the date hereof in the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for any material manner that is adverse to the Company and its subsidiaries, taken as a wholeor any Subsidiary; provided, however, the Company -------- ------- will give Parent prior notice of the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate enter into any material contract Contract that contains non-competition restrictions, including any restrictions relating to the conduct of the Company’s or amend any Subsidiary’s business or the sale of the Company’s or any Subsidiary’s products or any geographic restrictions, in any case that would prohibit or restrict the Surviving Company or any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder); (g) increase affiliates from conducting the compensation payable or to become payable to its officers or employees, or grant any severance or termination pay to, or, except as set forth on Schedule 6.10(c), enter into any employment or severance agreement with any director, officer or other employee business of the Company or any of its subsidiaries; Subsidiary as presently conducted; or (hvi) take authorize any actionnew capital expenditure, other than as required by GAAPset forth in Section 5.1 of the Disclosure Letter, up to change accounting policies or procedures or cash maintenance policies or procedures an aggregate amount equal to One Hundred Fifty Thousand Dollars (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable$150,000); (il) make or rescind any material Tax express or deemed election inconsistent with past practices or relating to Taxes, settle or compromise any material federalTax liability, stateenter into any closing or other agreement with any Tax authority, local file or foreign tax liability cause to be filed any amended Tax Return, file or cause to be filed claim for refund of Taxes previously paid or agree to an extension of a statute of limitations for with respect to the assessment or determination of Taxes; (m) fail to file any assessment Tax Returns when due, fail to cause such Tax Returns when filed to be true, correct and complete, prepare or fail to file any Tax Return of federal income tax the Company in a manner inconsistent with past practices in preparing or material state corporate income filing similar Tax Returns in prior periods, take any position, make any election or franchise taxadopt any method on such Tax Return that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods, in each case, except to the extent the amount of required by applicable law, or fail to pay any such settlement has been reserved for on the Company's most recent SEC FilingsTaxes when due; (jn) pay(i) settle or compromise any pending or threatened suit, dischargeaction or claim that (A) relates to the transactions contemplated hereby or (B) the settlement or compromise of which would require the payment by the Company or any Subsidiary of damages in excess of Fifty Thousand Dollars ($50,000), settleunless such settlement or compromise is fully covered by an insurance policy of the Company or a Subsidiary (other than with respect to any deductible), or satisfy involves any lawsuitsequitable relief or (ii) suffer to exist any suit, claimsclaim, liabilities action, proceeding or obligations investigation against the Company, any Subsidiary or any of their respective properties or assets that, if decided adversely to the Company or any such Subsidiary, would, individually or in the aggregate, result in any charge, assessment, levy, fine or other liability being imposed upon or incurred by the Company or any Subsidiary exceeding One Hundred Thousand Dollars (absolute, accrued, asserted or unasserted, contingent or otherwise$100,000), other than the paymentsuch claims, discharge actions, proceedings or satisfaction investigations that are (A) fully covered by insurance policies in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements favor of the Company and the Subsidiaries (other than with respect to any deductible) or incurred in (B) determined to be without merit by counsel mutually acceptable to Parent and the ordinary course of business and consistent with past practiceCompany; (ko) knowingly take any action that would result in a failure to maintain trading of the Shares on the NASDAQ; (p) take any action that results in the acceleration of vesting of any Company Stock Option, except as may be required pursuant to any agreement in effect as of the date hereof; (q) allow any insurance policy to be amended or terminated without replacing such policy with a policy providing at least equal coverage, insuring comparable risks and issued by law, an insurance company financially comparable to the prior insurance company; (r) take or permit any of its affiliates to take any action to establish, adopt or enter into, or to terminate or amend any Plan;that would prevent the Offer and the Merger together from qualifying as a reorganization under the provisions of Section 368(a) of the Code; or (is) permit take or agree in writing or otherwise to take any increase of the actions described in Sections 5.1(a) through 5.1(r) hereof or any action that would make any of the number of employees representations or warranties of the Company employed by contained in this Agreement untrue or incorrect in any material respect. Notwithstanding the foregoing and any other provision of this Agreement, neither Parent nor Acquisition shall have the right to control or direct the Company’s operations prior to the Effective Time. Prior to the Effective Time, the Company on shall exercise, consistent with the date hereof other than pursuant to an employee plan to be agreed to by the Company terms and Parent as promptly as practicable after the date hereof acting reasonably conditions of this Agreement, complete control and in good faith or (ii) terminate any employees of the Company identified on Schedule 6.10supervision over its operations.

Conduct of Business of the Company. Except The Company agrees that during the period from the Signing Date to the Effective Time (unless Purchaser shall otherwise agree in writing and except as otherwise contemplated ---------------------------------- by this Agreement, during the period commencing on the date hereof and ending at the Effective Time), the Company shallwill, and shall will cause each of its subsidiaries Subsidiaries to, conduct its operations according to its ordinary and usual course of business consistent with past practicepractice and, to the extent consistent therewith, with no less diligence and effort than would be applied in the Company shallabsence of this Agreement, and shall cause each of its subsidiaries to, use all reasonable efforts seek to preserve intact its current business organization and to maintain satisfactory relationships with organizations, keep available the service of its customers, supplierscurrent officers, employees and independent contractors and preserve its relationships with customers, suppliers and others having material business relationships dealings with it. Without limiting the generality of the foregoing, and except as otherwise expressly provided permitted in this Agreement, prior to the Effective Timeor as Purchaser shall otherwise agree in writing, neither the Company nor any or of its subsidiaries Subsidiaries will, without the prior written consent of the ParentPurchaser, which shall not be unreasonably withheld, delayed or conditioned: (a) amend (except for shares of Company Common Stock to be issued or propose delivered pursuant to amend its certificate (i) the Company Option Plans with respect to the exercise of incorporation options, (ii) the conversion of Company Series A Preferred, (iii) the exercise of Company Warrants, (iv) the conversion of Company Notes, or by-laws; (bv) authorize for issuancethe conversion of Seller Notes (to the extent convertible), which in each case are outstanding on the Signing Date and, in each case, together with any Company Rights issued in respect thereof and initially attached thereto) issue, deliver, sell, pledge, deliver or agree or commit to issue, selldispose of, pledge or deliver (whether through otherwise encumber, or authorize or propose the issuance issuance, sale, disposition or granting of any options, warrants, calls, subscriptions, stock appreciation rights pledge or other rights or other agreementsencumbrance of (x) any capital stock of any class or any securities convertible into or exchangeable for additional shares of capital stock of any class of (including the CompanyCompany Shares), or any other ownership interest Convertible Securities (including stock appreciation rights issuances pursuant to any of the Company Option Plans or phantom stockthe ESPP), or (y) any other than shares of Common Stock issuable upon exercise of securities in respect of, in lieu of, or in substitution for, Company Stock Options Shares outstanding on the date Signing Date; (b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any of this Agreementits outstanding Company Shares or any other outstanding Convertible Securities, provided that the Company may repurchase outstanding stock options in accordance with the terms of the Company Option Plans; (c) split, combine combine, subdivide or reclassify any shares of Common Stock Company Shares or Convertible Securities or declare, pay or set aside for payment or pay any dividend dividend, or make any other actual, constructive or deemed distribution in respect of any Common Stock, Company Shares or redeem, purchase Convertible Securities or otherwise acquire make any shares of Common Stock or any other securities payments to securityholders in their capacity as such, except for dividends by a wholly owned Subsidiary of the Company or any rights, warrants or options to acquire any such shares of other securitiesthe Company; (d) enter into any adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other agreements, commitments or contracts that are material to the Company and its subsidiaries taken as a whole or otherwise make any material change that is adverse to the Company in (i) any existing agreement, commitment or arrangement that is material to the Company and its subsidiaries taken as a whole or (ii) the conduct of the business or operations of the Company and its subsidiaries; (e) sell, pledge, dispose of or encumber any assets reorganization of the Company or any of its subsidiaries Subsidiaries not constituting an inactive Subsidiary (except for (i) sales of assets in other than the ordinary course of business and in a manner consistent with past practice, (ii) dispositions of obsolete or worthless assets, (iii) the dispositions described on, and pursuant to the terms described in, Schedule 6.1(e) and (iv) the sale of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer of the Company shall have certified in writing to Parent that as of the date of this Agreement the twelve months trailing EBITDA (determined on the basis disclosed to Parent prior to the date of this Agreement) associated with such assets is $1,300,000 or lessMerger); (ie) acquire (by adopt any amendments to its Certificate of Incorporation or Bylaws or alter through merger, consolidationliquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Subsidiary not constituting an inactive Subsidiary of the Company, except as expressly required or permitted by this Agreement; (f) make any material divestiture or acquisition, by means of merger, consolidation or otherwise, or acquisition material disposition, of stock assets or assets) any corporation, partnership or other business organization or division thereof, except for the acquisitions described on Schedule 6.1(f); securities; (iig) incur any indebtedness for borrowed money (other than pursuant to the Company's credit facilities as in effect on the date of this Agreement) or issue guarantee any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances; (iii) enter into or amend any material contract or agreement other than in the ordinary course of business or enter into any management contract for a facility not cancelable without penalty within 30 days of notice; (iv) authorize or make any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for the Company and its subsidiaries, taken as a whole; provided, however, the Company -------- ------- will give Parent prior notice of the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate any material contract or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder); (g) increase the compensation payable or to become payable to its officers or employees, or grant any severance or termination pay to, orsuch indebtedness, except as set forth on Schedule 6.10(c), enter into any employment or severance agreement with any director, officer or other employee of the Company or any of its subsidiaries; (h) take any action, other than as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable); for (i) make any material Tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign tax liability or agree to an extension of a statute of limitations indebtedness for any assessment of federal income tax or material state corporate income or franchise tax, except to the extent the amount of any such settlement has been reserved for on the Company's most recent SEC Filings; (j) pay, discharge, settle, or satisfy any lawsuits, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction borrowed money incurred in the ordinary course of business and consistent with past practice practice, (ii) indebtedness for borrowed money in replacement of liabilities reflected existing indebtedness for borrowed money on customary commercial terms, or reserved against in (iii) guarantees by the financial statements Company of indebtedness of wholly-owned Subsidiaries of the Company or guarantees by Subsidiaries of indebtedness of the Company (provided that all such guaranteed indebtedness, together with the indebtedness of the Company and its Subsidiaries incurred pursuant to clause (i) above, was incurred in the ordinary course of business and consistent with past practice); (h) make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company or any wholly owned Subsidiary of the Company in excess of $250,000 in the aggregate; (i) grant any increases in the compensation of any of its directors, officers or employees, except (i) in the ordinary course of business and consistent with past practice, (ii) as required under any Company Benefit Plan in effect on the Signing Date and set forth in the Company SEC Reports, (iii) as required under any written severance, termination or employment agreement in effect on the Signing Date, copies of which have been provided or made available to Purchaser prior to the Signing Date, or (iv) to the extent reflected in the Company Change in Control Payments; (j) pay or agree to pay any pension, retirement allowance or other employee benefit not required or contemplated by any of the existing benefit, severance, termination, pension or employment plans, agreements or arrangements as in effect on the Signing Date and provided or made available to Purchaser prior to the Signing Date; (k) except as expressly provided by this Agreement, enter into any new or materially amend any existing employment or severance or termination agreement with any director, officer or employee; (l) except as may be required to comply with applicable Law, become obligated under any new pension plan, welfare plan, multiemployer plan, employee benefit plan, severance plan, benefit arrangement, or similar plan or arrangement, which was not in existence on the Signing Date, or amend any such plan or arrangement in existence on the Signing Date if such amendment would have the effect of materially enhancing any benefits thereunder; (m) make or agree to make any material capital expenditures or material commitments not in the ordinary course of business and consistent with past practice; (kn) except as may be required by law, take any action or fail to establish, adopt take any action which could reasonably be expected to result in any of the covenants or enter into, or conditions to terminate or amend any Plan;the Merger set forth in Article VII not being satisfied; or (io) permit enter into any increase in the number of employees contract, agreement, commitment or arrangement to do any of the Company employed by the Company on the date hereof other than pursuant to an employee plan to be agreed to by the Company and Parent as promptly as practicable after the date hereof acting reasonably and in good faith or (ii) terminate any employees of the Company identified on Schedule 6.10foregoing.

Conduct of Business of the Company. Except as contemplated ---------------------------------- by this Agreement, during the period commencing on from the date hereof and ending at to the Effective Time, the Company shallwill, and shall will cause each of its subsidiaries to, conduct its operations according to its in the ordinary and usual course of business consistent with past practicepractice and, to the extent consistent therewith, with no less diligence and effort than would be applied in the Company shallabsence of this Agreement, and shall cause each of its subsidiaries to, use all reasonable efforts seek to preserve intact its current business organization organizations, seek to keep available the service of its current officers and employees and seek to maintain satisfactory preserve its relationships with its customers, suppliers, employees and others having material business relationships dealings with itit to the end that goodwill and ongoing businesses shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, and except as otherwise expressly provided in this Agreement, prior to the Effective Time, neither the Company nor any or of its subsidiaries will, without the prior written consent of the Parent: (a) amend or propose to amend its certificate of incorporation or by-lawsbylaws (or other similar organizational or governing instrument); (b) authorize for issuance, issue, sell, pledgedeliver, deliver or agree or commit to issue, sell, pledge or deliver (whether through the issuance or granting of any options, warrants, callscommitments, subscriptions, stock appreciation rights to purchase, or other rights or other agreementsotherwise) any capital stock of any class or any other securities convertible into or exchangeable for any stock or any equity equivalents (including any stock options or stock appreciation rights), except for (i) the issuance or sale of Shares pursuant to outstanding Company Stock Options or Company Warrants or the Company Stock Purchase Plan and (ii) the repurchase by the Company of all of the outstanding shares of capital stock of any class of its German Subsidiary not owned by the Company, or any other ownership interest (including stock appreciation rights or phantom stock) other than shares of Common Company pursuant to the Subsidiary Stock issuable upon exercise of Company Stock Options outstanding on the date of this Purchase Agreement; (c) (i) split, combine combine, or reclassify any shares of Common Stock or its capital stock; (ii) declare, pay or set aside for payment or pay any dividend or other distribution (whether in cash, stock, or property or any combination thereof) in respect of its capital stock; (iii) make any other actual, constructive, or deemed distribution in respect of any Common Stock, or redeem, purchase or otherwise acquire any shares of Common Stock or any other securities of the Company or any rights, warrants or options to acquire any such shares of other securities; (d) enter into any other agreements, commitments or contracts that are material to the Company and its subsidiaries taken as a whole capital stock or otherwise make any material change that is adverse to the Company in (i) any existing agreement, commitment or arrangement that is material to the Company and its subsidiaries taken as a whole or (ii) the conduct of the business or operations of the Company and its subsidiaries; (e) sell, pledge, dispose of or encumber any assets of the Company or any of its subsidiaries (except for (i) sales of assets in the ordinary course of business and in a manner consistent with past practice, (ii) dispositions of obsolete or worthless assets, (iii) the dispositions described on, and pursuant to the terms described in, Schedule 6.1(e) and (iv) the sale of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer of the Company shall have certified in writing to Parent that as of the date of this Agreement the twelve months trailing EBITDA (determined on the basis disclosed to Parent prior to the date of this Agreement) associated with such assets is $1,300,000 or less; (i) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, except for the acquisitions described on Schedule 6.1(f); (ii) incur any indebtedness for borrowed money (other than pursuant to the Company's credit facilities as in effect on the date of this Agreement) or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances; (iii) enter into or amend any material contract or agreement other than in the ordinary course of business or enter into any management contract for a facility not cancelable without penalty within 30 days of notice; (iv) authorize or make any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for the Company and its subsidiaries, taken as a whole; provided, however, the Company -------- ------- will give Parent prior notice of the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate any material contract or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder); (g) increase the compensation payable or to become payable to its officers or employees, or grant any severance or termination pay to, or, except as set forth on Schedule 6.10(c), enter into any employment or severance agreement with any director, officer or other employee of the Company or any of its subsidiaries; (h) take any action, other than as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable); (i) make any material Tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign tax liability or agree to an extension of a statute of limitations for any assessment of federal income tax or material state corporate income or franchise tax, except to the extent the amount of any such settlement has been reserved for on the Company's most recent SEC Filings; (j) pay, discharge, settle, or satisfy any lawsuits, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practice; (k) except as may be required by law, take any action to establish, adopt or enter into, or to terminate or amend any Plan; (i) permit any increase in the number of employees of the Company employed by the Company on the date hereof other than pursuant to an employee plan to be agreed to by the Company and Parent as promptly as practicable after the date hereof acting reasonably and in good faith or (ii) terminate any employees of the Company identified on Schedule 6.10payments

Conduct of Business of the Company. Except as contemplated ---------------------------------- by this AgreementAgreement or as expressly agreed to in writing by Acquirer, during the period commencing on from the date hereof of this Agreement to the earlier of the termination of this Agreement in accordance with Article IX (the "TERMINATION DATE") and ending at the Effective Time, each of the Company shall, and shall cause each of its subsidiaries to, Subsidiaries will conduct its operations according to its ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its subsidiaries to, will use all commercially reasonable efforts to preserve intact its business organization organization, to keep available the services of its officers and employees and to maintain satisfactory relationships with its customers, suppliers, employees distributors, customers and others having material business relationships with itit and will take no action which would materially adversely affect the ability of the parties to consummate the transactions contemplated by this Agreement. Without limiting the generality of the foregoing, and except as otherwise expressly provided in this Agreement, prior to earlier of the Termination Date and the Effective Time, neither the Company will not nor will it permit any or of its subsidiaries willSubsidiaries to, without the prior written consent of the ParentAcquirer: (a) amend or propose to amend its certificate of incorporation or by-laws; (b) authorize for issuance, issue, sell, pledgedeliver, deliver grant any options for, or otherwise agree or commit to issue, sell, pledge sell or deliver (whether through the issuance or granting of any options, warrants, calls, subscriptions, stock appreciation rights or other rights or other agreements) any capital stock shares of any class of its capital stock or any securities convertible into or exchangeable for shares of capital stock of any class of its capital stock, except (i) pursuant to and in accordance with the Companyterms of currently outstanding convertible securities and options, or any other ownership interest and (including stock appreciation rights or phantom stockii) other than shares of Common Stock issuable upon exercise of options granted under the Company Stock Options outstanding on Option Plans, in the date ordinary course of this Agreementbusiness consistent with past practice (but in no event shall options be granted covering more than 5,000 Company Shares per individual or 100,000 Company Shares in the aggregate); (c) split, combine or reclassify any shares of Common Stock or its capital stock, declare, pay or set aside for payment or pay any dividend or other distribution (whether in cash, stock or property (including stock of any Subsidiary) or any combination thereof) in respect of any Common Stockits capital stock or purchase, or redeem, purchase redeem or otherwise acquire any shares of Common Stock its own capital stock or any of its Subsidiaries, other securities than the repurchase at cost of shares of employees upon termination of their employment with the Company or any rights, warrants or options to acquire any such shares of other securitiesits Subsidiaries; (d) enter into any other agreements, commitments or contracts that are material to the Company and its subsidiaries taken as a whole or otherwise make any material change that is adverse to the Company in (i) any existing agreement, commitment or arrangement that is material to the Company and its subsidiaries taken as a whole or (ii) the conduct of the business or operations of the Company and its subsidiaries; (e) sell, pledge, dispose of or encumber any assets of the Company or any of its subsidiaries (except for (i) sales of assets in the ordinary course of business and in a manner business, consistent with past practicepractice (i) create, (ii) dispositions incur, assume, maintain or permit to exist any long-term debt or any short-term debt for borrowed money other than under existing lines of obsolete or worthless assetscredit, (iii) except for any loans to be made by Acquirer to the dispositions described on, and Company pursuant to the terms described in, Schedule 6.1(e) and (iv) the sale of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer of the Company shall have certified in writing to Parent that Credit Agreement dated as of the date of this Agreement the twelve months trailing EBITDA (determined on the basis disclosed to Parent prior to the date of this Agreement) associated with such assets is $1,300,000 or less; (i) acquire (by mergerJune 11, consolidation1999, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, except for the acquisitions described on Schedule 6.1(f)as amended; (ii) incur any indebtedness for borrowed money (other than pursuant to the Company's credit facilities as in effect on the date of this Agreement) or issue any debt securities or assume, guarantee or guarantee, endorse or otherwise as an accommodation become liable or responsible for(whether directly, contingently or otherwise) for the obligations of any person, or make any loans or advances; (iii) enter into or amend any material contract or agreement other than in the ordinary course of business or enter into any management contract for a facility not cancelable without penalty within 30 days of notice; (iv) authorize or make any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for the Company and person except its subsidiaries, taken as a whole; provided, however, the Company -------- ------- will give Parent prior notice of the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate any material contract or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder); (g) increase the compensation payable or to become payable to its officers or employees, or grant any severance or termination pay to, or, except as set forth on Schedule 6.10(c), enter into any employment or severance agreement with any director, officer or other employee of the Company or any of its subsidiaries; (h) take any action, other than as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable); (i) make any material Tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign tax liability or agree to an extension of a statute of limitations for any assessment of federal income tax or material state corporate income or franchise tax, except to the extent the amount of any such settlement has been reserved for on the Company's most recent SEC Filings; (j) pay, discharge, settle, or satisfy any lawsuits, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction wholly owned Subsidiaries in the ordinary course of business and consistent with past practice of liabilities reflected practices; or reserved against in the financial statements of the Company (iii) make any loans, advances or incurred capital contributions to, or investments in, any other person; (e) except as otherwise expressly contemplated by this Agreement or in the ordinary course of business business, consistent with past practice, (i) increase in any manner the compensation of any of its directors, officers or other employees; (ii) pay or agree to pay any pension, retirement allowance or other employee benefit not required, or enter into or agree to enter into any agreement or arrangement with such director, officer or employee, whether past or present, relating to any such pension, retirement allowance or other employee benefit, except as required under currently existing agreements, plans or arrangements; (iii) grant any severance or termination pay to, or enter into any employment or severance agreement with any of its directors, officers or other employees; or (iv) except as may be required to comply with applicable law, become obligated (other than pursuant to any new or renewed collective bargaining agreement) under any new pension plan, welfare plan, multiemployer plan, employee benefit plan, benefit arrangement, or similar plan or arrangement, which was not in existence on the date hereof, including any bonus, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other benefit plan, agreement or arrangement, or employment or consulting agreement with or for the benefit of any person, and to amend any of such plans or any of such agreements in existence on the date hereof; (f) except as otherwise expressly contemplated by this Agreement and except with respect to commitments or liabilities incurred in connection with this Agreement and the transactions contemplated hereby, including the incurrence of legal, accounting and investment banking fees and expenses, enter into any other material agreements, commitments or contracts, other than agreements, commitments or contracts for the purchase, sale or lease of goods or services in the ordinary course of business, consistent with past practice; (kg) except in the ordinary course of business, consistent with past practice, or as may be required contemplated by lawthis Agreement authorize, take any action recommend, propose or announce an intention to establishauthorize, adopt recommend or propose, or enter intointo any agreement in principle or an agreement with respect to, any plan of liquidation or dissolution, any acquisition of a material amount of assets or securities, any sale, transfer, lease, license, pledge, mortgage, or to terminate other disposition or amend encumbrance of a material amount of assets or securities or any Plan;material change in its capitalization, or any entry into a material contract or any amendment or modification of any material contract or any release or relinquishment of any material contract rights; or (ih) permit agree to do any increase in the number of employees of the Company employed by the Company on the date hereof other than pursuant to an employee plan to be agreed to by the Company and Parent as promptly as practicable after the date hereof acting reasonably and in good faith or (ii) terminate any employees of the Company identified on Schedule 6.10foregoing.

Conduct of Business of the Company. Except as contemplated ---------------------------------- by this Agreement, during During the period commencing on from the date hereof of this Agreement and ending at continuing until the Effective Timeearlier of the termination of this Agreement and the Closing, the Company shallwill (except to the extent that Parent shall otherwise consent in writing) carry on its business in the usual and ordinary course in substantially the same manner as heretofore conducted, pay its debts and Taxes when due, pay or perform other obligations when due, and shall cause each use its commercially reasonable efforts consistent with past practice and policies to preserve intact its present business organization, keep available the services of its subsidiaries topresent officers and the Key Employees and preserve its relationships with customers, conduct its operations according to its suppliers, distributors, licensors, licensees, and others having business dealings with it. Without limiting the foregoing and except as expressly set forth on Schedule 5.1, the Company shall not without the prior written consent of Parent: (a) make any payments or enter into any commitment or transaction outside of the ordinary course of business consistent with past prior practice or waive or release any right or claim outside the ordinary course of business or inconsistent with prior practice, and the Company shall, and shall cause each of its subsidiaries to, use all reasonable efforts to preserve intact its business organization and to maintain satisfactory relationships with its customers, suppliers, employees and others having material business relationships with it. Without limiting the generality of the foregoing, and except as otherwise expressly provided in this Agreement, prior to the Effective Time, neither the Company nor any or its subsidiaries will, without the prior written consent of the Parent: (a) amend or propose to amend its certificate of incorporation or by-laws; (b) authorize for issuance, issue, sell, pledgegrant, deliver or agree or commit to issue, sell, pledge or deliver (whether through authorize or propose the issuance issuance, grant, delivery or granting of any options, warrants, calls, subscriptions, stock appreciation rights or other rights or other agreements) any capital stock of any class or any securities convertible into or exchangeable for shares of capital stock of any class of the Companysale of, or purchase or propose the purchase of, any other ownership interest (including stock appreciation rights or phantom stock) other than shares of Common Stock issuable upon exercise of Company Stock Options outstanding on the date of this AgreementSecurity; (c) split, combine re-price or reclassify any shares of Common Stock or declare, pay or set aside for payment any dividend or other distribution in respect amend the terms of any Common StockSecurity Right or the terms of any agreement with respect to Company Securities, or redeem, purchase or otherwise acquire any shares including accelerating the vesting thereof; provided that the cancellation of Common Stock or any other securities Options and the payment of the Company or any rights, warrants or options to acquire any such shares of other securitiesOption Expenses incurred in connection therewith shall be excluded from this subclause (c)); (d) enter into acquire or agree to acquire by merging or consolidating with, or by purchasing any assets or equity securities of, or by any other agreementsmanner, commitments any business or contracts that are material to the Company and its subsidiaries taken as a whole any Person or division thereof, or otherwise make any material change that is adverse acquire or agree to the Company in (i) any existing agreement, commitment or arrangement that is material to the Company and its subsidiaries taken as a whole or (ii) the conduct acquire outside of the ordinary course of business or operations of the Company and its subsidiariesconsistent with prior practice any assets in any amount; (e) sellhire or engage any employees, pledgeconsultants or contractors, dispose or encourage any Employees, consultants or contractors to resign from the Company, or promote any Employees or change the employment status or titles of or encumber any assets of the Company or any of its subsidiaries (Employees, except for (i) sales the hiring or promotion of assets employees or engagements of consultants or contractors in the ordinary course of business and in a manner consistent with past practiceat compensation rates comparable to other Employees, (ii) dispositions of obsolete consultants or worthless assets, (iii) the dispositions described on, and pursuant to the terms described in, Schedule 6.1(e) and (iv) the sale of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer of the Company shall have certified in writing to Parent that as of the date of this Agreement the twelve months trailing EBITDA (determined on the basis disclosed to Parent prior to the date of this Agreement) associated with such assets is $1,300,000 or lesscontractors at similar levels; (if) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, except for the acquisitions described on fail to use commercially reasonable efforts to keep in full force all insurance policies listed in Schedule 6.1(f); (ii) incur any indebtedness for borrowed money (other than pursuant to the Company's credit facilities as in effect on the date of this Agreement) or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances; (iii) enter into or amend any material contract or agreement other than in the ordinary course of business or enter into any management contract for a facility not cancelable without penalty within 30 days of notice; (iv) authorize or make any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for the Company and its subsidiaries, taken as a whole; provided, however, the Company -------- ------- will give Parent prior notice of the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate any material contract or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder)2.21; (g) increase the compensation payable or to become payable to its officers or employees, or grant any severance or termination pay to, or, except as set forth on Schedule 6.10(c), enter into any employment agreement (i) pursuant to which the Company makes representations or severance agreement with warranties or assumes support or indemnification obligations that are materially more burdensome on the Company than the representations, warranties and support and indemnification obligations made in the Company’s standard form of services agreement, or (ii) that contains any director, officer or other employee provision relating to the “change of control” of the Company or any of its subsidiariesthat would constitute a Change in Control Agreement; (h) take any actionaction that would have been a breach of, other than as required by GAAPor would reasonably be expected to cause a breach of, any of the provisions of Section 2.9 (except the taking of any action described in Sections 2.9(k), (m) and (n) in the ordinary course of business, consistent with prior practice) had such action occurred after the date of this Agreement and prior to change accounting policies or procedures or cash maintenance policies or procedures the Closing (including, without limitation, procedures with respect regard to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivabledisclosures on the Disclosure Schedule); (i) make incur any material Tax election inconsistent Indebtedness, draw down or borrow any amounts under any existing agreements with past practices respect to Indebtedness, guarantee any Indebtedness of any Person, issue or settle sell any debt securities of the Company or compromise purchase or guarantee any material federal, state, local or foreign tax liability or agree to an extension debt securities of a statute of limitations for any assessment of federal income tax or material state corporate income or franchise taxothers, except for advances to the extent the amount of any such settlement has been reserved Employees for on the Company's most recent SEC Filings; (j) pay, discharge, settle, or satisfy any lawsuits, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction travel and business expenses in the ordinary course of business and consistent with past practice of liabilities reflected prior practice; (j) use any Cash at any time to make any voluntary prepayment or reserved against other non-mandatory payment of, or in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practicerespect of, any Lien; (k) except as may be required by lawfail to timely pay any Taxes or timely file any Tax Returns, take make or change any action to establishelection in respect of Taxes or change any Tax accounting period, adopt or request permission of any Tax Authority to change any accounting method in respect of Taxes, enter intointo any closing agreement in respect of Taxes, settle any claim or assessment in respect of Taxes, surrender or allow to expire any right to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, or to terminate make any application for, negotiate or amend any Planconclude a Tax ruling or arrangement with a Tax Authority; (il) permit make any increase Distribution; or (m) take, or agree in the number of employees writing or otherwise to take, any of the Company employed by actions described in Sections 5.1(a) through (l) above, or any other action that would prevent the Company on the date hereof other than pursuant to an employee plan to be agreed to by from performing or cause the Company and Parent as promptly as practicable after the date hereof acting reasonably and in good faith or (ii) terminate any employees of the Company identified on Schedule 6.10not to perform its obligations hereunder.

Conduct of Business of the Company. Except as contemplated ---------------------------------- by this AgreementAgreement or as described in Section 5.1 of the Company Disclosure Schedule, during the period commencing on from the date hereof and ending at until the Effective Timedate Parent's designees constitute a majority of the Company Board, the Company shall, will and shall will cause each of its subsidiaries to, to use commercially reasonable efforts to (a) conduct its operations according to its in the ordinary course of business consistent with past practice, practice and with no less diligence and effort than would be applied in the Company shall, absence of this Agreement and shall cause each of its subsidiaries to, use all reasonable efforts to (b) preserve intact its current business organization organizations, keep available the service of its current key officers and to maintain satisfactory employees and preserve its relationships with its key customers, suppliers, employees lessors, creditors, employees, contractors and others having material business relationships dealings with itit with the intention that its goodwill and ongoing businesses shall not be materially adversely impaired at the Effective Time. Without limiting the generality of the foregoing, and except as otherwise expressly provided in this AgreementAgreement or in Section 5.1 of the Company Disclosure Schedule, prior to the Effective Timedate Parent's designees constitute a majority of the Company Board, neither the Company nor any or of its subsidiaries willsubsidiaries, without the prior written consent of the ParentParent (which consent shall not be unreasonably withheld), will: (a) amend its Certificate of Incorporation or propose to amend its certificate of incorporation bylaws (or by-lawsother similar governing instrument); (b) authorize for issuance, issue, sell, pledge, deliver or agree or commit to issue, sell, pledge sell or deliver (whether through the issuance or granting of any options, warrants, callscommitments, subscriptions, stock appreciation rights to purchase or other rights or other agreementsotherwise) any capital stock of any class or any other debt or equity securities convertible into or exchangeable for shares of capital stock of any class of the Company, or any other ownership interest equity equivalents (including any stock options or stock appreciation rights or phantom stockrights) other than shares except for the issuance and sale of Common Stock issuable upon exercise of Shares pursuant to Company Stock Options outstanding on the date of this Agreementhereof; (c) split, combine or reclassify any shares of Common Stock or its capital stock, declare, pay or set aside for payment or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, make any Common Stockother actual, constructive or deemed distribution in respect of its capital stock or otherwise make any payment to stockholders in their capacity as such, or redeem, purchase redeem or otherwise acquire any shares of Common Stock its securities or any other securities of any of its subsidiaries, except as may be required on the date hereof under the terms of any Company Stock Option or any rights, warrants or options to acquire any such shares of other securitiesSAR; (d) enter into any adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other agreements, commitments or contracts that are material to the Company and its subsidiaries taken as a whole or otherwise make any material change that is adverse to the Company in (i) any existing agreement, commitment or arrangement that is material to the Company and its subsidiaries taken as a whole or (ii) the conduct of the business or operations of the Company and its subsidiaries; (e) sell, pledge, dispose of or encumber any assets reorganization of the Company or any of its subsidiaries (except for other than the Merger); (e) alter through merger, liquidation, reorganization, restructuring or any other fashion the corporate structure of any material subsidiary (other than as a result of the transactions contemplated by this Agreement); (f) (i) sales incur or assume any long-term or short-term debt or issue any debt securities except, in each case, for borrowings under existing lines of assets credit in the ordinary course of business and in a manner consistent with past practice, or modify or agree to any material amendment of the terms of any of the foregoing; (ii) dispositions assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of obsolete or worthless assetsany other person except for obligations of subsidiaries of the Company incurred in the ordinary course of business consistent with past practice, other than third-party guarantees and lease agreements not to exceed $250,000 in the aggregate; (iii) make any loans, advances or capital contributions to or investments in any other person (other than to subsidiaries of the dispositions described on, and pursuant Company or customary loans or advances to employees in each case in the terms described in, Schedule 6.1(e) and ordinary course of business consistent with past practice); (iv) the sale pledge or otherwise subject to any Lien shares of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer capital stock of the Company shall have certified or any of its subsidiaries; or (v) mortgage or pledge any of its material assets, tangible or intangible, or create or suffer to exist any material Lien thereupon; (g) except as may be required by Applicable Law or any policy, plan, agreement or arrangement in writing to Parent that effect as of the date hereof, enter into, adopt or amend or terminate any bonus, special remuneration, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase agreement, pension, retirement, deferred compensation, employment, health, life or disability insurance, dependent care, severance or other employee benefit plan, agreement, trust, fund or other arrangement for the benefit or welfare of this Agreement any director, officer, employee or consultant or materially increase the twelve months trailing EBITDA compensation or fringe benefits of any director, officer or employee or pay any benefit not required by any plan and arrangement as in effect as of the date hereof (determined including the granting of stock appreciation rights or performance units); (h) except as may be required by Applicable Law, grant any severance or termination pay to any director, officer, employee or consultant, except payments made pursuant to written agreements outstanding on the basis disclosed to Parent prior to date hereof or the current severance policies of the Company described on Section 3.10(a) of the Company Disclosure Schedule; (i) except as provided in any policy, plan, agreement or other arrangement in effect as of the date hereof, accelerate the vesting of this Agreementany Company Stock Option as a result of the Merger, any other "change in control" of the Company or otherwise; (i) associated sell, lease, license, transfer or otherwise dispose of any material assets in any single transaction or series of related transactions (including in any transaction or series of related transactions having a fair market value in excess of $250,000 in the aggregate) or (ii) enter into any exclusive license, distribution, marketing, sales or other agreement other than in the ordinary course of business; (k) except as may be required as a result of a change in law or in generally accepted accounting principles, change any of the accounting principles, practices or methods used by it; (l) revalue in any material respect any of its assets, including writing-off notes or accounts receivable, other than in the ordinary course of business consistent with such assets is $1,300,000 past practice or lessas required by generally accepted accounting principles; (i) acquire (by merger, consolidation, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization person or division thereof, except for the acquisitions described on Schedule 6.1(f)thereof or any material equity interest therein; (ii) incur any indebtedness for borrowed money (other than pursuant to the Company's credit facilities as in effect on the date of this Agreement) or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances; (iii) enter into or amend any material contract or agreement other than in the ordinary course of business or enter into any management contract for a facility not cancelable without penalty within 30 days of notice; (iv) authorize or make any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for that would be material to the Company and its subsidiaries, taken as a whole; provided(iii) amend, however, the Company -------- ------- will give Parent prior notice of the making modify or the firm commitment of capital expenditure or lease payment in waive any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate material right under any material contract or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder); (g) increase the compensation payable or to become payable to its officers or employees, or grant any severance or termination pay to, or, except as set forth on Schedule 6.10(c), enter into any employment or severance agreement with any director, officer or other employee of the Company or any of its subsidiaries; (iv) modify its standard warranty or contract terms for its services or amend or modify any warranties or contract terms in effect as of the date hereof in any material manner that is adverse to the Company or any of its subsidiaries; (v) authorize any new capital expenditure or expenditures that in the aggregate are in excess of $250,000; or (vi) acquire any asset or related group of assets, or make any investment, in a single transaction or series of related transactions, with a cost in excess of $250,000; (h) take any action, other than as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable); (in) make any material Tax tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign income tax liability or agree permit any insurance policy naming it as a beneficiary or loss-payee to an extension of expire, or to be canceled or terminated, unless a statute of limitations for any assessment of federal income tax or material state corporate income or franchise tax, except comparable insurance policy reasonably acceptable to the extent the amount of any such settlement has been reserved for on the Company's most recent SEC FilingsParent is obtained and in effect; (jo) payfail to file any material Tax Returns when due (or, dischargealternatively, settle, fail to file for available extensions) or satisfy any lawsuits, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction fail to cause such Tax Returns when filed to be complete and accurate in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practiceall material respects; (kp) except as may be required by law, take fail to pay any action to establish, adopt material Taxes or enter into, or to terminate or amend any Planother material debts when due; (q) settle or compromise any pending or threatened suit, action or claim that (i) permit any increase in relates to the number of employees of the Company employed by the Company on the date hereof other than pursuant to an employee plan to be agreed to by the Company and Parent as promptly as practicable after the date hereof acting reasonably and in good faith transactions contemplated hereby or (ii) terminate the settlement or compromise of which would involve more than $250,000 or that would otherwise have a Material Adverse Effect on the Company; or (r) take or agree in writing or otherwise to take any employees of the actions described in Sections 5.1(a) through 5.1(q) or any action that would make any of the representations or warranties of the Company identified on Schedule 6.10contained in this Agreement to be untrue or incorrect in any material respect.

Conduct of Business of the Company. Except as for matters permitted or contemplated ---------------------------------- by this Agreement, during set forth on Section 5.01 of the period commencing on Seller Disclosure Schedule or as required by applicable Law, unless Buyer otherwise agrees in writing, from the date hereof of this Agreement to the Closing, Xx. Xxxxxx and ending at the Effective Time, Seller shall cause the Company shall, and shall cause each of its subsidiaries to, to conduct its operations according to its business in the ordinary course of business consistent with past practicepractices. In addition, and the Company shall, and shall cause each of its subsidiaries to, use all reasonable efforts to preserve intact its business organization and to maintain satisfactory relationships with its customers, suppliers, employees and others having material business relationships with it. Without without limiting the generality of the foregoing, and except as otherwise expressly provided in for matters permitted or contemplated by this Agreement, prior set forth on Section 5.01 of the Seller Disclosure Schedule or required by applicable Law, from the date of this Agreement to the Effective TimeClosing, neither the Xx. Xxxxxx and the Seller shall not permit the Company nor to do take any or its subsidiaries will, of the following without the prior written consent of the ParentBuyer, such consent not to be unreasonably withheld or delayed or conditioned: (a) amend (i) declare, set aside or propose to amend its certificate of incorporation or by-laws; (b) authorize for issuance, issue, sell, pledge, deliver or agree or commit to issue, sell, pledge or deliver make any distributions (whether through in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the issuance or granting of voting of, any options, warrants, calls, subscriptions, stock appreciation rights or other rights or other agreements) any capital stock of any class or any securities convertible into or exchangeable for shares of capital stock of any class of membership interests in the Company, or any other ownership interest ; (including stock appreciation rights or phantom stock) other than shares of Common Stock issuable upon exercise of Company Stock Options outstanding on the date of this Agreement; (cii) split, combine or reclassify any shares of Common Stock the membership interests in the Company; (iii) issue or declare, pay or set aside for payment authorize the issuance of any dividend or other distribution securities in respect of, in lieu of any Common Stockor in substitution for, membership interests in the Company; or redeem(iv) purchase, purchase redeem or otherwise acquire any shares of Common Stock membership interests in the Company or any other securities of the Company thereof or any rights, options, warrants or options calls to acquire any such shares securities; (b) issue, deliver, sell, grant, pledge, transfer or otherwise encumber or dispose of or subject to any Encumbrance (i) any of the Company’s membership interests, (ii) any of its other voting securities, (iii) any securities convertible into or exchangeable for, or any options, warrants or rights to acquire, any such membership interests or voting securities or convertible or exchangeable securities or (iv) any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units; (c) amend its organizational documents; (d) enter into acquire any stock, other equity interest or assets (including real property) of any other agreements, commitments or contracts that are material to the Company and its subsidiaries taken as Person (in connection with a purchase of such Person’s business whether in whole or otherwise make any material change that is adverse to the Company in (i) any existing agreementpart), commitment whether by purchase of stock, purchase of assets, merger, consolidation, or arrangement that is material to the Company and its subsidiaries taken as a whole or (ii) the conduct of the business or operations of the Company and its subsidiariesotherwise; (e) pledge, transfer, sell, pledgelease, license, otherwise dispose of or encumber subject to any assets Lien, any of the Company Property; (f) enter into any Contract or incur any of its subsidiaries (except for (i) sales of assets in the ordinary course of business and in a manner consistent with past practice, Liability whatsoever or (ii) dispositions of obsolete make any loans, advances or worthless assetscapital contributions to, (iii) the dispositions described on, and pursuant to the terms described or investments in, Schedule 6.1(e) and (iv) the sale of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer of the Company shall have certified in writing to Parent that as of the date of this Agreement the twelve months trailing EBITDA (determined on the basis disclosed to Parent prior to the date of this Agreement) associated with such assets is $1,300,000 or less; (i) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, except for the acquisitions described on Schedule 6.1(f); (ii) incur any indebtedness for borrowed money (other than pursuant to the Company's credit facilities as in effect on the date of this Agreement) or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances; (iii) enter into or amend any material contract or agreement other than in the ordinary course of business or enter into any management contract for a facility not cancelable without penalty within 30 days of notice; (iv) authorize or make any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for the Company and its subsidiaries, taken as a whole; provided, however, the Company -------- ------- will give Parent prior notice of the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate any material contract or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder)Person; (g) increase the compensation payable adopt a plan or to become payable to its officers or employeesagreement of, or grant any severance resolutions providing for or termination pay toauthorizing, orcomplete or partial liquidation, except as set forth on Schedule 6.10(c)dissolution, enter into any employment or severance agreement with any directormerger, officer consolidation, restructuring, recapitalization or other employee reorganization of the Company or any of its subsidiariesCompany; (h) take institute, settle, or agree to settle any actionProceeding pending or threatened before any arbitrator, court or other than as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable);Governmental Entity; or (i) make any material Tax election inconsistent with past practices or settle or compromise any material federalauthorize, state, local or foreign tax liability commit or agree to an extension of a statute of limitations for take any assessment of federal income tax or material state corporate income or franchise tax, except to the extent the amount of any such settlement has been reserved for on the Company's most recent SEC Filings; (j) pay, discharge, settle, or satisfy any lawsuits, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practice; (k) except as may be required by law, take any action to establish, adopt or enter into, or to terminate or amend any Plan; (i) permit any increase in the number of employees of the Company employed by the Company on the date hereof other than pursuant to an employee plan to be agreed to by the Company and Parent as promptly as practicable after the date hereof acting reasonably and in good faith or (ii) terminate any employees of the Company identified on Schedule 6.10foregoing actions.

Conduct of Business of the Company. Except as contemplated ---------------------------------- by this Agreement, during the period commencing on from the date hereof and ending at to the Effective Time, the Company shallwill, and shall will cause each of its subsidiaries to, conduct its operations according to its in the ordinary and usual course of business consistent with past practicepractice and, to the extent consistent therewith, with no less diligence and effort than would be applied in the Company shallabsence of this Agreement, and shall cause each of its subsidiaries to, use all reasonable efforts seek to preserve intact its current business organization organizations, seek to keep available the service of its current officers and employees and seek to maintain satisfactory preserve its relationships with its customers, suppliers, employees suppliers and others having material business relationships dealings with itit to the end that goodwill and ongoing businesses shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, and except as otherwise expressly provided in this AgreementAgreement or in the Company Disclosure Schedule, prior to the Effective Time, neither the Company nor any or of its subsidiaries will, without the prior written consent of the Parent: (a) amend or propose to amend its certificate of incorporation or by-lawsbylaws (or other similar governing instrument) or amend, modify or terminate the Company Rights Agreement; (b) authorize for issuance, issue, sell, pledge, deliver or agree or commit to issue, sell, pledge sell or deliver (whether through the issuance or granting of any options, warrants, callscommitments, subscriptions, stock appreciation rights to purchase or other rights or other agreementsotherwise) any capital stock of any class or any other securities convertible into or exchangeable for shares of capital any stock of any class of the Company, or any other ownership interest equity equivalents (including including, without limitation, any stock options or stock appreciation rights rights), except for (i) the issuance or phantom stock) other than shares sale of Common Stock issuable upon exercise of Shares pursuant to outstanding Company Stock Options or (ii) the issuance or sale of Shares pursuant to the outstanding on the date of this AgreementWarrant; (c) (i) split, combine or reclassify any shares of Common Stock or its capital stock; (ii) declare, pay or set aside for payment or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock; (iii) make any other actual, constructive or deemed distribution in respect of any Common Stock, shares of its capital stock or otherwise make any payments to stockholders in their capacity as such; or (iv) redeem, purchase repurchase or otherwise acquire any shares of Common Stock its securities or any securities of any of its subsidiaries (including redeeming any Rights); (d) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other securities reorganization of the Company or any rights, warrants or options to acquire any such shares of its subsidiaries (other securitiesthan the Merger); (de) enter into alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any subsidiary; (f) (i) incur or assume any long-term or short-term debt or issue any debt securities, except for borrowings under existing lines of credit in the ordinary and usual course of business consistent with past practice and in amounts not material to the Company and its subsidiaries taken as a whole; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary and usual course of business consistent with past practice and in amounts not material to the Company and its subsidiaries, taken as a whole, and except for obligations of the wholly owned subsidiaries of the Company; (iii) make any loans, advances or capital contributions to, or investments in, any other person (other than to the wholly owned subsidiaries of the Company or customary loans or advances to employees in the ordinary and usual course of business consistent with past practice and in amounts not material to the maker of such loan or advance); (iv) pledge or otherwise encumber shares of capital stock of the Company or its subsidiaries; or (v) mortgage or pledge any of its material assets, tangible or intangible, or create or suffer to exist any material Lien thereupon; (g) except as may be required by Law or as contemplated by this Agreement, enter into, adopt or amend or terminate any bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund, award or other arrangement for the benefit or welfare of any director, officer or employee in any manner, or (except as set forth in Section 6.1(g) of the Company Disclosure Schedule, and as required under existing agreements) increase in any manner the compensation or fringe benefits of any director, commitments officer or contracts that employee or pay any benefit not required by any plan and arrangement as in effect as of the date hereof (including, without limitation, the granting of stock appreciation rights or performance units); (h) acquire, sell, lease or dispose of any assets outside the ordinary and usual course of business consistent with past practice or any assets which in the aggregate are material to the Company and its subsidiaries taken as a whole whole, enter into any commitment or otherwise make transaction outside the ordinary and usual course of business consistent with past practice or grant any material change that is adverse to the Company in exclusive distribution rights; (i) any existing agreement, commitment or arrangement that is material to the Company and its subsidiaries taken except as may be required as a whole result of a change in Law or (ii) the conduct in GAAP, change any of the business accounting principles or operations of the Company and its subsidiariespractices used by it; (ej) sell, pledge, dispose of or encumber revalue in any assets of the Company or material respect any of its subsidiaries (except for (i) sales assets, including, without limitation, writing down the value of assets inventory or writing-off notes or accounts receivable other than in the ordinary and usual course of business and in a manner consistent with past practice, (ii) dispositions of obsolete practice or worthless assets, (iii) the dispositions described on, and pursuant to the terms described in, Schedule 6.1(e) and (iv) the sale of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer of the Company shall have certified in writing to Parent that as of the date of this Agreement the twelve months trailing EBITDA (determined on the basis disclosed to Parent prior to the date of this Agreement) associated with such assets is $1,300,000 or lessrequired by GAAP; (i) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, except for the acquisitions described on Schedule 6.1(f)thereof or any equity interest therein; (ii) incur enter into any indebtedness for borrowed money (contract or agreement, other than pursuant to in the Company's credit facilities as ordinary and usual course of business consistent with past practice or amend in effect on the date of this Agreement) any material respect any material contracts or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advancesagreements; (iii) authorize any new capital expenditure or expenditures which, individually, is in excess of $100,000 or, in the aggregate, are in excess of $300,000; or (iv) enter into or amend any material contract contract, agreement, commitment or agreement other than in the ordinary course of business or enter into any management contract for a facility not cancelable without penalty within 30 days of notice; (iv) authorize or make any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) arrangement providing for the Company and its subsidiaries, taken as a whole; provided, however, the Company -------- ------- will give Parent prior notice taking of the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate any material contract or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder)action that would be prohibited hereunder; (g) increase the compensation payable or to become payable to its officers or employees, or grant any severance or termination pay to, or, except as set forth on Schedule 6.10(c), enter into any employment or severance agreement with any director, officer or other employee of the Company or any of its subsidiaries; (h) take any action, other than as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable); (il) make or revoke any material Tax election inconsistent with past practices election, or settle or compromise any material federalTax liability, state, local or foreign tax liability change (or agree make a request to an extension any taxing authority to change) any aspect of a statute its method of limitations accounting for any assessment of federal income tax or material state corporate income or franchise tax, except to the extent the amount of any such settlement has been reserved for on the Company's most recent SEC FilingsTax purposes; (jm) pay, discharge, settle, discharge or satisfy any lawsuits, material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary and usual course of business and consistent with past practice of liabilities reflected or reserved against in the consolidated financial statements of the Company and its subsidiaries or incurred in the ordinary and usual course of business and consistent with past practicepractice or waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement to which the Company or any of its subsidiaries is a party; (kn) except as may be required by lawsettle or compromise any pending or threatened suit, take any action or claim relating to establish, adopt or enter into, or to terminate or amend any Planthe transactions contemplated hereby; (io) permit enter into any increase agreement or arrangement that limits or otherwise restricts the Company or any of its subsidiaries or any successor thereto or that could, after the Effective Time, limit or restrict the Surviving Corporation and its affiliates (including Parent) or any successor thereto, from engaging or competing in any line of business or in any geographic area; or (p) take, propose to take, or agree in writing or otherwise to take, any of the number actions described in Sections 6.1 (a) through 6.1(o) or any action which would make any of employees the representations or warranties of the Company employed by the Company on the date hereof other than pursuant contained in this Agreement (i) which are qualified as to an employee plan to be agreed to by the Company and Parent as promptly as practicable after the date hereof acting reasonably and in good faith materiality untrue or incorrect or (ii) terminate which are not so qualified untrue or incorrect in any employees of the Company identified on Schedule 6.10material respect.

Conduct of Business of the Company. Except (a) Unless Purchaser shall otherwise agree in writing or except as contemplated ---------------------------------- expressly provided by this AgreementAgreement or as required by applicable Law or as set forth in Section 4.1 of the Company Disclosure Schedule (the inclusion of any item thereon having been consented to by Purchaser), during the period commencing on from the date hereof and ending at of this Agreement to the Effective Time, (i) the Company shall, and its Subsidiaries shall cause each of its subsidiaries to, conduct its operations according to its their respective businesses in the ordinary course of business and consistent with past practice, practice and (ii) the Company shall, and shall cause each of its subsidiaries to, use all commercially reasonable best efforts to preserve intact its business organization organization, to keep available the services of its and its Subsidiaries’ officers and employees, to maintain satisfactory relationships with all Persons with whom it and its customersSubsidiaries do business, suppliersand to preserve the possession, employees control and others having material business relationships with it. condition of all of its and its Subsidiaries’ tangible and intangible assets. (b) Without limiting the generality of the foregoing, foregoing clause (a) and except as otherwise expressly provided by this Agreement or as required by applicable Law or as set forth in Section 4.1 of the Company Disclosure Schedule, during the period from the date of this Agreement, prior Agreement to the Effective Time, neither the Company nor any or of its subsidiaries Subsidiaries will, without the prior written consent of the ParentPurchaser: (aA) amend or propose to amend its certificate Articles of incorporation Organization or by-lawsBylaws (or comparable governing instruments); (bB) authorize for issuance, issue, sell, pledge, deliver or agree or commit to issuegrant, sell, pledge or deliver (whether through the issuance dispose of any shares of, or granting of any options, warrants, callscommitments, subscriptionssubscriptions or rights of any kind to acquire or sell any shares of, its capital stock appreciation rights or other rights securities or other agreements) equity interests or any capital stock of any class or Voting Debt, including, but not limited to, any securities convertible into or exchangeable for shares of capital stock of any class class, except for the issuance of Shares pursuant to the Company, or any other ownership interest (including stock appreciation rights or phantom stock) other than shares of Common Stock issuable upon exercise of Company Stock Options stock options outstanding on the date of this AgreementAgreement in accordance with their present terms; (cC) split, combine or reclassify any shares of Common Stock its capital stock or equity interests or declare, pay or set aside for payment any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of any Common Stockits capital stock or equity interests, or directly or indirectly redeem, purchase or otherwise acquire or offer to acquire any shares of Common Stock its capital stock or any other securities of or equity interests, other than dividends and distributions to the Company or any rights, warrants or options to acquire any such shares one of other securitiesits wholly-owned Subsidiaries; (dD) enter into (1) create, incur, assume, forgive or make any other agreementschanges to the terms or collateral of any indebtedness for money borrowed (including capital leases), commitments except for the incurrence of such indebtedness not to exceed $300,000 in the aggregate or contracts incurrences that constitute a refinancing of existing obligations on terms that are material no less favorable to the Company and its subsidiaries taken as a whole than the existing terms; (2) create, incur, assume, forgive or otherwise make any material change that is adverse changes to the Company in (i) terms or collateral of any existing agreement, commitment or arrangement that is material to the Company and its subsidiaries taken as a whole or (ii) the conduct of the business or operations of the Company and its subsidiaries; (e) sell, pledge, dispose of or encumber any assets of the Company or any of its subsidiaries (receivables except for (i) sales of assets in the ordinary course of business and in a manner consistent with past practice; (3) create, (ii) dispositions of obsolete incur, assume, forgive or worthless assets, (iii) the dispositions described on, and pursuant make any changes to the terms described in, Schedule 6.1(e) and (iv) the sale or collateral of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial any employee or officer of the Company shall have certified in writing to Parent that as of the date of this Agreement the twelve months trailing EBITDA (determined on the basis disclosed to Parent prior to the date of this Agreement) associated with such assets is $1,300,000 loans or less; (i) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereofadvances, except for advances in connection with business expenses incurred in the acquisitions described on Schedule 6.1(f)ordinary course of business consistent with past practice; (ii4) incur any indebtedness except in the ordinary course of business consistent with past practice for borrowed money (other than pursuant to the Company's credit facilities as in effect on the date purpose of this Agreement) or issue any debt securities or depositing third party checks, assume, guarantee or guarantee, endorse or otherwise as an accommodation become liable or responsible for(whether directly, indirectly, contingently or otherwise) for the obligations of any personPerson; (5) except in accordance with the Capex Budgets, make any capital expenditures in excess of $250,000; (6) make any loans, advances or capital contributions to, or make investments in, any loans other Person (other than customary travel, relocation or advancesbusiness advances to employees); (iii7) enter into acquire the stock or amend assets of, or merge or consolidate with, any other Person; (8) voluntarily incur any material contract liability or agreement obligation (absolute, accrued, contingent or otherwise) other than in the ordinary course of business or enter into any management contract for a facility not cancelable without penalty within 30 days of notice; (iv) authorize or make any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for the Company and its subsidiaries, taken as a whole; provided, however, the Company -------- ------- will give Parent prior notice of the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment consistent with a fair market value greater than $1,000,000past practice; or (v9) terminate any material contract sell, transfer, mortgage, pledge, encumber or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder); (g) increase the compensation payable or to become payable to its officers or employeesotherwise dispose of, or grant any severance or termination pay to, or, except as set forth on Schedule 6.10(c), enter into any employment or severance agreement with any director, officer or other employee of the Company or any of its subsidiaries; (h) take any action, other than as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable); (i) make any material Tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign tax liability or agree to an extension of a statute of limitations for sell, transfer, mortgage, pledge, encumber or otherwise dispose of, any assessment of federal income tax assets or material state corporate income properties (real, personal or franchise taxmixed, except to the extent the amount of any such settlement has been reserved for on the Company's most recent SEC Filings; (jtangible or intangible) pay, discharge, settle, or satisfy any lawsuits, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge to secure debt permitted under subclause (1) of this clause (D) or satisfaction other than in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practice; (kE) except as may be required by law(1) increase in any manner the wages, take salaries, bonus, compensation or other benefits of any action to establishof its officers, adopt directors, employees, independent contractors or consultants or enter into, establish, amend or terminate any employment, consulting, retention, change in control, collective bargaining, bonus or other incentive compensation, profit sharing, health or other welfare, stock option or other equity, pension, retirement, vacation, severance, termination, deferred compensation or other compensation or benefit plan, policy, agreement, trust, fund or other arrangement with, for or in respect of any officer, director, employee, agent, consultant or Affiliate, other than as required by applicable Law or pursuant to terminate the terms of agreements in effect on the date of this Agreement or amend annual increases in salary or hourly wages for employees other than officers in the ordinary course of business consistent with past practice; or (2) enter into or engage in any Planagreement, arrangement or transaction with any of its directors, officers, employees or Affiliates, except for expense reimbursements, and current compensation and benefits, in the ordinary course of business consistent with past practice and as permitted under the terms of this Agreement; (F) (1) commence, settle or compromise any litigation or other claim or proceedings with any Governmental Authority or other Person where the amount sought or paid in settlement or compromise exceeds, in the aggregate for all such litigation, claims and proceedings, $250,000 or (2) make or rescind any election relating to Taxes except to the extent consistent with prior practice, settle any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, file any amended Tax Return or claim for refund, change any method of accounting or make any other material change in its accounting or Tax policies, in each case except as required by applicable Law, provided, however, that in no event shall the Company settle any litigation or other claim (i) permit any increase in relating to the number of employees of the Company employed transactions contemplated by the Company on the date hereof other than pursuant to an employee plan to be agreed to by the Company and Parent as promptly as practicable after the date hereof acting reasonably and in good faith this Agreement or (ii) terminate relating to any Company Takeover Proposal (whether first made prior to or after the date hereof) where, in the case of this subclause (ii), the amount sought or paid in settlement or compromise exceeds, in the aggregate for all such litigation, claims and proceedings, $100,000; (G) adopt or amend any resolution or agreement concerning indemnification of its directors, officers, employees or agents; (H) materially modify or amend, or terminate, any Company Material Contract, or waive, release or assign any material rights or claims thereunder, except, in each case, in the ordinary course of business consistent with past practice; (I) modify, amend or terminate, or waive, release or assign any material rights or claims with respect to, any confidentiality agreement or non-competition agreement to which the Company or any of its Subsidiaries is a party; (J) establish any Subsidiary or enter into any new line of business; (K) enter into or amend any lease, contract or agreement pursuant to which the Company or any of its Subsidiaries is obligated to pay or incur obligations of more than $250,000 per year, other than leases contemplated in connection with the Capex Budgets or other leases, contracts or agreements in the ordinary course of business consistent with past practice; (L) permit any material insurance policy naming the Company or any of its Subsidiaries as a beneficiary or a loss payee to be cancelled or terminated without notice to and consent by Purchaser, unless the Company uses reasonable efforts to maintain substantially similar insurance coverage as is currently in place; (M) revalue any of its assets or make any change in accounting methods, principles or practices, except as required by GAAP; (N) fail to make in a timely manner any filings with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder; (O) discharge any obligations (including accounts payable) other than inter-company obligations or other obligations discharged on a timely basis in the ordinary course of business consistent with past practice; (P) close or materially reduce the Company’s or any Subsidiary’s activities, or effect any material layoff at any of the Company’s or any Subsidiary’s facilities; or (Q) authorize any of, or agree to commit to do any of, the foregoing actions. (c) The Company identified on Schedule 6.10shall use commercially reasonable best efforts to comply in all material respects with all Laws applicable to it or any of its properties, assets or business and maintain in full force and effect all the Company Permits necessary for, or otherwise material to, such business.

Conduct of Business of the Company. Except as contemplated ---------------------------------- set forth in Section 6.01 of the Disclosure Letter or as expressly provided for by this Agreement, during the period commencing on from the date hereof of this Agreement and ending at continuing until the earlier of the valid termination of this Agreement or the Effective Time, the Company shall, and shall cause each of its subsidiaries to, will (i) conduct its operations according to its ordinary course of business consistent with past practice, and the Company shall, and shall cause each of (ii) use its subsidiaries to, use all commercially reasonable efforts to preserve intact its business organization and to maintain preserve satisfactory business relationships with its customers, suppliers, employees licensors, licensees, distributors, wholesalers, lessors and others having material business relationships dealings with itthe Company, and (iii) comply in all material respects with all applicable Laws. Without limiting the generality of the foregoing, foregoing and except as otherwise set forth in Section 6.01 of the Disclosure Letter or as expressly provided in for by this Agreement, prior to during the period from the date hereof and continuing until the earlier of the valid termination of this Agreement or the Effective Time, neither the Company nor any or its subsidiaries will, without the prior written consent of Parent (which consent shall not be unreasonably conditioned, withheld or delayed), the ParentCompany will not: (a) amend issue, deliver or propose sell any Company Securities or other voting securities or equity interests, any securities convertible or exchangeable into any such securities or equity interests, any options, warrants or other rights to amend its certificate acquire any such securities or equity interests or convertible or exchangeable securities, any stock-based performance units or any Voting Company Debt, other than Shares issuable upon exercise of incorporation the Company Options or by-lawsCompany Warrants or settlement of Restricted Stock Units, in each case outstanding on the date hereof and in accordance with their respective present terms; (b) authorize for issuancerepurchase, issue, sell, pledge, deliver redeem or agree otherwise acquire any Company Securities or commit to issue, sell, pledge or deliver (whether through the issuance or granting of any options, warrants, calls, subscriptions, stock appreciation rights warrants or other rights or to acquire any such Company Securities, other agreementsthan (i) any capital stock the acquisition by the Company of any class or any securities convertible into or exchangeable for shares Shares in connection with the surrender of capital stock Shares by holders of any class Company Options in order to pay the exercise price of the CompanyCompany Options, (ii) the withholding of Shares to satisfy Tax obligations with respect to Company Options or any other ownership interest Restricted Stock Units, and (including stock appreciation rights or phantom stockiii) other than shares of Common Stock issuable upon exercise the acquisition by the Company of Company Options or Restricted Stock Options outstanding on Units in connection with the date forfeiture of this Agreementsuch awards; (c) (i) split, combine or reclassify any shares Company Securities, (ii) issue or authorize the issuance of Common Stock any other securities in lieu of or in substitution for any Company Securities, or (iii) declare, set aside, make or pay or set aside for payment any dividend or other distribution (whether in respect of any Common Stockcash, stock or redeem, purchase or otherwise acquire property) on any shares of Common Stock any Company Securities or set a record date therefor; (d) (i) make any acquisition or disposition or cause any acquisition or disposition to be made, by means of a merger, consolidation, recapitalization or otherwise, of any business, assets or securities or any sale, lease, license, sublicense, encumbrance or other disposition of assets or securities of the Company or any rightsthird party, warrants or options to acquire any such shares of other securities; (d) enter into any other agreements, commitments or contracts that are material to the Company and its subsidiaries taken as a whole or otherwise make any material change that is adverse to the Company in (i) any existing agreement, commitment or arrangement that is material to the Company and its subsidiaries taken as a whole or (ii) the conduct of the business or operations of the Company and its subsidiaries; (e) sell, pledge, dispose of or encumber any assets of the Company or any of its subsidiaries (except for (i) purchases or sales of assets raw materials or inventory, or dispositions of obsolete equipment, made in the ordinary course of business and in a manner consistent with past practice, (ii) dispositions adopt a plan of obsolete complete or worthless assetspartial liquidation, dissolution, recapitalization, restructuring or other reorganization of the Company, or (iii) merge or consolidate with in any Person; (A) except in the dispositions described onordinary course of business consistent with past practice, and pursuant to enter into, terminate or materially amend or modify any Material Contract or Contract that, if in effect on the terms described indate hereof, Schedule 6.1(ewould have been a Material Contract, (B) and (iv) waive in any material respect any term of, or waive any material default under, or release, settle or compromise any material claim against the sale of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse Company or material liability or obligation owing to the Company ifunder, and only ifany Material Contract, five days prior (C) enter into any Contract which contains a change of control or similar provision that would require a payment to such sale the chief financial officer other party or parties thereto in connection with the Offer, the Merger, the Support Agreement or the other transactions contemplated herein (including in combination with any other event or circumstance), or (D) terminate, amend or modify any of the Company shall have certified in writing to Parent that as of the date of this Agreement the twelve months trailing EBITDA (determined on the basis disclosed to Parent prior to the date of this Agreement) associated with such assets is $1,300,000 Key License Agreements or lessKey Supply Agreements; (f) (i) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, except for the acquisitions described on Schedule 6.1(f); (ii) incur any indebtedness for borrowed money (other than pursuant to the Company's credit facilities as in effect on the date of this Agreement) money, or issue or sell any debt securities or assumewarrants or other rights to acquire any debt securities of the Company, guarantee or endorse or otherwise as an accommodation become responsible for, except for short-term debt incurred pursuant to the obligations of any person, or make any loans or advances; (iii) enter into or amend any material contract or agreement other than Existing Loan Agreement in the ordinary course of business or enter into any management contract for a facility not cancelable without penalty within 30 days consistent with past practice to fund working capital requirements, and in no event in excess of notice; (iv) authorize or make any capital expenditures or purchase of fixed assets which are, $1,000,000 in the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for the Company and its subsidiaries, taken as a whole; provided, however, the Company -------- ------- will give Parent prior notice of the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (vii) terminate redeem, repurchase, prepay, defease, cancel or otherwise acquire any material contract such indebtedness, debt securities or amend any of its material terms (warrants or other than amendments to existing credit arrangements designed to remedy defaults thereunder)rights; (g) (i) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, or (ii) subject to the payoff of the Existing Loan Agreement immediately prior to (but subject to) the Effective Time, take any action that would result in the administrative agent of the lenders under the Debt Financing not having a perfected first priority security interest in the assets to be pledged as collateral in connection with the Debt Financing at the Effective Time; (h) (i) make any loans, advances or capital contributions to, or investments in, any other Person or (ii) form any Subsidiary; (i) change any financial accounting methods, principles or practices used by it and affecting the assets, liabilities or results of operations of the Company, except as required by GAAP or applicable Law; (j) make or change any material Tax election, adopt or change any accounting method for Tax purposes that has a material effect on Taxes, extend the statute of limitations (or file any extension request) relating to material Taxes with any Governmental Entity, amend any material Tax Return, or settle or compromise any material Tax liability; (k) amend its Certificate of Incorporation or Bylaws; (l) except as required by applicable Law, the terms of this Agreement or any Plan in existence as of the date hereof, or as provided in Section 6.01(l) of the Disclosure Letter, (i) increase the compensation or benefits payable or to become payable to any of its officers directors, officers, employees or employeesindividual independent contractors, (ii) grant to any of its directors, officers, employees or grant individual independent contractors any increase in severance or termination pay, (iii) pay toor award, oror commit to pay or award, except as set forth on Schedule 6.10(c)any bonuses or incentive compensation, (iv) enter into any employment employment, consulting, severance, retention or severance termination agreement (including, for the avoidance of doubt, offer letters) with any director, officer or other employee of the Company or any of its subsidiaries; directors, officers, employees or individual independent contractors, (hv) take establish, adopt, enter into, amend or terminate any action, other than as required by GAAP, to change accounting policies collective bargaining agreement or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable); (i) make any material Tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign tax liability or agree to an extension of a statute of limitations for any assessment of federal income tax or material state corporate income or franchise taxPlan, except for amendments to the extent the amount of any such settlement has been reserved for on the Company's most recent SEC Filings; (j) pay, discharge, settle, or satisfy any lawsuits, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction Plans that are welfare plans in the ordinary course of business and consistent with past practice that do not increase the cost of liabilities reflected maintaining such Plans and that apply to substantially all employees across-the-board, (vi) take any action to accelerate any payment or reserved against in benefit, or the financial statements funding of any payment or benefit, payable or to become payable to any of its directors, officers, employees or individual independent contractors, (vii) terminate the employment of any of the Company Company’s executive officers listed on Section 9.11(r) of the Disclosure Letter, other than for cause, or incurred (viii) hire any employee or individual independent contractor having total annual compensation in excess of $150,000; (m) incur any capital expenditure or any obligations or liabilities in respect thereof, except for those contemplated by the capital expenditure budget set forth in Section 6.01(m) of the Disclosure Letter; (n) settle any Legal Proceeding, in each case made or pending by or against or by the Company, other than the settlement of Legal Proceedings in the ordinary course of business and consistent with past practicepractice that solely require payments by the Company (net of insurance proceeds received) in an amount not to exceed, individually or in the aggregate, $500,000; provided, however, that the foregoing shall not permit the Company to settle any Legal Proceeding (i) relating to any Key Patent, Key License Agreement or Key Supply Agreement, (ii) that would impose any material restrictions or changes on the business or operations of, or the admission of wrongdoing by, the Company, or (iii) for which such settlement is not permitted pursuant to Section 6.04 or Section 6.08; (ko) mortgage, pledge, hypothecate, grant an easement with respect to, or otherwise encumber or restrict the use of Company Securities or assets (including, for the avoidance of doubt, Intellectual Property rights) or properties in any material respect, or otherwise create, assume or suffer to exist any Liens thereupon except as may be required by lawPermitted Liens; (p) enter into any new line of business; (q) relinquish, abandon or permit to lapse, or fail to take any action necessary to establishmaintain, adopt or enter intoenforce and protect, or to terminate or amend any Planof its rights in Company Material IP; (ir) permit any increase fail to maintain in the number of employees of the Company employed by the Company on the date hereof other than pursuant to an employee plan to be agreed to by full force and effect insurance policies covering the Company and Parent as promptly as practicable after the date hereof acting reasonably its properties, businesses, assets and operations in good faith a form and amount consistent with past practice in all material respects; or (s) authorize, offer, agree or (ii) terminate commit, in writing or otherwise, to take any employees of the Company identified on Schedule 6.10foregoing actions.

Conduct of Business of the Company. Except as contemplated ---------------------------------- by this AgreementAgreement or disclosed in Section 5.1 of the Company Disclosure Letter or with the prior written consent of the Parent, during the period commencing on from the date hereof and ending at of this Agreement to the Effective Time, the Company shallwill, and shall will cause each of its subsidiaries the Company Subsidiaries to, conduct its operations according to its and business in the ordinary course of business consistent with past practicepractice and, and to the Company shall, and shall cause each of its subsidiaries toextent consistent therewith, use all reasonable best efforts to preserve intact its business organization organization's goodwill, keep available the services of its officers and to maintain satisfactory key employees, and preserve the goodwill and business relationships with its customers, material suppliers, employees facilities providers, customers and others having material business relationships with it, with the intent that such goodwill and ongoing business relationships shall be unimpaired in all material respects at the Effective Time. Without limiting the generality of the foregoing, and except as otherwise expressly provided contemplated by this Agreement or disclosed in this AgreementSection 5.1 of the Company Disclosure Letter, prior to the Effective Time, neither the Company nor will not, and will not permit any or its subsidiaries willCompany Subsidiary to, without the prior written consent of the Parent:Parent (which consent will not be unreasonably withheld, conditioned or delayed): (a) amend except to the extent required by law, adopt any amendment to the Company Charter Documents or propose to amend its certificate the comparable organizational documents of incorporation or by-lawsany Company Subsidiary; (b) authorize except for issuanceissuances of capital stock of Company Subsidiaries to the Company or a wholly owned Company Subsidiary, issue, reissue or sell, pledgeor authorize the issuance, deliver reissuance or agree or commit to issue, sell, pledge or deliver sale of (whether through the issuance or granting of any options, warrants, calls, subscriptions, stock appreciation rights or other rights or other agreementsi) any capital stock of any class or any securities convertible into or exchangeable for additional shares of capital stock of any class of the Companyclass, or any other ownership interest (including securities convertible or exchangeable into capital stock appreciation rights or phantom stock) other than shares of Common Stock issuable upon exercise of Company Stock Options outstanding on the date of this Agreement; (c) split, combine or reclassify any shares of Common Stock or declare, pay or set aside for payment any dividend or other distribution in respect of any Common Stockclass, or redeem, purchase or otherwise acquire any shares of Common Stock or any other securities of the Company or any rights, warrants or options to acquire any convertible or exchangeable securities or capital stock, other than the issue of Company Shares, in accordance with the terms of the instruments governing such shares issuance on the date hereof, pursuant to the exercise of Company Stock Options or Company Warrants outstanding on the date hereof or pursuant to the ESPP, or (ii) any other securitiessecurities in respect of, in lieu of, or in substitution for, Company Shares outstanding on the date hereof; (c) declare, set aside or pay any dividend or other distribution (whether in cash, securities or property or any combination thereof) in respect of any class or series of its capital stock other than between the Company and any wholly owned Company Subsidiary; 42 (d) enter into any other agreementssplit, commitments combine, subdivide, reclassify or contracts that are material to the Company and its subsidiaries taken as a whole redeem, purchase or otherwise make acquire, or propose to redeem or purchase or otherwise acquire, any material change that is adverse to shares of its capital stock, or any of its other securities, except for repurchase of shares in connection with the Company in (i) any existing agreement, commitment or arrangement that is material to the Company and its subsidiaries taken as a whole or (ii) the conduct termination of the business or operations employment relationship with any employee pursuant to agreements in effect on the date hereof and listed in Section 3.18 of the Company and its subsidiariesDisclosure Schedule; (e) sell, pledge, dispose of or encumber any assets of the Company or any of its subsidiaries (except for (i) sales increases in salary, wages and benefits of assets officers or employees of the Company or the Company Subsidiaries in the ordinary course of business and in a manner consistent accordance with past practice, (ii) dispositions of obsolete or worthless assetsincreases in salary, (iii) the dispositions described on, wages and pursuant benefits granted to the terms described in, Schedule 6.1(e) officers and (iv) the sale of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer employees of the Company shall have certified or the Company Subsidiaries in writing to Parent that as of the date of this Agreement the twelve months trailing EBITDA (determined on the basis disclosed to Parent prior to the date of this Agreement) associated conjunction with such assets is $1,300,000 or less; (i) acquire (by mergernew hires, consolidation, or acquisition of stock or assets) any corporation, partnership promotions or other business organization or division thereof, except for the acquisitions described on Schedule 6.1(f); (ii) incur any indebtedness for borrowed money (other than pursuant to the Company's credit facilities as changes in effect on the date of this Agreement) or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances; (iii) enter into or amend any material contract or agreement other than job status in the ordinary course of business and consistent with past practices, or enter into any management contract for a facility not cancelable without penalty within 30 days (iii) payment of notice; (iv) authorize or make any capital expenditures or purchase of fixed assets which are, bonuses to officers and employees in the aggregateordinary course of business (including with respect to the Company's fiscal year ended June 30, 1999) not to exceed the amounts specified in excess Section 5.1 of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for the Company and its subsidiariesDisclosure Letter, taken as a whole; provided, however, the Company -------- ------- will give Parent prior notice of the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate any material contract or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder); (g) increase the compensation or fringe benefits payable or to become payable to its directors, officers or employeesemployees (whether from the Company or any Company Subsidiaries), or pay any benefit not required by any existing plan or arrangement (including the granting of stock options, stock appreciation rights, shares of restricted stock or performance units) or grant any severance or termination pay toto (except pursuant to existing agreements, or, except as set forth on Schedule 6.10(cplans or policies), or enter into any employment or severance agreement with with, any director, officer or other employee of the Company or any Company Subsidiaries or establish, adopt, enter into, or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, savings, welfare, deferred compensation, employment, termination, severance or other employee benefit plan, agreement, trust, fund, policy or arrangement for the benefit or welfare of its subsidiariesany directors, officers or current or former employees, except in each case to the extent required by applicable Law; (f) acquire, sell, lease, license, transfer, mortgage, pledge, encumber, grant or dispose of (whether by merger, consolidation, purchase, sale or otherwise) any material property or assets, including capital stock of Company Subsidiaries (other than the acquisition and sale of inventory or the disposition of used or excess equipment or the purchase of raw materials, supplies and equipment, in each case in the ordinary course of business consistent with past practice), or enter into any material commitment or transaction outside the ordinary course of business, other than transactions between a wholly owned Company Subsidiary and the Company or another wholly owned Company Subsidiary; (g) (i) incur, assume or prepay any indebtedness or incur or assume any short-term indebtedness, in each case, in an amount in excess of the amounts specified in Section 5.1 of the Company Disclosure Letter (including, in either case, by issuance of debt securities), except that the Company and the Company Subsidiaries may incur, assume or prepay indebtedness in the ordinary course of business consistent with past practice under existing lines of credit or existing or additional equipment financing arrangements in the amounts specified in Section 5.1 of the Company Disclosure Letter, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person except in the ordinary course of business, or (iii) make any loans, advances or capital contributions to, or investments in, any other person except in the ordinary course of business and except for loans, advances, capital contributions or investments between any wholly owned Company Subsidiary and the Company or another wholly owned Company Subsidiary or between the Company and any other entity in which the Company has an equity interest pursuant to the terms of the governing instruments or other agreements relating to such entities as in effect on the date hereof; (h) take terminate, cancel or request any actionmaterial change in, or agree to any material change in any Contract which is material to the Company and the Company Subsidiaries taken as a whole, or enter into any Contract which would be material to the Company and the Company Subsidiaries taken as a whole, in either case other than in the ordinary course of business consistent with past practice or enter into any joint venture agreement, partnership agreement or similar arrangement; or make or authorize any capital expenditure, other than capital expenditures that are not, in the aggregate, for any fiscal year, in excess of the capital expenditures provided for in the Company's budget for the Company and the Company Subsidiaries taken as required by GAAPa whole for such fiscal year (a copy of which budget has been provided to the Parent) and are in the amounts set forth in Section 5.1 of the Company Disclosure Letter; (i) adopt a plan of complete or partial liquidation, to change accounting policies dissolution, merger, consolidation, restructuring, recapitalization or procedures other reorganization of the Company or cash maintenance policies or procedures any Company Subsidiaries (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivableother than the Merger); (ij) alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Company Subsidiary; (k) enter into any agreement or arrangement that materially limits or otherwise materially restricts the Company or any Company Subsidiary or any successor thereto, or that would, after the Effective Time, limit or restrict the Surviving Corporation and its affiliates (including Parent) or any successor thereto, from engaging or competing in any line of business or in any geographic area, other than in the ordinary course of business consistent with past practices; (l) take any action with respect to accounting policies or procedures, other than actions in the ordinary course of business and consistent with past practice or as required pursuant to applicable Law or GAAP; (m) waive, release, assign, settle or compromise any material rights, claims or litigation; (n) make any material Tax election inconsistent (unless required by applicable Law or made in the ordinary course of business consistent with past practices practice) or settle or compromise any material federal, state, local or foreign tax liability or agree to an extension of a statute of limitations for any assessment of federal income tax or material state corporate income or franchise tax, except to the extent the amount of any such settlement has been reserved for on the Company's most recent SEC Filings;Tax liability; or (jo) pay, discharge, settle, authorize or satisfy enter into any lawsuits, claims, liabilities formal or obligations (absolute, accrued, asserted informal written or unasserted, contingent other agreement or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements otherwise make any commitment to do any of the Company or incurred in the ordinary course of business and consistent with past practice; (k) except as may be required by law, take any action to establish, adopt or enter into, or to terminate or amend any Plan; (i) permit any increase in the number of employees of the Company employed by the Company on the date hereof other than pursuant to an employee plan to be agreed to by the Company and Parent as promptly as practicable after the date hereof acting reasonably and in good faith or (ii) terminate any employees of the Company identified on Schedule 6.10foregoing.

Conduct of Business of the Company. Except The Company agrees that during the period from the date of this Agreement to the Effective Time (unless Parent shall otherwise agree in writing, which consent, solely in the case of clause (l) below, shall not be unreasonably withheld or delayed, and except as contemplated ---------------------------------- is otherwise expressly required by this Agreement, during the period commencing on the date hereof and ending at the Effective Time), the Company shallwill, and shall will cause each of its subsidiaries Subsidiaries to, conduct its operations according to its ordinary and usual course of business consistent with past practicepractice in compliance in all material respects with all applicable Laws, pay its debts and taxes when due (subject to good faith disputes over such debts), pay or perform other material obligations when due, and, to the Company shallextent consistent therewith, with no less diligence and shall cause each effort than would be applied in the absence of its subsidiaries tothis Agreement, use all commercially reasonable efforts to preserve intact its current business organization organizations, keep available the service of its current officers and to maintain satisfactory employees and preserve its relationships with its customers, suppliers, employees suppliers and others having business dealings with it to the end that goodwill and ongoing businesses shall not be impaired in any material business relationships with itrespect at or prior to the Effective Time. Without limiting the generality of the foregoing, and except as otherwise expressly provided set forth in this Agreement, or as expressly set forth in Section 4.1 of the Company Disclosure Schedule, prior to the Effective Time, neither the Company nor any or of its subsidiaries Subsidiaries will, without the prior written consent of the Parent: (a) amend except for shares to be issued or propose delivered upon exercise of the Options outstanding as of the date hereof in accordance with the Option Plans or other Option-related agreements outstanding as of the date hereof in accordance with their respective terms and except for up to amend its certificate of incorporation or by-laws; 150,000 Options that may be granted by the Company after the date hereof pursuant to the Company’s merit options grants (bthe “Merit Options”) authorize for issuancedone in the ordinary course consistent with past practice, issue, sell, pledge, deliver or agree or commit to issuedeliver, sell, dispose of, pledge or deliver (whether through otherwise encumber, or authorize or propose the issuance issuance, sale, disposition or granting of any options, warrants, calls, subscriptions, stock appreciation rights pledge or other rights or other agreementsencumbrance of (i) any capital stock of any class or any securities convertible into or exchangeable for additional shares of capital stock of any class of (including the CompanyShares), or any other ownership interest (including stock appreciation securities or rights convertible into, exercisable or phantom stock) other than exchangeable for, or evidencing the right to subscribe for any shares of Common Stock issuable upon exercise capital stock, or any rights, warrants, options, calls, commitments or any other agreements of Company Stock Options any character to purchase or acquire any shares of capital stock or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of capital stock, or (ii) any other securities in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof; (b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any of this Agreementits outstanding shares of capital stock; (c) split, combine combine, subdivide or reclassify any shares of Common Stock capital stock or declare, pay or set aside for payment or pay any dividend dividend, or make any other actual, constructive or deemed distribution in respect of any Common Stock, or redeem, purchase shares of capital stock or otherwise acquire make any shares of Common Stock or any other securities of payments to shareholders in their capacity as such, except for “upstream” dividends paid by a Subsidiary to the Company or any rights, warrants or options to acquire any such shares of other securitiesCompany; (d) enter into any adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other agreements, commitments or contracts that are material to the Company and its subsidiaries taken as a whole or otherwise make any material change that is adverse to the Company in (i) any existing agreement, commitment or arrangement that is material to the Company and its subsidiaries taken as a whole or (ii) the conduct of the business or operations of the Company and its subsidiaries; (e) sell, pledge, dispose of or encumber any assets reorganization of the Company or any of its subsidiaries Subsidiaries (other than the Merger); (e) adopt any amendment, modification or repeal, or propose to, or permit or consent to, any amendment, modification or repeal of the Company Certificate of Incorporation or Bylaws (or the equivalent Subsidiary Organizational Documents) or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of the Company’s Subsidiaries; (f) make any acquisition, by means of merger, consolidation, acquisition of all or substantially all of the assets, capital stock or equity interests, or otherwise, of any Person, or make any disposition or assignment, of any of its capital stock, material assets or properties or permit any of its assets or properties to be subject to any Liens (other than Permitted Liens), except to the extent such disposition or Lien is made or incurred in the ordinary course of business consistent with past practice; (g) incur any Indebtedness for borrowed money or guarantee any such Indebtedness, or make any loans, advances or capital contributions to, or investments in, any other Person other than to or in the Company or any of its Subsidiaries, or enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing), except, in each case, to the extent such Indebtedness is made or incurred in the ordinary course of business consistent with past practices; (h) grant any increases (other than as required by Law) in the compensation, pension, retirement or other employment benefit of any character, or grant any new material benefit to any of its directors, officers or employees, except for (i) sales of assets increases in compensation for employees who are not officers in the ordinary course of business and in a manner consistent accordance with past practice, (ii) dispositions of obsolete or worthless assets, (iii) the dispositions described on, and pursuant to the terms described in, Schedule 6.1(e) and (iv) the sale of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer of the Company shall have certified in writing to Parent that as of the date of this Agreement the twelve months trailing EBITDA (determined on the basis disclosed to Parent prior to the date of this Agreement) associated with such assets is $1,300,000 or less; (i) acquire (by mergerpay or agree to pay any pension, consolidation, or acquisition of stock or assets) any corporation, partnership retirement allowance or other business organization employee benefit with respect to its directors, employees, agents or division thereof, except for consultants not required or contemplated by any of the acquisitions described on Schedule 6.1(f); (ii) incur any indebtedness for borrowed money (other than pursuant to the Company's credit facilities existing Company Plans as in effect on the date of this Agreement) or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances; hereof; (iiij) enter into any new, or amend any material contract existing, employment agreement with any director, officer, consultant, agent or employee; provided, that the Company shall be permitted to so enter or amend to the extent that (1) the cost to the Company with respect to any single individual does not exceed $4,000 and (2) the aggregate cost to the Company with respect to all individuals does not exceed (A) $25,000 during the first 45 calendar days after the date hereof or (B) $50,000 from the date hereof through the Effective Time; provided further that in no event shall any severance or change of control provision, payment or agreement be created or increased directly or directly in any respect; (k) enter into any new, or amend any existing, severance, change of control or termination agreement with any director, officer, consultant, agent or employee; (l) except as may be required to comply with applicable Law, become obligated under any new pension plan, welfare plan, multiemployer plan, employee benefit plan, severance plan, benefit arrangement or similar plan or arrangement, which was not in existence on the date hereof, or amend any such plan or arrangement in existence on the date hereof if such amendment would have the effect of enhancing of any benefits thereunder; (m) change or remove the certified public accountants for the Company or change any of the accounting methods, policies, procedures, practices or principles used by the Company unless required by GAAP or the SEC; (n) enter into, or become obligated under, or change, amend, terminate or otherwise modify any Material Contract), except, in the ordinary course of business consistent with past practices; (o) modify the terms of, discount, setoff or accelerate the collection of, any accounts receivable, except in the ordinary course of business consistent with past practice; (p) pay accounts payable and other obligations and liabilities other than in the ordinary course of business consistent with past practice; (q) fail to maintain in all material respects inventory levels appropriate for the businesses of the Company and each of its Subsidiaries; (r) make or enter into any management contract for a facility not cancelable without penalty within 30 days of notice; (iv) authorize or commit to make any aggregate capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for the Company and its subsidiaries, taken as a whole; provided, however, the Company -------- ------- will give Parent prior notice of the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate any material contract or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder)100,000; (gs) increase settle any material pending claim or other material disagreement resulting in any payment of an amount in excess of $50,000 in the compensation payable aggregate as to all such claims or to become payable to its officers or employees, or disagreements; (t) grant any severance or termination pay to, or, except as set forth Lien on Schedule 6.10(c), enter into any employment or severance agreement with any director, officer or other employee the capital stock of the Company or any of its subsidiariesSubsidiaries except for a Permitted Lien; (hu) take enter into, directly or indirectly, any action, other than as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures new material transaction with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable); (i) make any material Tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign tax liability or agree to an extension of a statute of limitations for any assessment of federal income tax or material state corporate income or franchise tax, except to the extent the amount of any such settlement has been reserved for on the Company's most recent SEC Filings; (j) pay, discharge, settle, or satisfy any lawsuits, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements Affiliate of the Company or incurred (excluding transactions with the Subsidiaries in the ordinary course of business and consistent with past practice), including, without limitation, any transaction, agreement, arrangement or understanding that would be required to be reported as a Certain Relationship or Related Transaction or similar relationship or transaction pursuant to Statement of Financial Accounting Standards No. 57, or in any SEC filing pursuant to Item 404 of Regulation S-B; (kv) except as may be required by lawtake, undertake, incur, authorize, commit or agree to take any action that would cause any of the representations or warranties in Section 2 to establishbe untrue in any material respect or would reasonably be anticipated to cause any of the conditions to closing set forth in Section 5 not to be satisfied in any material respect; or (w) authorize, adopt recommend, propose or announce an intention to do any of the foregoing, or enter intointo any contract, agreement, commitment or arrangement to terminate or amend do any Plan; (i) permit any increase in the number of employees of the Company employed by the Company on the date hereof other than pursuant to an employee plan to be agreed to by the Company and Parent as promptly as practicable after the date hereof acting reasonably and in good faith or (ii) terminate any employees of the Company identified on Schedule 6.10foregoing.

Conduct of Business of the Company. Except as contemplated ---------------------------------- by this Agreement, during the period commencing on from the date hereof and ending at to the Effective Time, the Company shall, and shall cause each Board will not permit the Company or its any of its subsidiaries to, Subsidiaries to conduct its their operations according to its otherwise than in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its subsidiaries Subsidiaries to, use all its or their reasonable best efforts to preserve substantially intact its business organization organization, to keep available the services of its present officers and employees and to maintain satisfactory preserve the present commercial relationships of the Company and its Subsidiaries with persons with whom the Company or its customers, suppliers, employees and others having material business relationships with itSubsidiaries do business. Without limiting the generality of the foregoing, and except as otherwise expressly provided in this Agreement, prior to the Effective Time, neither the Company nor any or its subsidiaries willwill not, without the prior written consent of the ParentParent or Acquisition, and will not permit any of its Subsidiaries to: (a) amend its Articles of Incorporation or propose to amend its certificate of incorporation Bylaws (or by-lawsother similar governing instrument); (b) amend or modify (except as required hereby) the terms of the Company Plans or authorize for issuance, issue, sell, pledge, deliver or agree or commit to issue, sell, pledge or deliver issue (whether through the issuance or granting of any options, warrants, callscommitments, subscriptions, stock appreciation rights to purchase or other rights or other agreementsotherwise) any capital stock of any class or any other securities convertible into or exchangeable equity equivalents (including, without limitation, any stock options or stock appreciation rights), except for the issuance or sale of shares of capital stock of any class of the Company, or any other ownership interest (including stock appreciation rights or phantom stock) other than shares of Company Common Stock issuable upon pursuant to the exercise of Company Stock Options outstanding on the date of this AgreementOptions; (c) split, combine or reclassify any shares of Common Stock or its capital stock, declare, pay or set aside for payment or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of any Common Stockits capital stock, or redeem, purchase redeem or otherwise acquire any shares of Common Stock Company Securities or any other securities of the Company or any rights, warrants or options to acquire any such shares of other securitiesits Subsidiaries; (d) enter into any other agreementsexcept in connection with the exercise of purchase options under existing leases, commitments or contracts that are material to the Company and its subsidiaries taken as a whole or otherwise make any material change that is adverse to the Company in (i) incur or assume any existing agreementlong-term or short-term debt or other liability (whether directly, commitment contingently or arrangement that is material to the Company and its subsidiaries taken as a whole otherwise) or (ii) the conduct of the business or operations of the Company and its subsidiaries; (e) sellissue any debt securities, pledge, dispose of or encumber any assets of the Company or any of its subsidiaries (except for (i) sales borrowings under existing lines of assets credit in the ordinary course of business and in amounts not material to the Company and its Subsidiaries taken as a manner consistent with past practicewhole and except for indebtedness not exceeding $100,000 in the aggregate, (ii) dispositions of obsolete or worthless assets, (iiiexcept as described in Schedule 5.1(d) the dispositions described on, and pursuant to the terms described in, Schedule 6.1(e) and (iv) the sale of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as isDisclosure Schedule, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer of the Company shall have certified in writing to Parent that as of the date of this Agreement the twelve months trailing EBITDA (determined on the basis disclosed to Parent prior to the date of this Agreement) associated with such assets is $1,300,000 or less; (i) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, except for the acquisitions described on Schedule 6.1(f); (ii) incur any indebtedness for borrowed money (other than pursuant to the Company's credit facilities as in effect on the date of this Agreement) or issue any debt securities or assume, guarantee or guarantee, endorse or otherwise as an accommodation become liable or responsible for(whether directly, contingently or otherwise) for the obligations of any other person, or make any loans or advances; (iii) enter into or amend any material contract or agreement other than except in the ordinary course of business or enter into any management contract consistent with past practice and in amounts not material to the Company and its Subsidiaries taken as a whole and except for a facility obligations of its Subsidiaries, (iii) except for investments not cancelable without penalty within 30 days of notice; (iv) authorize or make any capital expenditures or purchase of fixed assets which are, exceeding $100,000 in the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for the Company and its subsidiariesmake any loans, taken as a whole; provided, however, the Company -------- ------- will give Parent prior notice of the making advances or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate any material contract or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder); (g) increase the compensation payable or to become payable to its officers or employees, or grant any severance or termination pay contributions to, or, except as set forth on Schedule 6.10(c), enter into any employment or severance agreement with any director, officer or other employee of the Company or any of its subsidiaries; (h) take any action, other than as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable); (i) make any material Tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign tax liability or agree to an extension of a statute of limitations for any assessment of federal income tax or material state corporate income or franchise tax, except to the extent the amount of any such settlement has been reserved for on the Company's most recent SEC Filings; (j) pay, discharge, settle, or satisfy any lawsuits, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practice; (k) except as may be required by law, take any action to establish, adopt or enter into, or to terminate or amend any Plan; (i) permit any increase in the number of employees of the Company employed by the Company on the date hereof other than pursuant to an employee plan to be agreed to by the Company and Parent as promptly as practicable after the date hereof acting reasonably and in good faith or (ii) terminate any employees of the Company identified on Schedule 6.10

Conduct of Business of the Company. Except as contemplated ---------------------------------- by this ---------------------------------- Agreement, during the period commencing on the date hereof of this Agreement and ending at continuing until the Effective TimeCut-Off Date or until the termination of this Agreement in accordance with its terms, the Company shall, and shall cause each of its subsidiaries to, Subsidiaries shall conduct its operations according to its in the ordinary and usual course of business consistent with past practice, and the Company shall, and shall cause its Subsidiaries will each of its subsidiaries to, use all reasonable efforts endeavor to preserve intact its business organization organization, to keep available the services of its officers and employees and to maintain satisfactory relationships relations with its customers, suppliers, employees contractors, distributors, licensors, licensees, customers and others having material business relationships with it. Without limiting the generality of the foregoing, foregoing and except as otherwise expressly provided in this Agreement, prior to the Effective TimeCut-Off Date, neither the Company nor any of its Subsidiaries shall directly or its subsidiaries willindirectly do, or propose to do, any of the following, without the prior written consent of the Parent: (a) amend Declare or propose to amend its certificate pay any dividends on or make any other distribution in respect of incorporation or by-lawsany of the capital stock of the Company; (b) authorize for issuanceSplit, issue, sell, pledge, deliver combine or agree or commit to issue, sell, pledge or deliver (whether through reclassify any of the issuance or granting of any options, warrants, calls, subscriptions, stock appreciation rights or other rights or other agreements) any capital stock of the Company or issue or authorize any class other securities in respect of, in lieu of or in substitution for, shares of the capital stock of the Company or repurchase, redeem or otherwise acquire any shares of the capital stock of the Company; (c) Issue, deliver, encumber, sell or purchase any shares of the capital stock of the Company or any securities convertible into into, or exchangeable for rights, warrants, options or other rights of any kind to acquire, any such shares of capital stock of any class of the Companystock, other convertible securities or any other ownership interest (including stock appreciation rights or including, without limitation, any phantom stockinterest) (other than shares the issuance of Common Stock issuable upon the exercise of outstanding Stock Options, in compliance with the Stock Purchase Plan stock purchases to be made on June 30, 2000, and upon the exercise of outstanding warrants for Company Common Stock Options outstanding on ("Warrants")); provided that the date occurrence of -------- -------- a separation of the Rights under the Rights Plan, and the related issuance of shares of Company Common Stock to the Company's stockholders thereunder shall not be deemed a breach of this Agreement; Agreement to the extent that (ci) split, combine or reclassify any shares the occurrence of such separation occurred as a result of an unsolicited acquisition of Company Common Stock or declareby a third party, pay or set aside for payment any dividend or other distribution in respect of any Common Stock, or redeem, purchase or otherwise acquire any shares of Common Stock or any other securities and (ii) such acquisition did not occur as a result of the Company or any rights, warrants or options to acquire any such shares of other securities;breaching Section 5.3 hereof; ----------- (d) enter into any other agreements, commitments or contracts that are material to the Company and its subsidiaries taken as a whole Amend or otherwise make any material change that is adverse to its Certificate of Incorporation or Bylaws (or other comparable organizational document), or amend the Company in (i) any existing agreement, commitment Rights Plan or arrangement that is material to reduce the Company and its subsidiaries taken as a whole or (ii) the conduct of the business or operations of the Company and its subsidiariesRights issued thereunder; (e) sellAcquire or agree to acquire by merging or consolidating with, pledge, dispose of or encumber any assets of the Company or any of its subsidiaries (except for (i) sales of assets in the ordinary course of business and in by purchasing a manner consistent with past practice, (ii) dispositions of obsolete or worthless assets, (iii) the dispositions described on, and pursuant to the terms described in, Schedule 6.1(e) and (iv) the sale substantial portion of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer of the Company shall have certified in writing to Parent that as of the date of this Agreement the twelve months trailing EBITDA (determined on the basis disclosed to Parent prior to the date of this Agreement) associated with such assets is $1,300,000 or less; (i) acquire (by merger, consolidationof, or acquisition of stock by any other manner, any business or assets) any corporation, partnership partnership, association or other business organization or division thereof; (f) Sell, lease or otherwise dispose of any of its assets, other than in the ordinary course of business consistent with its past practices, except for as set forth in Section 5.1(f) of the acquisitions described on Schedule 6.1(f)Company Disclosure Schedule; ------------- (iig) incur Incur any indebtedness for borrowed money (other than pursuant to the Company's credit facilities as in effect on the date of this Agreement) or guarantee any such indebtedness or issue or sell any debt securities of the Company or assumeany Subsidiary of the Company or guarantee any debt securities of others, guarantee or endorse or otherwise as an accommodation become responsible for, other than in the obligations ordinary course of business consistent with past practice; (h) Enter into any person, or make any loans or advances; (iii) enter into or amend any material contract or agreement other than in the ordinary course of business consistent with past practice; (i) Authorize any single capital expenditure which is in excess of $50,000 or enter into any management contract for a facility not cancelable without penalty within 30 days of notice; (iv) authorize or make any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) 500,000 for the Company and its subsidiaries, the Subsidiaries taken as a whole; provided, however, the Company -------- ------- will give Parent prior notice of the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate any material contract or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder); (gj) increase Increase the compensation payable or to become payable to its officers or employees, except for increases in accordance with past practices in salaries or wages of employees of the Company or any Subsidiary who are not officers of the Company, or, except in the ordinary course of business, grant any severance or termination pay to, or, except as set forth on Schedule 6.10(c), or enter into any employment or severance agreement with any director, officer or other employee of the Company or any Subsidiary, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of its subsidiariesany director, officer or employee; (hk) take Take any action, other than as required by GAAPreasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognitioncash management, capitalization of development costs, payments the payment of accounts payable and the collection of accounts receivable); (il) make Make any material Tax tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign tax liability or agree to an extension of a statute of limitations for any assessment of federal income tax liability, or material state corporate income execute or franchise taxfile with the IRS or any other taxing authority any agreement or other document extending, except to or having the extent effect of extending, the amount period of assessment or collection of any such settlement has been reserved for on the Company's most recent SEC Filingstaxes; (jm) payPay, discharge, settlesatisfy, settle or satisfy compromise any lawsuitssuit, claimsclaim, liabilities liability or obligations obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction satisfaction, in the ordinary course of business and consistent with past practice practice, of liabilities reflected or reserved against in the financial statements Company's consolidated balance sheet dated as of March 31, 2000, as filed by the Company with the SEC in its Annual Report on Form 10-K for its fiscal year ended March 31, 2000, litigation or claims set forth in Section 4.9 of the Company Disclosure Schedule, or subsequently ----------- incurred in the ordinary course of business and consistent with past practice;; or (kn) except as may be required by law, take Take any action to establish, adopt or enter into, or to terminate or amend that could result in any Plan; (i) permit any increase in of the number of employees representations and warranties of the Company employed by the Company on the date hereof other than pursuant to an employee plan to be agreed to by the Company and Parent as promptly as practicable after the date hereof acting reasonably and set forth in good faith this Agreement becoming untrue in any material respect or (ii) terminate in any employees of the Company identified on Schedule 6.10conditions to the Offer or any of the conditions to the Merger set forth in Section Seven not being satisfied. -------------

Conduct of Business of the Company. Except as contemplated ---------------------------------- by this AgreementAgreement or as set forth in Section 6.1 of the Company Disclosure Schedule, during the period commencing on from the date hereof and ending at to the Effective Timedate on which Purchaser first accepts Shares for payment pursuant to the Offer (the “Offer Acceptance Date”), the Company shallwill, and shall will cause each of its subsidiaries to, in all material respects, conduct its operations according to its in the ordinary course of business consistent and with past practice, no less diligence and effort than would be applied in the Company shall, and shall cause each absence of its subsidiaries to, use all reasonable efforts to preserve intact its business organization and to maintain satisfactory relationships with its customers, suppliers, employees and others having material business relationships with itthis Agreement. Without limiting the generality of the foregoing, and except as otherwise expressly provided in this AgreementAgreement or the Company Disclosure Schedule, prior to the Effective TimeOffer Acceptance Date, neither the Company nor any or of its subsidiaries will, without the prior written consent of the Parent: (a) amend or propose to amend its certificate of incorporation or by-lawsbylaws (or other similar governing instrument); (b) authorize for issuance, issue, sell, pledge, deliver or agree or commit to issue, sell, pledge sell or deliver (whether through the issuance or granting of any options, warrants, callscommitments, subscriptions, stock appreciation rights to purchase or other rights or other agreementsotherwise) any capital stock of any class or any other securities convertible into or exchangeable for shares of capital any stock of any class of the Company, or any other ownership interest equity equivalents (including including, without limitation, any stock options or stock appreciation rights rights), except for (i) the issuance or phantom stock) other than shares sale of Common Stock issuable upon Shares pursuant to the exercise of Company Stock Options outstanding on the date of this Agreement, (ii) shares of Company Common Stock issuable upon exchange of the CDAI Exchangeable Shares, (iii) the issuance of options (A) as set forth in Section 6.1(b) of the Company Disclosure Schedule or (B) in the ordinary course of business consistent with past practice, to new hires of the Company plus not more than 75,000 additional options per quarter (provided, that none of the options permitted by this clause (iii)(B) shall be granted to any officer or director or any family member thereof), and (iv) as contemplated in Section 3.2(d) with regard to the Company Stock Purchase Plan; (c) (i) split, combine or reclassify any shares of Common Stock or its capital stock; (ii) declare, pay or set aside for payment or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock; (iii) make any other actual, constructive or deemed distribution in respect of any Common Stock, shares of its capital stock or otherwise make any payments to stockholders in their capacity as such; or (iv) redeem, purchase repurchase or otherwise acquire any of its securities or any securities of any of its subsidiaries, other than with respect to the CDAI Exchangeable Shares or the repurchase of shares of Company Common Stock pursuant to existing contractual obligations or, at a price of not more than the Offer Price, pursuant to existing contractual rights; (d) adopt a plan of complete or any partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other securities reorganization of the Company or any rights, warrants or options to acquire any such shares of its subsidiaries (other securitiesthan the Merger); (de) alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any subsidiary, other than with respect to any redemption or call of the CDAI Exchangeable Shares; (f) (i) incur or assume any long-term or short-term debt or issue any debt securities, except for (A) borrowings under existing lines of credit in the ordinary course of business or in amounts not material to the Company and its subsidiaries taken as a whole and (B) equipment leases pursuant to which the Company is obligated to make payments of not more than $25,000 individually and $100,000 in the aggregate; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and except for guarantees of obligations of subsidiaries of the Company; (iii) make or cancel, or waive any rights with respect to, any loans, advances or capital contributions to, or investments in, any other person (other than to subsidiaries of the Company); (iv) pledge or otherwise encumber shares of capital stock of the Company or its subsidiaries; or (v) mortgage or pledge any of its tangible or intangible assets or properties, or create or suffer to exist any Lien thereupon; (g) except as may be required by Law or in the ordinary course of business consistent with past practice (other than with respect to directors or officers of the Company or their family members) or as expressly permitted by Section 6.1(b): enter into, adopt, amend, fund, extend or terminate any bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase, pension, retirement, deferred or incentive compensation, labor, collective bargaining, employment, or other employee benefit, retention, change in control or similar agreement, trust, plan, fund, award or other arrangement; (h) except as expressly permitted by Section 6.1(b), take any action to accelerate the vesting of any Company Stock Options or other equity based awards, bonus or incentive compensation or other non-periodic compensation payment or award, or waive or otherwise impair any repurchase rights related to any such awards or compensation, or (except as required under the terms of agreements that are Company Benefit Plans as in effect on the date hereof) increase in any manner the compensation or benefits of any current or former director, officer, or (except in the ordinary course of business) any employee or consultant; (i) acquire, sell, lease or dispose of any assets or enter into any other agreements, commitments commitment or contracts that transaction outside the ordinary course of business which in the aggregate are material to the Company and its subsidiaries taken as a whole or otherwise make any material change that is adverse to the Company in (i) any existing agreement, commitment or arrangement that is material to the Company and its subsidiaries taken as a whole or (ii) the conduct of the business or operations of the Company and its subsidiarieswhole; (ej) sellexcept as may be required by applicable Law or GAAP, pledge, dispose of or encumber change any assets of the Company accounting principles or practices used by it; (k) revalue in any material respect any of its subsidiaries (except for (i) sales assets, including, without limitation, writing down the value of assets inventory or writing-off notes or accounts receivable other than in the ordinary course of business and in a manner consistent with past practice, (ii) dispositions of obsolete or worthless assets, (iii) the dispositions described on, and pursuant to the terms described in, Schedule 6.1(e) and (iv) the sale of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer of the Company shall have certified in writing to Parent that as of the date of this Agreement the twelve months trailing EBITDA (determined on the basis disclosed to Parent prior to the date of this Agreement) associated with such assets is $1,300,000 or lessrequired by GAAP; (i) acquire (by merger, consolidation, or acquisition of stock or assetsassets or otherwise) any corporation, partnership or other business organization or division thereof, except for the acquisitions described on Schedule 6.1(f)thereof or any material equity interest therein; (ii) incur any indebtedness for borrowed money (other than pursuant to the Company's credit facilities as in effect on the date of this Agreement) or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances; (iii) enter into or amend any material contract or agreement agreement, other than a contract or agreement entered into in the ordinary course of business business; (iii) make any amendment in a manner materially adverse to the Company and its subsidiaries taken as a whole to any material Company Contracts or enter any security of the Company or any subsidiary of the Company, other than amendments entered into any management contract for a facility not cancelable without penalty within 30 days in the ordinary course of noticebusiness; (iv) authorize any new capital expenditure or make any capital expenditures or purchase which, individually, is in excess of fixed assets which areone hundred thousand U.S. dollars (US$100,000) or, in the aggregate, are in excess of $7,400,000 five hundred thousand U.S. dollars (exclusive of management information systems expenditures as described in the proviso heretoUS$500,000) for the Company and its subsidiaries, taken as a whole; provided, however, the Company -------- ------- will give Parent prior notice of the making or the firm commitment of capital expenditure or lease payment in any calendar fiscal quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate any material contract or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder); (g) increase the compensation payable or to become payable to its officers or employees, or grant any severance or termination pay to, or, except as set forth on Schedule 6.10(c), enter into any employment Customer Contract the breach of which would be caused by (or severance agreement with any director, officer or other employee of which would be terminable in a manner adverse to the Company or any its subsidiaries upon) the consummation of its subsidiariesthe Merger or the other transactions contemplated hereby; (h) take any action, other than as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable); (im) make or revoke any material Tax election inconsistent with past practices that would result in at least $100,000 of Tax, or settle or compromise any material federalTax liability that exceeds $100,000, stateor file any refund claim that exceeds $100,000, local or foreign tax liability change (or agree make a request to an extension any taxing authority to change) any aspect of a statute its method of limitations accounting for any assessment of federal income tax or material state corporate income or franchise tax, except to the extent the amount of any such settlement has been reserved for on the Company's most recent SEC FilingsTax purposes; (jn) pay, discharge, settle, discharge or satisfy any lawsuits, material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements of the Company September 30 Balance Sheet, or incurred subsequent to such date in the ordinary course of business and consistent with past practicebusiness; (ko) except as waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement to which the Company or any of its subsidiaries is a party, unless, after consultation with outside counsel, the Company Board reasonably determines in good faith that such waiver or agreement to modify may reasonably expected to be required by lawnecessary for the Company Board to comply with its fiduciary duties to the Company’s stockholders under applicable Law; (p) settle or compromise any pending or threatened suit, take action or claim relating to the transactions contemplated hereby; (q) enter into any action agreement or arrangement that would, after the Effective Time, limit or restrict the Surviving Corporation and its affiliates (including Parent) or any successor thereto, from engaging or competing in any line of business or in any geographic area; (r) enter into any license, consulting agreement or other agreement with respect to establishthe Company Owned Intellectual Property (other than licenses or other agreements that do not, adopt in any case, involve rights to computer software source code); provided that the foregoing restriction shall not include any license, agreement or consulting arrangement that is granted in the ordinary course of business; (s) enter into, or to terminate adopt any agreement, or extend, modify or amend any Planexisting agreement that contains any provision pursuant to which the transactions contemplated by this agreement could constitute a breach or could result in a forfeiture or other significant reduction in the benefits to the Company (and, after the acquisition, to the Parent) under such agreement; (it) permit directly or indirectly engage in any increase in the number of employees transaction with, or enter into any agreement with, any director, officer or affiliate of the Company employed by or any family member of any such person except for transactions solely between the Company on the date hereof other than pursuant to an employee plan to be agreed to by or any wholly-owned subsidiary of the Company and Parent as promptly as practicable after the date hereof acting reasonably and in good faith one or (ii) terminate any employees more wholly-owned subsidiaries of the Company identified on Schedule 6.10Company; or (u) take, propose to take, or agree in writing or otherwise to take, any of the actions described in Sections 6.1(a) through 6.1(t).

Conduct of Business of the Company. Except (i) as ---------------------------------- expressly contemplated ---------------------------------- by this Agreement, (ii) as agreed in writing by Purchaser, or (iii) for the consummation of the financing of the Transactions pursuant to and in accordance with the terms of the Financing Documents, during the period commencing on from the date hereof and ending at to the Effective Timetime persons designated or elected by Purchaser or any of its respective affiliates shall constitute a majority of the Board, the Board will not permit the Company shall, and shall cause each or any of its subsidiaries to, Subsidiaries to conduct its operations according to its otherwise than in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its subsidiaries to, use all reasonable efforts to preserve intact its business organization and to maintain satisfactory relationships with its customers, suppliers, employees and others having material business relationships with it. Without limiting the generality of the foregoing, and except as otherwise expressly provided in this Agreement, prior to the Effective Timetime persons designated or elected by Purchaser or any of the respec tive affiliates shall constitute a majority of the Board, neither the Company nor any or its subsidiaries willBoard will not, without the prior written consent of Purchaser, permit the ParentCompany or any of its Subsidiaries to: (a) amend or propose to amend its certificate of incorporation or by-laws; (b) authorize for issuance, issue, sell, pledgedeliver, deliver or agree or commit to issue, sellsell or deliver, dispose of, encum ber or pledge or deliver (whether through the issuance or granting of any options, warrants, callscommitments, subscriptions, stock appreciation rights to purchase or other rights or other agreementsotherwise) any capital stock of any class or any securities convertible into securities, except as required by agreements with the Company's employees under the benefit plans as in effect as of the date hereof or exchangeable for shares pursuant to the Rights Agreement, or amend any of capital stock the terms of any class such securities or agreements outstanding as of the Companydate hereof, or any other ownership interest (including stock appreciation rights or phantom stock) other than shares of Common Stock issuable upon exercise of Company Stock Options outstanding on the date of except as specifically contemplated by this Agreement; (c) split, combine or reclassify any shares of Common Stock or its capital stock, declare, pay or set aside for payment or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of any Common Stockits capital stock, or redeem, purchase redeem or otherwise acquire any shares of Common Stock its securities or any other securities of the Company or any rights, warrants or options to acquire any such shares of other securitiesits Subsidiaries; (d) enter into any other agreements, commitments or contracts that are material to the Company and its subsidiaries taken as a whole or otherwise make any material change that is adverse to the Company in (i) incur or assume any existing agreement, commitment long-term or arrangement that is material to the Company and its subsidiaries taken as a whole short-term debt or (ii) the conduct of the business or operations of the Company and its subsidiaries; (e) sell, pledge, dispose of or encumber issue any assets of the Company or any of its subsidiaries (debt securities except for (i) sales borrowings under existing lines of assets credit in the ordinary course of business and in amounts not material to the Company and its Subsidiaries taken as a manner whole; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person except in the ordinary course of business consistent with past practice and in amounts not material to the Company and its Subsidiaries, taken as a whole, and except for obligations of wholly owned Subsidiaries of the Company to the Company or to other wholly owned Subsidiaries of the Company; (iii) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries of the Company or customary loans or advances to employees in the ordinary course of business consistent with past practice and in amounts not material to the maker of such loan or advance) or make any change in its existing borrowing or lending arrangements for or on behalf of any such person, whether pursuant to an employee benefit plan or otherwise; (iv) pledge or otherwise encumber shares of capital stock of the Company or any of its Subsidiaries; or (v) mortgage or pledge any of its material assets, tangible or intangible, or create or suffer to exist any material Lien thereupon; (e) adopt a plan of complete or partial liquidation or adopt resolutions providing for the complete or partial liquidation, dissolution, consolidation, merger, restructuring or recapitalization of the Company or any of its Subsidiaries; (i) except as may be required by law or as contemplated by this Agreement, enter into, adopt or pay, agree to pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to, or amend or terminate any bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase agreement, pension, retirement, deferred compensation, employment, severance, welfare, insurance or other employee benefit agreement, trust, plan, fund or other arrangement for the benefit or welfare of any director, officer or employee in any manner; or (ii) (except for normal increases in the ordinary course of business consistent with past practice that, in the aggregate, do not result in a material increase in benefits or compensation expense to the Company, and as required under existing agreements or in the ordinary course of business consistent with past practice) increase in any manner the compensation or fringe benefits of any director, (ii) dispositions of obsolete officer or worthless assets, (iii) the dispositions described on, employee or pay any benefit not required by any plan and pursuant to the terms described in, Schedule 6.1(e) and (iv) the sale of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "arrangement as is, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer of the Company shall have certified in writing to Parent that effect as of the date hereof (including, without limitation, the granting of this Agreement stock apprecia- tion rights or performance units); (g) acquire, sell, transfer, lease, encumber or dispose of any assets outside the twelve months trailing EBITDA (determined on ordinary course of business or any assets which in the basis disclosed to Parent prior aggregate are material to the date Company and its Subsidiaries taken as a whole, or enter into any commitment or transaction outside the ordinary course of this Agreementbusiness consistent with past practice which would be material to the Company and its Subsidiaries taken as a whole; (h) associated with such assets is $1,300,000 except as may be required as a result of a change in law or lessin GAAP, change any of the accounting principles or practices used by it; (i) revalue in any material respect any of its assets, including, without limitation, writing down the value of inventory or writing-off notes or accounts receivable other than in the ordinary course of business; (A) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, except for the acquisitions described on Schedule 6.1(f)thereof or any equity interest therein; (ii) incur any indebtedness for borrowed money (other than pursuant to the Company's credit facilities as in effect on the date of this Agreement) or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances; (iiiB) enter into or amend any material contract or agreement other than in the ordinary course of business or enter into any management contract for consistent with past practice which would be material to the Company and its Subsidiaries taken as a facility not cancelable without penalty within 30 days of noticewhole; (ivC) authorize any new capital expenditure or make any capital expenditures or purchase which, individually, is in excess of fixed assets which are$50,000 or, in the aggregate, are in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for the Company and its subsidiaries, taken as a whole; provided, however, the Company -------- ------- will give Parent prior notice of the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000100,000; or (vD) terminate any material contract enter into or amend any contract, agreement, commitment or arrangement providing for the taking of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder)any action that would be prohibited hereunder; (gk) increase the compensation payable make any Tax election (unless required by law) or to become payable to its officers settle or employees, or grant compromise any severance or termination pay to, or, except as set forth on Schedule 6.10(c), enter into any employment or severance agreement with any director, officer or other employee income tax liability of the Company or any of its subsidiariesSubsidiaries, except if such action is taken in the ordinary course of business, and, in any event, the Company shall consult with Purchaser before filing or causing to be filed any Tax Return of the Company or before executing or causing to be executed any agreement or waiver extending the period for assessment or collection of any Taxes of the Company; (h) take any action, other than as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable); (i) make any material Tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign tax liability or agree to an extension of a statute of limitations for any assessment of federal income tax or material state corporate income or franchise tax, except to the extent the amount of any such settlement has been reserved for on the Company's most recent SEC Filings; (jl) pay, discharge, settle, discharge or satisfy any lawsuits, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in in, or contemplated by, the consol- idated financial statements (or the notes thereto) of the Company and its Subsidiaries or incurred in the ordinary course of business consistent with past practice; (m) permit any insurance policy naming it as a beneficiary or a loss payable payee to be canceled or terminated without notice to Purchaser except in the ordinary course of business and consistent with past practicepractice unless the Company shall have obtained a comparable replacement policy; (kn) except as may be required by lawsettle or compromise any pending or threatened suit, take action or claim relating to the Transactions; or (o) take, or agree in writing or otherwise to take, any of the actions described in Sections 8.1(a) through 8.1(n) or any action to establish, adopt which would make any of the representations or enter into, or to terminate or amend any Plan; (i) permit any increase in the number of employees warranties of the Company employed by the Company on contained in this Agreement untrue or incorrect as of the date hereof other than pursuant to an employee plan to be agreed to by the Company and Parent as promptly as practicable after the date hereof acting reasonably and when made or would result in good faith or (ii) terminate any employees of the Company identified on Schedule 6.10conditions set forth in Annex A not being satisfied.

Conduct of Business of the Company. Except as contemplated ---------------------------------- by this Agreement, during During the period commencing on from the date hereof and ending at of this Agreement until the Effective TimeClosing, except (a) as otherwise contemplated or expressly permitted by, or necessary to effectuate the Company shalltransactions contemplated by, and this Agreement or the other Transaction Agreements, (b) for the matters set forth in Section 5.1 of the Disclosure Schedule, (c) as required by applicable Law or any Material Contract, (d) as Buyer otherwise consents in writing in advance (which consent will not be unreasonably withheld, delayed or conditioned), Seller shall cause each of its subsidiaries tothe Transferred Companies to (x) conduct the Business in the Ordinary Course of Business, conduct its operations according to its ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its subsidiaries to, (y) use all commercially reasonable efforts to preserve intact its business organization organizations and maintain material relationships with policyholders, Producers, suppliers and service providers of and to maintain satisfactory relationships with its customers, suppliers, employees respective businesses and others having material business relationships dealings with it. Without limiting the generality it and (z) not do any of the foregoing, and except as otherwise expressly provided in this Agreement, prior to the Effective Time, neither the Company nor any or its subsidiaries will, without the prior written consent of the Parentfollowing: (ai) amend declare or propose to amend pay any dividends on, or make any distributions with respect to, any class of its certificate of incorporation or by-lawsCapital Stock after December 31, 2010; (bii) authorize for issuancerepurchase, redeem, repay or otherwise acquire any outstanding shares of Capital Stock or other securities of any of the Transferred Companies; (iii) transfer, issue, sell, pledge, deliver sell or agree or commit to issue, sell, pledge or deliver (whether through the issuance or granting dispose of any shares of Capital Stock or other securities of any of the Transferred Companies or grant options, warrants, calls, subscriptions, stock appreciation rights calls or other rights or other agreements) any capital stock of any class or any securities convertible into or exchangeable for shares of capital stock of any class of the Company, or any other ownership interest (including stock appreciation rights or phantom stock) other than shares of Common Stock issuable upon exercise of Company Stock Options outstanding on the date of this Agreement; (c) split, combine or reclassify any shares of Common Stock or declare, pay or set aside for payment any dividend or other distribution in respect of any Common Stock, or redeem, to purchase or otherwise acquire any shares of Common Capital Stock or any other securities of any of the Company or any rights, warrants or options to acquire any such shares of other securitiesTransferred Companies; (div) enter into effect any recapitalization, reclassification, stock split or like change in the capitalization of any of the Transferred Companies; (v) amend the certificate of incorporation or by-laws (or other agreementscomparable organizational documents) of any of the Transferred Companies; (vi) except with respect to changes intended to improve underwriting profitability (even if such changes have an effect of reducing premium volume), commitments or contracts that are material to the Company and its subsidiaries taken as a whole or otherwise make any material change that is adverse to in the Company in (i) policies, practices or principles of any existing agreement, commitment or arrangement that is material to the Company and its subsidiaries taken as a whole or (ii) the conduct of the business or operations of the Company and its subsidiaries; (e) sell, pledge, dispose of or encumber any assets of the Company or any of its subsidiaries (except for (i) sales of assets in the ordinary course of business and in a manner consistent with past practice, (ii) dispositions of obsolete or worthless assets, (iii) the dispositions described on, and pursuant to the terms described in, Schedule 6.1(e) and (iv) the sale of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon for a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer of the Company shall have certified in writing to Parent that as of the date of this Agreement the twelve months trailing EBITDA (determined on the basis disclosed to Parent prior to the date of this Agreement) associated with such assets is $1,300,000 or less; (i) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, except for the acquisitions described on Schedule 6.1(f); (ii) incur any indebtedness for borrowed money (other than pursuant to the Company's credit facilities as Insurance Subsidiaries in effect on the date hereof with respect to accounting methodology, reserving, underwriting or claims administration (other than any change required by IFRS, SAP or, in respect of underwriting or claims administration, in the Ordinary Course of Business); (vii) purchase, sell, lease, exchange or otherwise dispose of or acquire any property or assets (other than (A) Proposed Protected Assets or Excluded Assets, (B) transactions occurring in the Ordinary Course of Business and not otherwise prohibited under this AgreementSection 5.1(z), (C) the sale, exchange or other disposition of investment assets, which are the subject of Section 5.1(z)(viii), and (D) pledges or other collateral assignments of assets, including by means of a credit for reinsurance trust, to or for the benefit of cedents under reinsurance written by an Insurance Subsidiary, for purposes of statutory accounting credit) or issue enter into any debt securities lease of real property or make any capital expenditure for which the aggregate consideration paid or payable in any individual transaction is in excess of $2,000,000 or in the aggregate in excess of $5,000,000, in each case other than in the Ordinary Course of Business; (viii) sell, exchange, or otherwise dispose of any investment assets (other than Proposed Protected Assets and Excluded Assets, which may be sold, exchanged or otherwise disposed of without restriction), provided that the Transferred Companies may sell, exchange or otherwise dispose of such investment assets to the extent that such transactions result in (A) aggregate cumulative gross capital gains not in excess of (1) $50,000,000 plus (2) an additional $50,000,000 of aggregate capital gains to the extent that such gains would be reflected in the statutory financial statements of OMFLIC or OMFLICNY, as the case may be, as additions to the interest maintenance reserve or (B) aggregate cumulative gross capital losses not in excess of (1) $50,000,000 plus (2) an additional $50,000,000 of aggregate capital losses to the extent that such losses would be reflected in the statutory financial statements of OMFLIC or OMFLICNY, as the case may be, as reductions to the interest maintenance reserve; (ix) incur any financial indebtedness for borrowed money from third party lending sources (other than current trade accounts payable incurred in respect of property or services purchased in the Ordinary Course of Business and letters of credit issued in the Ordinary Course of Business) or assume, grant, guarantee or endorse endorse, or otherwise as an accommodation become responsible for, the obligations of any personPerson, or make any loans or advances; advances (iiiother than advance commissions to Producers), for individual amounts in excess of $2,000,000 or in the aggregate in excess of $5,000,000 (or, in the case of loans or advances to Affiliates, for amounts in the aggregate in excess of $5,000,000); (x) enter into, as a reinsured, any reinsurance or other similar contract, or enter into or amend (in any material respect) or renew or extend any Material Contract; (xi) in any material respect, (A) grant, increase, or accelerate the vesting or payment of, or announce or promise to grant, increase or accelerate the vesting or payment of, any wages, salaries, bonuses, incentives, severance pay, other compensation, pension or other benefits payable or potentially available to any executive officers or directors of the Transferred Companies, including any increase or change pursuant to any Company Benefit Plan or (B) establish, adopt, increase or amend (or promise to take any such action(s)) any Benefit Plan or any benefits potentially available thereunder, in either case except as required by Law or by any contract in existence on the date hereof or agreement involving increases or changes in the Ordinary Course of Business; (xii) enter into, or amend in any material respect, any employment contracts with executive officers; (xiii) settle or compromise any Action or threatened Action (in each case, except for claims under any Insurance Contracts within applicable policy limits), other than in the ordinary course any settlement or compromise that involves cash payments, net of business any insurance or enter into any management contract for a facility not cancelable without penalty within 30 days reinsurance, of notice; (iv) authorize or make any capital expenditures or purchase of fixed assets which are, less than $5,000,000 in the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for the Company and its subsidiaries, taken as a whole; provided, however, the Company -------- ------- will give Parent prior notice of the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate any material contract or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder); (gxiv) increase the compensation payable make, revoke, amend or to become payable to its officers or employees, or grant any severance or termination pay to, or, except as set forth on Schedule 6.10(c), enter into any employment or severance agreement with any director, officer or other employee of the Company or any of its subsidiaries; (h) take any action, other than as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable); (i) make any material Tax election inconsistent with past practices or concerning Taxes, settle or compromise any material federalTax liability, statefile any amended Tax Return to the extent such amendment could negatively affect the Financial Statements or the Statutory Statements in a material manner, local enter into any closing agreement with any Taxing Authority, extend or foreign tax liability or agree to an extension waive the application of a any statute of limitations for any assessment of federal income tax regarding the assessment, reassessment or material state corporate income or franchise tax, except to the extent the amount collection of any such settlement has been reserved for on the Company's most recent SEC Filingsmaterial Tax, or enter into any Tax allocation agreement, Tax sharing agreement or Tax indemnity agreement; (jxv) pay, discharge, settle, enter into or satisfy renew any lawsuits, claims, liabilities or obligations lease of real property with a term of longer than one year; or (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent xvi) enter into any legally binding commitment with past practice of liabilities reflected or reserved against in the financial statements respect to any of the Company foregoing. Notwithstanding anything contained in this Section 5.1 to the contrary, nothing contained herein shall limit or incurred in restrict the ordinary course ability of business and consistent with past practice; (k) except as may be required by lawSeller of any of its Affiliates to sell, take liquidate or otherwise dispose of any action to establish, adopt Proposed Protected Asset or enter into, or to terminate or amend any Plan; (i) permit any increase in the number of employees of the Company employed by the Company on the date hereof other than pursuant to an employee plan to be agreed to by the Company and Parent as promptly as practicable after the date hereof acting reasonably and in good faith or (ii) terminate any employees of the Company identified on Schedule 6.10Excluded Asset.

Conduct of Business of the Company. Except as contemplated ---------------------------------- by this Agreement, with the prior written consent of Parent or as set forth on Schedule 6.1 of the Company Disclosure Letter, during the period commencing on from the date hereof and ending at of this Agreement to the earlier of the Effective TimeTime or termination of this Agreement in accordance with its terms, the Company shall, shall (and shall cause each of its subsidiaries Subsidiaries to, ) conduct its and its Subsidiaries’ operations according to its in the ordinary course of business consistent with past practice, practice and the Company shall, shall (and shall cause each of its subsidiaries Subsidiaries to, ) use all its reasonable best efforts to preserve intact its the business organization of the Company and its Subsidiaries and to maintain satisfactory relationships with its preserve the goodwill of customers, suppliers, employees suppliers and others all other Persons having material business relationships with itthe Company and its Subsidiaries. Without limiting the generality of the foregoing, and except as otherwise expressly provided in contemplated by this AgreementAgreement or as set forth on Schedule 6.1 of the Company Disclosure Letter, prior to the Effective TimeClosing Date, neither the Company nor shall not (and shall cause each of its Subsidiaries not to) do any or its subsidiaries will, of the following without the prior written consent of the Parent:Parent (such consent not to be unreasonably withheld): (a) amend adopt or propose to amend any change in its certificate of incorporation or by-lawsorganizational documents; (b) authorize for issuanceengage in any material transaction (including capital expenditures) outside of the ordinary course of business that would require expenditures by the Surviving Corporation, Parent or any Parent’s Subsidiaries in excess of $5,000,000 per annum or $10,000,000 in the aggregate; (c) issue, reissue, sell, pledge, deliver or agree or commit to issue, sellgrant, pledge or deliver (whether through otherwise encumber, or authorize the issuance or granting of any optionsissuance, warrantsreissuance, callssale, subscriptionsgrant, stock appreciation rights pledge or other rights encumbrance of shares of Company Capital Stock, or other agreements) any capital stock of any class or any securities convertible into or exchangeable for shares of capital stock of any class of the Company, or any other ownership interest rights, warrants or options to acquire any convertible securities or capital stock of the Company (including stock appreciation rights or phantom stock) other than the issuance of shares of Common Company Capital Stock issuable upon in connection with the exercise of Company Equity Awards or Company Warrants, in each case outstanding as of the date of this Agreement in accordance with the Company Stock Options outstanding on Plan or the Warrant Agreement, respectively, in each case as in effect of the date of this Agreement); (cd) (i) increase the compensation or benefits payable or provided to any current or former director, officer, employee or independent contractor, other than any such increases made in the ordinary course of business and consistent with past practice for employees whose total annual compensation does not exceed $300,000, (ii) grant or pay to any current or former director, officer, employee or independent contractor any severance, change in control or termination pay, or modifications thereto or increases therein, other than pursuant to any Company Plan as in effect on the date hereof, in accordance with their terms as in effect on such date, (iii) pay any benefit or grant or amend any award (including in respect of stock options, stock appreciation rights, performance units, restricted stock or other stock-based or stock-related awards or the removal or modification of any restrictions in any Company Plan or awards made thereunder) except as required to comply with any Applicable Law or any Company Plan as in effect as of the date hereof, (iv) adopt, enter into, amend, modify or terminate any collective bargaining agreement or other labor union contract, (v) take any action to accelerate the vesting or payment of any compensation or benefit (including in respect of Company Equity Awards) under any Company Plan or awards made thereunder or other Contract with any current or former director, officer, employee or independent contractor of the Company or any of its Subsidiaries, other than as required pursuant to this Agreement, (vi) amend or terminate any, or enter into or adopt any new, Company Plan or any other plan, trust, fund, policy, agreement or arrangement for the benefit of any current or former directors, officers, employees or independent contractors of the Company or any of its Subsidiaries, other than in the ordinary course of business consistent with past practice and as would not have a material cost to the Company or its Subsidiaries, (vii) hire any employee whose total annual compensation exceeds $300,000, or (viii) waive or materially amend any restrictive covenant entered into by any current or former director, officer, employee or independent contractor of the Company or any of its Subsidiaries. (e) except in the ordinary course of business consistent with past practice, sell, lease, encumber or otherwise surrender, relinquish, dispose of, transfer, exclusively license, mortgage, pledge or grant any Lien on any material Assets, properties or rights (including the capital stock of its Subsidiaries) except (i) to the extent they are used, retired or replaced in the ordinary course of business or (ii) to the Company or any Subsidiary of the Company; (f) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock, other than dividends or distributions declared, set aside, paid or made by a direct or indirect Subsidiary of the Company to the Company or a Subsidiary of the Company, and payments on preferred stock to the extent required by the applicable certificate of designations, (ii) adjust, split, combine or reclassify any of its capital stock or issue or propose or authorize the issuance of any other securities (including options, warrants, or any similar security exercisable for or convertible into, such other security) in respect of, in lieu of or in substitution for shares of Common Stock its capital stock or declare(iii) purchase, pay or set aside for payment any dividend or other distribution in respect of any Common Stock, or redeem, purchase redeem or otherwise acquire any shares of Common Stock its capital stock or the capital stock of any of its Subsidiaries or any other securities of the Company thereof or any rights, warrants or options to acquire any such shares or other securities, except for purchases, redemptions or other acquisitions of capital stock or other securities pursuant to an existing restricted stock purchase agreement with current or former employees and acceptance of shares of Company Capital Stock as payment for the exercise price of any outstanding Company Stock Options or for withholding Taxes incurred in connection with the exercise of Company Stock Options or the vesting or settlement of other securitiesCompany Equity Awards, in each case outstanding as of the date of this Agreement; (dg) make, change or revoke any material Tax election, file any material amended Tax Return, settle or compromise any material claim, action, proceeding or assessment for Taxes, change any method of Tax accounting, enter into any other agreements, commitments closing agreement with respect to Taxes or contracts that are material to the Company and its subsidiaries taken as a whole make or otherwise make surrender any material change that is adverse to the Company claim for a refund of Taxes, in each case except (i) any existing agreementas required by applicable Tax Law, commitment or arrangement that is material to the Company and its subsidiaries taken as a whole or (ii) the conduct of the business or operations of the Company and its subsidiariesconsistent with past practice; (eh) selltake any action or omit to take any action or enter into any transaction which, pledge, dispose of or encumber any assets to the Knowledge of the Company Company, prior to taking or omitting to take any such action or prior to entering into any such transaction, has, or would reasonably be expected to have, the effect of its subsidiaries (except for materially delaying or otherwise materially impeding or preventing the consummation of the transactions contemplated by this Agreement and each of the other Transaction Documents; (i) sales of assets except in the ordinary course of business and in a manner consistent with past practice, (i) modify, amend or terminate any Material Contract, (ii) dispositions enter into any successor agreement to an expiring Material Contract that changes the terms of obsolete the expiring Material Contract or worthless assets, (iii) the dispositions described on, and pursuant to the terms described in, Schedule 6.1(e) and (iv) the sale of the assets on Schedule 6.1(e) hereto (the "Meridian Assets") on an "as is, where is," basis to --------------- the individuals named thereon for enter into any new agreement that would have been considered a cash purchase price of $3,000,000 without recourse to the Company if, and only if, five days prior to such sale the chief financial officer of the Company shall have certified in writing to Parent that as of the date of this Agreement the twelve months trailing EBITDA (determined on the basis disclosed to Parent Material Contract if it were entered into at or prior to the date hereof, in each of this Agreementcases (i), (ii) associated with and (iii) if the effect of such assets is $1,300,000 or lessaction would be materially adverse to the Company and its Subsidiaries, taken as a whole; (i) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, except for the acquisitions described on Schedule 6.1(f); (iij) incur any indebtedness for borrowed money (other than pursuant to Indebtedness in excess of $5,000,000 in the Company's credit facilities as in effect on the date of this Agreement) aggregate or issue any debt securities or assume, guarantee or endorse endorse, or otherwise as an accommodation become responsible forfor or cancel, the obligations Indebtedness of any personPerson (other than the Company or any of the Company’s Subsidiaries), or make or authorize any material loan to any Person (in each case other than loans or advances; advances made to the Company or by the Company or any of its Subsidiaries), other than Indebtedness in replacement of existing Indebtedness (iiiprovided that such replacement Indebtedness shall be prepayable without premium or penalty and shall have a principal amount no greater than the principal amount of the Indebtedness it replaces); (k) acquire or agree to acquire by merging or consolidating with, or by purchasing all or substantially all the assets of or all or substantially all the outstanding equity interests in, any business or any corporation, partnership, joint venture, limited liability company or other company, association or other business organization; (l) change any significant method of accounting or accounting principles or practices by the Company or any of its Subsidiaries, except for such changes required by U.S. GAAP or applicable regulatory accounting requirements; (m) terminate, cancel, or materially amend or modify any material insurance policies maintained by it covering the Company or any of its Subsidiaries or their respective properties which is not replaced by a comparable amount of insurance coverage; (n) adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries; (o) abandon, encumber, convey title (in whole or in part), exclusively license or grant any right or other licenses to material Intellectual Property owned or exclusively licensed to the Company or any of its Subsidiaries, or enter into licenses or amend agreements that impose material new restrictions upon the Company or any material contract or agreement of its Subsidiaries with respect to Intellectual Property owned by any third party, in each case, other than in the ordinary course of business consistent with past practice; (p) materially change any of the architecture or infrastructure of the Company’s or any of its Subsidiaries’ network or information technology infrastructure systems or any material component thereof or any other material IT Assets currently used in the Company Business, other than maintenance or upgrades to any product provided by any existing vendor of the Company or such Subsidiary or otherwise in the ordinary course of business consistent with past practice; (q) institute, compromise, settle or agree to settle any Claims (a) involving amounts in excess of $5,000,000 individually or $15,000,000 in the aggregate or (b) that would impose any material non-monetary obligation on the Company that would continue after the Effective Time; or (r) authorize or enter into any management contract for a facility not cancelable without penalty within 30 days of notice; (iv) authorize agreement or otherwise make any capital expenditures commitment to do any of the foregoing. Nothing contained in this Agreement gives, or purchase of fixed assets which areis intended to give the Acquirer Parties, in the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for the Company and its subsidiaries, taken as a whole; provided, howeverdirectly or indirectly, the Company -------- ------- will give Parent prior notice of right to control or direct the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate any material contract or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder); (g) increase the compensation payable or to become payable to its officers or employees, or grant any severance or termination pay to, or, except as set forth on Schedule 6.10(c), enter into any employment or severance agreement with any director, officer or other employee operations of the Company or any of its subsidiaries; (h) take any action, other than as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable); (i) make any material Tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign tax liability or agree to an extension of a statute of limitations for any assessment of federal income tax or material state corporate income or franchise tax, except Subsidiaries prior to the extent Effective Time. Prior to the amount of any such settlement has been reserved for on Effective Time, the Company's most recent SEC Filings; (j) payCompany shall exercise, discharge, settle, or satisfy any lawsuits, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice the terms and conditions of liabilities reflected or reserved against in the financial statements of the Company or incurred in the ordinary course of business this Agreement, complete control and consistent with past practice; (k) except as may be required by law, take any action to establish, adopt or enter into, or to terminate or amend any Plan; (i) permit any increase in the number of employees of the Company employed by the Company on the date hereof other than pursuant to an employee plan to be agreed to by the Company supervision over its and Parent as promptly as practicable after the date hereof acting reasonably and in good faith or (ii) terminate any employees of the Company identified on Schedule 6.10its Subsidiaries’ operations.

Conduct of Business of the Company. Except as contemplated ---------------------------------- set forth in Schedule 8.1 of the Company Disclosure Statement, as expressly permitted by this AgreementAgreement (including any transaction permitted by Schedule 8.1 of the Company Disclosure Statement), as required by any change in applicable Law, or as otherwise agreed by Parent in writing (which agreement shall not be unreasonably withheld), during the period commencing on from the date hereof and ending at of this Agreement to the Effective Time, (i) the Company shallwill, and shall will cause each of its subsidiaries Subsidiaries to, conduct its operations according to its the Company's business in the ordinary course of business consistent with past practice, and (ii) to the extent consistent with the foregoing, the Company shallwill, and shall will cause each of its subsidiaries Subsidiaries to, use all their reasonable best efforts to preserve intact its current business organization organizations, keep available the service of its current officers and to maintain satisfactory employees, and preserve its relationships with its customers, suppliers, employees suppliers and others having material business relationships dealings with itit (but without the obligation to pay any additional compensation to any such officers, employees, customers, suppliers and other persons), in each case with respect to the Company's current business, with the objective that the goodwill and ongoing businesses of the Company shall be materially unimpaired at the Effective Time. Without limiting the generality of the foregoing, from and except as otherwise expressly provided in this Agreement, prior including the date hereof to the Effective Time, neither the Company nor will not, and will not permit any or of its subsidiaries willSubsidiaries to, without the prior written consent of Parent (except to the Parent:extent set forth in Schedule 8.1 of the Company Disclosure Statement): (a) amend except for (i) Company Common Stock issued upon exercise of options or propose to amend other rights outstanding as of the date hereof under Employee Plans in accordance with the terms thereof and (ii) securities issued in connection with the conversion of convertible or exchangeable securities of the Company or its certificate Subsidiaries outstanding as of incorporation or by-laws; (b) authorize for issuancethe date hereof in accordance with the terms of such securities, issue, sell, pledge, deliver or agree or commit to issuedeliver, sell, dispose of, pledge or deliver otherwise encumber, or authorize or propose the issuance, sale, disposition or pledge or other encumbrance (in each instance, whether through the issuance or granting of any options, warrants, callscommitments, subscriptions, stock appreciation rights to purchase or other rights or other agreementsotherwise) of (A) any additional shares of its capital stock of any class class, or any Voting Debt or any securities or rights convertible into into, exchangeable for, or exchangeable evidencing the right to subscribe for any shares of its capital stock of or Voting Debt or any class of the Companyrights, warrants, options, calls, commitments or any other ownership interest (including stock appreciation rights agreements of any character to purchase or phantom stock) other than acquire any shares of its capital stock or Voting Debt or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock, or (B) any other securities in respect of, in lieu of, or in substitution for, Company Common Stock issuable upon exercise of Company Stock Options outstanding on the date hereof; (b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any of this Agreementits outstanding securities, other than pursuant to existing agreements requiring the Company to repurchase or acquire any shares of its capital stock (provided that such repurchase or acquisition is in accordance with the terms of such agreement as in effect on the date hereof); (c) split, combine combine, subdivide or reclassify any shares of Common Stock its capital stock or declare, pay or set aside for payment or pay any dividend dividend, or make any other actual, constructive or deemed distribution in respect of any Common Stock, or redeem, purchase or otherwise acquire any shares of Common Stock or any other securities of the Company or any rights, warrants or options to acquire any such shares of other securities; (d) enter into any other agreements, commitments or contracts that are material to the Company and its subsidiaries taken as a whole capital stock or otherwise make any material change that is adverse payments to stockholders in their capacity as such (other than dividends or distributions paid by any Wholly Owned Subsidiary of the Company to the Company in or another Wholly Owned Subsidiary of the Company); (i) grant any existing agreement, commitment or arrangement that is material to increases in the Company and its subsidiaries taken as a whole or (ii) the conduct compensation of the business or operations of the Company and its subsidiaries; (e) sell, pledge, dispose of or encumber any assets of the Company or any of its subsidiaries (directors, officers or employees, except for (i) sales of assets increases granted to employees other than officers in the ordinary course of business and in a manner consistent with past practice, (ii) dispositions pay or award or agree to pay or award any pension, retirement allowance, or other non-equity incentive awards, or other employee benefit, not required by any of obsolete the Employee Plans to any current or worthless assetsformer director, officer or employees, whether past or present, or to any other Person, except for payments or awards to current employees other than officers that are in the ordinary course of business, consistent with past practice, (iii) the dispositions described onpay or award or agree to pay or award any stock option or equity incentive awards, and pursuant to the terms described in, Schedule 6.1(e) and (iv) except as provided for in the sale of business plan previously dated April 29, 1999 provided by the assets on Schedule 6.1(e) hereto Company to Parent and Merger Sub (the "Meridian AssetsBusiness Plan"), enter into any new or amend any existing employment agreement with any director, officer or employee except for employment agreements with new employees entered into in the ordinary course of business consistent with past practice and except for amendments in the ordinary course of business, consistent with past practice, that do not materially increase benefits or payments, (v) enter into any new or amend any existing severance agreement with any current or former director, officer or employee, except for agreements or amendments in the ordinary course of business, consistent with past practice, that do not provide for material benefits, or (vi) become obligated under any new Employee Plan which was not in existence on an "as isthe date hereof, where is," basis to --------------- or amend any such Employee Plan in existence on the individuals named thereon date hereof, except for any such amendment in the ordinary course of business, consistent with past practice, that does not provide for material additional benefits; (e) adopt a cash purchase price plan of $3,000,000 without recourse to the Company ifcomplete or partial liquidation, and only ifdissolution, five days prior to such sale the chief financial officer merger, consolidation, restructuring, recapitalization or other reorganization of the Company shall have certified in writing to Parent that as or any Subsidiary of the date Company not constituting an inactive Subsidiary (other than the Merger and other than any such merger, consolidation, restructuring, recapitalization or other reorganization that is used to effect an acquisition permitted pursuant to Section 8.1(f) and which does not result in a change of this Agreement control of the twelve months trailing EBITDA Company or change the Company's Common Stock into a different number or kind of securities); (determined f) make any acquisition, by means of stock or asset purchase, recapitalization, merger, consolidation or otherwise, of (i) any direct or indirect ownership interest in or assets comprising any business enterprise or operation or (ii) except in the ordinary course and consistent with past practice, any other assets; PROVIDED FURTHER that such acquisitions do not and would not prevent or materially delay the consummation of the Merger; and PROVIDED FURTHER that the foregoing shall not prevent the Company from exploring on a preliminary basis and conducting diligence investigations (including having discussions with any potential acquisition target) with respect to any potential acquisition that would require Parent's consent hereunder, for the purpose of determining the desirability of such potential acquisition and developing the basis disclosed on which to Parent prior seek Parent's consent, so long as the Company does not submit any formal proposal or indication of interest with respect to the date of this Agreement) associated such an acquisition to such acquisition target, or make any binding commitments with respect to such assets is $1,300,000 or lesspotential acquisition, without obtaining Parent's consent; (i) acquire dispose of any interest in any material business enterprise or operation of the Company, (by merger, consolidation, ii) make any other disposition of any other direct or acquisition indirect ownership interest in any material assets of stock or assets) any corporation, partnership or other business organization or division thereof, the Company (except for the acquisitions described on Schedule 6.1(freplacement or upgrade of assets, or disposition of unnecessary assets, in the ordinary course and consistent with past practice); , or (iiiii) except in the ordinary course and consistent with past practice, dispose of any other assets of the Company; (h) adopt any amendments to the Company Charter or the by-laws or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Subsidiary of the Company; (i) incur any indebtedness for borrowed money or guarantee any indebtedness of any other Person or make any loans, advances or capital contributions to, or investments in, any other Person (other than pursuant to the Company's credit facilities as in effect on the date of this Agreement) or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances; (iii) enter into or amend any material contract or agreement other than in the ordinary course of business or enter into any management contract for a facility not cancelable without penalty within 30 days of notice; (iv) authorize or make any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $7,400,000 (exclusive of management information systems expenditures as described in the proviso hereto) for the Company and its subsidiaries, taken as a whole; provided, however, the Company -------- ------- will give Parent prior notice of the making or the firm commitment of capital expenditure or lease payment in any calendar quarter relating to management information systems equipment with a fair market value greater than $1,000,000; or (v) terminate any material contract or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder); (g) increase the compensation payable or to become payable to its officers or employees, or grant any severance or termination pay to, or, except as set forth on Schedule 6.10(c), enter into any employment or severance agreement with any director, officer or other employee of the Company or any Wholly Owned Subsidiary of its subsidiaries; (h) take any action, other than as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable); (i) make any material Tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign tax liability or agree to an extension of a statute of limitations for any assessment of federal income tax or material state corporate income or franchise tax, except to the extent the amount of any such settlement has been reserved for on the Company's most recent SEC Filings); (j) payexcept as provided for in the Business Plan, dischargeengage in the conduct of any business other than the Company's existing businesses; (k) enter into any agreement or exercise any discretion providing for acceleration of payment or performance as a result of a change of control of the Company or its Subsidiaries, settleexcept in connection with the Offer and the Merger; PROVIDED THAT this paragraph (k) shall not restrict the Company's right to respond or take action in response to any such acceleration so long as such action is permitted under this Section 8.1; (l) enter into any contracts, arrangements or satisfy understandings requiring in the aggregate the purchase of equipment, materials, supplies or services in excess of $2 million individually or $20 million in the aggregate other than any lawsuitssuch contracts, claimsarrangements or understandings providing for capital spending of the Company or its Subsidiaries in accordance with the Business Plan; (m) enter into or amend, liabilities modify, terminate or obligations waive any right under any agreement with any Affiliates of the Company (absolute, accrued, asserted or unasserted, contingent or otherwiseother than its Subsidiaries), other than any of the payment, discharge or satisfaction foregoing as may be done in the ordinary course of business and consistent with past practice of liabilities reflected that (x) would not reasonably be expected, individually or reserved against in the financial statements aggregate, to have a Material Adverse Effect or (y) would not be reasonably likely to prevent or materially delay consummation of the transactions contemplated by this Agreement; (n) settle or compromise any material litigation or material Tax Controversy with respect to the Company or incurred its Subsidiaries or waive, release or assign any material rights or claims with respect to the Company or its Subsidiaries, except in the ordinary course of business and consistent with past practice; (ko) effect any material change in any of its methods of accounting, except as may be required by law, take any action to establish, adopt law or enter into, or to terminate or amend any Plangenerally accepted accounting principles; (ip) permit take any increase action, engage in any transaction or enter into any agreement which would cause any of the number representations or warranties set forth in Article VI hereof that are subject to, or qualified by, a "Material Adverse Effect", "material adverse change" or other materiality qualification to be untrue as of employees the Closing Date, or any such representations and warranties that are not so qualified to be untrue in any respect which would have a Material Adverse Effect; (q) take any action, including without limitation, the adoption of any shareholder rights plan or amendments to the Certificate of Incorporation, which would, directly or indirectly, restrict or impair the ability of Parent to vote, or otherwise to exercise the rights and receive the benefits of a shareholder with respect to, securities of the Company employed that may be acquired or controlled by Parent or Merger Sub or permit any shareholder to acquire securities of the Company on a basis not available to Parent in the date hereof event that Parent were to acquire securities of the Company; (r) authorize, recommend or propose (other than pursuant to Parent), or announce an employee plan intention to be agreed to by the Company and Parent as promptly as practicable after the date hereof acting reasonably and in good faith or (ii) terminate do any employees of the Company identified on Schedule 6.10foregoing, or enter into any contract, agreement, commitment or arrangement to do any of the foregoing.