Common use of Conduct of Business Pending the Merger Clause in Contracts

Conduct of Business Pending the Merger. SECTION 6.1 Conduct of Business by the Company Pending the Merger. Except as otherwise contemplated by this Agreement or disclosed in Section 6.1 of the Company Disclosure Schedule, after the date hereof and prior to the Closing Date or earlier termination of this Agreement, unless Parent shall otherwise agree in writing, the Company shall, and shall cause its subsidiaries to: (a) conduct their respective businesses in the ordinary and usual course of business and consistent with past practice; (b) not (i) amend or propose to amend their respective certificates of incorporation or bylaws, (ii) split, combine or reclassify their outstanding capital stock or (iii) declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise, except for the payment of dividends or distributions to the Company by a wholly-owned subsidiary of the Company; (c) not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that (i) the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereof, (ii) the Company may issue shares of Company Common Stock (or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings in the ordinary course of business (other than pursuant to credit facilities) or borrowings under the existing credit facilities of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets in the ordinary course of business and expenditures for fixed or capital assets in the ordinary course of business and other than as set forth in the proviso in this Section 6.1(d), (vi) sell, pledge, dispose of or encumber any material assets or businesses other than (A) sales of businesses or assets in the ordinary course of business, (B) sales of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, or (vii) except as contemplated by the following proviso, enter into any binding contract, agreement, commitment or arrangement with respect to any of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent with past practice; provided, however, that the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annum; (h) not adopt, enter into or amend any pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any employees or retirees generally, other than in the ordinary course of business, except (i) as contemplated by Section 6.1(c), (ii) as required to comply with changes in applicable law, (iii) any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreement; (i) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses in such amounts and against such risks and losses as are consistent with past practice; and (j) not make, change or revoke any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authority.

Conduct of Business Pending the Merger. SECTION 6.1 5.1 Conduct of Business by the Company Pending the Merger. Except as ----------------------------------------------------- Prior to the Effective Time, except to the extent that Purchaser shall otherwise contemplated consent (including by this Agreement or disclosed in Section 6.1 virtue of action by the Board of Directors of the Company Disclosure Scheduleapproved by all of Purchaser's or Merger Sub's designees, after the date hereof and prior to the Closing Date or earlier termination as applicable, at such time as they shall constitute a majority of this Agreement, unless Parent shall otherwise agree in writingsuch Board), the Company shall, and shall cause its subsidiaries Subsidiaries to: (a) , except as expressly permitted by this Agreement, conduct their respective businesses in in, and shall not take any action except in, the ordinary and usual course of business and in a manner consistent with past practice;; and the Company shall, and shall cause its Subsidiaries to, use their respective reasonable best efforts to preserve intact the business organization of the Company and its Subsidiaries, to keep available the services of the current officers, employees and consultants of the Company and its Subsidiaries and to preserve the current business relationships of the Company and its Subsidiaries, including, without limitation, with customers, licensors, suppliers, distributors and others with which the Company or any Subsidiary has business relations. Without limiting the generality of the foregoing, and except as expressly permitted or specifically contemplated by this Agreement, the Company shall not, and shall not permit any Subsidiary to, between the date of this Agreement and the Effective Time, directly or indirectly do, or propose to do, any of the following without the prior written consent of Purchaser (except as otherwise expressly permitted by this Agreement): (b) not (i) amend declare, set aside or propose pay any dividends on or other distributions in respect of any of its capital stock (other than dividends and distributions by any direct or indirect wholly owned subsidiary of the Company to amend their respective certificates of incorporation or bylawsits parent), (ii) split, combine or reclassify their outstanding 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 or (iii) declarerepurchase, set aside redeem or pay otherwise acquire, or permit any dividend Subsidiary to repurchase, redeem or distribution payable in cashotherwise acquire, any shares of capital stock, property or otherwise, except for the payment of dividends or distributions to the Company by a wholly-owned subsidiary of the Company; (cb) not issue, deliver, sell, pledge pledge, dispose or dispose ofencumber, or agree to issueauthorize or propose the issuance, selldelivery, pledge sale, pledge, disposal or dispose encumbrance of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their its capital stock of any class or any debt or equity securities convertible into into, or exchangeable for any rights, warrants, calls, subscriptions or options to acquire, any such capital stockshares or convertible securities, except that or any other ownership interest other than (i) the Company may issue shares upon conversion issuance of convertible securities and exercise of options and warrants outstanding on the date hereof, (ii) the Company may issue shares of Company Common Stock upon the exercise of stock options granted under the Company Stock Option Plans outstanding on the date of this Agreement and in accordance with the current terms of such options, (or warrants or options to acquire Company Common Stockii) in connection with acquisitions issuances by a Subsidiary of assets or businesses pursuant its capital stock to the proviso Company or a Subsidiary so long as the Company will, after such issuance, directly or indirectly own all the outstanding capital stock of Section 6.1(d) the issuing Subsidiary and (iii) the Company may issue shares grant of Company Common Stock pursuant stock options to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings new hires in the ordinary course of business consistent with past practice and with the written consent of Purchaser; (other than pursuant c) amend or propose to credit facilitiesamend its Certificate of Incorporation or By- Laws; (d) acquire or borrowings under the existing credit facilities agree to acquire, including, without limitation, by merging or consolidating with, or by purchasing a substantial equity interest in or substantial portion of the Company assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof; (e) sell, lease, license, grant a security interest in, encumber or otherwise dispose of, or agree to sell, lease, grant a security interest in, encumber or otherwise dispose of, any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company assets other than (the "Existing Credit Facilities"i) up to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, sales or (C) borrowings in connection with acquisitions as set forth licenses of its products in the proviso in this Section 6.1(d)ordinary course of business consistent with past practice, (ii) redeemequipment and property no longer used in the operation of the Company and its Subsidiaries' respective businesses and (iii) assets related to any discontinued operations of the Company and its Subsidiaries which operations were discontinued prior to the date hereof; (f) incur (which shall not be deemed to include entering into credit agreements, purchase, acquire lines of credit or offer to purchase similar arrangements until borrowings are made under such arrangements) any indebtedness for borrowed money or acquire guarantee any shares of its capital stock such indebtedness or issue or sell any options, debt securities or warrants or rights to acquire any debt securities of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (any Subsidiary or guarantee any debt securities of others, except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets in the ordinary course of business and expenditures consistent with past practice; (i) grant any increase in the compensation of any of its directors, officers or employees, except for fixed or capital assets increases for employees in the ordinary course of business and consistent with past practices, (ii) grant, pay or agree to pay any pension, retirement allowance or other than employee benefit not required or contemplated by any existing employee benefit plan, program, arrangement, agreement or contract (including, without limitation, any "employee benefit plan", as set forth defined in the proviso in this Section 6.1(d3(3) of ERISA), maintained or contributed to by the Company or any Subsidiary, or with respect to which the Company or any Subsidiary could incur liability under Sections 4069, 4212(c) or 4204 of ERISA (vithe "Company Benefit Plans") sellas in effect on the date hereof to any director, pledge, dispose of officer or encumber any material assets or businesses other than (A) sales of businesses or assets in the ordinary course of businessemployee, (Biii) sales of businesses enter into any new employment, severance or assets disclosed in Section 6.1 of the Company Disclosure Scheduletermination plan, (C) sales of businesses program, arrangement, agreement or assets contract with aggregate 1997 revenues of less than $5 millionany such director, and (D) pledges officer or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, employee or (viiiv) except as contemplated by the following provisomay be required to comply with applicable law, enter into any binding contract, agreement, commitment or arrangement with respect to any of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and become obligated under any Company Common Stock issued Benefit Plan that was not in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock existence on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into hereof or amend any employment, severance, special pay arrangement with respect such plan in existence on the date hereof to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except in enhance the ordinary course and consistent with past practice; provided, however, that the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annumbenefits thereunder; (h) not adopt, enter into make any capital expenditure or amend any pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any employees or retirees generally, other than expenditures which exceed $250,000 in the ordinary course of business, except (i) as contemplated by Section 6.1(c), (ii) as required to comply with changes in applicable law, (iii) any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreement;aggregate; or (i) use commercially reasonable efforts authorize any of, or commit or agree to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses take any of, the actions described in such amounts and against such risks and losses as are consistent with past practice; and paragraphs (ja) not make, change or revoke any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authoritythrough (h) of this Section 5.1.

Conduct of Business Pending the Merger. SECTION 6.1 5.1 Conduct of Business by of the Company Pending the Merger. Except as otherwise contemplated by this Agreement or disclosed in Section 6.1 of The Company covenants and agrees that, during the Company Disclosure Schedule, after period from the date hereof and prior to such time as Purchaser's designees shall constitute a majority of the Closing Date or earlier termination Company's Board of this AgreementDirectors, except as specifically contemplated hereby, unless Parent Purchaser shall otherwise agree in writing, the businesses of the Company and its subsidiaries shall be conducted only in, and the Company and its subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice and in compliance with applicable laws; and the Company and its subsidiaries shall each use its commercially reasonable efforts to preserve substantially intact the business organization of the Company and its subsidiaries, to keep available the services of the present officers, employees and consultants of the Company and its subsidiaries and to preserve the present relationships of the Company and its subsidiaries with customers, suppliers and other persons with which the Company or any of its subsidiaries has significant business relations. By way of amplification and not limitation, except as specifically contemplated hereby, neither the Company nor any of its Significant Subsidiaries (or, in the case of clause (j) below, its subsidiaries) shall, and shall cause its subsidiaries toduring such period, directly or indirectly do, or commit to do, any of the following without the prior written consent of Purchaser: (a) conduct their respective businesses in Amend or otherwise change its certificate of incorporation or by-laws or equivalent organizational documents or, except as expressly contemplated by this Agreement, amend the ordinary and usual course of business and consistent with past practiceRights Agreement; (b) Issue, deliver, sell, pledge, dispose of or encumber, or authorize or commit to the issuance, sale, pledge, disposition or encumbrance of, (A) any shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest (including but not limited to stock appreciation rights or phantom stock), of the Company or any of its subsidiaries (except for (i) amend or propose the issuance of up to amend their respective certificates 1,322,688 shares of incorporation or bylawsCompany Common Stock issuable in accordance with the terms of Options outstanding as of November 2, 1997, and (ii) splitthe issuance of up to 7,616,003 shares of Company Common Stock issuable in accordance with the terms of Convertible Notes outstanding as of November 2, combine or reclassify their outstanding capital stock 1997) or (iiiB) declareany assets of the Company or any of its subsidiaries, except for (x) assets (excluding real property) sold, leased, pledged or otherwise encumbered in the ordinary course of business and in a manner consistent with past practice and (y) sale/leaseback transactions on commercially reasonably terms and in an aggregate amount not in excess of $15 million, so long as such transactions are not consummated prior to January 15, 1998 and so long as such transactions can be abandoned by the Company at any time prior to consummation without the payment or incurrence of material cost, expense or fees; (c) Declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock, property or otherwise, except for the payment with respect to any of dividends or distributions to the Company by a wholly-owned subsidiary of the Company; (c) not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such its capital stock, except that (i) the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereof, (ii) the Company may issue shares of Company Common Stock (or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (d) not Reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock; (i) incur Acquire (by merger, consolidation, or become contingently liable acquisition of stock or assets) any corporation, partnership or other business organization or division thereof; (ii) other than with respect to borrowings necessary to effect the Debt Offer, incur any indebtedness for borrowed money (other than (Ax) borrowings up to an aggregate principal amount of $10 million at any one time outstanding and incurred in the ordinary course of business or (y) pursuant to the Financing), or issue any debt securities, or enter into any sale/leaseback transaction other than pursuant to credit facilitiesas described in clause (b) or borrowings under the existing credit facilities of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parentabove, or (C) borrowings in connection with acquisitions assume, guarantee or endorse, or otherwise as set forth in an accommodation become responsible for, the proviso in this Section 6.1(d)obligations of any person, (ii) redeemor make any loans, purchaseadvances or capital contributions to, acquire or offer to purchase or acquire investments in, any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, other person; (iii) take enter into any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take contract or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses agreement other than expenditures for current assets in the ordinary course of business and expenditures for fixed consistent with past practice; (iv) authorize any single capital expenditure (or series of capital expenditures) which is in excess of $50,000 or capital assets expenditures which are, in the ordinary course aggregate, in excess of business and other than as set forth in the proviso in this Section 6.1(d), (vi) sell, pledge, dispose of or encumber any material assets or businesses other than (A) sales of businesses or assets in the ordinary course of business, (B) sales of businesses or assets disclosed in Section 6.1 of $250,000 for the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, its subsidiaries taken as a whole; or (viiv) except as contemplated by the following proviso, enter into or amend any binding contract, agreement, commitment or arrangement with respect to any of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of matters set forth in this Section 6.1(d5.1(e)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent with past practice; provided, however, provided that the Company and its subsidiaries shall may obtain commitments for up to $25 million of financing in replacement for any existing commitments so long as no event enter into material fees are incurred in respect thereof on or amend prior to the initial expiration date of the Offer and so long as any written employment agreements providing for annual base salary in excess such commitments may be terminated by the Company at any time without the payment or incurrence of $100,000 per annummaterial cost, expense or fees; (hf) Except to the extent required under existing employee and director benefit plans, agreements or arrangements as in effect on the date of this Agreement, increase the compensation or fringe benefits of any of its directors, officers or employees, other than increases in salary or wages of employees of the Company or its subsidiaries who are not officers of the Company in the ordinary course of business in accordance with past practice, or grant any severance or termination pay not currently required to be paid under existing severance plans or enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee of the Company or any of its subsidiaries, or establish, adopt, enter into or amend or terminate any pension collective bargaining agreement or retirement planCompany Plan, trust or fundincluding, except as required to comply with changes in applicable law and but not adoptlimited to, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, health careemployment, employment termination, severance or other employee benefit plan, agreement, trust, fund fund, policy or arrangement for the benefit or welfare of any employees directors, officers or retirees generallyemployees, or make any loans to any employees, officers or directors (other than advances in respect of reimbursable expenses) or cancel or forgive any such existing loans; (g) 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; (h) Make or change any tax election, file any amended Tax Return, or settle or compromise any material federal, state, local or foreign Tax liability; (i) Settle or compromise any pending or threatened suit, action or claim for an amount in excess of $25,000 or which relates to the Transactions; (j) Adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries other than the Merger and other than with respect to an inactive subsidiary so long as neither the Company nor its Significant Subsidiaries incurs or assumes any liabilities or obligations in connection therewith or as a result thereof; (k) Pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of businessbusiness and consistent with past practice of liabilities; or (l) Take, except (i) as contemplated by Section 6.1(c)or offer or propose to take, (ii) as required or agree to comply with changes take in applicable lawwriting or otherwise, (iii) any of the foregoing involving actions described in Sections 5.1(a) through 5.1(k) or any such then existing plans, agreements, trusts, funds action which would make any of the representations or arrangements warranties of any company acquired after the Company contained in this Agreement untrue and incorrect as of the date hereofwhen made if such action had then been taken, or (iv) as required pursuant to an existing contractual arrangement or agreement; (i) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses would result in such amounts and against such risks and losses as are consistent with past practice; and (j) any of the Offer Conditions not make, change or revoke any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authoritybeing satisfied.

Conduct of Business Pending the Merger. SECTION 6.1 4.1 Conduct of Business by the Company Pending the Merger. Except as otherwise contemplated by The Company covenants and agrees that, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or disclosed in Section 6.1 of the Company Disclosure Schedule, after the date hereof and prior to the Closing Date or earlier termination of this AgreementEffective Time, unless Parent shall otherwise agree in writingwriting and except as set forth in Section 4.1 of the Company Disclosure Schedule or as contemplated by this Agreement, the Company shallshall conduct its business, and shall cause the businesses of its subsidiaries toto be conducted, only in the ordinary course of business; and the Company shall use all reasonable efforts to preserve substantially intact the business organization of the Company and its subsidiaries, to keep available the services of the present officers, employees and consultants of the Company and its subsidiaries and to preserve the present relationships of the Company and its subsidiaries with customers, suppliers and other persons with which the Company or any of its subsidiaries has significant business relations. By way of amplification and not limitation, neither the Company nor any of its subsidiaries shall, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, directly or indirectly do, or propose to do, any of the following without the prior written consent of Parent: (a) conduct their respective businesses in amend or otherwise change the ordinary and usual course Certificate of business and consistent with past practiceIncorporation or By-Laws of the Company or similar organizational documents of any of its subsidiaries; (b) not issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock of any, class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest (including, without limitation, any phantom interest) in the Company or any of its subsidiaries (except for (i) amend the issuance of shares of Company Common Stock issuable pursuant to Stock Options which were granted under the Company Stock Option Plans and are outstanding on the date hereof, (ii) grants of Stock Options under the Company Stock Option Plans for the purchase of a maximum of 25,000 shares of Company Common Stock in the aggregate to the individuals identified in Section 4.1(b) of the Company Disclosure Schedule and (iii) the issuance of shares of Company Common Stock issuable pursuant to the Warrants); (c) (i) declare, set aside, make or propose pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, except that a wholly-owned subsidiary of the Company may declare and pay a dividend to amend their respective certificates of incorporation or bylawsits parent, (ii) split, combine or reclassify their outstanding any of its capital stock stock, or (iii) declare, set aside amend the terms or pay any dividend or distribution payable in cash, stock, property or otherwise, except for change the payment period of dividends or distributions to the Company by a wholly-owned subsidiary of the Company; (c) not issue, sell, pledge or dispose exercisability of, purchase, repurchase, redeem or agree otherwise acquire, or permit any subsidiary to issuepurchase, sellrepurchase, pledge redeem or dispose ofotherwise acquire, any additional shares of, of its securities or any options, warrants or rights securities of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock31 37 its subsidiaries, except that (i) the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereofincluding, (ii) the Company may issue without limitation, shares of Company Common Stock (or warrants any option, warrant or options right, directly or indirectly, to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with Stock, or provide that upon the existing terms exercise or conversion of any such option, warrant or right the agreements relating theretoholder thereof shall receive cash; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings in the ordinary course of business (other than pursuant to credit facilities) or borrowings under the existing credit facilities of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets in the ordinary course of business and expenditures for fixed or capital assets in the ordinary course of business and other than as set forth in the proviso in this Section 6.1(d), (vi) sell, pledge, dispose of or encumber any material assets of the Company or businesses other than any of its subsidiaries (Aexcept for (i) sales of businesses or assets in the ordinary course of business, (Bii) dispositions of obsolete or worthless assets, and (iii) sales of businesses immaterial assets not in excess of $250,000 in the aggregate); (i) acquire (by merger, consolidation, or assets disclosed acquisition of stock or assets) any corporation, partnership or other business organization or division thereof; (ii) except in Section 6.1 the ordinary course of business, incur or assume any Funded Debt (as defined below) not currently outstanding; (iii) except in the ordinary course of business, assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any person (other than the Company Disclosure Scheduleor any of its wholly-owned subsidiaries); (iv) except in the ordinary course of business, make any loans or advances to any person (Cother than the Company or any of its wholly-owned subsidiaries); (v) sales enter into or amend any material contract or agreement; (vi) authorize any capital expenditures or purchases of businesses or fixed assets with aggregate 1997 revenues in excess of less than $5 million, million in the aggregate for the Company and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, its subsidiaries taken as a whole; or (vii) except as contemplated by the following proviso, enter into or amend any binding contract, agreement, commitment or arrangement with respect to effect any of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of matters prohibited by this Section 6.1(d4.1(e)); (i) increase the compensation payable or to become payable to its officers or employees, the Company shall not be prohibited from acquiring any assets except for increases in salary or businesses or incurring or assuming indebtedness in connection with acquisitions wages of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 employees of the Company Disclosure Schedule, or (B) the aggregate value any of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 its subsidiaries who are not officers of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent of business; (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with past practice; providedany director, however, that officer or other employee of the Company and or any of its subsidiaries shall in no event enter into subsidiaries; or amend any written employment agreements providing for annual base salary in excess of $100,000 per annum; (hiii) not establish, adopt, enter into or amend any pension or retirement plancollective bargaining, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, health careemployment, employment termination, severance or other employee benefit plan, agreement, trust, fund fund, policy or arrangement for the benefit or welfare of any employees current or retirees generallyformer directors, other than officers or employees, except, in the ordinary course each case, as may be required by law; (g) except as may be required as a result of businessa change in law or in generally accepted accounting principles, except take any action to change accounting policies or procedures (iincluding, without limitation, procedures with respect to revenue recognition, payments of accounts payable and collection of accounts receivable); (h) as contemplated by Section 6.1(c)make any material tax election inconsistent with past practice or settle or compromise any material federal, (ii) as required to comply with changes in applicable lawstate, (iii) any of the foregoing involving any such then existing plans, agreements, trusts, funds local or arrangements of any company acquired after the date hereof, foreign tax liability or (iv) as required pursuant agree to an existing contractual arrangement or agreementextension of a statute of limitations; (i) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses in such amounts and against such risks and losses as are consistent with past practice; andpay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or (j) not maketake, change or revoke agree in writing or otherwise to take, any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authorityof the actions described in Sections 4.1(a) through (i) above.

Conduct of Business Pending the Merger. SECTION 6.1 Conduct (a) From the date of Business by this Agreement until the Company Pending earlier of the Merger. Except Effective Time and the termination of this Agreement in accordance with Article VII, except as otherwise expressly contemplated by this Agreement or disclosed Agreement, set forth in a specific subsection of Section 6.1 4.01(a) of the Company Disclosure Schedule, after the date hereof and prior Letter responsive to the Closing Date or earlier termination applicable subsection of this AgreementSection 4.01(a) (unless Section 4.01(a) of the Company Disclosure Letter expressly provides that a disclosure contained therein qualifies all subsections of this Section 4.01(a), unless in which case such disclosure shall qualify all subsections of this Section 4.01(a)), required by applicable Law or consented to in writing by Parent shall otherwise agree in writing(such consent not to be unreasonably withheld, conditioned or delayed), (x) the Company shall, and shall cause each of its subsidiaries Subsidiaries to, conduct its business in the ordinary course consistent with past practice and shall use commercially reasonable efforts to preserve its current business organizations and to preserve in all material respects its relationships and goodwill with Governmental Entities, customers, suppliers, creditors, lessors, lessees, officers and employees and (y) without limiting the foregoing, the Company shall not, and shall not permit any of its Subsidiaries to: (a) conduct their respective businesses in the ordinary and usual course of business and consistent with past practice; (b) not (i) amend or propose to amend their respective certificates of incorporation or bylaws, (ii) split, combine or reclassify their outstanding capital stock or (iii) declare, set aside or pay any dividend dividends on, or distribution payable make any other distributions (whether in cash, stockstock or property) in respect of, property any of its capital stock or otherwiseother equity interests, except for the payment of other than (A) dividends or distributions by a wholly owned Subsidiary of the Company, (B) dividends or distributions required under the applicable organizational documents of such entity in effect on the date of this Agreement, (C) regular quarterly cash dividends with customary record and payment dates on the Shares not in excess of the amounts per Share set forth in Section 4.01(a)(i)(C) of the Company Disclosure Letter and (D) regular quarterly cash distributions with customary record and payment dates on the common units of CPPL not in excess of the amounts per common unit set forth in Section 4.01(a)(i)(D) of the Company Disclosure Letter; (ii) split, combine, subdivide, redeem, reclassify, amend or otherwise acquire, directly or indirectly, any of its capital stock or other equity interests, other than with respect to the Company by capital stock or other equity interests of a wholly-wholly owned subsidiary Subsidiary of the Company; (ciii) not issuepurchase, sell, pledge redeem or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to otherwise acquire any shares of their its or its Subsidiaries’ (including CPPL’s) capital stock of any class or other securities or any debt or equity securities convertible into or exchangeable for such capital stockrights, except that (i) the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereof, (ii) the Company may issue shares of Company Common Stock (or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets any such shares or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other securities, other than (A) borrowings the withholding of Shares to satisfy Tax obligations with respect to awards granted pursuant to the Company Stock Plans and (B) the acquisition by the Company of awards granted pursuant to the Company Stock Plans and purchase rights under the Company ESPP in connection with the forfeiture of such awards or rights, in each case that are outstanding as of the date hereof and in accordance with their terms as of the date hereof or granted after the date hereof in accordance with this Agreement; (iv) issue, deliver, sell, pledge, grant, transfer, dispose of, encumber or subject to any Lien any shares of its capital stock, ownership interests, any other voting securities (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary), or any securities convertible into, exercisable or exchangeable for, or any rights, warrants or options to acquire, any such shares, ownership interests, voting securities or convertible securities or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units, other than (A) by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company, (B) upon the exercise of purchase rights under the Company ESPP and (C) upon the vesting or settlement of Company RSUs, Company PSUs and Company Phantom Units granted under the Company Stock Plans, in the case of each of clauses (B) and (C) of this Section 4.01(a)(iv) that are outstanding as of the date hereof and in accordance with their terms as of the date hereof or granted after the date hereof in accordance with this Agreement; (v) amend (A) the Company Certificate of Incorporation or the Company Bylaws, (B) other applicable governing instruments of the Company or (C) the comparable organizational documents of any Subsidiary of the Company, other than, in the case of this clause (C), amendments that solely effect ministerial changes to such documents; (vi) acquire, whether by merger, consolidation, or the purchase of stock, equity interests or assets, any business, a division of any business with a value in excess of $10 million in the aggregate, other than transactions solely between or among (A) the Company and its wholly owned Subsidiaries or (B) CPPL and its wholly owned Subsidiaries; (vii) sell, license, lease, transfer, assign, divest, cancel, abandon or otherwise dispose of any of its properties, rights or assets (excluding cash) with a value in excess of $10 million in the aggregate (including to CPPL), other than (A) sales or other dispositions of assets to a Person that is not a Subsidiary of the Company in the ordinary course of business consistent with past practice, (B) sales, transfers and dispositions of assets or properties that are obsolete, non-operating or worthless, in each case, as determined in the ordinary course of business consistent with past practice and (C) sales, leases, transfers or other than pursuant to credit facilitiesdispositions made in connection with any transaction among (1) the Company and its wholly owned Subsidiaries or borrowings under (2) a Subsidiary of the existing credit facilities Company and such Subsidiary’s wholly owned Subsidiaries; (viii) incur, redeem, prepay, defease, cancel, assume or, in any material respect, modify, any Indebtedness of the Company or any of its subsidiaries Subsidiaries, or guarantee, assume or endorse or otherwise as such an accommodation become responsible for any Indebtedness of another Person, other than (A) Indebtedness incurred under the revolving credit facilities may be amended in a manner that does not have a material adverse effect on of the Company (the "Existing Credit Facilities") up to the existing borrowing limit on and CPPL in existence as of the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), (ii) redeem, purchase, acquire or offer to purchase or acquire any shares prepayments of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets in the ordinary course of business and expenditures for fixed or capital assets in the ordinary course of business and other than as set forth in the proviso in this Section 6.1(d), (vi) sell, pledge, dispose of or encumber any material assets or businesses other than (A) sales of businesses or assets Indebtedness in the ordinary course of business, (B) sales of businesses or assets disclosed in Section 6.1 including repayments under the revolving credit facilities of the Company Disclosure Scheduleand CPPL in existence as of the date hereof, (C) sales Indebtedness incurred by the Company or a Subsidiary of businesses the Company to the Company or assets a Subsidiary of the Company in the ordinary course of business consistent with aggregate 1997 revenues past practice, including, for the avoidance of less than $5 milliondoubt, Indebtedness among the Company (and its Subsidiaries) and CPPL and its Subsidiaries, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, or Indebtedness incurred under a commercial paper program (vii) except as contemplated by provided that any such amounts shall not exceed availability under the following proviso, enter into any binding contract, agreement, commitment or arrangement with respect to any revolving credit facilities of the foregoingCompany); provided, however, that notwithstanding the foregoing Indebtedness incurred pursuant to clauses (other than subsections (iiiA) and (ivD) above (x) shall be incurred for the purpose of funding capital expenditure projects in compliance with the terms of this Section 6.1(d)), Agreement and then-reasonably foreseeable working capital needs of the Company and its Subsidiaries and (y) shall not be prohibited from acquiring exceed in the aggregate for any assets or businesses or incurring or assuming indebtedness period the amount specified with respect to such period in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed the table set forth in Section 6.1 4.01(a)(viii) of the Company Disclosure ScheduleLetter; (ix) make any capital expenditures in the aggregate in excess of $40 million in any three (3) month period, or other than (A) expenditures contemplated by the CapEx Plan, (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments expenditures made in connection with acquisitions of businesses response to any emergency, whether caused by war, terrorism, weather events, public health events, outages or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operatesotherwise, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) expenditures that the Company will not acquire or agree reasonably determines are necessary to acquire all or substantially all of maintain the business, assets, properties or capital stock safety and integrity of any entity with securities registered under the Securities Act asset or the Exchange Act; (e) use all reasonable efforts property in response to preserve intact their respective business organizations any unanticipated and goodwillsubsequently discovered events, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly occurrences or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent with past practicedevelopments; provided, however, that the Company and will use its subsidiaries shall reasonable best efforts to consult with Parent prior to making or agreeing to make any capital expenditure referenced in no event enter into this clause (C); (x) settle any suit, action, claim, investigation, proceeding or amend litigation with a Governmental Entity or third party, in each case threatened, made or pending against the Company or any written employment agreements providing for annual base salary of its Subsidiaries, in excess of $100,000 per annum2 million individually or $5 million in the aggregate (excluding any amounts that are covered by any insurance policies of the Company or its Subsidiaries, as applicable); (hxi) except as required by Law or pursuant to the terms of any Company Benefit Plan or other written agreement, in each case, in effect on the date hereof, (A) grant to any director, executive officer, employee or consultant any increase in compensation or pay, or award any bonuses or incentive compensation, other than (1) merit increases for select executive officers that were approved by the Compensation Committee in January 2016 which will take effect June 1, 2016, and (2) merit increases for other employees of the Company which will take effect June 1, 2016, in the ordinary course of business consistent with past practice (it being understood that such increases shall not adoptexceed 3% in the aggregate of all salaries or base compensation for such other employees), enter into (B) grant to any current or former director, executive officer or employee any increase in severance, retention or termination pay, (C) grant or amend any pension equity awards, (D) enter into any new or retirement planmodify in any material respect any existing consulting agreement with any current or former individual consultant pursuant to which the annual base salary of such individual under such agreement exceeds $250,000, trust or fund(E) establish, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment or other employee benefit plan, (1) collective bargaining agreement, trust(2) Company Benefit Plan, fund (3) individual employment, change in control and termination, or arrangement for retention agreement, or (4) other agreement, policy, plan or program which would be a Company Benefit Plan if it was in effect on the benefit date hereof, (F) take any action to accelerate any rights or welfare benefits under any Company Benefit Plan or (G) hire or promote any individual as a Company Employee to a level of Vice President or above without first consulting with and considering in good faith the views of Parent; provided, however, that the foregoing shall not restrict the Company or any of its Subsidiaries from entering into or making available to newly hired employees or retirees generallyto employees in the context of promotions based on job performance or workplace requirements, in each case, in the ordinary course of business, plans, agreements, benefits and compensation arrangements (including incentive grants, but excluding any individual severance arrangements) that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees in similar positions; (xii) other than as required (A) by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or (B) by Law, including pursuant to SEC rule or policy, make any material change in accounting methods, principles or practices; (xiii) other than in the ordinary course of business, except (i) as contemplated by Section 6.1(c), (ii) as required to comply with changes in applicable law, (iii) any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreement; (i) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses in such amounts and against such risks and losses as are business consistent with past practice; and , (jA) not make any change (or file any such change) in any material method of Tax accounting, (B) make, change or revoke rescind any material Tax election election, (C) settle or make compromise any material Tax liability or consent to any claim or assessment relating to a material amount of Taxes, (D) file any amended Tax Return reflecting a material amount of Taxes or (E) enter into any closing agreement relating to a material amount of Taxes; (xiv) (A) amend, modify, renew, extend or settlement regarding Taxes terminate, or waive any rights under, any Material Contract; provided, however, that the Company and its Subsidiaries shall not be restricted from taking any such action if (1) in the case of a Material Contract that restricts the Company or its Subsidiaries in a manner described in Section 3.01(h)(ii) or Section 3.01(h)(x), (I) such Material Contract is classified as a Material Contract pursuant to Section 3.01(h)(ii) or Section 3.01(h)(x) and is not classified as a Material Contract pursuant to any other subsection of Section 3.01(h), (II) such action would not reasonably be expected to alter the scope or impact of such restriction in a manner that is adverse to the Company or its Subsidiaries (or, after the Effective Time, the Surviving Corporation or its Affiliates) and (III) such action would not cause such Material Contract to be classified as a Material Contract pursuant to any subsection of Section 3.01(h) other than Section 3.01(h)(ii) and Section 3.01(h)(x) (if such action were in effect as of the date of this Agreement) and (2) in the case of any Material Contract not described in clause (1) above, such action would not reasonably be expected to materially diminish the value of such Material Contract in a manner that is adverse to the Company or any of its Subsidiaries (or, after the Effective Time, the Surviving Corporation or any of its Affiliates), or (B) enter into any Contract that (1) would be a Material Contract under Section 3.01(h)(ii), Section 3.01(h)(v), Section 3.01(h)(viii), Section 3.01(h)(x), Section 3.01(h)(xiii) or Section 3.01(h)(xiv) if in effect as of the date of this Agreement, (2) is a Significant CapEx Contract or (3) calls for aggregate capital expenditures by the Company or its Subsidiaries of more than $25 million over the term of such Contract that are not contemplated by the CapEx Plan; (xv) (A) amend, modify, renew, extend or terminate, or waive any material rights under, any Company Real Property Lease or (B) enter into any Contract that would be a Company Real Property Lease if in effect as of the date of this Agreement; (xvi) amend, modify or terminate, or waive any rights under, the Tax Allocation Agreement; (xvii) forgive, cancel, waive or compromise any material debt or material claim of the Company or any of its Subsidiaries, or fail to pay when due any material liability (other than any such liability that is being contested in good faith); provided, however, that this Section 4.01(a)(xvii) shall not restrict the Company or any of its Subsidiaries from amending, modifying, renewing, extending or terminating, or waiving any rights under, any Contract referred to in Section 4.01(a)(xiv), in each case, to the extent such action is not prohibited under Section 4.01(a)(xiv); (xviii) terminate or permit any material Permit to lapse, other than in accordance with the terms and regular expiration of any taxing authoritysuch Permit, or fail to apply on a timely basis for any renewal of any renewable material Permit; (xix) enter into any consent decree or similar agreement that, individually or in the aggregate, is material to the Company and its Subsidiaries, taken as a whole; (xx) other than in the ordinary course of business or on account of Changes in the insurance industry generally in the United States or elsewhere in the world, make or agree to any material changes to be made to any insurance policies so as to affect the insurance coverage of the Company or any of its Subsidiaries or their respective assets following the Effective Time; (xxi) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization, other than the Merger and any other mergers, consolidations, restructurings, recapitalizations or other reorganizations solely among the Company and its wholly owned Subsidiaries or among its wholly owned Subsidiaries; or (xxii) authorize any of, or commit or agree to take any of, the foregoing actions prohibited pursuant to clauses (i) through (xxi) of this Section 4.01(a).

Conduct of Business Pending the Merger. SECTION 6.1 5.1 Conduct of Business by the Company Pending the Merger. Except as otherwise The Company covenants and agrees that, from the date hereof until the Effective Time, unless expressly contemplated by this Agreement or disclosed as may be agreed to in Section 6.1 of the Company Disclosure Schedule, after the date hereof and prior to the Closing Date or earlier termination of this Agreement, unless Parent shall otherwise agree in writing, the Company shall, and shall cause its subsidiaries towriting by Parent: (a) conduct their respective The businesses of the Company and its Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practice; (b) the Company shall not, and shall not permit any of its Subsidiaries to: (i) amend sell or propose pledge or agree to amend their respective certificates sell or pledge any stock owned by it in any of incorporation or bylaws, its Subsidiaries; (ii) amend its Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify their any shares of its outstanding capital stock or (iii) declare, set aside or pay any dividend or other distribution payable in cash, stock, stock or property or otherwise, except for the payment redeem or otherwise acquire any shares of dividends or distributions to the Company by a wholly-owned subsidiary of the Companyits capital stock; (c) the Company shall not, and shall cause each of its Subsidiaries not issueto: (i) authorize for issuance, sell, pledge issue or dispose of, or agree to issue, sell, pledge or dispose of, sell any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their of, its capital stock of any class (whether through the issuance or any debt granting of stock options, warrants, convertible securities, commitments, subscriptions, rights to purchase or equity securities convertible into or exchangeable for such capital stockotherwise), except that (i) for unissued Shares reserved for issuance upon the Company may issue shares upon conversion of convertible securities and exercise of options and warrants Stock Options or Warrants outstanding on the date hereof, hereof in accordance with their existing terms; (ii) the Company may issue shares of Company Common Stock (acquire, dispose of, transfer, lease, license, mortgage, pledge or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and encumber any material assets; (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (d) not (i) incur incur, assume or become contingently liable with respect to prepay any indebtedness for borrowed money or any other than (A) borrowings material liabilities, except accounts payable incurred in the ordinary course of business (other than pursuant consistent with past practice, or issue or sell any debt securities or warrants or rights to credit facilities) or borrowings under the existing credit facilities acquire debt securities of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), Subsidiaries; (iv) take assume, endorse (other than in the ordinary course of business consistent with past practices), guarantee or fail to take otherwise become liable or responsible (whether directly, contingently or otherwise) for the material obligations of any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, other person; (v) make any acquisition of loans, advances or capital contributions to, or investments in, any assets other person or businesses otherwise enter into any Material Contract other than expenditures for current assets in the ordinary course of business and expenditures for fixed or capital assets in the ordinary course of business and other than as set forth in the proviso in this Section 6.1(d), consistent with past practices; (vi) sellmake any loans to employees, pledge, dispose of or encumber any material assets or businesses other than (A) sales of businesses or assets travel advances in the ordinary course of business, (B) sales of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, or ; (vii) except as contemplated by fail to maintain adequate insurance consistent with past practices for its business and properties; (viii) undertake, make or commit to undertake or make any capital expenditures in an amount greater than $10,000 per individual capital expenditure and no more than $25,000 per month in the following proviso, aggregate (on a combined basis for the Company and the Subsidiaries); or (ix) enter into any binding contract, agreement, commitment or arrangement with respect to any of the foregoing; provided, however, that notwithstanding the foregoing ; (other than subsections (iiid) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection use its reasonable best efforts consistent with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 past practice to preserve intact the business organization of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwillits Subsidiaries, keep available the services of its and their respective present officers and key employees, and preserve the goodwill and business its existing relationships with customers customers, suppliers and others having with which it and its respective Subsidiaries have business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreementdealings; (fe) subject to restrictions imposed by applicable lawthe Company shall not, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; shall cause its Subsidiaries not to, (gi) not enter into any new agreements or amend or modify any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or existing agreements with any of its respective officers, directors or employees or with any "disqualified individuals" (as defined in Section 280G(c) of the Code), (ii) grant any increases in the compensation of its respective directors, officers and employees or key employeesany "disqualified individuals" (as defined in Section 280G(c) of the Code) other than (A) pursuant to written agreements in effect at the date hereof, except true, complete and correct copies of all of which have previously been furnished to Parent by the Company, or (B) increases in the ordinary course of business and consistent with past practicepractice to persons who are not directors or corporate officers of or "disqualified individuals" with respect to the Company or any Subsidiary, (iii) enter into, adopt, amend or terminate, or grant any new benefit not presently provided for under, any employee benefit plan or arrangement, except as required by law or to maintain the tax qualified status of the plan; provided, however, that the Company and or its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annum; (h) not adopt, enter into or amend any pension or retirement plan, trust or fund, except as required may terminate to comply with changes in the extent permitted by applicable law and not adopt, enter into any benefit or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund plan or arrangement for or (iv) take any action with respect to the benefit or welfare grant of any employees severance or retirees generally, termination pay other than in the ordinary course of business and consistent with past practice and pursuant to policies in effect on the date of this Agreement; (f) the Company shall not, and shall not permit any Subsidiary to, acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets (other than equipment, inventory and supplies in the ordinary course of business); (g) the Company shall not, and shall not permit any of its Subsidiaries to, sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any of its material assets; (h) the Company shall take all actions reasonably necessary so that the conditions set forth in the Appendix which require actions to be performed by the Company are satisfied on a timely basis, except (i) as contemplated by Section 6.1(c), (ii) as required to comply with changes in applicable law, (iii) any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreementthis Agreement; (i) use commercially reasonable efforts unless the Company receives a "Superior Acquisition Proposal" (as defined in Section 6.5(b) hereof), the Company will not call any meeting of its stockholders to maintain be held prior to March 25, 1997 other than as required by this Agreement; (j) the Company shall not, and shall not permit any Subsidiary to, make any tax election or settle (except to settle reserved amounts for an amount equal to or less than the amount so reserved) or compromise any income tax liability; (k) the Company and each Subsidiary shall make timely payments, in accordance with financially responsible insurance companies insurance on its tangible assets the terms applicable thereto, of all currently due liabilities for borrowed money; (l) the Company shall not, and its businesses shall not permit any Subsidiary to, pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction, in such amounts and against such risks and losses as are the ordinary course of business consistent with past practicepractice or in accordance with their terms, of liabilities reflected or reserved against in the most recent consolidated financial statements (or the notes thereto) of the Company included in the SEC Documents; (m) the Company shall not, and shall not permit any Subsidiary to, modify, amend or terminate any Material Contract, lease of real property or of a material amount of assets, or agreement relating to indebtedness or the extension of credit, or waive, release or assign any rights or claims thereunder; and (jn) not make, change or revoke any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authoritythe Company shall maintain in full force and effect its current policies of directors' and officers' liability insurance covering all persons who are presently covered by such policies.

Conduct of Business Pending the Merger. SECTION 6.1 (a) Conduct of Business by the Company Pending the Merger. Except as otherwise contemplated by During the period from the date of this Agreement or disclosed in Section 6.1 until the earlier of the Company Disclosure Schedule, after Effective Time or such time as Parent's designees shall constitute a majority of the date hereof and prior to Board of Directors of the Closing Date or earlier termination of this Agreement, unless Parent shall otherwise agree in writingCompany, the Company shall, and shall cause each of its subsidiaries Subsidiaries to: (a) conduct their respective businesses , in all material respects, except as contemplated by this Agreement, carry on its business in the ordinary course as currently conducted. Without limiting the generality of the foregoing, and usual course except as otherwise contemplated by this Agreement (including, without limitation, as permitted or required by Section 7.9 or Section 7.11), during such period, the Company shall not, and shall not permit any of business and consistent with past practice;its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed): (b) not (i) amend or propose to amend their respective certificates of incorporation or bylaws, (ii) split, combine or reclassify their outstanding capital stock or (iiiA) declare, set aside or pay any dividend dividends on, or distribution payable make any other distributions in cashrespect of, any of its capital stock, property or otherwise, except for the payment dividends by a Subsidiary of dividends or distributions to the Company by a wholly-owned subsidiary to its parent or (B) split, combine or reclassify any of its capital stock or issue or authorize the Companyissuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock; (cii) not issue, deliver, sell, pledge or otherwise encumber any shares of its capital stock, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities, other than (i) the issuance of Shares upon exercise of Company Stock Options outstanding on the date hereof or (ii) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any of its Subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities; (iii) amend its Restated Certificate of Incorporation or Bylaws or other similar organizational documents; (iv) except as disclosed in Item 6.1(a) of the Company Letter, acquire, or agree to acquire, in a single transaction or in a series of related transactions, any business or assets, other than transactions that are in the ordinary course of business, or which involve assets having a purchase price not in excess of $5 million individually or $10 million in the aggregate; (v) make or agree to make any new capital expenditure other than expenditures approved by the Board of Directors of the Company and within the Company's capital budget for fiscal 2001, a true, complete and correct copy of which has been provided to Parent; provided, however, that no individual capital expenditure by the Company pursuant to a single authority for expenditure may exceed $2.5 million; (vi) except as disclosed in Item 6.1(a) of the Company Letter, sell, lease, license, encumber or otherwise dispose of, or agree to issue, sell, pledge lease, license, encumber or otherwise dispose of, any additional shares ofof its assets, other than transactions that are in the ordinary course of business or any options, warrants which involve assets having a current value not in excess of $1 million individually or rights $5 million in the aggregate; (vii) except as disclosed in Item 6.1 (a) of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that the Company Letter: (i) increase the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding salary or wages payable or to become payable to its directors, officers or employees, except for increases required under employment agreements existing on the date hereof, and except for increases for officers and employees not in excess of 10% of such person's salary or wages as in effect at the date of this Agreement; or (ii) enter into, modify or amend any employment or severance agreement with, or establish, adopt, enter into or amend any bonus, profit sharing, thrift, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination or severance plan or agreement or material policy or arrangement for the benefit of, any director, officer or employee, except as may be required by the terms of any such plan, agreement, policy or arrangement or to comply with applicable law or as contemplated by this Agreement; (viii) except as may be required as a result of a change in law or in generally accepted accounting principles, make any material change in its method of accounting; (ix) make any material Tax election (unless required by law) or enter into any settlement or compromise of any material Tax liability that, in either case, could reasonably be expected to have a Material Adverse Effect on the Company; (i) mortgage or otherwise encumber or subject to any Lien the Company's or its Subsidiaries', properties or assets, except in the ordinary course of business consistent with past practice or pursuant to existing contracts or commitments, or (ii) except in the ordinary course of business consistent with past practice or pursuant to existing contracts or commitments, license any of the Company's Intellectual Property; (xi) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business consistent with past practice and in accordance with their terms, or (i) liabilities reflected or reserved against in, or contemplated by, the most recent consolidated financial statements (or the notes thereto) of the Company may issue shares included in the Company SEC Documents, (ii) liabilities incurred in the ordinary course of Company Common Stock (business consistent with past practice, or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) other liabilities or obligations not to exceed in the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating theretoaggregate $2,500,000; (d) not (i) incur any Indebtedness or become contingently liable with respect guarantee any such Indebtedness of another Person, issue or sell any debt securities or warrants or other rights to acquire any indebtedness debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, 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 for borrowed money other than (A) borrowings incurred in the ordinary course of business (other than pursuant or to credit facilitiesrefund existing or maturing indebtedness) or borrowings under the existing credit facilities of consistent with past practice and except for intercompany indebtedness between the Company or and any of its subsidiaries as wholly-owned Subsidiaries or between such facilities may be amended Subsidiaries and except for Indebtedness, guarantees and similar commitments which do not exceed $10 million in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parentaggregate, or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of loans, advances or capital contributions to, or investments in, any assets or businesses other than expenditures for current assets Person, except in the ordinary course of business and expenditures for fixed or capital assets in the ordinary course of business and other than as set forth in the proviso in this Section 6.1(d), (vi) sell, pledge, dispose of or encumber any material assets or businesses other than (A) sales of businesses or assets in the ordinary course of business, (B) sales of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, or (vii) except as contemplated by the following proviso, enter into any binding contract, agreement, commitment or arrangement with respect to any of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock an agreement existing on the date the agreement in respect of any such acquisition is entered into) does hereof or loans, advances, capital contributions or investments which do not exceed $10 million and such acquisition is accretive in the aggregate; or (xiii) enter into or authorize any contract, agreement or binding commitment to the earnings per share do any of the Companyforegoing. (b) Conduct of Business by the Parent Pending the Merger. For purposes During the period from the date of this Agreement until the Effective Time, Parent shall, and shall cause each of its Subsidiaries to, in all material respects, except as contemplated by this Agreement, carry on its business in the ordinary course as currently conducted. Without limiting the generality of the foregoing, any contingentand except as otherwise contemplated by this Agreement, royalty and similar payments made in connection with acquisitions of businesses or assets during such period, Parent shall be included as acquisition consideration not, and shall not permit any of its Subsidiaries to, without the prior written consent of the Company (which consent shall not be deemed unreasonably withheld or delayed): (i) make any change in or amendment to have Parent's Certificate of Incorporation that changes any material term or provision of the Parent Shares; (ii) make any material change in or amendment to Sub's Certificate of Incorporation; (iii) engage in any material repurchase at a value equal premium, recapitalization, restructuring or reorganization with respect to their present value assuming Parent's capital stock, including, without limitation, by way of any extraordinary dividend on, or other extraordinary distributions with respect to, Parent's capital stock; (iv) acquire by merging or consolidating with, or by purchasing a 8% per annum discount rate and assuming that all amounts payable for substantial portion of the first five years following assets of or equity in, or by any other manner, any person or any business or division thereof, or otherwise acquire any assets, unless such acquisition or the entering into of a definitive agreement relating to or the consummation of the acquisitions (but such transaction would not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) impose any material delay in the Company will obtaining of, or materially increase the risk of not acquire obtaining, any authorizations, consents, orders, declarations or agree approvals of any Governmental Entity necessary to acquire consummate the Offer, the Merger or the expiration or termination of any assets or businesses if such acquisition or agreement may reasonably be expected to delay applicable waiting period, (B) materially increase the risk of any Governmental Entity entering an order prohibiting the consummation of the Merger; (B) Offer or the Company will not acquire Merger or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) increase the Company will risk of not acquire being able to remove any such order on appeal or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act;otherwise; or (ev) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into any contract or amend any employment, severance, special pay arrangement with respect agreement to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent with past practice; provided, however, that the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annum; (h) not adopt, enter into or amend any pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any employees or retirees generally, other than in the ordinary course of business, except (i) as contemplated by Section 6.1(c), (ii) as required to comply with changes in applicable law, (iii) do any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreement; (i) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses in such amounts and against such risks and losses as are consistent with past practice; and (j) not make, change or revoke any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authorityforegoing.

Conduct of Business Pending the Merger. SECTION 6.1 5.1 Conduct of Business by of the Company Pending the Merger. Except as otherwise contemplated by this Agreement or disclosed in Section 6.1 of The Company covenants and agrees that, during the Company Disclosure Schedule, after period from the date hereof and prior until the time persons nominated by Parent or Purchaser constitute a majority of the Board of Directors, except pursuant to the Closing Date terms hereof or earlier termination of this Agreementas disclosed in the SEC Reports, or unless Parent Purchaser shall otherwise agree in writing, the businesses of the Company and its subsidiaries shall be conducted only in, and the Company and its subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice and in compliance in all material respects with applicable laws; and the Company and its subsidiaries shall each use its reasonable good faith efforts to preserve substantially intact the business organization and assets of the Company and its subsidiaries, to keep available the services of the present officers, employees and consultants of the Company and its subsidiaries and to preserve the present relationships of the Company and its subsidiaries with customers, suppliers and other persons with which the Company or any of its subsidiaries has significant business relations. By way of amplification and not limitation, neither the Company nor any of its subsidiaries shall, between the date of this Agreement and shall cause its subsidiaries tothe time persons nominated by Parent or Purchaser constitute a majority of the Board of Directors, directly or indirectly do, or propose or commit to do, any of the following, except as otherwise contemplated by this Agreement, as previously disclosed in the SEC Reports filed prior to the date of this Agreement or as set forth in Schedule 5.1 of the Disclosure Schedule, without the prior written consent of Parent: (a) conduct their respective businesses Amend or otherwise change its Articles or By-Laws or equivalent organizational documents; (b) Issue, deliver, sell, pledge, dispose of or encumber, or authorize or commit to the issuance, sale, pledge, disposition or encumbrance of, (A) any shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest (including but not limited to stock appreciation rights or phantom stock), of the Company or any of its subsidiaries (except for the issuance of up to 1,571,302 shares of Company Common Stock issuable in accordance with the terms of Employee Options outstanding as of November 30, 1998) or (B) any property or assets, whether tangible or intangible, of the Company or any of its subsidiaries, except for sales of products in the ordinary and usual course of business and in a manner consistent with past practice; (bc) not (i) amend or propose to amend their respective certificates of incorporation or bylaws, (ii) split, combine or reclassify their outstanding capital stock or (iii) declareDeclare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock, property or otherwise, except for the payment with respect to any of dividends or distributions to the Company by a wholly-owned subsidiary of the Company; (c) not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such its capital stock, except that (i) the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereof, (ii) the Company may issue shares of Company Common Stock (or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (d) not (i) incur Reclassify, combine, split, subdivide or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings in the ordinary course of business (other than pursuant to credit facilities) or borrowings under the existing credit facilities of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock otherwise acquire, directly or any optionsindirectly, warrants or rights to acquire any of its capital stock or any security convertible into capital stock of any of its subsidiaries; (i) Acquire (by merger, consolidation, or exchangeable for its capital stockacquisition of stock or assets) any corporation, partnership or other business organization or division thereof or any material assets, (iiiii) take incur any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board indebtedness for borrowed money ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets indebtedness incurred under the Company's existing revolving credit facility in the ordinary course of business and expenditures for fixed consistent with past practice to fund working capital requirements) 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, advances or capital assets contributions to, or investments in, any other person, (iii) make or start any bid or proposal, or enter into or renew or amend in any material respect any contract or agreement other than in the ordinary course of business and other than as set forth consistent with past practice that would involve aggregate consideration under such bid, proposal, contract or agreement in excess of $4.0 million or is bid, proposed or renewed at an amount at which the Company would expect such bid, proposal or renewal to result in a loss thereunder to the Company, (iv) except for expenditures relating to the anticipated acquisition of Oracle Software in accordance with the Edgemark Systems Proposal for Microdyne dated September 9, 1998, authorize any single capital expenditure which is in excess of $250,000 or capital expenditures which are, in the proviso aggregate, in this Section 6.1(d)excess of $1.0 million for the Company and its subsidiaries taken as a whole, (viv) sellenter into any transaction, pledge, dispose of contract or encumber commitment with any material assets or businesses other than (A) sales of businesses or assets in the ordinary course of business, (B) sales of businesses or assets disclosed in Section 6.1 affiliate of the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowingsCompany, or (viivi) except as contemplated or permitted by the following provisoclauses (i)-(v) of this Section 5.1(e), enter into or amend any binding contract, agreement, commitment or arrangement with respect to any of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of matters set forth in this Section 6.1(d5.1(e)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject Except to restrictions imposed by applicable lawthe extent required under existing employee and director benefit plans, confer with one agreements or more representatives arrangements as in effect on the date of Parent to report operational matters this Agreement, increase the compensation or fringe benefits of materiality and the general status any of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any its directors, officers or key employees, except for increases in salary or wages of employees of the Company or its subsidiaries who are not officers of the Company in the ordinary course and consistent of business in accordance with past practice; provided, howeveror grant any retention, that severance or termination pay not currently required to be paid under existing severance plans to or enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee of the Company and or any of its subsidiaries shall in no event enter into subsidiaries, or amend any written employment agreements providing for annual base salary in excess of $100,000 per annum; (h) not establish, adopt, enter into or amend or terminate any pension collective bargaining agreement or retirement planCompany Plan, trust or fundincluding, except as required to comply with changes in applicable law and but not adoptlimited to, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, health careemployment, employment termination, severance or other employee benefit plan, agreement, trust, fund fund, policy or arrangement for the benefit or welfare of any employees directors, officers or retirees generallyemployees; (g) Except as may be required as a result of a change in law or in generally accepted accounting principles, other change any of the accounting methods, practices or principles used by it; (h) Make or change any Tax election, make or change any method of accounting with respect to Taxes, file any amended Tax Return or settle or compromise any material Tax liability; (i) Settle or compromise any pending or threatened suit, action or claim for an aggregate amount in excess of $100,000 or which is material or which relates to the transactions contemplated hereby; (j) Make any change in the key management structure of the Company or any of its subsidiaries, including, without limitation, the hiring of additional officers or the termination of existing officers; (k) Other than in the ordinary course of business, except (i) as contemplated by Section 6.1(c), (ii) as required to comply with changes in applicable law, (iii) transfer or grant any of the foregoing involving rights under any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereofIntellectual Property, or (iv) as required pursuant modify any existing rights with respect thereto; provided that the Company shall not grant an exclusive license with respect to an existing contractual arrangement or agreementany Intellectual Property; (il) use commercially reasonable efforts to maintain Adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries not constituting an inactive subsidiary (other than the Merger); (m) Pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business in accordance with financially responsible insurance companies insurance on its tangible assets the terms of such obligation or liability and its businesses consistent with past practice of liabilities reflected or reserved against in such amounts the financial statements of the Company or incurred in the ordinary course of business and against such risks and losses as are consistent with past practice; and; (jn) not makeFail to maintain in full force and effect the existing insurance policies covering the Company and its subsidiaries and their respective properties, change assets and businesses (provided, that the Company may substitute therefor policies providing for coverages no less favorable to the Company and its subsidiaries on terms and conditions no less favorable to the Company and its subsidiaries); or (o) Take, or revoke offer or propose to take, or agree to take in writing or otherwise, any material Tax election of the actions described in Sections 5.1(a) through 5.1(n) or any action which would make any material agreement of the representations or settlement regarding Taxes with warranties of the Company contained in this Agreement untrue and incorrect as of the date when made if such action had then been taken, or would result in any taxing authorityof the conditions set forth in Annex A not being satisfied.

Conduct of Business Pending the Merger. SECTION 6.1 Conduct of Business by the Company Pending the Merger. Except (x) as otherwise expressly permitted, contemplated or required by this Agreement or disclosed required by applicable Law, (y) as set forth in Section 6.1 5.1 of the Company Disclosure ScheduleLetter or (z) with the consent in advance in writing by Parent (such consent not to be unreasonably withheld or delayed), after at all times during the date hereof period commencing with the execution and prior delivery of this Agreement and continuing until the earlier to occur of the Closing Date or earlier termination of this Agreement, unless Parent shall otherwise agree in writing, Agreement pursuant to Article VIII and the Company shall, and shall cause its subsidiaries toClosing Date: (a) conduct their respective businesses the Company shall (and shall cause each of its Subsidiaries to) to: (i) carry on the Business as currently conducted in all material respects in the ordinary and usual course of business and consistent with past practice;; and (ii) use commercially reasonable efforts to (A) preserve (1) in all material respects its business organizations, (2) its material rights and franchises and (3) its relationships with material customers, suppliers, lessors, lessees, licensors, licensees and other third parties having significant business relationships with it and (B) keep available the services of its present officers and key employees; and (b) the Company shall not, and shall not cause or permit any of its Subsidiaries to, do any of the following: (i) amend or propose to amend their respective certificates of incorporation or bylaws, its Organizational Documents; (ii) splitissue, combine deliver, sell, pledge, dispose of or reclassify their encumber any shares of capital stock, ownership interests or voting securities, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, any other ownership interests or any voting securities (including stock options, stock appreciation rights, phantom stock, restricted stock units, performance shares or other similar instruments), of the Company or any of its Subsidiaries (except for (x) the issuance of shares of Company Common Stock upon the exercise of currently outstanding capital stock Company Stock Options, in accordance with the terms of any Company Stock Plan, (y) the issuance of shares of Company Common Stock upon the settlement of currently outstanding RSUs (and dividend equivalents thereon, if applicable) in accordance with the terms of such instruments or (z) the issuance of shares by a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary of the Company); (iii) declare, authorize, set aside for payment, establish a record date for, make or pay any dividend or distribution other distribution, payable in cash, stock, property or otherwise, except for the payment of dividends or distributions to the Company by a wholly-owned subsidiary of the Company; (c) not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that (i) the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereof, (ii) the Company may issue shares of Company Common Stock (or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings in the ordinary course of business (other than pursuant to credit facilities) or borrowings under the existing credit facilities of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), other equity interests; (iv) take reclassify, combine, split, subdivide, redeem, purchase or fail to take otherwise acquire any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu shares of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result capital stock of the consummation Company, or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Merger Company’s Subsidiaries; (i) acquire (whether by merger, consolidation or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any stock or assets or businesses otherwise) any corporation, partnership or other business organization or division thereof or any assets, rights or properties, in each case, other than expenditures for current (x) purchases of inventory and other assets in the ordinary course of business or pursuant to existing Contracts which have been made available to Parent prior to the date hereof, or (y) acquisitions of assets or properties not exceeding $5 million in the aggregate, or (ii) sell or otherwise dispose of (whether by merger, consolidation or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or any assets, rights or properties, in each case of this clause (ii), other than (x) sales or dispositions of inventory and expenditures for fixed or capital obsolete assets in the ordinary course of business and or of other assets pursuant to existing Contracts which have been made available to Parent prior to the date hereof, or (y) sales or dispositions of assets or properties not exceeding $5 million in the aggregate; (vi) modify or amend on terms materially adverse to the Company or terminate any Material Contract, or enter into any Contract, which if entered into prior to the date hereof would be a Material Contract other than to the extent such Contract is required to effect any action explicitly permitted by Sections 5.1(b)(i) through 5.1(b)(xiv) or change the conversion price of the Convertible Notes; (vii) make or authorize any new capital expenditures during any fiscal quarter (including new capital expenditures made or authorized during such fiscal quarter prior to the date of this Agreement) that are in excess of the Company’s capital expenditure budget for such fiscal quarter as set forth in Section 5.1(b)(vii) of the proviso in this Section 6.1(d), Company Disclosure Letter; (viviii) sell, pledge, dispose grant any licenses of or encumber any material assets or businesses other than (A) sales of businesses or assets Intellectual Property to third parties except in the ordinary course of business, (B) sales of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, or (vii) except as contemplated by the following proviso, enter into any binding contract, agreement, commitment or arrangement with respect to any of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (eix) use all reasonable efforts to preserve intact their respective business organizations and goodwillincur, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent with past practice; provided, however, that the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annum; (h) not adopt, enter into or amend any pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend modify in any material respect the terms of, any bonusindebtedness for borrowed money, profit sharingor assume, compensationguarantee or endorse, stock optionor otherwise as an accommodation become responsible for, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare obligations of any employees Person, or retirees generallymake any loans, advances or capital contributions to, or investments in, any other Person (other than a wholly-owned Subsidiary of the Company), in each case, other than in the ordinary course of businessbusiness (including any borrowings under the Company’s existing credit facility and in respect of letters of credit) and in an amount to not exceed $10 million; (x) except as required by applicable Law or existing Contracts or Company Plans as in effect on the date hereof, (A) increase the compensation or benefits of any of its present or former directors, officers or employees (except (i) as contemplated by Section 6.1(cfor increases in salary or wages for non-officer level employees in the ordinary course of business consistent with past practice), (iiB) grant any severance or termination pay to any present or former director, officer or employee or any retention pay (other than cash retention benefits not to exceed the amount set forth in Section 5.1(b)(x)(B) of the Company Disclosure Letter in the aggregate payable to active employees of the Company and its Subsidiaries), (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or prospective directors, officers or other employees (excluding prospective employees or officers that had offers outstanding as of the date hereof which, with respect to offers of employment, are disclosed by title in Section 5.1(b)(x)(C) of the Company Disclosure Letter), except for offers of employment to prospective employees whose annual cash compensation (including any eligible bonus amounts) would not exceed the amount set forth in Section 5.1(b)(ii)(C) of the Company Disclosure Letter, in the ordinary course of business consistent with the recent past practices of the Company, (D) loan or advance any money or other property to any present or former director, officer or employee, (E) increase the funding obligation or contribution rate of any Company Plan or allow for the commencement of any new offering periods under any employee stock purchase plan, (F) grant any equity or equity-based awards, (G) establish, adopt, enter into, amend or terminate any Company Plan or (H) other than as expressly contemplated by this Agreement, use discretion to waive or accelerate any performance conditions applicable to any bonus or incentive awards or establish annual or long-term incentive targets with respect to future performance periods which are greater in amount, or otherwise have terms materially inconsistent with, the amount and terms applicable to the most recent annual and long-term awards made by the Company; (xi) make any material change in any accounting principles or methods, except as may be required to comply with by changes in applicable lawstatutory or regulatory accounting rules or GAAP or regulatory requirements with respect thereto; (xii) other than in the ordinary course of business (except with respect to clauses (B), (iiiE) or (F)), (A) make any material Tax election, (B) enter into any material settlement or compromise of any material Tax liability, (C) file any amended Tax Return with respect to any material Tax, (D) change any method of Tax accounting or Tax accounting period, (E) enter into any closing agreement relating to any material Tax, (F) surrender any right to claim a material Tax refund, or (G) consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or any of its Subsidiaries; (xiii) settle or compromise any Action (A) described in Section 5.1(b)(xiii) of the Company Disclosure Letter, (B) with any Governmental Entity or (C) any other Action, other than, with respect to this clause (C), settlements or compromises where the amount paid in settlement or compromise, in each case, does not exceed $1 million, individually, or $5 million, in the aggregate, and which do not impose any material restrictions on the operations or businesses of the Company and its Subsidiaries, taken as a whole; (xiv) except for this Agreement, adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of such entity (other than with respect to or among wholly-owned Subsidiaries of the Company); or (xv) authorize, commit or agree to take any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreement;actions. (ic) use commercially reasonable efforts Other than the right to maintain consent or withhold consent with financially responsible insurance companies insurance on respect to the foregoing matters (such consent not to be unreasonably withheld or delayed), nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its tangible assets Subsidiaries’ operations prior to the Effective Time, and nothing contained in this Agreement shall give the Company, directly or indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, each of the Company and Parent shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its businesses in such amounts and against such risks and losses as are consistent with past practice; and (j) not make, change or revoke any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authoritySubsidiaries’ respective operations.

Conduct of Business Pending the Merger. SECTION 6.1 7.1. Conduct of Business by the Company Pending the Merger. Except as otherwise contemplated by this Agreement or disclosed in Section 6.1 of the Company Disclosure ScheduleAgreement, after the date hereof and prior to the Closing Date or earlier termination of this Agreement, unless Parent shall otherwise agree in writing, the Company shall, and shall cause its subsidiaries subsidiaries, to: (a) conduct their respective businesses its business in the ordinary and usual course of business and consistent with past practice; (b) not (i) amend or propose to amend their respective certificates of incorporation its charter or bylawsby-laws, (ii) split, combine or reclassify their its outstanding capital stock or (iii) declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise, except for the payment of dividends or distributions to the Company by a wholly-owned subsidiary of the CompanyCompany and the payment of a quarterly cash dividend by the Company in accordance with its prior practices in an amount not in excess of $0.03 per share; (c) not issue, sell, pledge sell or dispose ofpledge, or agree to issue, sell, sell or pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their its capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that (i) the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereof, (ii) the Company may issue shares of Company Common Stock (or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings in the ordinary course of business (other than pursuant to credit facilities) or borrowings under the existing credit facilities of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets in the ordinary course of business and expenditures for fixed or capital assets in the ordinary course of business and other than as set forth in the proviso in this Section 6.1(d), (vi) sell, pledge, dispose of or encumber any material assets or businesses other than (A) sales of businesses or assets in the ordinary course of business, (B) sales of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, or (vii) except as contemplated by the following proviso, enter into any binding contract, agreement, commitment or arrangement with respect to any of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective its business organizations and goodwill, keep available the services of their respective present its officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them the Company and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (fe) subject to restrictions imposed by applicable law, confer on a regular and frequent basis with one or more designated representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (gf) except as contemplated in Section 7.1 of the Disclosure Schedule, not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent with past practice; provided, however, that the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annum;and (hg) not adopt, enter into or amend any pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any employees employee or retirees generally, other than in the ordinary course of businessretiree, except (i) as contemplated by Section 6.1(c), (ii) as required to comply with changes in applicable law, (iii) any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreement; (i) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses in such amounts and against such risks and losses as are consistent with past practice; and (j) not make, change or revoke any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authority.

Conduct of Business Pending the Merger. SECTION 6.1 Conduct The Company covenants and agrees that, during the period from the date hereof to the Effective Time, unless Newco gives its prior written consent, the businesses of Business by the Company Pending and its Subsidiaries shall be conducted only in, and the MergerCompany and its Subsidiaries shall not take any action except in, the ordinary course of business consistent with past practice and in compliance with applicable laws; and the Company and its Subsidiaries shall each use its reasonable best efforts (i) to preserve substantially intact the business organization of the Company and its Subsidiaries, (ii) to keep available the services of the present officers, employees and consultants of the Company and its Subsidiaries and (iii) to preserve the present relationships of the Company and its Subsidiaries with customers, distributors, licensors, designers and suppliers and other persons with which the Company or any of its Subsidiaries has significant business relations. Except as otherwise expressly contemplated by this Agreement, by way of amplification and not limitation, neither the Company nor any of its Subsidiaries shall, between the date of this Agreement or disclosed and the Effective Time, except as set forth in Section 6.1 5.1 of the Company Disclosure Schedule, after directly or indirectly take, or propose or commit to take, any of the date hereof and following actions without the prior to the Closing Date or earlier termination written consent of this Agreement, unless Parent shall otherwise agree in writing, the Company shall, and shall cause its subsidiaries toNewco: (a) conduct their respective businesses amend or otherwise change the certificate of incorporation or by-laws or equivalent organizational documents of the Company or any of its Subsidiaries; (b) issue, deliver, sell, lease, sell and leaseback, pledge, mortgage, dispose of or encumber or subject to any Lien, or authorize or commit to the issuance, delivery, sale, lease, sale/leaseback, pledge, mortgage, disposition or encumbrance of or to the subjection to any Lien, (A) any shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock or any other ownership interest (including but not limited to stock appreciation rights or phantom stock) of the Company or any of its Subsidiaries (except for the issuance and delivery of shares of Company Common Stock issuable in accordance with the terms of Options outstanding as of the date hereof, and upon the terms in effect as of the date hereof) or (B) any assets of the Company or any of its Subsidiaries, other than inventory or other assets sold, leased or disposed of in the ordinary and usual course of business and consistent with past practice; (b) not (i) amend or propose to amend their respective certificates of incorporation or bylaws, (ii) split, combine or reclassify their outstanding capital stock or (iiic) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock, property or otherwise, except for the payment with respect to any of its capital stock, other than dividends or distributions by a direct or indirect wholly owned Subsidiary of the Company to the Company by a wholly-and/or other direct or indirect wholly owned subsidiary Subsidiaries of the Company; (cd) not issuereclassify, sellcombine, pledge split, subdivide or dispose ofredeem, purchase or otherwise acquire, directly or indirectly, any of the capital stock, or agree any other ownership interest (including but not limited to issuestock appreciation rights or phantom stock), sell, pledge of the Company or dispose of, any additional shares of, of its Subsidiaries or any options, warrants warrants, convertible securities or other rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that or any other ownership interest (i) including but not limited to stock appreciation rights or phantom stock), other than in connection with the Company may issue shares upon conversion of convertible securities and exercise of options and warrants Options outstanding on the date hereof, (ii) the Company may issue shares of Company Common Stock (or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses hereof pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms 8.3 of the agreements relating theretoStock Plan; (d) not (i) incur or become contingently liable other than with respect to any indebtedness for borrowed money other than (A) borrowings and repayments in the ordinary course of business (other than pursuant to credit facilities) or borrowings under the existing lines of credit facilities of the Company or listed on Schedule 5.1(e)(i) (which borrowings shall not in aggregate amount exceed $18 million in U.S. dollars at any of its subsidiaries as such facilities may be amended in a manner that does one time outstanding and shall not have a material adverse effect on interest rate periods extending beyond the Company (the "Existing Credit Facilities") up Effective Time), repurchase, repay, incur or cause or permit to the existing borrowing limit on the date hereofexist any indebtedness for borrowed money or issue any debt securities or assume, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parentguarantee or endorse, or (C) borrowings in connection with acquisitions otherwise as set forth in an accommodation become responsible for, the proviso in this Section 6.1(d), (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition obligations of any assets or businesses other than expenditures for current assets in the ordinary course of business and expenditures for fixed or capital assets in the ordinary course of business and other than as set forth in the proviso in this Section 6.1(d), (vi) sell, pledge, dispose of or encumber any material assets or businesses other than (A) sales of businesses or assets in the ordinary course of business, (B) sales of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowingsperson, or (vii) except as contemplated by the following proviso, enter into any binding contract, agreement, commitment "keep well" or other agreement to maintain any financial statement condition of another person or enter into any arrangement with respect to having the economic effect of any of the foregoing; provided, howeveror make any loans, that notwithstanding the foregoing (advances or capital contributions to, or investments in, any person other than subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses a direct or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share indirect wholly owned Subsidiary of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (Bii) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operatesenter into, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the businessterminate, assetswaive, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into modify or amend any employmentmaterial contract, severance, special pay arrangement with respect to termination of employment license or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent with past practice; provided, however, that the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annum; (h) not adopt, enter into or amend any pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any employees or retirees generally, other than in the ordinary course of businessbusiness consistent with past practice; or (iii) except as set forth in the Company's capital budget which is set forth in Section 5.1(e)(iii) of the Disclosure Schedule, except authorize any single expenditure for any capital or acquisition (including without limitation any acquisition of any corporation, partnership or other business enterprise or division thereof by share purchase, merger, consolidation or otherwise) other than capital expenditures not to exceed $50,000 individually or $200,000 in the aggregate; (i) as contemplated by Section 6.1(c)increase the compensation or fringe benefits of any of its directors, officers or employees, except for increases in salary or wages of employees of the Company or its Subsidiaries, who are not directors or officers of the Company, in the ordinary course of business and consistent in all material respects with the Company's budget, (ii) as grant any severance or termination pay not currently required to comply with changes be paid under existing severance plans to, or enter into or modify in applicable lawany material or economic respect any employment, (iii) consulting or severance agreement or arrangement with, any present or former director, officer or other employee of the Company or any of its Subsidiaries, except for the foregoing involving any such then existing plansgranting of severance or termination pay, agreementsin the ordinary course of business consistent with past practice, trusts, funds or arrangements of any company acquired to nonexecutive employees who are terminated by the Company after the date hereof, (iii) establish, adopt, enter into or amend or terminate any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees or (iv) terminate the existing employment arrangements with any of the individuals listed in Section 5.1(f) of the Disclosure Schedule or take any action that would constitute a breach of any such arrangements or take any action (other than consummation of the Merger) which would cause any change-of-control, severance or similar payment to be payable to any such individual or make any payment of any bonus or other extraordinary or termination payment which such individual has agreed to waive, modify or amend in connection with the Employment Arrangements; (g) except as may be required pursuant to an existing contractual arrangement as a result of a change in law or agreementin generally accepted accounting principles, change in any material respect any of the accounting practices or principles used by it; (h) make any material tax election or settle or compromise any material Federal, state, local or foreign Tax liability; (i) use commercially reasonable efforts settle or compromise any pending or threatened suit, action or claim for in excess of $100,000 per suit, action or claim, and $250,000 in the aggregate, or which relates to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses in such amounts and against such risks and losses as are consistent with past practice; andthe transactions contemplated hereby; (j) not makeadopt a plan of complete or partial liquidation, change dissolution, merger, consolidation, restructuring, recapitalization or revoke other reorganization of the Company or any material Tax election of its Subsidiaries (other than this Agreement and the Merger); or (k) take, or make offer or propose to take, or agree to take in writing or otherwise, any material agreement or settlement regarding Taxes with any taxing authorityof the actions described in Sections 5.1(a) through 5.1(j).

Conduct of Business Pending the Merger. SECTION 6.1 Section 5.01 Conduct of Business by the Company Pending the Merger. Except as otherwise contemplated by The Company agrees that, between the date of this Agreement or disclosed in Section 6.1 and the earlier of the Company Disclosure ScheduleEffective Time and the termination of this Agreement pursuant to Article VIII, after the date hereof and prior to the Closing Date except as required by applicable Law or earlier termination as expressly permitted by any other provision of this Agreement, unless Parent shall otherwise agree consent in writingwriting (which consent shall not be unreasonably withheld, conditioned or delayed), the businesses of the Group Companies shall only be conducted, and the Group Companies shall not take any action except, in a lawfully permitted manner in the ordinary course of business and consistent with past practice or at the direction of or with approval from any of Parent, Merger Sub, Rollover Shareholders or their respective Affiliates. By way of amplification and not limitation, except as expressly permitted by any other provision of this Agreement or as required by Law, unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, conditioned or delayed), the Company shallshall not permit any of its Subsidiaries to, between the date of this Agreement and the earlier of the Effective Time and the termination of this Agreement pursuant to Article VIII, directly or indirectly, do, or propose to do, any of the following without the prior written consent of Parent (which consent shall cause its subsidiaries tonot be unreasonably withheld, conditioned or delayed), except at the direction of or with written approval from any of Parent, Merger Sub, Rollover Shareholders or their respective Affiliates: (a) conduct their respective businesses amend or otherwise change the memorandum and articles of association or equivalent organizational documents of the Company or any of Company’s Subsidiaries; (b) issue, sell, transfer, lease, sublease, license, pledge, dispose of, grant or encumber, or authorize the issuance, sale, transfer, lease, sublease, license, pledge, disposition, grant or encumbrance of, other than in connection with the exercise, settlement or vesting of any Company Share Award in accordance with the Share Incentive Plan and other than transactions between the Company and any of the Company’s Subsidiaries or between or among one or more of the Company’s Subsidiaries, (i) any shares of the Company or any options, warrants, convertible securities or other rights of any kind to acquire any shares, or any other ownership interest (including any phantom interest), of any Group Company except pursuant to the terms of any Company Benefit Plan, or (ii) any property or assets (whether real, personal or mixed, and including leasehold interests and intangible property) of any Group Company that are material to the business of the Group Companies, taken as a whole, except in the ordinary course of business and usual in a manner consistent with past practice, except for the expiration of Intellectual Property; (c) declare, set aside, make or pay any dividend or other distribution, payable in cash, shares, property or otherwise, with respect to any of its shares (other than (i) pursuant to the Company’s previously announced dividend policy, and (ii) dividends or other distributions from any Subsidiary of the Company to the Company or to another Company’s Subsidiary consistent with past practice); (d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its shares, or any options, warrants, convertible securities or other rights exchangeable into or convertible or exercisable for any of its shares, except pursuant to (i) the Company’s previously announced share repurchase policy, or (ii) the exercise or settlement of Company Share Awards, employee severance, retention, termination, change of control and other contractual rights in existence on the date hereof on the terms in effect on the date hereof; (e) effect or commence any liquidation, dissolution, scheme of arrangement, merger, consolidation, amalgamation, restructuring, reorganization or similar transaction involving any Group Company (other than the Merger or any merger restructuring or consolidation among wholly-owned Subsidiaries of the Company), or create any new Subsidiaries; (f) (i) acquire (including by merger, consolidation, scheme of arrangement, amalgamation or acquisition of stock or assets or any other business combination) or make any capital contribution or investment in any corporation, partnership, other business organization or any division thereof or acquire any significant amount of assets (other than the acquisition, sale or other disposition of assets in the ordinary course of business consistent with past practice or pursuant to the Contracts in existence on the date hereof and on the terms in effect on the date hereof); (ii) incur, assume, alter, amend or modify any Indebtedness in excess of US$5,000,000 individually or US$10,000,000 in the aggregate, or guarantee such Indebtedness, or issue any debt securities or make any loans or advances in excess of US$10,000,000 individually or US$50,000,000 in the aggregate; or (iii) authorize, or make any commitment with respect to, any single capital expenditure which is in excess of US$10,000,000 or capital expenditures which are, in the aggregate, in excess of US$50,000,000 for the Group Companies taken as a whole; (g) except as otherwise required by Law or pursuant to any Contract in existence as of the date hereof or the terms of a Company Benefit Plan or as otherwise contemplated by this Agreement, (i) enter into any new employment or compensatory agreements (including the renewal of any such agreements), or terminate any such agreements, with any director or executive officer of any Group Company (other than the hiring or termination of executive officer with aggregate annual compensation of less than US$200,000), (ii) grant or provide any severance or termination payments or benefits to any director or executive officer of any Group Company outside the ordinary course of business, (iii) materially increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director or executive officer of any Group Company, (iv) establish, adopt, materially amend or terminate any Company Benefit Plan or amend the terms of any outstanding Company Share Awards, (v) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under the Company Benefit Plan, (vi) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or materially change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, or (vii) forgive any loans to directors or executive officers of any Group Company; (h) issue or grant any new Company Share Award to any Person under any Company Benefit Plan; (i) make any material changes with respect to any credit practice, method of financial accounting, or financial accounting policies or procedures, including changes affecting the reported consolidated assets, liabilities or results of operations of the Group Companies, except as required by changes in GAAP or as a result of a change in Law; (j) pay, discharge or satisfy any material claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of liabilities or obligations as they become due in the ordinary course of business and consistent with past practice; (bk) not (i) amend enter into, materially amend, modify or propose to amend their respective certificates of incorporation or bylaws, (ii) split, combine or reclassify their outstanding capital stock or (iii) declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise, except for the payment of dividends or distributions consent to the Company by a wholly-owned subsidiary of the Company; termination (c) not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that (i) the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereof, (ii) the Company may issue shares of Company Common Stock (or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings extension at the end of a term in the ordinary course of business business) of any Material Contract (other than pursuant to credit facilities) or borrowings under the existing credit facilities of the Company or any of its subsidiaries as Contract that would be a Material Contract if such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up Contract had been entered into prior to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent), or waive any Group Company’s material rights thereunder; (Cl) borrowings terminate or cancel, let lapse, or amend or modify in connection with acquisitions as set forth in the proviso in this Section 6.1(d)any material respect, (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets in the ordinary course of business and expenditures for fixed or capital assets in the ordinary course of business and other than as set forth in the proviso in this Section 6.1(d), (vi) sell, pledge, dispose of or encumber any material assets or businesses other than (A) sales of businesses or assets renewals in the ordinary course of business, any material insurance policies maintained by it which is not promptly replaced by a comparable amount of insurance coverage; (Bm) sales settle any Action; (n) (i) abandon or dedicate to the public any item of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, Owned Intellectual Property or (viiii) except as contemplated by the following proviso, enter into any binding contract, agreement, commitment or arrangement with respect to any Company Owned Intellectual Property registered with or applied to Governmental Authorities and to the extent required by applicable Laws to maintain the validity of the foregoing; providedsuch Company Owned Intellectual Property, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedulefail to make any applicable filings with Governmental Authorities when finally due, or (B) fail to pay all required fees and taxes to Governmental Authorities when finally due; in each case, except for expiration of Intellectual Property; (o) fail to make in a timely manner any filings or registrations with the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered SEC required under the Securities Act or the Exchange ActAct or the rules and regulations promulgated thereunder; (ep) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in the conduct of any actionnew line of business material to the Group Companies, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreementtaken as a whole; (fq) subject to restrictions imposed make or change any material Tax election, materially amend any Tax return (except as required by applicable lawLaw), confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement material closing agreement with respect to termination Taxes, surrender any right to claim a material refund of employment Taxes, settle or other similar arrangements finally resolve any material controversy with respect to Taxes or agreements with materially change any directors, officers or key employees, except in the ordinary course and consistent with past practicemethod of Tax accounting; provided, however, that the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annum;or (hr) not adoptpublicly announce an intention, enter into any formal agreement or amend any pension or retirement planotherwise make a legal commitment, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any employees or retirees generally, other than in the ordinary course of business, except (i) as contemplated by Section 6.1(c), (ii) as required to comply with changes in applicable law, (iii) do any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreement; (i) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses in such amounts and against such risks and losses as are consistent with past practice; and (j) not make, change or revoke any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authorityforegoing.

Conduct of Business Pending the Merger. SECTION 6.1 Section 5.1 Conduct of Business by the Company COL Pending the Merger. Except as otherwise contemplated by During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or disclosed in Section 6.1 of the Effective Time, COL covenants and agrees that, unless the Company Disclosure Schedule, after the date hereof and prior to the Closing Date or earlier termination of this Agreement, unless Parent shall otherwise agree in writing, the Company shallCOL shall conduct its business only in, and COL shall cause its subsidiaries to: (a) conduct their respective businesses in not take any action except in, the ordinary and usual course of business business; and consistent with past practice; (b) not COL shall use reasonable commercial efforts to (i) amend or propose to amend their respective certificates of incorporation or bylawspreserve substantially intact its business organization, (ii) splitpay its trade payables and other liabilities in accordance with their terms as they became due, combine or reclassify their outstanding capital stock or (iii) declare, set aside or pay any dividend or distribution payable collect its receivables and other claims in cash, stock, property or otherwise, except for the payment of dividends or distributions to the Company by a wholly-owned subsidiary of the Company; (c) not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that (i) the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereof, (ii) the Company may issue shares of Company Common Stock (or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions full in accordance with their terms, as they become due, (iv) keep available the existing terms services of the agreements relating thereto; each of its present officers, employees and consultants, (dv) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings take all reasonable actions in the ordinary course of business (other than pursuant necessary to credit facilities) prevent the loss, cancellation, abandonment forfeiture or borrowings under the existing credit facilities of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition expiration of any assets or businesses other than expenditures for current assets in the ordinary course of business COL Intellectual Property, and expenditures for fixed or capital assets in the ordinary course of business and other than as set forth in the proviso in this Section 6.1(d), (vi) preserve each of its present relationships with customers, suppliers and other persons with which COL has significant business relations. By way of amplification and not limitation, except as contemplated by this Agreement, COL shall not, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, directly or indirectly do, or propose to do, any of the following without the prior written consent of the Company: (a) amend or otherwise change its Articles of Formation or the Operating Agreement; (b) issue, transfer, pledge, dispose of or encumber, or authorize the transfer, pledge, disposition or encumbrance of, any Interests; (c) sell, lease, assign, transfer, pledge, dispose of or encumber any material of its assets (whether real, personal or businesses other than intellectual property) (Aexcept for (i) sales of businesses assets in the ordinary course of business; and (ii) dispositions of obsolete or worthless assets). (d) [Intentionally Omitted]; (e) sell, transfer, license, sublicense or otherwise dispose of any COL Intellectual Property Rights, or amend or modify any existing agreements with respect to COL Intellectual Property Rights or Third Party Intellectual Property Rights, other than nonexclusive licenses in the ordinary course of business; (i) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof; (ii) incur any indebtedness for borrowed money or representing the deferred purchase price of any property or assets or issue debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person (except for the endorsement of commercial paper for deposit or collection in the ordinary course of business) or make any loans or advances to or investments in any person; (iii) create, incur, assume or suffer to exist, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind or nature upon its property or assets, income or profits, whether now owned or hereafter acquired, other than "Permitted Liens" (as defined in that certain Loan and Security Agreement dated as of June 14, 1996 by and between VDC Corporation and COL (the "VDC Loan Agreement")); (iv) assume, guarantee, endorse or otherwise in anyway be or become responsible or liable for, directly or indirectly, any contingent obligation; (v) enter into or amend any contract or agreement other than in the ordinary course of business; (vi) authorize any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $10,000 for COL, taken as a whole; (vii) enter into any agreement or become liable under any agreement for the lease, hire or use of any real or personal property; or (viii) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 4.1(f); (g) increase the compensation payable or to become payable to any of their officers or employees (except for such increases as may be set forth in the employment agreements and/or consulting agreements to be entered into upon consummation of the Merger) or grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or other employee of COL, or establish, adopt or enter into any Employee Plan; (h) take any action, other than as required by GAAP, to change accounting policies or procedures (including, without limitation, procedures with respect to revenue recognition, 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 any Tax, except to the extent the amount of any such settlement has been reserved for on the Balance Sheet of COL; (j) pay, discharge or satisfy any principal of any debt prior to its scheduled maturity for borrowed money or for the deferred purchase price of property or services, except at the stated maturity of such debt or as required by mandatory prepayment provisions relating thereto; or amend any provision pertaining to the subordination or the terms of payment of any debt; (k) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) except for (i) the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against on the Balance Sheet of COL or incurred in the ordinary course of business, (Bii) sales of businesses or assets disclosed the Loan (as such term is defined in Section 6.1 of the Company Disclosure ScheduleVDC Loan Agreement), (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, or (vii) except as contemplated by the following proviso, enter into any binding contract, agreement, commitment or arrangement with respect to any of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) reasonable attorneys' fees and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent with past practice; provided, however, that the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annum; (h) not adopt, enter into or amend any pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any employees or retirees generally, other than expenses incurred in the ordinary course of business, except and (iiv) Indebtedness secured by Permitted Liens (as contemplated by Section 6.1(ceach such term is defined in the VDC Loan Agreement); (l) liquidate or dissolve itself (or suffer any liquidation or dissolution); or (m) take, (ii) as required or agree in writing or otherwise to comply with changes in applicable lawtake, (iii) any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereofactions described in Sections 5.1(a) through (l) above, or (iv) as required pursuant to an existing contractual arrangement or agreement; (i) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses in such amounts and against such risks and losses as are consistent with past practice; and (j) not make, change or revoke any material Tax election or action which would make any material agreement of the representations or settlement regarding Taxes with warranties contained in Article 2 or Article 3 of this Agreement untrue or incorrect or prevent COL from performing or cause COL not to perform its covenants hereunder or result in any taxing authorityof the conditions to the Merger set forth herein not being satisfied.

Conduct of Business Pending the Merger. SECTION 6.1 4.01. Conduct of Business by the Company Pending the Merger. Except as otherwise contemplated by During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or disclosed in Section 6.1 of the Effective Time, the Company Disclosure Schedule, after the date hereof covenants and prior to the Closing Date or earlier termination of this Agreementagrees that, unless Parent shall otherwise agree in writing, (i) the Company shall conduct its business and shall cause the businesses of its subsidiaries to be conducted only in, and the Company and its subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; (ii) the Company shall, and shall cause its subsidiaries to, use commercially reasonable efforts to keep in full force and effect adequate insurance coverages consistent with past practice and maintain and keep its properties and assets in good repair, working order and condition, normal wear and tear excepted; and (iii) the Company shall use its reasonable efforts to preserve substantially intact the business organization of the Company and its subsidiaries, to keep available the services of the present officers, employees and consultants of the Company and its subsidiaries and to preserve the present relationships of the Company and its subsidiaries with customers, suppliers and other persons with which the Company or any of its subsidiaries has significant business relations. By way of amplification and not limitation, except as contemplated by this Agreement, neither the Company nor any of its subsidiaries shall, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, directly or indirectly do, or propose to do, any of the following without the prior written consent of Parent: (a) conduct their respective businesses in the ordinary and usual course amend or otherwise change its Articles of business and consistent with past practiceIncorporation or By-laws; (b) not (i) amend or propose to amend their respective certificates of incorporation or bylaws, (ii) split, combine or reclassify their outstanding capital stock or (iii) declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise, except for the payment of dividends or distributions to the Company by a wholly-owned subsidiary of the Company; (c) not issue, sell, pledge pledge, dispose of or dispose ofencumber, or agree to issueauthorize the issuance, sellsale, pledge pledge, disposition or dispose encumbrance of, any additional shares ofof capital stock of any class, or any options, warrants warrants, convertible securities or other rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that or any other ownership interest (i) the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereofincluding, (ii) the Company may issue shares of Company Common Stock (or warrants or options to acquire Company Common Stockwithout limitation, any phantom interest) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings in the ordinary course of business (other than pursuant to credit facilities) or borrowings under the existing credit facilities of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on subsidiaries, except for the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), (ii) redeem, purchase, acquire or offer to purchase or acquire any issuance of shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets in the ordinary course of business and expenditures for fixed or capital assets in the ordinary course of business and other than as set forth in the proviso in this Section 6.1(d), (vi) sell, pledge, dispose of or encumber any material assets or businesses other than (A) sales of businesses or assets in the ordinary course of business, (B) sales of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, or (vii) except as contemplated by the following proviso, enter into any binding contract, agreement, commitment or arrangement with respect to any of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent with past practice; provided, however, that the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annum; (h) not adopt, enter into or amend any pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any employees or retirees generally, other than in the ordinary course of business, except (i) as contemplated by Section 6.1(c), (ii) as required to comply with changes in applicable law, (iii) any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreement; (i) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses in such amounts and against such risks and losses as are consistent with past practice; and (j) not make, change or revoke any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authority.Common

Conduct of Business Pending the Merger. SECTION 6.1 Section 9.1 Conduct of Business by the Company Pending the Merger. Except ----------------------------------------------------- (a) Prior to the Effective Date, except as otherwise contemplated specifically permitted by this Agreement or disclosed in Section 6.1 of the Company Disclosure Schedule, after the date hereof and prior to the Closing Date or earlier termination of this Merger Agreement, unless Parent shall otherwise agree the other party has consented in writingwriting thereto, Purchaser and the Company shallCompany: (i) Shall use their reasonable best efforts, and shall cause its each of their respective subsidiaries toto use their reasonable best efforts, to preserve intact their business organizations and goodwill and keep available the services of their respective officers and employees; (ii) Shall confer on a regular basis with one or more representatives of the other to report operational matters of materiality and, subject to Section 10.6, any proposals to engage in material transactions; (iii) Shall promptly notify the other of any material emergency or other material change in the condition (financial or otherwise), business, properties, assets, liabilities, prospects or in the normal course of their businesses or in the operation of their properties, any material governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated), or the breach in any material respect of any representation or warranty contained herein; and (iv) Shall promptly deliver to the other true and correct copies of any report, statement or schedule filed with the SEC subsequent to the date of this Merger Agreement. (b) Prior to the Effective Date, unless Purchaser has consented thereto, the Company: (ai) Shall, and shall cause each Company subsidiary to, conduct its operations according to their respective businesses usual, regular and ordinary course in substantially the same manner as heretofore conducted, subject to clauses (ii)-(ix) below; (ii) Shall not, and shall cause each Company subsidiary not to, acquire, enter into an option to acquire or exercise an option or contract to acquire additional real property, incur additional indebtedness, encumber assets or commence construction of, or enter into any agreement or commitment to develop or construct, any other type of real estate projects except for the transactions contemplated in the Disclosure Schedule; (iii) Shall not amend the Articles or the Bylaws of the Company, and shall cause each Company subsidiary not to amend its charter, bylaws, joint venture documents, partnership agreements or equivalent documents except as contemplated by this Merger Agreement; (iv) Shall not (A) issue any shares of its capital stock, effect any stock split, reverse stock split, stock dividend, recapitalization or other similar transaction, (B) grant, confer or award any option, warrant, conversion right or other right not existing on the date hereof to acquire any shares of its capital stock, (C) increase any compensation or enter into or amend any employment agreement with any of its present or future officers or trustees, or (D) adopt any new employee benefit plan (including any stock option, stock benefit or stock purchase plan) or amend any existing employee benefit plan in any material respect, except for changes which are less favorable to participants in such plans; (v) Shall not, and shall not permit any of the Company subsidiaries to, except in accordance with and as permitted under Section 9.1(c) hereof, sell, lease or otherwise dispose of (A) any the Company Properties or any portion thereof or any of the capital stock of or partnership or other interests in any of the Company subsidiaries or (B) except in the ordinary course of business, any of its other assets which are material, individually or in the aggregate; (vi) Shall not, and usual shall not permit any of the Company subsidiaries to, make any loans, advances or capital contributions to, or investments in, any other person; (vii) Shall not, and shall not permit any of the Company subsidiaries to, pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in, or contemplated by, the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company Public Reports or incurred in the ordinary course of business consistent with past practice; (bviii) Shall not, and shall not (i) amend or propose to amend their respective certificates permit any of incorporation or bylaws, (ii) split, combine or reclassify their outstanding capital stock or (iii) declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise, except for the payment of dividends or distributions to the Company subsidiaries to, enter into any material commitment, contractual obligation, borrowing, capital expenditure or transaction (each, a "Commitment") which may result in total payments or liability by a wholly-owned subsidiary or to it in excess of $50,000 other than Commitments for expenses of attorneys, accountants and investment bankers incurred in connection with the CompanyMerger; (cix) Shall not, and shall not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, permit any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that (i) the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereofsubsidiaries to, (ii) the Company may issue shares of Company Common Stock (enter into any Commitment with any officer, trustee, director, consultant or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings in the ordinary course of business (other than pursuant to credit facilities) or borrowings under the existing credit facilities affiliate of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company subsidiaries; and (x) Shall use its best efforts to assist the Purchaser in making contact with the financial institutions that are lenders to the Company for the purpose of obtaining any necessary consents. (c) the Company shall not, without the written consent of Purchaser, which consent may not be unreasonably withheld, (i) effect any material change in any lease or occupancy agreement currently in effect which affects the Company Properties (together with such additional leases approved or permitted pursuant to this Merger Agreement, the "Existing Credit FacilitiesLeases") up to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), ; (ii) redeemrenew or extend the term of any Lease, purchase, acquire unless the same is an extension or offer expansion permitted pursuant to purchase the terms of an existing Lease; or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets in the ordinary course of business and expenditures for fixed or capital assets in the ordinary course of business and other than as set forth in the proviso in this Section 6.1(d), (vi) sell, pledge, dispose of or encumber any material assets or businesses other than (A) sales of businesses or assets in the ordinary course of business, (B) sales of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, or (vii) except as contemplated by the following proviso, enter into any binding contract, agreement, commitment new Lease or arrangement with respect cancel or terminate any Lease. When seeking consent to any of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of this Section 6.1(d))a new or modified Lease, the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 provide notice of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 identity of the Company Disclosure Scheduletenant, a term sheet, letter of intent or proposed lease containing material business terms (including, without limitation, rent, expense base, concessions, tenant improvement allowances, brokerage commissions, and expansion and extension options) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of whatever credit and background information, if any, the Company Common Stock on the date the agreement in then possesses with respect of any to such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Companytenant. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and Purchaser shall be deemed to have consented to any proposed Lease or Lease modification if it has not responded to the Company within five (5) business days after receipt of such information. Upon Purchaser's approval or deemed approval, the Company shall be entitled to enter into a value equal Lease on the standard lease form for such Company Property, without material change other than changes customarily made to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation leases to other comparable tenants of the acquisitions (but not thereafter) are paidCompany Property. Purchaser hereby designates Xxxxx X. Xxxxxx XX and Xxxxxxxx X. Xxxx as individuals who will be available and authorized to grant Lease approvals. Notwithstanding anything herein in this Merger Agreement to the contrary: (A) , the Company will not acquire may cancel or agree to acquire terminate any assets Lease or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operatescommence collection, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment unlawful detainer or other similar arrangements or agreements with remedial action against any directors, officers or key employees, except in tenant without Purchaser's consent upon the ordinary course and consistent with past practice; provided, however, that occurrence of a default by the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annum; (h) not adopt, enter into or amend any pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any employees or retirees generally, other than in the ordinary course of business, except (i) as contemplated by Section 6.1(c), (ii) as required to comply with changes in applicable law, (iii) any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreement; (i) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses in such amounts and against such risks and losses as are consistent with past practice; and (j) not make, change or revoke any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authoritytenant under said Lease.

Conduct of Business Pending the Merger. SECTION 6.1 5.01 Conduct of Business by the Company Pending the Merger. Except as otherwise contemplated by The Company covenants and agrees that, between the date of this Agreement and the election or disclosed in Section 6.1 appointment of the Company Disclosure Schedule, after the date hereof and prior Purchaser's designees to the Closing Date or earlier termination Board pursuant to Section 6.03 upon the purchase by Purchaser of this Agreementany Shares pursuant to the Offer (the "Purchaser's Election Date"), unless Parent shall otherwise agree in writing, the businesses of the Company and the Subsidiaries shall be conducted only in, and the Company and the Subsidiaries shall not take any action except in, the ordinary course of business consistent with past practice and the Company shall use all reasonable best efforts consistent with good business judgment under the current circumstances to preserve intact the business organization of the Company and the Subsidiaries, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with customers, suppliers, vendors, distributors and other persons with which the Company or any Subsidiary has business relations to the end that their goodwill and ongoing businesses shall be unimpaired in all material respects at the Effective Time. By way of amplification and not limitation, except as contemplated by this Agreement or by Section 5.01 of the Disclosure Schedule, the Company agrees that neither the Company nor any Subsidiary shall, between the date of this Agreement and shall cause its subsidiaries tothe Purchaser's Election Date, directly or indirectly do, or propose to do, any of the following without the prior written consent of Parent: (a) conduct their respective businesses amend or otherwise change, directly or indirectly, its Constituent Documents; (b) issue, sell, pledge, dispose of, grant, encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of (i) any shares of capital stock of any class of the Company or any Subsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary, and except pursuant to the Stock Option Agreement and outstanding Options and Warrants and the Company's Associate Stock Purchase Plan, or (ii) any assets of the Company or any Subsidiary, except for sales in the ordinary and usual course of business and in a manner consistent with past practice; (b) not (i) amend or propose to amend their respective certificates of incorporation or bylaws, (ii) split, combine or reclassify their outstanding capital stock or (iiic) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except for the payment of such declarations, set asides, dividends or and other distributions made by any Subsidiary to the Company by a wholly-owned subsidiary of the Company; (cd) not issuereclassify, sellcombine, pledge split, subdivide or dispose ofredeem, purchase or agree to issueotherwise acquire, sell, pledge directly or dispose ofindirectly, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such its capital stock, except that ; (i) the Company may issue shares upon conversion acquire (including, without limitation, by merger, consolidation, or acquisition of convertible securities and exercise of options and warrants outstanding on the date hereofstock or assets or any other business combination) any corporation, (ii) the Company may issue shares of Company Common Stock (partnership, other business organization or warrants any division thereof or options to acquire Company Common Stock) in connection with acquisitions any material amount of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings in the ordinary course of business (other than pursuant to credit facilities) or borrowings under the existing credit facilities of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection consistent with acquisitions as set forth in the proviso in this Section 6.1(d), past practice; (ii) redeemincur or modify any indebtedness for borrowed money or issue any debt securities or assume, purchaseguarantee or endorse, acquire pledge in respect of or offer to purchase otherwise as an accommodation become responsible for the obligations of any person, or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets loans, advances or businesses other than expenditures for current assets capital contributions, except in the ordinary course of business and expenditures for fixed consistent with past practice; (iii) enter into any contract or capital assets agreement, other than any contract or agreement entered into in the ordinary course of business consistent with past practice and other than as set forth in the proviso in this Section 6.1(d), (vi) sell, pledge, dispose of or encumber any material assets or businesses other than (A) sales of businesses or assets in the ordinary course of business, (B) sales of businesses or assets disclosed in Section 6.1 of which requires payments by the Company Disclosure Schedule, (C) sales of businesses or assets with the Subsidiaries in an aggregate 1997 revenues amount of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, or (vii) except as contemplated by the following proviso, enter into any binding contract, agreement, commitment or arrangement 5,000,000 with respect to any of the foregoingall such agreements taken together; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of this Section 6.1(d))terminate, the Company shall not be prohibited from acquiring cancel or request any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedulematerial change in, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire material change in, any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employeesMaterial Contract, except in the ordinary course and of business consistent with past practice, or waive, release or assign any material rights or claims; providedor (v) authorize capital commitments, however, that the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary an aggregate amount in excess of $100,000 per annum2,500,000 for the Company and the Subsidiaries taken as a whole; (hf) 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 grant or modify any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company or any Subsidiary (other than in connection with hiring and terminating employees in the ordinary course of the Company's business), or establish, adopt, enter into or amend any pension or retirement plancollective bargaining agreement, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, health careemployment, employment retention, termination or other employee benefit severance plan, benefit, agreement, trust, fund fund, policy or arrangement for the benefit or welfare of any employees director, officer or retirees generallyemployee or circulate to any employee any details of any proposal to adopt or amend any such plan or make, authorize or approve the payment of any extraordinary amount to any outside advisor, attorney or consultant in all cases, except as required by law; (g) take any action, other than reasonable and usual actions in the ordinary course of business consistent with past practice, with respect to accounting policies or procedures (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivable); (h) make any Tax election or settle or compromise any federal, state, local or foreign income Tax liability; (i) pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business consistent with past practice, of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiaries, or subsequently incurred in the ordinary course of business consistent with past practice; (j) waive the benefits of, or agree to modify in any manner any confidentiality, standstill or similar agreement to which the Company or any Subsidiary is a party, other than in the ordinary course of businessbusiness consistent with past practice; (k) settle or comprise any pending or threatened suit, except action or claim that is material or which relates to any of the Transactions; (l) announce an intention, enter into any formal or informal agreement, or otherwise make a commitment, to do any of the foregoing; or (m) take any action that would result in (i) any of its representations and warranties set forth in this Agreement that are qualified as contemplated by Section 6.1(c)to materiality becoming untrue, (ii) as required to comply with changes any of such representations and warranties that are not so qualified becoming untrue in applicable lawany material respect, or (iii) any of the foregoing involving any such then existing plans, agreements, trusts, funds conditions to the Offer or arrangements of any company acquired after the date hereof, or Note Tender Offer set forth in Annex A and Annex B not being satisfied (iv) as required pursuant subject to an existing contractual arrangement or agreement; (i) use commercially reasonable efforts the Company's right to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses in such amounts and against such risks and losses as are consistent with past practice; and (j) not make, change or revoke any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authoritytake action specifically permitted by Section 6.05).

Conduct of Business Pending the Merger. SECTION 6.1 4.1 Conduct of Business by of the Company Pending the Merger. Except as set forth in Section 4.1 of the Disclosure Schedule, the Company covenants and agrees that, during the period from the date hereof to the Effective Time (except as otherwise contemplated by this Agreement or disclosed in Section 6.1 of the Company Disclosure Schedule, after the date hereof and prior to the Closing Date or earlier termination terms of this Agreement), unless Parent shall otherwise agree in writingwriting in advance, the businesses of the Company shalland its Subsidiaries shall be conducted, in all material respects, only in, and the Company and its Subsidiaries shall cause not take any action except in, the ordinary course of business and in a manner consistent with past practice and, in all material respects, in compliance with applicable laws; and the Company and its subsidiaries toSubsidiaries shall each use its reasonable best efforts consistent with the foregoing to preserve substantially intact the business organization of the Company and its Subsidiaries, to keep available the services of the present officers, employees and consultants of the Company and its Subsidiaries and to preserve the present relationships of the Company and its Subsidiaries with customers, suppliers, advertisers, distributors and other persons with which the Company or any of its Subsidiaries has significant business relations. By way of amplification and not limitation, neither the Company nor any of its Subsidiaries shall (except as set forth in Section 4.1 of the Disclosure Schedule and except as otherwise contemplated by the terms of this Agreement) between the date of this Agreement and the Effective Time, directly or indirectly do, or propose or commit to do, any of the following without the prior written consent of Parent: (a) conduct their respective businesses make or commit to make any capital expenditures in excess of amounts reflected in the most recent financial model disclosed to Parent prior to the date of this Agreement; (b) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person (other than the Company or a wholly-owned Subsidiary of the Company) or enter into any "keep well" or other agreement to maintain the financial condition of another Person (other than the Company or a wholly-owned Subsidiary of the Company) or make any loans, or advances of borrowed money or capital contributions to, or equity investments in, any other Person (other than the Company or a wholly owned Subsidiary of the Company) or issue or sell any debt securities, other than borrowings under existing lines of credit in the ordinary and usual course of business and consistent with past practice; (b) not (i) amend or propose to amend their respective certificates its certificate of incorporation or bylaws, bylaws or the charter or bylaws of any of its Subsidiaries; (ii) split, combine or reclassify their the outstanding shares of its capital stock or (iii) other ownership interests or declare, set aside or pay any dividend or distribution payable in cash, stock, stock or property or otherwisemake any other distribution with respect to such shares of capital stock or other ownership interests; (iii) redeem, except for the payment purchase or otherwise acquire, directly or indirectly, any shares of dividends its capital stock or distributions to the Company by a wholly-owned subsidiary other ownership interests; or (iv) sell or pledge any stock of the Companyany of its Subsidiaries; (ci) not issueOther than upon exercise of options or warrants or the conversion of Company Preferred Stock or as required by the terms of Employee Plans disclosed in Section 2.3 of the Disclosure Schedule, sell, pledge issue or dispose of, sell or agree to issue, sell, pledge issue or dispose of, sell any additional shares of, or grant, confer or award any options, warrants or rights of any kind to acquire any shares of their of, its capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that (i) the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereof, class; (ii) enter into any agreement, contract or commitment out of the Company may issue shares ordinary course of Company Common Stock (its business, to dispose of or warrants acquire, or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant relating to the proviso disposition or acquisition of, a segment of Section 6.1(d) and its business; (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings except in the ordinary course of business (other than pursuant to credit facilities) or borrowings under the existing credit facilities of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereofconsistent with past practice, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets in the ordinary course of business and expenditures for fixed or capital assets in the ordinary course of business and other than as set forth in the proviso in this Section 6.1(d), (vi) sell, pledge, dispose of or encumber any material Assets (including without limitation, any indebtedness owed to them or any claims held by them); or (iv) acquire (by merger, consolidation, acquisition of stock or assets or businesses otherwise) any corporation, partnership or other business organization or division thereof or any material Assets (other than (A) sales of businesses or assets inventory in the ordinary course of businessbusiness consistent with past practice) or make any material investment, (B) sales either by purchase of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities stock or other permitted borrowingssecurities, or (vii) except as contemplated by the following provisocontribution to capital, enter into in any binding contractcase, agreementin any material amount of property or assets, commitment in or arrangement with respect to any of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Actother Person; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements severance agreement with any directors, officers officer or key employeesdirector or, except in the ordinary course and of business consistent with past practice; provided, however, that grant any severance or termination pay (other than pursuant to policies or agreements in effect on the date hereof as disclosed in the Recent Company and SEC Reports or set forth in Section 4.1(e) of the Disclosure Schedule) or increase the benefits payable under its subsidiaries shall severance or termination pay policies or agreements in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annumeffect on the date hereof; (hf) not adopt, enter into adopt or amend any pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or other arrangement for the benefit or welfare of any employees director, officer or retirees generallyemployee or increase in any manner the compensation or fringe benefits of any director, officer or employee or grant, confer, award or pay any forms of cash incentive, bonuses or other benefit not required by any existing plan, arrangement or agreement except as required by law, except for incentives, merit increases and promotional increases in the ordinary course of business consistent with past practice; (g) enter into or amend any Contract for the purchase of inventory with a term in excess of three years which is not cancelable within one (1) year without penalty, cost or liability; (h) negotiate, enter into, or modify any material collective bargaining agreements, other than renewals in the ordinary course of business consistent with past practice; (i) make any material change in its tax or accounting policies or any material reclassification of assets or liabilities except as required by law or GAAP; (j) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), except the payment, discharge or satisfaction of (i) liabilities or obligations in the ordinary course of business consistent with past practice or in accordance with the terms thereof as in effect on the date hereof or (ii) claims settled or compromised to the extent permitted by Section 4.1(k), or waive, release, grant or transfer any rights of material value or modify or change in any material respect any existing Contract, in each case other than in the ordinary course of business, except (i) as contemplated by Section 6.1(c), (ii) as required to comply with changes in applicable law, (iii) any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreement; (i) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses in such amounts and against such risks and losses as are business consistent with past practice; (k) settle or compromise any litigation, other than litigation not in excess of amounts reserved for in the most recent consolidated financial statements of the Company included in the Recent Company SEC Documents or, if not so reserved for, in an aggregate amount not in excess of $1,500,000 (but not more than $1,000,000 on any one case) (provided in either case such settlement documents do not involve any material non-monetary obligations on the part of the Company and its Subsidiaries); (l) intentionally take any action (without regard to any action taken or agreed to be taken by Parent or any of its affiliates) with knowledge that such action would prevent (x) Parent from accounting for the business combination to be effected by the Merger as a pooling of interests or (y) the Merger from qualifying as a reorganization within the meaning of Section 368(a)(1)(B) or Sections 368(a)(1)(A) and 368(a)(2)(E) of the Code; and (jm) take, or offer or propose to take, or agree to take in writing or otherwise, any of the actions described in Sections 4.1(a) through 4.1(m) or any action which would result in any of the conditions set forth in Article VI not make, change or revoke any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authoritybeing satisfied.

Conduct of Business Pending the Merger. SECTION Section 6.1 Conduct of Business by the Company Pending the Merger. Except as otherwise contemplated by From the date of this Agreement or disclosed in Section 6.1 until the earlier of the Company Disclosure Schedule, after Effective Time or the date hereof and prior to the Closing Date or earlier termination of this Agreement, unless Parent shall otherwise agree in writing, the Company shall, and shall cause its subsidiaries toor as otherwise expressly contemplated by this Agreement: (a) conduct the Company shall conduct, and cause each of its Subsidiaries to conduct, its business only in the ordinary and usual course consistent with past practice, and the Company shall use, and cause each of its Subsidiaries to use, its reasonable efforts to preserve intact the present business organization, keep available the services of its present officers and key employees, and preserve the goodwill of those having business relationships with it; (b) the Company shall not, nor shall it permit any of its Subsidiaries to, (i) amend its charter, bylaws or other organizational documents, (ii) split, combine or reclassify any shares of its outstanding capital stock, (iii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or (iv) directly or indirectly redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of any of its Subsidiaries; (c) the Company shall not, nor shall it permit any of its Subsidiaries to, (i) authorize for issuance, issue or sell or agree to issue or sell any shares of, or Rights to acquire or convertible into any shares of, its capital stock or shares of the capital stock of any of its Subsidiaries (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for the issuance of shares of Company Common Stock upon the exercise of Company Stock Options outstanding on the date of this Agreement, or amend any outstanding Company Stock Option, Company Warrant or other Right, except that the Company may amend the terms of the Company Stock Options set forth on Schedule 4.2(b) under the heading "1987 Plan" to provide that the holders thereof may exercise such options prior to their respective businesses expiration dates regardless of whether such holders are then serving as directors of the Company; (ii) merge or consolidate with another entity; (iii) acquire or purchase an equity interest in or a substantial portion of the assets of another corporation, partnership or other business organization (except for such potential acquisitions, and on substantially such terms, as have been described in a letter executed and delivered by the Company and Parent simultaneously with the execution and delivery of this Agreement and provided that the Company keeps Parent informed as to the status of all negotiations with respect thereto (including any termination of such negotiations) and gives Parent prior notice of the consummation of any such acquisition and the signing of any agreement with respect thereto) or otherwise acquire any assets outside the ordinary and usual course of business and consistent with past practice or otherwise enter into any material contract, commitment or transaction outside the ordinary and usual course of business consistent with past practice; (iv) sell, lease, license, waive, release, transfer, encumber or otherwise dispose of any of its assets outside the ordinary and usual course of business and consistent with past practice; ; (bv) not (i) amend incur, assume or propose to amend their respective certificates of incorporation or bylaws, (ii) split, combine or reclassify their outstanding capital stock or (iii) declare, set aside or pay prepay any dividend or distribution payable in cash, stock, property or otherwise, except for the payment of dividends or distributions to the Company by a wholly-owned subsidiary of the Company; (c) not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, material indebtedness or any options, warrants or rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that (i) the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereof, (ii) the Company may issue shares of Company Common Stock (or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other material liabilities other than (A) borrowings in the ordinary course of business and consistent with past practice; (vi) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than pursuant a Subsidiary of the Company or customers, in each case in the ordinary course of business and consistent with past practice; (vii) make, extend or modify in any material respect any loans, advances or capital contributions to, or investments in, any other person, other than to credit facilities) Subsidiaries of the Company or borrowings under the existing credit facilities loans to employees of the Company or any of its subsidiaries Subsidiaries, in an aggregate amount not exceeding $25,000, for such reasons, and on such terms and conditions, as such facilities may be amended are consistent with past practice; (viii) authorize or make capital expenditures in a manner that does not have a material adverse effect on excess of the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection with acquisitions as respective amounts set forth in the proviso in this Section 6.1(d), on Schedule 6.1 hereto; (iiix) redeem, purchase, acquire or offer to purchase or acquire permit any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause insurance policy naming the Company or its stockholders (except to any Subsidiary of the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes Company as a result of the consummation of the Merger beneficiary or would otherwise cause the Merger not a loss payee to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets be canceled or businesses terminated other than expenditures for current assets in the ordinary course of business and expenditures for fixed or capital assets in the ordinary course of business and other than as set forth in the proviso in this Section 6.1(d), (vi) sell, pledge, dispose of or encumber any material assets or businesses other than (A) sales of businesses or assets in the ordinary course of business, (B) sales of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, ; or (viix) except as contemplated by the following proviso, enter into any binding contract, agreement, commitment or arrangement with respect to any of the foregoing; provided; (d) the Company shall not, howevernor shall it permit its Subsidiaries to, (i) adopt, enter into, terminate or amend (except as may be required by Applicable Law) any Company Plan or other arrangement for the current or future benefit or welfare of any director, officer or current or former employee, (ii) increase in any manner the compensation or fringe benefits of, or pay any bonus to, any director, officer or employee (except for normal increases in compensation in the ordinary course of business consistent with past practice and accrued and unpaid bonuses in respect of the Company's fiscal year ended November 30, 1996 that notwithstanding are consistent with past practice and have been properly accrued and reflected on the foregoing (other than subsections Company's books and records, or (iii) and (iv) of this Section 6.1(d))take any action to fund or in any other way secure, or to accelerate or otherwise remove restrictions with respect to, the payment of compensation or benefits under any employee plan, agreement, contract, arrangement or other Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as Plan (A) such acquisitions are disclosed in Section 6.1 of including the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange ActOptions); (e) use all reasonable efforts the Company shall not, nor shall it permit its Subsidiaries to, take any action with respect to, or make any material change in, its accounting or tax policies or procedures, except as required by law or to preserve intact their respective business organizations and goodwillcomply with GAAP; and (f) the Company shall not (i) take any action or allow any action to be taken by any of its Subsidiaries or affiliates which would jeopardize the treatment of Parent's acquisition of the Company as a pooling of interests for accounting purposes; or (ii) take any action which would jeopardize qualification of the Merger as a reorganization within the meaning of Section 368(a) of the Code. Section 6.2 Conduct of Business by Parent Pending the Merger. From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement, keep available unless the services of their respective present officers and key employeesCompany shall otherwise agree in writing, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions as otherwise expressly contemplated by this Agreement: (a) Parent shall conduct its business and the business of its Subsidiaries in a manner designed, in the good faith judgment of its Board of Directors, to enhance the long-term value of the Parent Common Stock and the business prospects of Parent and its Subsidiaries; (fb) subject to restrictions imposed by applicable lawParent shall not (i) split, confer with one combine or more representatives reclassify any shares of Parent to report operational matters of materiality and the general status of ongoing operationsits outstanding capital stock; or (ii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property; (gc) Parent shall not enter authorize for issuance, issue or sell or agree to issue or sell any shares of, or Rights to acquire or convertible into or amend any employmentshares of, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employeesits capital stock, except in the ordinary course and consistent with past practice; provided, however, that the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annum; (h) not adopt, enter into or amend any pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any employees or retirees generally, other than in the ordinary course of business, except (i) as contemplated by Section 6.1(cthe issuance of shares of Parent Common Stock (x) upon the exercise of Parent Stock Options or other Rights outstanding on the date of this Agreement or (y) upon the exercise of Rights described in the immediately following clause (ii), (ii) as required the issuance of Rights pursuant to comply with changes in applicable law, (iii) any of the foregoing involving any such then existing plans, agreements, trusts, funds employee benefit plans or arrangements of any company acquired after the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreement; (i) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses in such amounts and against such risks and losses as are a manner consistent with past practice, and (iii) the issuance of shares of Parent Common Stock in connection with arms' length acquisitions with non-affiliates; and (jd) not makeExcept as described on Schedule 6.2(d), change Parent shall not, nor shall it permit any of its Subsidiaries to, (i) amend its charter, bylaws or revoke other organizational documents, (ii) split, combine or reclassify any material Tax election shares of its outstanding capital stock, or make (iii) directly or indirectly redeem or otherwise acquire any material agreement shares of its capital stock or settlement regarding Taxes with shares of the capital stock of any taxing authorityof its Subsidiaries.

Conduct of Business Pending the Merger. SECTION 6.1 Conduct (a) From the date of Business by the Company Pending the Merger. Except as otherwise contemplated by this Agreement or disclosed in Section 6.1 until the earliest of (i) such time as designees of Parent first constitute at least a majority of the Company Disclosure ScheduleBoard pursuant to Section 1.3(a), after (ii) the Effective Time and (iii) the date hereof and prior to the Closing Date or earlier of any termination of this Agreement pursuant to Section 8.1, except as otherwise consented to by Parent in writing (such consent not to be unreasonably withheld, conditioned or delayed), and except as otherwise expressly contemplated, required or permitted by this Agreement, unless Parent shall otherwise agree in writing, (A) the Company shall, and shall cause each of its subsidiaries Subsidiaries to: (a) , conduct their respective businesses in business only in, and the Company and any of its Subsidiaries shall not take any action except in, the ordinary and usual course of business and consistent with past practice;, including purchasing inventory consistent with past practice and (B) the Company shall use its commercially reasonable efforts consistent with the foregoing to (1) preserve intact its and each of its Subsidiaries’ business organizations, (2) preserve its and each of its Subsidiaries’ assets and properties, (3) keep available the services of its and each of its Subsidiaries’ current officers and employees and (4) preserve, in all material respects, the current relationships of the Company and each of its Subsidiaries with their respective customers, suppliers, licensors, licensees, distributors and other Persons with which the Company and its Subsidiaries has business dealings. (b) Without limiting the generality of the foregoing, except as set forth in Section 6.1(b) of the Company Disclosure Letter or as otherwise explicitly required by this Agreement, applicable Law or with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed, other than with respect to clauses (i), (iii), (iv), (v), (vi), (vii), (viii), (ix) and, solely with respect to acquisitions of any business, (x); provided that Parent may deny consent for the Company or its Subsidiaries to exceed any specified dollar threshold in this Section 6.1(b) in its sole discretion) at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier of (i) amend the Effective Time and (ii) the date of any termination of this Agreement pursuant to Section 8.1, the Company shall not do any of the following and shall not permit its Subsidiaries to do any of the following: (i) amend, or propose to amend their respective certificates adopt any amendments to, its certificate of incorporation or bylaws, bylaws or comparable organizational documents; (ii) make any amendment or qualification to, or waiver of, the Rights Agreement; (iii) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any securities in respect of, in lieu of or in substitution for shares of its capital stock, except in respect of Equity Awards outstanding as of the date hereof, or grant or accelerate the exercisability or vesting of any share of restricted stock, restricted stock unit, stock option or other right to acquire any shares of its capital stock, except as set forth in Section 6.1(b)(iii) of the Company Disclosure Letter; (iv) acquire or redeem, directly or indirectly, or amend any securities in respect of, in lieu of or in substitution for shares of its capital stock, except to the extent that such acquisition or redemption is pursuant to the terms of any Company Stock Plan (as then in effect) or any agreement subject to any such Company Stock Plan; (v) other than dividends or distributions made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock, split, combine or reclassify their outstanding any shares of capital stock or (iii) stock, declare, set aside or pay any dividend or other distribution payable (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock, property or otherwisemake any other actual, except for the payment of dividends constructive or distributions to the Company by a wholly-owned subsidiary deemed distribution in respect of the Companyshares of capital stock; (cvi) not issuepropose or adopt a plan of complete or partial liquidation, selldissolution, pledge merger, consolidation, restructuring, recapitalization or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that (i) the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereof, (ii) the Company may issue shares of Company Common Stock (or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings in the ordinary course of business (other than pursuant to credit facilities) or borrowings under the existing credit facilities reorganization of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company Subsidiaries; (the "Existing Credit Facilities"vii) up to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets in the ordinary course of business and expenditures consistent with past practice, (i) incur indebtedness for fixed borrowed money or issue any debt securities, except for loans or advances to or from Subsidiaries, or assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except with respect to obligations of Subsidiaries of the Company, (ii) make any loans or advances to employees of the Company or any of its Subsidiaries, (iii) acquire, or make any capital assets contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business and consistent with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital; or (iv) mortgage or pledge any of its or its Subsidiaries assets, tangible or intangible, or create or suffer to exist any material Lien (other than as set forth in the proviso in this Section 6.1(d), Permitted Liens) thereupon; (viviii) sell, pledge, dispose of or encumber any material assets or businesses other than (A) sales grant or enter into any agreement to effect any increase or decrease in the compensation or benefits payable or that may become payable to any current or former employee, consultant or director of businesses the Company or assets any of its Subsidiaries (except for promotion-related increases of base salary in the ordinary course of businessbusiness consistent with past practice) or pay any bonus or special remuneration (whether in cash, equity or otherwise) to any employee, consultant, independent contractor or director (other than cash bonuses made or payable in the ordinary course of business consistent with past practice), (B) sales of businesses establish, adopt, enter into, amend or assets disclosed terminate any Company Benefit Plan (or any benefit plan, agreement, program, policy, commitment or other arrangement that would be a Company Benefit Plan if it were in Section 6.1 existence as of the Company Disclosure Scheduledate of this Agreement), except as contemplated by this Agreement or to the extent required by applicable Law or the terms of a collective bargaining agreement, (C) sales grant, increase or enter into any agreement which provides for, change-in-control, severance or retention pay, or equity or equity-based compensation, in each case with respect to any current or former employees, directors or consultants of businesses the Company or assets with aggregate 1997 revenues of less than $5 millionany Subsidiary, and (D) pledges except as specifically provided herein, take any affirmative action to accelerate or encumbrances otherwise accelerate the vesting of any outstanding awards of equity or equity-based compensation, (E) other than to fill a vacancy in the ordinary course of business consistent with past practice, hire or promise to hire any employee with a title of Divisional Vice President or above, (F) other than to fill a vacancy in the ordinary course of business consistent with past practice, hire or promise to hire any employee with a title below Divisional Vice President who has or is expected to have an aggregate annual compensation in excess of $150,000; (G) other than in the ordinary course of business consistent with past practice, terminate without “cause” any employee, director or consultant of the Company with compensation in excess of $150,000 or any employee with a title of Divisional Vice President or above, (H) implement any facility closings or employee layoffs that do not comply with WARN, (I) adopt, enter into, amend, terminate or extent any collective bargaining agreement (or enter into negotiations to do any of the foregoing); (ix) make, forgive or discharge, in whole or in part, any loans or advances to any current or former employees, officers, directors or consultants of the Company or any of its Subsidiaries, or any of their respective Affiliates; (x) acquire, lease or sublease any material assets or properties (including any real property) except for (A) transactions required pursuant to Existing Credit Facilities Contracts as in effect as of the date hereof or (B) transactions in the ordinary course of business consistent with past practice (including entering into new leases, lease terminations, assignments, amendments and renewals to the extent on fair market terms and consistent with decisions the Company would have made in the absence of the existence of this Agreement); (xi) except as may be required as a result of a change in applicable Laws or in GAAP, make any change in any of the accounting principles or practices used by it; (i) make or change any Tax election that, individually or in the aggregate, would be reasonably expected to adversely affect in any material respect the Tax liability of the Company or any of its Subsidiaries, (ii) change any material Tax accounting method, (iii) settle or compromise any material U.S. federal, state, local or non-U.S. Tax liability or (iv) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes; (xiii) other permitted borrowingsthan in the ordinary course of business consistent with past practice, (i) enter into, renew, extend or terminate (other than the termination or expiration of a Material Contract pursuant to its terms as in effect as of the date hereof) any Material Contract (or any Contract that would have been a Material Contract if it had been in effect on the date hereof) or (ii) make any material amendment or change in any such Material Contract; (xiv) except for the Litigation referred to in Section 6.6, settle or compromise any pending or threatened Litigation 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 settlement, compromise, payment, discharge or satisfaction of Litigation, claims and other liabilities that (i) are reflected or reserved against in full in the Company Financial Statements or incurred since the date of the most recent Company Financial Statement in the ordinary course of business consistent with past practice, (ii) are covered by existing insurance policies, or (viiiii) except as contemplated otherwise do not involve the payment of money in excess of $1,000,000 in the aggregate, in each case where the settlement, compromise, discharge or satisfaction of which does not include any obligation (other than the payment of money not in excess of $1,000,000 in the aggregate above the amounts reflected or reserved in the Company Financial Statement in respect of such Litigation) to be performed by the Company or its Subsidiaries following proviso, the Effective Time; or (xv) enter into a Contract to do any binding contractof the foregoing or make any formal or informal arrangement or understanding, agreementwhether or not binding, commitment or arrangement with respect to any of the foregoing; provided, however, that notwithstanding the foregoing . (other than subsections (iiic) and (iv) of this Section 6.1(d)), Except as approved by the Company shall not be prohibited from acquiring in writing, neither Parent nor any assets of its Subsidiaries shall, directly or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Scheduleindirectly, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire (whether by merger, consolidation, stock or asset purchase, tender or exchange offer, recapitalization, reorganization or any assets or businesses other form of transaction) any other Person if and to the extent that such acquisition or agreement may transaction would reasonably be expected to (a) impair the ability of the parties hereto to consummate the Merger, or (b) delay the consummation of the Merger; Merger in any material respect. (Bd) the The Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets shall reasonably cooperate with Parent in connection with such acquisition; soliciting and (C) the negotiating consents, waivers and desired lease amendments from landlords and lessors with respect to any Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity Lease in connection with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent with past practice; provided, however, that the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annum; (h) not adopt, enter into or amend any pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any employees or retirees generally, other than in the ordinary course of business, except (i) as contemplated by Section 6.1(c), (ii) as required to comply with changes in applicable law, (iii) any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreement; (i) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses in such amounts and against such risks and losses as are consistent with past practice; and (j) not make, change or revoke any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authority.

Conduct of Business Pending the Merger. SECTION 6.1 5.1 Conduct of Business by the Company Pending the Merger. Except as otherwise contemplated by this Agreement or disclosed in Section 6.1 of the The Company Disclosure Schedulecovenants and agrees that, after the date hereof and prior to the Closing Date or earlier termination of this AgreementEffective Time, unless Parent the Purchaser shall otherwise agree in writing, the Company shall, and shall cause its subsidiaries towriting (such agreement not to be unreasonably withheld) or as otherwise expressly contemplated by this Merger Agreement: (a) conduct their respective the businesses in of the Company and its Subsidiaries shall be conducted only in, and the Company and its Subsidiaries shall not take any action except in, the ordinary and usual course of business and consistent with past practice; (b) the Company shall not (i) amend sell or propose pledge or agree to amend their respective certificates sell or pledge any stock owned by it in any of incorporation or bylaws, its Subsidiaries; (ii) amend its Articles of Incorporation or By-Laws; or (iii) split, combine or reclassify their any shares of its outstanding capital stock or (iii) declare, set aside or pay any dividend or other distribution payable in cash, stock, stock or property or otherwise, except for the payment redeem or otherwise acquire any shares of dividends its capital stock or distributions to the Company by a wholly-owned subsidiary shares of the Companycapital stock of any of its Subsidiaries; (c) except as set forth Section 5.1 of the Disclosure Letter, the Company shall not, and shall cause each of its Subsidiaries not issueto, sell(i) authorize for issuance, pledge issue or dispose of, or agree to issue, sell, pledge or dispose of, sell any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their of, its capital stock of any class (whether through the issuance or any debt granting of options, warrants, commitments, subscriptions, rights to purchase or equity securities convertible into or exchangeable for such capital stockotherwise), except that (i) for Shares reserved for issuance upon the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereofStock Options in accordance with their existing terms, as such Stock Options may be accelerated pursuant to their existing terms; (ii) the Company may issue shares of Company Common Stock (acquire, dispose of, transfer, lease, license, mortgage, pledge or warrants encumber any fixed or options to acquire Company Common Stock) in connection with acquisitions of other assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings in the ordinary course of business (other than pursuant to credit facilities) or borrowings under the existing credit facilities of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets in the ordinary course of business and expenditures for fixed consistent with past practices; (iii) incur, assume or capital assets prepay any material indebtedness or any other material liabilities other than the incurrence of liabilities in the ordinary course of business and borrowings under the credit agreement described in Section 5.1 of the Disclosure Letter for working capital purposes up to the credit limit described in Section 5.1 of the Disclosure Letter; (iv) assume, endorse (other than as set forth in the proviso in this Section 6.1(d), (vi) sell, pledge, dispose of or encumber any material assets or businesses other than (A) sales of businesses or assets in the ordinary course of businessbusiness consistent with past practices), guarantee or otherwise become liable or responsible (Bwhether directly, contingently or otherwise) sales for the material obligations of any other person (other than a Subsidiary); (v) make any loans, advances or capital contributions to, or investments in, any other person, other than to its Subsidiaries, or otherwise enter into any Material Contract; (vi) make any loans to employees, other than advances in the ordinary course of business consistent with past practices; (vii) fail to maintain adequate insurance consistent with past practices for their businesses and properties (to the extent available at commercially reasonable prices); and (viii) make capital expenditures in excess of $25,000 individually or assets disclosed $250,000 in Section 6.1 the aggregate; (d) the Company shall use reasonable business efforts to preserve intact the business organization of the Company Disclosure Scheduleand its Subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it and them; (e) the Company shall not and shall cause its Subsidiaries not to (i) enter into any new agreements (other than in its ordinary course of business consistent with past practice) or amend or modify any existing agreements (other than in its ordinary course of business consistent with past practice) with any of their respective officers, directors or employees or with any "disqualified individuals" (as defined in Section 280G(c) of the Code), (Cii) sales grant any increases in the compensation of businesses their respective directors, officers and employees or assets any "disqualified individuals" other than increases in the ordinary course of business and consistent with aggregate 1997 revenues past practice to persons who are not directors or corporate officers of less than $5 millionor "disqualified individuals" with respect to the Company or any Subsidiary, and (Diii) pledges enter into, adopt, amend or encumbrances pursuant to Existing Credit Facilities or other permitted borrowingsterminate, or grant any new benefit not presently provided for under, any employee benefit plan or arrangement, except as required by law or to maintain the Tax qualified status of the plan; provided, however, it is understood that the Company is permitted to pay bonuses to the extent described in Section 5.1 of the Disclosure Letter; or (viiiv) except as contemplated by the following provisoSection 6.14, enter into take any binding contract, agreement, commitment or arrangement action with respect to the grant of any of the foregoing; provided, however, that notwithstanding the foregoing (severance or termination pay other than subsections (iii) in the ordinary course of business and (iv) consistent with past practice and pursuant to policies or practices in effect on the date of this Section 6.1(d)), Merger Agreement; (f) the Company shall not, and shall not be prohibited from acquiring permit any assets Subsidiary to, acquire or businesses agree to acquire by merging or incurring consolidating with, or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 by purchasing a substantial portion of the Company Disclosure Scheduleassets of, or (B) the aggregate value of consideration paid or payable in connection with by any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoingmanner, any contingentbusiness or any corporation, royalty and similar payments made in connection with acquisitions of businesses partnership, association or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not other business organization or division thereof or otherwise acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent with past practice; provided, however, that the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annum; (h) not adopt, enter into or amend any pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any employees or retirees generally, other than in the ordinary course of business) that are material, individually or in the aggregate, to the Company and its Subsidiaries taken as a whole; (g) except as set forth in Section 5.1 of the Disclosure Letter, neither the Company nor any of its Subsidiaries shall settle or compromise any material claims or litigation or, except (i) as contemplated by Section 6.1(c)in the ordinary and usual course of business modify, (ii) as required to comply with changes in applicable law, (iii) amend or terminate any of its Material Contracts or waive, release or assign any material rights or claims; (h) neither the foregoing involving Company nor any such then existing plans, agreements, trusts, funds of its Subsidiaries shall make any material Tax election or arrangements permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated except in the ordinary and usual course of any company acquired after the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreementbusiness; (i) use commercially reasonable efforts neither the Company nor any of its Subsidiaries shall take any action or omit to maintain with financially responsible insurance companies insurance on take any action that would cause any of its tangible assets representations and warranties herein to become untrue in any material respect; (j) neither the Company nor any of its businesses in such amounts and against such risks and losses as are consistent with past practiceSubsidiaries will authorize or enter into an agreement to do any of the foregoing; and (jk) except as required by the Pennsylvania Law or the Company's By-Laws, the Company will not makecall any meeting of its shareholders to be held prior to December 31, change 2003 other than a special or revoke any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authorityannual meeting of shareholders to consider and vote upon the Merger.

Conduct of Business Pending the Merger. SECTION 6.1 7.1. Conduct of Business by of the Company Pending the Merger. Except as otherwise expressly contemplated by this Agreement or disclosed as expressly agreed to in Section 6.1 writing by Parent, during the period from the date of this Agreement to the Effective Time, the Company will conduct its operations according to its ordinary course of business consistent with past practice, and will use all commercially reasonable efforts to keep intact its business organization, to keep available the services of its officers and employees and to maintain satisfactory relationships with suppliers, distributors, customers and others having business relationships with it and will take no action which would impair the ability of the Company Disclosure Scheduleparties to consummate the Merger or the other transactions contemplated by this Agreement. Without limiting the generality of the foregoing, after the date hereof and except as otherwise expressly provided in this Agreement, prior to the Closing Date or earlier termination of this Agreement, unless Parent shall otherwise agree in writingEffective Time, the Company shallwill not, and without the prior written consent of Parent, which consent shall cause its subsidiaries tonot be unreasonably withheld or delayed: (a) conduct their respective businesses in the ordinary and usual course amend its articles of business and consistent with past practiceincorporation or by-laws; (b) not authorize for issuance, issue, sell, deliver, grant any warrants, options or other rights for, or otherwise agree or commit to issue, sell or deliver any shares of any class of its capital stock or any securities convertible into shares of any class of its capital stock (i) amend or propose to amend their respective certificates except for the exercise of incorporation or bylaws, currently outstanding stock options); (iic) split, combine or reclassify their outstanding any shares of its capital stock or (iii) stock, declare, set aside or pay any dividend or other distribution payable (whether in cash, stock, stock or property or otherwiseany combination thereof) in respect of its capital stock or purchase, redeem or otherwise acquire any shares of its own capital stock or of any of its subsidiaries, except as otherwise expressly provided in this Agreement; (d) (i) create, incur, assume, maintain or permit to exist any debt for borrowed money other than under existing lines of credit in the ordinary course of business consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the payment obligations of dividends any other person in the ordinary course of business consistent with past practices; (iii) make any loans or distributions to advances (except in the Company by a wholly-owned subsidiary ordinary course of business consistent with past practice) to, capital contributions to, or investments in, any other person; or (iv) pledge or otherwise encumber shares of capital stock of the Company; (ce) not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that (i) increase in any manner the Company may issue shares upon conversion compensation of convertible securities and exercise (x) except under the terms of options and warrants outstanding any agreement in existence on the date hereof, any of its directors or officers or (iiy) the Company may issue shares of Company Common Stock (or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings employee except in the ordinary course of business (other than pursuant to credit facilities) or borrowings under the existing credit facilities of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection consistent with acquisitions as set forth in the proviso in this Section 6.1(d), past practice; (ii) redeempay or agree to pay any pension, purchaseretirement allowance or other employee benefit not required, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible enter into or exchangeable for its capital stockagree to enter into any agreement or arrangement with such director or officer or employee, (iii) take whether past or present, relating to any action that would jeopardize the treatment of the Merger such pension, retirement allowance or other employee benefit, except as a pooling of interests required under Opinion No. 16 of the Accounting Principles Board ("APB No. 16")currently existing agreements, (iv) take plans or fail arrangements or to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets extend employee benefits upon termination in the ordinary course of business and expenditures for fixed consistent with past practice; (iii) grant any severance or capital assets termination pay to, or enter into any employment or severance agreement with, (x) except under the terms of any agreement or policy in existence on the date hereof, any of its directors or officers or (y) any other employee except in the ordinary course of business and consistent with past practice; or (iv) except as may be required to comply with applicable law, become obligated 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, or amend any of such plans or any of such agreements in existence on the date hereof; (f) enter into any agreement or transaction with any director, officer or holder of more than 5% of Company Shares or any family member or affiliate of any of the foregoing; (g) except as set forth in Section 7.1(g) of the proviso Company Disclosure Letter, enter into any other agreements, commitments or contracts in this Section 6.1(d)excess of $50,000 in the aggregate, (vi) sellexcept agreements, pledge, dispose of commitments or encumber any material assets or businesses other than (A) sales of businesses or assets contracts in the ordinary course of businessbusiness consistent with past practice and agreements, commitments or contracts for third party services in connection with the Merger; (Bh) sales 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 businesses liquidation or dissolution, any acquisition of a material amount of assets disclosed (other than in the ordinary course of business consistent with past practice) or securities, any sale, transfer, lease, license, pledge, mortgage, or other disposition or encumbrance of a material amount of assets (other than in the ordinary course of business consistent with past practice) or securities or any 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; (i) authorize any new capital expenditure or expenditures in excess of $50,000 in the aggregate, other than expenditures that were (a) included in the Company's capital expenditure budget for the current fiscal year, which is set forth in Section 6.1 7.1(i) of the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, Letter or (viib) except incurred as contemplated by the following proviso, enter into any binding contract, agreement, commitment or arrangement with respect to any a result of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (fj) subject to restrictions imposed make any change in the accounting methods or accounting practices followed by applicable lawthe Company, confer with one except changes required by Law or more representatives of Parent to report operational matters of materiality and the general status of ongoing operationsby GAAP; (gk) not enter into settle or amend compromise any employmentmaterial federal, severancestate, special pay arrangement with respect local or foreign Tax liability, make any new material Tax election, revoke or modify any existing Tax election, or request or consent to termination a change in any method of employment or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent with past practice; provided, however, that the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annumTax accounting; (hl) not adopttake, enter into cause or amend permit to be taken any pension action, whether before or retirement planafter the Effective Date, trust that could reasonably be expected to prevent the Merger from constituting a "reorganization" within the meaning of Section 368(a) of the Code; (m) create or fund, except as required acquire any subsidiary; (n) knowingly do any act or omit to comply with changes do any act that would result in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare a breach of any employees or retirees generally, other than representation by the Company set forth in this Agreement; (o) make any increase in the ordinary course of businessCompany's trade or consumer promotions from those reflected in the Company Budget, except or consumer promotions extending beyond December 31, 2005 without Parent's written approval; or (ip) as contemplated by Section 6.1(c), (ii) as required agree to comply with changes in applicable law, (iii) do any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreement; (i) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses in such amounts and against such risks and losses as are consistent with past practice; and (j) not make, change or revoke any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authorityforegoing.

Conduct of Business Pending the Merger. SECTION 6.1 Section 5.1. Conduct of Business by of the Company Pending the Merger. Except From the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement in accordance with Article VIII, except (i) as otherwise contemplated by this Agreement or disclosed Agreement, (ii) as set forth in Section 6.1 5.1 of the Company Disclosure Schedule, after the date hereof and prior to the Closing Date (iii) as required by applicable Laws or earlier termination of this Agreement, (iv) unless Parent shall otherwise agree consent in writingwriting (which consent shall not be unreasonably withheld, conditioned or delayed), (a) the Company shall, shall and shall cause its subsidiaries Subsidiaries to: (a) , conduct their respective businesses in all material respects in the ordinary and usual course of business and consistent with past practice; practice and the Company shall use its commercially reasonable efforts to preserve substantially intact in all material respects its business organization and material business relationships, provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1(b) shall be deemed a breach of this sentence unless such action would constitute a breach of such provision of Section 5.1(b), and (b) without limiting the foregoing, the Company shall not, and shall not permit any of its Subsidiaries (including Clinic Joint Ventures, but only to the extent the Company or its Subsidiaries has the ability, contractual or otherwise, to exercise control thereon or negative control rights to prevent) to: (i) amend the Certificate of Incorporation or propose the Bylaws or amend other similar organizational documents of any of its Subsidiaries or Clinic Joint Ventures, except, in the case of Subsidiaries and Clinic Joint Ventures, for amendments that would not be materially adverse to amend their respective certificates of incorporation the Company or bylaws, any Subsidiary or Clinic Joint Venture or adversely impact the transactions contemplated hereby; (ii) except with respect to transactions among wholly-owned Subsidiaries of the Company, make any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all of the assets or otherwise), or make any investment in any interest in, any Person, in each case, except for (A) purchases of equipment, inventory and other assets in the ordinary course of business consistent with past practice or pursuant to the express terms of existing Contracts, (B) acquisitions or investments that do not exceed $2,000,000 in the aggregate, (C) acquisitions of or investments in Clinic Joint Ventures that are not (x) in accordance with Section 5.1(b)(x), (y) set forth on Section 3.8(f) of the Company Disclosure Schedule or (y) in an aggregate amount exceeding $5,000,000 and (D) acquisitions of equity interests or investments in existing Clinic Joint Ventures as required pursuant to the terms of the governing documents of such Clinic Joint Ventures or the acquisition of the interests of defaulting partners in any Clinic Joint Venture; (iii) issue, sell, grant, pledge, encumber or dispose of (or authorize the issuance, sale, grant, pledge, encumbrance or disposition of), any shares of capital stock, ownership interests or voting securities, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, any other ownership interests or any voting securities (including stock appreciation rights, phantom stock or similar instruments), of the Company, any of its Subsidiaries or any Clinic Joint Ventures (except (A) for the issuance of Shares upon the exercise, vesting or settlement of Options, Restricted Stock or RSU Awards outstanding as of the date hereof, (B) for any issuance, sale or disposition to the Company or a wholly-owned Subsidiary of the Company by any Subsidiary of the Company, (C) the issuance of equity interests in Clinic Joint Ventures as required pursuant to the terms of the governing documents of such Clinic Joint Ventures), or (D) for sales or dispositions with respect to any of the Company’s Subsidiaries or any Clinic Joint Venture to physicians or other providers at such Clinic Joint Ventures in the ordinary course of business consistent with past practice so long as, in each case of this clause (D), the Company maintains, directly or indirectly, a majority equity ownership interest in such Subsidiary or Clinic Joint Venture following such sale or disposition; it being understood that the Company or any of its Subsidiaries shall not sell or dispose of any equity interests in any Clinic Joint Venture where it does not otherwise own the majority of the outstanding equity interests in such Clinic Joint Venture; (iv) amend the terms of any Joint Venture Agreement, other than (A) to account for transactions permitted by Section 5.1(b)(ii) or Section 5.1(b)(iii), (B) pursuant to applicable Law or regulatory safe harbors or (C) for amendments that would not be materially adverse to the Company, its Subsidiaries or any Clinic Joint Venture or adversely impact the transactions contemplated hereby. (v) reclassify, combine, split, combine subdivide, redeem, purchase or reclassify their outstanding otherwise acquire any shares of capital stock, ownership interests or voting securities of the Company or any of its Subsidiaries (except (A) for the acquisition of Shares tendered by directors or employees in connection with a cashless or net settled exercise of Options or in order to pay the exercise price or Taxes in connection with the exercise, vesting or settlement of Options, Restricted Stock or RSU Awards or (B) as expressly contemplated by this Agreement); (vi) other than Permitted Liens, create or incur any Lien on any material assets of the Company or its Subsidiaries (other than existing Liens on the assets of Subsidiaries acquired following the date hereof or other than in connection with indebtedness permitted to be incurred pursuant to Section 5.1(b)(x)); (vii) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) the capital stock or other equity interest in any Person or otherwise sell, assign, transfer, license, abandon or dispose of any material assets, rights or properties of any Person other than (iiiA) as permitted pursuant to Section 5.1(b)(iii), (B) sales, dispositions or licensing of equipment and/or inventory and other assets in the ordinary course of business consistent with past practice or pursuant to the express terms of existing Contracts or (C) other sales, assignments or dispositions of assets, rights or properties to the Company or of assets, rights or properties with a value of less than $2,000,000 in the aggregate; (viii) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or other equity interests (except for (A) any dividend or distribution by a Subsidiary of the payment of dividends or distributions Company to the Company by or to a wholly-owned subsidiary Subsidiary of the Company; Company or (cB) not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that (i) the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereof, (ii) the Company may issue shares of Company Common Stock (or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (d) not (i) incur or become contingently liable solely with respect to any indebtedness for borrowed money Clinic Joint Venture, any cash dividend or cash distribution made to all equity owners of such Clinic Joint Venture in proportion to their equity ownership thereof as required pursuant to the terms of the governing documents of such Clinic Joint Ventures, as may be amended subject to Section 5.1(a)(iv) above); (ix) other than (A) borrowings in the ordinary course of business consistent with past practice or as required by Law, (A) modify, terminate, assign (other than pursuant to credit facilities) or borrowings under the existing credit facilities a Subsidiary of the Company or any Clinic Joint Venture) or amend in any material respect any Material Contract or (B) enter into a new Contract that, if entered into prior to the date of its subsidiaries this Agreement, would have been a Material Contract (other than as such facilities may be amended in a manner permitted pursuant to Section 5.1(b)(x)); provided, that does not have a material adverse effect on the Company and its Subsidiaries shall not take the actions set forth in item 1 of Section 5.1(b)(ix) of the Company Disclosure Schedules; (x) except for (A) revolver borrowings and/or letters of credit under the "Existing Company’s and its Subsidiaries’ Credit Facilities"Facilities in an amount not to exceed the sum of $2,000,000 plus the fees, costs and expenses incurred, or to be incurred, by the Company and its Subsidiaries in connection with the transactions contemplated hereby and the matters set forth in Section 5.1(b)(x)(A) up to of the existing borrowing limit on the date hereofCompany Disclosure Schedule, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection with acquisitions as the item set forth in the proviso in this Section 6.1(d), (ii5.1(b)(x)(B) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets in the ordinary course of business and expenditures for fixed or capital assets in the ordinary course of business and other than as set forth in the proviso in this Section 6.1(d), (vi) sell, pledge, dispose of or encumber any material assets or businesses other than (A) sales of businesses or assets in the ordinary course of business, (B) sales of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, (C) sales intercompany loans between the Company and any of businesses its Subsidiaries or assets between any Subsidiaries incurred in the ordinary course of business consistent with aggregate 1997 revenues of less than $5 millionpast practice, and (D) pledges loans between the Company and any of its Subsidiaries, on the one hand, and any Clinic Joint Venture, on the other hand, in the ordinary course consistent with past practice or encumbrances pursuant (E) the refinancing of any indebtedness outstanding as of the date hereof for a principal amount that is equal to Existing Credit Facilities or other permitted borrowingsless than the principal amount of such indebtedness outstanding as of the date hereof, (i) create or incur indebtedness in excess of $4,000,000 in the aggregate or (ii) modify in any material respect in a manner adverse to the Company the terms of or extend the maturity of, any such indebtedness, or assume, guarantee or endorse the obligations of any Person (viiother than a Subsidiary of the Company or a Clinic Joint Venture), in each case, in excess of $1,000,000 in the aggregate; (xi) except as contemplated by required pursuant to the following provisoterms of any Company Plan, enter into any binding contract, agreement, commitment or arrangement with respect to any of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of increase the Company Disclosure Schedule, compensation or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect benefits of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any its directors, officers or key employees, except other employees other than in the ordinary course and of business consistent with past practice; provided, however(B) grant any severance or termination pay to any of its directors, officers or other employees not provided for under any Company Plan, other than in the ordinary course of business consistent with past practice, (C) enter into any employment, consulting or severance agreement or arrangement with any of its directors, officers or other employees that provides for annual expected payments of greater than $200,000, (D) take any action to accelerate the vesting or payment, or the funding of any payment or benefit under, any Company Plan, (E) establish, adopt, enter into, modify or amend in any material respect or terminate any Company Plan, except as would not materially increase the costs to the Company or (F) hire or terminate the employment or services of any employee with annual expected compensation of greater than $200,000, other than a replacement hiring or a termination for cause or due to permanent disability; (xii) make any material change in the financial accounting policies or procedures used by the Company or any of its Subsidiaries or any of the methods of reporting income, deductions or other items for financial accounting purposes used by the Company or any of its Subsidiaries, except as required by GAAP or applicable Law; (xiii) other than in the ordinary course of business or as required by applicable Law or GAAP, (A) make or change any material Tax election, (B) settle, consent to or compromise any material Tax claim or assessment, (C) surrender any material claim for a refund of Taxes, (D) enter into any material closing agreement with respect to material Taxes with a Taxing Authority, or (E) amend any material Tax Return, in the case of each of (A), (B), (D) and (E), that would materially increase the Taxes payable by the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annumSubsidiaries; (hxiv) not adopt, enter into or amend any pension or retirement plan, trust or fund, except other than as required to comply with changes in by applicable law and not adoptLaw, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment material collective bargaining agreement with any labor organization representing any Company Employees; (xv) settle or other employee benefit plan, agreement, trust, fund compromise any pending or arrangement for the benefit or welfare of any employees or retirees generallythreatened Proceeding, other than settlements or compromises of Proceedings that involve only the payment by the Company or its Subsidiaries of monetary damages not in excess of $1,000,000 individually or $3,000,000 in the aggregate, in either case in excess of amounts paid by an insurer, it being understood that no Transaction Litigation shall be settled or compromised other than in accordance with Section 6.10; (xvi) implement any “mass layoffs” or “plant closings” that would reasonably be expected to trigger notification requirements pursuant to the WARN Act (as such terms are defined by the WARN Act); (xvii) other than as contemplated by the capital budget of the Company set forth on Section 5.1(b)(xvii) of the Company Disclosure Schedules, make any capital expenditures that exceed $5,000,000 in the aggregate; (xviii) adopt a rights plan, “poison pill” or similar agreement that is, or at the Effective Time will be, applicable to Parent and its controlled affiliates in connection with this Agreement or the Merger; (xix) enter into a plan of complete or partial liquidation, dissolution, merger, consolidation or recapitalization of the Company or enter into a new line of business; (xx) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC; (xxi) fail to maintain in full force and effect material insurance policies or comparative replacement policies covering the Company and its Subsidiaries and their respective properties, assets and businesses in a form and amount consistent with past practice; or (xxii) agree, authorize or commit to take any of the foregoing actions prohibited by this Section 5.1(b). Notwithstanding anything to the contrary in this Agreement: (i) any action taken, or omitted to be taken, by the Company or any of its Subsidiaries pursuant to any applicable Law or any other directive, pronouncement or guideline issued by a Governmental Entity or industry group providing for business closures, “sheltering-in-place” or other restrictions that relates to, or arises out of, any pandemic (including COVID-19), epidemic or disease outbreak shall in no event be deemed to constitute a breach of this Section 5.1 and shall be deemed to be in the ordinary course of business, except (i) as contemplated by Section 6.1(c), business consistent with past practices for all purposes under this Agreement; and (ii) as required any action taken, or omitted to comply with changes in applicable lawbe taken, (iii) by the Company of any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements its Subsidiaries that may be reasonably necessary to protect health and safety as a result of any company acquired after pandemic (including COVID-19), epidemic or disease outbreak, in each case as determined by the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreement; (i) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets Company and its businesses Subsidiaries in such amounts their sole discretion and against such risks that is reasonable in light of the applicable circumstances, shall in no event be deemed to constitute a breach of this Section 5.1 and losses as are shall be deemed to be in the ordinary course of business consistent with past practice; and (j) not make, change or revoke any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authoritypractices for all purposes under this Agreement.

Conduct of Business Pending the Merger. SECTION 6.1 6.01. Conduct of Business by the Company Pending the Merger. Except as otherwise contemplated by The Company and the Stockholders covenant and agree that, between the date of this Agreement or disclosed and the Effective Time, except as set forth in Section 6.1 6.01 of the Company Disclosure Schedule, after the date hereof and prior to the Closing Date or earlier termination of this Agreement, unless Parent shall otherwise agree in writing, (a) the business of the Company shallshall be conducted only in, and the Company shall cause not take any action except in, the ordinary course of business and in a manner consistent with past practice and (b) the Company shall use its subsidiaries toreasonable efforts to preserve substantially intact its business organization, to keep available the services of the current officers, employees and consultants of the Company and to preserve the current relationships of the Company with customers, suppliers and other Persons with which the Company has significant business relations. By way of amplification and not limitation, except as contemplated by this Agreement, the Company shall not, between the date of this Agreement and the Effective Time, directly or indirectly do, or propose to do, without the prior written consent, which consent shall not be unreasonably withheld, of Parent any of the following: (a) conduct their respective businesses amend or otherwise change its Certificate of Incorporation or By-Laws; (b) issue, sell or pledge, or authorize the issuance, sale or pledge of, any shares of its capital stock; (c) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except for any such distribution to pay the income Tax liability of the Stockholders for 1997 and that portion of 1998 up to and including the Effective Time with respect to the income of the Company; (d) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock; (e) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest in any corporation, partnership, other business organization or any assets, other than the acquisition of assets in the ordinary and usual course of business consistent with past practice; (f) incur any indebtedness for borrowed money, except for indebtedness incurred in the ordinary course of business and consistent with past practice; (bg) not (i) amend or propose to amend their respective certificates of incorporation or bylaws, (ii) split, combine or reclassify their outstanding capital stock or (iii) declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise, except for the payment of dividends or distributions to the Company by a wholly-owned subsidiary of the Company; (c) not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that (i) the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereof, (ii) the Company may issue shares of Company Common Stock (or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings in the ordinary course of business (other than pursuant to credit facilities) or borrowings under the existing credit facilities of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets in the ordinary course of business and expenditures for fixed or capital assets in the ordinary course of business and other than as set forth in the proviso in this Section 6.1(d), (vi) sell, pledge, dispose of or encumber any material assets or businesses other than (A) sales of businesses or assets in the ordinary course of business, (B) sales of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, or (vii) except as contemplated by the following proviso, enter into any binding contract, agreement, commitment or arrangement with respect to any of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition contract or agreement may reasonably be expected material to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the its business, assets, properties results of operations or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent with past practice; provided, however, that the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annum; (h) not adopt, enter into or amend any pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any employees or retirees generally, financial condition other than in the ordinary course of business, except consistent with past practice; (ih) as contemplated authorize any capital expenditure which, when taken together with all other capital expenditures made by Section 6.1(c), (ii) as required to comply with changes in applicable law, (iii) any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after Company between the date hereofof this Agreement and the Effective Time, or (iv) as required pursuant to an existing contractual arrangement or agreementis in excess of $25,000; (i) use commercially increase the compensation payable or to become payable to its officers, consultants or employees, except for increases in accordance with past practices in salaries or wages of employees or consultants of the Company who are not officers of the Company, or grant any severance or termination pay to, or enter into any employment or severance agreement with any director, officer, consultant or other employee of the Company, or establish, adopt, enter into or amended any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer, consultant or employee; (j) take any action, other than reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses usual actions in such amounts the ordinary course of business and against such risks and losses as are consistent with past practice; and, with respect to accounting policies or procedures (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivable); (jk) not make, change make any tax election or revoke settle or compromise any material Tax election federal, state, local or foreign income tax liability; (l) pay, discharge or satisfy any claim, liability or obligation (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 Company Financial Statements or subsequently incurred in the ordinary course of business and consistent with past practice; (m) disclose any confidential or proprietary Company Intellectual Property; (n) make any material agreement changes in the customary methods of operations of the Company, including, without limitation, practices and policies relating to manufacturing, purchasing, marketing, selling and pricing; (o) enter into any agreement, arrangement or settlement regarding Taxes transaction with any taxing authorityof its directors, officers, employees or shareholders (or with any relative, beneficiary, spouse or Affiliate of such Person); (p) suffer any Company Material Adverse Effect; or (q) agree, whether in writing or otherwise, to take any of the actions specified in this Section 6.01 or grant any options to purchase, rights of first refusal, rights of first offer or any other similar rights or commitments with respect to any of the actions specified in this Section 6.01, except as expressly contemplated by this Agreement.

Conduct of Business Pending the Merger. SECTION 6.1 5.1 Conduct of Business by the Company Pending the Merger. Except as otherwise contemplated by The Company covenants and agrees that, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or disclosed in Section 6.1 the time Acquisition's designees are elected as directors of the Company Disclosure Schedule, after the date hereof and prior pursuant to the Closing Date or earlier termination of this AgreementSection 1.3, unless Parent shall otherwise agree in writing, which agreement shall not be unreasonably withheld or delayed, the Company shall, shall conduct its business and shall cause the businesses of its subsidiaries toto be conducted only in, and the Company and its subsidiaries shall not take any action except in, the ordinary course of business and in the manner consistent with past practice; and the Company shall use reasonable commercial efforts to preserve substantially intact the business organization of the Company and its subsidiaries, to keep available the services of the present officers, employees and consultants of the Company and its subsidiaries and to preserve the present relationships of the Company and its subsidiaries with customers, suppliers and other persons with which the Company or any of its subsidiaries has significant business relations. By way of amplification and not limitation, except as contemplated by this Agreement, neither the Company nor any of its subsidiaries shall, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the time Acquisition's designees are elected as directors of the Company pursuant to Section 1.3, directly or indirectly do, or propose to do, any of the following without the prior written consent of Parent, which consent shall not be unreasonably withheld or delayed: (a) conduct their respective businesses in amend or otherwise change the ordinary and usual course Certificate of business and consistent with past practiceIncorporation or By-Laws of the Company or any of its subsidiaries; (b) not (i) amend or propose to amend their respective certificates of incorporation or bylaws, (ii) split, combine or reclassify their outstanding capital stock or (iii) declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise, except for the payment of dividends or distributions to the Company by a wholly-owned subsidiary of the Company; (c) not issue, sell, pledge pledge, dispose of or dispose ofencumber, or agree to issueauthorize the issuance, sellsale, pledge pledge, disposition or dispose encumbrance of, any additional shares ofof capital stock of any class, or any options, warrants warrants, convertible securities or other rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, or any other ownership interest (including, without limitation, any phantom interest) in the Company, any of its subsidiaries or affiliates (except that for (i) the Company may issue shares upon conversion issuance of convertible securities and exercise of options and warrants outstanding on the date hereof, (ii) the Company may issue shares of Company Common Stock (or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses issuable pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating theretoOptions listed on Schedule 3.11 hereto; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings in the ordinary course of business (other than pursuant to credit facilities) or borrowings under the existing credit facilities of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets in the ordinary course of business and expenditures for fixed or capital assets in the ordinary course of business and other than as set forth in the proviso in this Section 6.1(d), (vi) sell, pledge, dispose of or encumber any material assets or businesses other than (A) sales of businesses or assets in the ordinary course of business, (B) sales of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, or (vii) except as contemplated by the following proviso, enter into any binding contract, agreement, commitment or arrangement with respect to any of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent with past practice; provided, however, that the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annum; (h) not adopt, enter into or amend any pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any employees or retirees generally, other than in the ordinary course of business, except (i) as contemplated by Section 6.1(c), (ii) as required to comply with changes in applicable law, (iii) any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreement; (i) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses in such amounts and against such risks and losses as are consistent with past practice; and (j) not make, change or revoke any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authority.

Conduct of Business Pending the Merger. SECTION 6.1 5.01 Conduct of Business by the Company Pending the Merger. Except The Company agrees that, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement or disclosed as set forth in Section 6.1 5.01 of the Company Disclosure Schedule, after the date hereof businesses of the Company and prior to the Closing Date or earlier termination Subsidiaries shall be conducted only in, and the Company and the Subsidiaries shall not take any action except in, the ordinary course of this Agreementbusiness and in a manner consistent with past practice and in compliance in all material respects with applicable Law, unless Parent shall otherwise agree in writing, and the Company shall, and shall cause each of the Subsidiaries to, use its subsidiaries toreasonable best efforts to preserve substantially intact the business organization of the Company and the Subsidiaries, to preserve the assets and properties of the Company and the Subsidiaries in good repair and condition, to maintain and protect rights in material Intellectual Property used in the business of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary has material business relations, in each case in the ordinary course of business and in a manner consistent with past practice. By way of amplification and not limitation, except as expressly contemplated by any other provision of this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule, the Company agrees that neither the Company nor any Subsidiary shall, between the date of this Agreement and the Effective Time, directly or indirectly, do, or propose to do, any of the following without the prior written consent of Parent: (a) conduct their respective businesses amend or otherwise change its Certificate of Incorporation, Bylaws or other similar organizational documents; (b) issue, sell, pledge, dispose of, grant, encumber, or otherwise subject to any Lien, or authorize such issuance, sale, pledge, disposition, grant or encumbrance of or subjection to such Lien, (i) any shares of any class of capital stock of the Company or any Subsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including any phantom interest), of the Company or any Subsidiary (except for the issuance of Shares issuable pursuant to employee stock options outstanding on the date of this Agreement and granted under Company Stock Option Plans as in effect on the date of this Agreement in the ordinary course of business and usual in a manner consistent with past practice), or (ii) any Properties or other assets of the Company or any Subsidiary, except assets (other than Properties) that are not material in the ordinary course of business and in a manner consistent with past practice; (c) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except for dividends or other distributions by any Subsidiary only to the Company or any direct or indirect wholly owned Subsidiary; (d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any capital stock of the Company or any Subsidiary; (i) acquire (including by merger, consolidation, or acquisition of stock or assets or any other business combination) any corporation, partnership, other business organization (or any division thereof) or any property or asset, except assets (other than real property) in the ordinary course of business and in a manner consistent with past practice, and other assets (other than real property) that do not exceed $1,000,000 in the aggregate; (ii) authorize, or make any commitment with respect to, any capital expenditure, other than maintenance expenditures at existing Properties in the ordinary course of business and consistent with past practice; (iii) acquire, enter into or extend any option to acquire, or exercise an option to acquire, real property or commence construction of, or enter into any Contract to develop or construct, other real estate projects, other than as contemplated by the Company Capex and Development Budget dated August 11, 2004 (the "Company Capex and Development Budget"), a copy of which has been made available to Parent; (iv) enter into any new line of business; or (v) make investments in persons other than existing Subsidiaries; provided, however, that nothing contained in this Section 5.01(e) (other than the succeeding proviso of this Section 5.01(e)) shall prohibit or limit the Company's ability to take such actions as are contemplated by the Company Capex and Development Budget, and all limitations set forth in this Section 5.01(e) shall be in addition to any amounts or actions contemplated by the Company Capex and Development Budget; and provided further that prior to the 90-day anniversary of the date of this Agreement, neither the Company nor any Subsidiary shall undertake the capital projects set forth on Section 5.01(e) of the Company Disclosure Schedule without the prior written consent of Parent; (f) (i) increase the compensation payable or to become payable or the benefits provided to its current or former directors, officers or employees, except for increases in compensation in the ordinary course of business and in a manner consistent with past practice; (ii) grant any retention, severance or termination pay to, or enter into any employment, bonus, change of control or severance agreement with, any current or former director, officer or other employee of the Company or of any Subsidiary; (iii) establish, adopt, enter into, terminate or amend any Plan or establish, adopt or enter into any plan, agreement, program, policy, trust, fund or other arrangement that would be a Plan if it were in existence as of the date of this Agreement for the benefit of any director, officer or employee except as required by Law; (iv) loan or advance any money or other property to any current or former director, officer or employee of the Company or the Subsidiaries; or (v) grant any equity or equity based awards (provided that equity awards may be transferred in accordance with the terms of the applicable plan document or agreement); (g) make any change (or file for such change) in any method of Tax accounting; (h) make, change or rescind any material Tax election, file any amended Tax Return, except as required by applicable Law, enter into any closing agreement relating to Taxes, waive or extend the statute of limitations in respect of Taxes (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business) or settle or compromise any material United States federal, state or local income Tax liability, audit, claim or assessment, or surrender any right to claim for a Tax Refund; (i) pay, discharge, waive, settle or satisfy any claim, liability or obligation that is not an Action, other than the payment, discharge, waiver, settlement or satisfaction, in the ordinary course of business and consistent with past practice; (bj) not waive, release, assign, settle or compromise any pending or threatened Action (i) amend or propose to amend their respective certificates of incorporation or bylaws, (ii) split, combine or reclassify their outstanding capital stock or (iii) declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise, except for the requiring payment of dividends or distributions to the Company by a wholly-owned subsidiary of the Company; (c) not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that (i) the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereof, (ii) the Company may issue shares of Company Common Stock (or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings in the ordinary course of business (other than pursuant to credit facilities) or borrowings under the existing credit facilities of the Company or any Subsidiary in excess of its subsidiaries as $250,000 individually or $1,000,000 in the aggregate, unless such facilities may be amended in a manner that does not have a material adverse effect payments are fully covered by the Company's or such Subsidiary's insurance policies; provided, however, that, with respect to the matter set forth on Section 5.01(j)(2) of the Company Disclosure Schedule, (A) neither the "Existing Credit Facilities") up to Company nor any Subsidiary shall waive, release, assign, settle or compromise such Action without the existing borrowing limit on the date hereofprior written consent of Parent, which shall not be unreasonably withheld or delayed, and (B) borrowings to refinance existing indebtedness on terms which are the Company shall keep Parent reasonably acceptable to informed and consider requests reasonably made by Parent, or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), (ii) redeemthat is brought by any current, purchase, acquire former or offer to purchase or acquire purported holder of any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment securities of the Merger Company in its capacity as a pooling of interests under Opinion No. 16 of the Accounting Principles Board such and that ("APB No. 16"), (ivX) take or fail requires any payment to take any action which action or failure to take action would cause such security holders by the Company or its stockholders any Subsidiary or (except to Y) adversely affects in any material respect the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result ability of the consummation of Company and the Merger or would otherwise cause the Merger not Subsidiaries to qualify as conduct their business in a reorganization under Section 368(amanner consistent with past practice; (k) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets (I) in the ordinary course of business and in a manner consistent with past practice, (II) as may be necessary as a result of unforeseen circumstances or developments and which does not result in an increase in expenditures for fixed from those contemplated by the Company Capex and Development Budget, or capital assets (III) change orders in the ordinary course of business and other than as consistent with past practice (which change orders do not cause expenditures to exceed the relevant amounts set forth in the proviso in this Section 6.1(dCompany Budget, provided that Parent shall not unreasonably withhold its consent if such expenditures do exceed such budgeted amounts), (vii) sellenter into, pledgeamend, dispose modify or consent to the termination of or encumber any material assets or businesses (other than (Aa termination in accordance with its terms) sales of businesses or assets in the ordinary course of business, (B) sales of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowingsany Material Contract, or (viiii) except as contemplated by amend, waive, modify or consent to the following proviso, enter into termination of (other than a termination in accordance with its terms) the Company's or any binding contract, agreement, commitment or arrangement with respect to any of the foregoingSubsidiary's rights thereunder; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in no event shall the Company or any Subsidiary amend, modify or waive (including consenting to or otherwise agreeing to any extension of any diligence contingency period) any provision of the Contract set forth on Section 6.1 5.01(k) of the Company Disclosure Schedule, or Schedule and (B) neither the aggregate value Company nor any Subsidiary shall agree on the form of consideration paid (w) the Development Agreement, (x) License Agreement, (y) Grant of Easement for Buyer's Access Easement or payable (z) Grant of Easement for Seller's Access Easement (as each such term in connection with any such acquisition (other than those acquisitions disclosed defined in Schedule 6.1 the Contract set forth on Section 5.01(k) of the Company Disclosure Schedule) including without the prior written consent of Parent (not to be unreasonably withheld or delayed), and the Company shall permit Parent to participate in any funded indebtedness assumed and negotiations of such agreements; (l) make any Company Common Stock issued expenditure in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses advertising or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent with past practice; provided, however, that the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annum; (h) not adopt, enter into or amend any pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any employees or retirees generallymarketing, other than in the ordinary course of business, except (i) as contemplated by Section 6.1(c), (ii) as required to comply with changes business and in applicable law, (iii) any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreement; (i) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses in such amounts and against such risks and losses as are a manner consistent with past practice; and; (jm) not makefail to maintain in full force and effect the existing insurance policies covering the Company and the Subsidiaries and their respective properties, change assets and businesses; (n) enter into, amend, modify or revoke consent to the termination of any material Tax election Contract that would be a Material Contract or make any material agreement or settlement regarding Taxes with any taxing authority.transaction that would be required to be set forth in Section 3.17(c) of the Company Disclosure Schedule if in effect on the date of this Agreement;

Conduct of Business Pending the Merger. SECTION 6.1 Conduct of Business by the Company Pending the MergerCONDUCT OF BUSINESS BY MBI, PALATIN AND MERGER SUBSIDIARY. Except as otherwise contemplated by this Agreement or disclosed in Section 6.1 of the Company Disclosure Schedule, after the date hereof and prior Prior to the Closing Date or earlier termination of this AgreementEffective Date, unless Parent shall otherwise agree in writing, the Company each party shall, and shall cause its subsidiaries to, conduct its business in the ordinary course consistent with past practice and shall use its commercially reasonable efforts to preserve intact its business organizations and relationships with third parties. Without limiting the generality of the foregoing, and except with the prior written consent of the other party, from the date hereof until the Effective Date: (a) conduct each party shall, and shall cause any of its subsidiaries to, use their respective commercially reasonable efforts to keep available the services of their present officers and employees and preserve their relationships with customers, suppliers and others having business dealings with them to the end that their goodwill and ongoing businesses shall be unimpaired at the Effective Date, except such impairment as would not have either an MBI Material Adverse Effect or Palatin Material Adverse Effect, as the case may be. Each party shall, and shall cause its subsidiaries to, (A) maintain insurance coverages and its books, accounts and records in the ordinary and usual course of business and a manner consistent with past practiceprior practices, (B) comply in all material respects with all laws, ordinances and regulations of Governmental Entities applicable to such party and its subsidiaries, (C) maintain and keep its properties and equipment in good repair, working order and condition, ordinary wear and tear excepted, and (D) perform in all material respects its obligations under all contracts and commitments to which it is a party or by which it is bound; (b) not neither party shall, nor shall it propose to, nor shall it permit any of its subsidiaries to, except as required by this Agreement, (iA) sell or pledge or agree to sell or pledge any capital stock owned by it in any of its subsidiaries, (B) amend its Certificate of Incorporation or propose to amend their respective certificates of incorporation or bylawsBylaws, (iiC) split, combine or reclassify their its outstanding capital stock or (iii) issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of the capital stock, or declare, set aside or pay any dividend or other distribution payable in cash, stock or property, or (D) directly or indirectly redeem, purchase or otherwise acquire or agree to redeem, purchase or otherwise acquire any shares of its capital stock, property except pursuant to (A) the exercise of rights granted to such party to repurchase shares of its capital stock from employees upon termination of employment or otherwise(B) contractual obligations arising under agreements existing on the date hereof and disclosed in the MBI Disclosure Schedule, except for in the payment case of dividends MBI, or distributions to in the Company by a wholly-owned subsidiary Palatin Disclosure Schedule, in the case of the CompanyPalatin; (c) not neither party shall, nor shall it permit any of its subsidiaries to, (A) except as required by this Agreement, issue, sell, pledge deliver or dispose of, sell or agree to issue, sell, pledge deliver or dispose of, sell any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their of, its capital stock of any class class, any Palatin Voting Debt or MBI Voting Debt, as the case may be, or any debt option, rights or equity warrants to acquire, or securities convertible into into, shares of capital stock other than (x) issuances of MBI Common Stock or exchangeable for such capital stockPalatin Common Stock, except that (i) as the Company case may issue shares upon conversion of convertible securities and be, pursuant to the exercise of warrants or stock options and warrants outstanding on the date hereof, or (iiy) the Company may issue shares grant of Company employee stock options and the issuance of MBI Common Stock (or warrants or options Palatin Common Stock upon exercise thereof, at fair market value at the time of grant of the options, to acquire Company Common Stock) new employees in connection with acquisitions the commencement of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions their employment, in accordance with the existing terms of the agreements relating thereto; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings in the ordinary course of business (other than pursuant to credit facilities) or borrowings under the existing credit facilities of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets each case in the ordinary course of business and expenditures for fixed consistent with past practice, (B) acquire, lease or dispose or agree to acquire, lease or dispose of any capital assets in the ordinary course of business and or any other assets other than as set forth in the proviso in this Section 6.1(d), (vi) sell, pledge, dispose of or encumber any material assets or businesses other than (A) sales of businesses or assets in the ordinary course of business, (B) sales of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, (C) sales incur additional indebtedness or encumber or grant a security interest in any asset or enter into any other material transaction other than in each case in the ordinary course of businesses or assets with aggregate 1997 revenues of less than $5 millionbusiness, and (D) pledges acquire or encumbrances pursuant agree to Existing Credit Facilities acquire by merging or consolidating with, or by purchasing a substantial equity interest in, or by any other manner, any business or any corporation, partnership, association or other permitted borrowingsbusiness organization or division thereof, in each case in this clause (D) which are material, individually or in the aggregate to such party and its subsidiaries taken as a whole, except that such party may create new wholly owned subsidiaries in the ordinary course of business, or (viiE) except as contemplated by the following provisoadopt, enter into into, amend or terminate any binding contract, agreement, commitment or arrangement with respect to any of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except each case in the ordinary course and consistent with past practice; provided, however, that the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annumbusiness; (hd) not adoptneither party shall, enter into or amend nor shall it permit, any pension or retirement plan, trust or fundof its subsidiaries to, except as required to comply with changes in applicable law and not except as provided in Section 7.5, (A) adopt, enter into into, terminate or amend in any material respect any bonus, profit sharing, compensation, severance, termination, stock option, pension, retirement, deferred compensation, health care, employment or other employee benefit planMBI Benefit Plan or Palatin Benefit Plan, as the case may be, agreement, trust, fund or other arrangement for the benefit or welfare of any director, officer or current or former employee, (B) increase in any manner the compensation or fringe benefits of any director, officer or employee (except for normal increases in the ordinary course of business that are consistent with past practice and that, in the aggregate, do not result in a material increase in benefits or compensation expense to such party and its subsidiaries relative to the level in effect prior to such increase), (C) pay any benefit not provided under any existing plan or arrangement, (D) grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or MBI Benefit Plan or Palatin Benefit Plan (including, without limitation, 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 benefit plans or agreements or awards made thereunder) except for (x) payment of year-end bonuses to employees, (y) making of matching contributions to 401(k) plans and (z) the grant of employee stock options and the issuance of MBI Common Stock or Palatin Common Stock, as the case may be, upon exercise thereof, at fair market value at the time of grant of the options, to new employees in connection with the commencement of their employment, in each case in the ordinary course of business and consistent with past practice, (E) take any action to fund or retirees generallyin any other way secure the payment of compensation or benefits under any employee plan, agreement, contract or arrangement or MBI Benefit Plan or Palatin Benefit Plan, as the case may be, other than in the ordinary course of businessbusiness consistent with past practice, except or (iF) as contemplated by Section 6.1(c)adopt, (ii) as required enter into, amend or terminate any contract, agreement, commitment or arrangement to comply with changes in applicable law, (iii) do any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreementforegoing; (ie) neither party shall, nor shall it permit any of its subsidiaries to, make any investments in non-investment grade securities; (f) each party shall use its commercially reasonable efforts to maintain with financially responsible insurance companies insurance on ensure that neither it nor any of its tangible assets subsidiaries takes or causes to be taken any action which would disqualify the Merger as a "reorganization" under Section 368 of the Code; (g) each party shall use its commercially reasonable efforts to refrain from taking, nor shall it permit any of its subsidiaries to take, any action that would, or reasonably might be expected to, result in any of its representations and its businesses warranties set forth in this Agreement being or becoming untrue in any material respect, or in any of the conditions to the Merger set forth in Article 8 not being satisfied, or (unless such amounts and against such risks and losses as are consistent with past practiceaction is required by applicable law) which would adversely affect the ability of any of them to obtain any of the regulatory approvals required to consummate the Merger; and (jh) not makeMBI shall not, change nor shall it permit any of its subsidiaries to, settle any claim of any other party against MBI, or revoke any of its subsidiaries, related to any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authoritylitigation without the express written consent of Palatin to such settlement, which consent shall not be unreasonably withheld.

Conduct of Business Pending the Merger. SECTION 6.1 4.1 Conduct of Business by the Company Pending the Merger. Except . (a) The Company covenants and agrees that, beginning on the date hereof and ending at the earlier to occur of the Closing or such earlier time as otherwise contemplated this Agreement is terminated in accordance with Section 7 (such period being hereinafter referred to as the “Interim Period”), except as expressly provided or permitted by this Agreement or disclosed set forth in Section 6.1 4.1 of the Company Disclosure Schedule, after the date hereof and prior to the Closing Date Schedule or earlier termination of this Agreement, unless Parent shall otherwise agree consent in writingwriting (which consent shall not be unreasonably withheld), the Company shall, and shall cause the Company Subsidiary to, use its subsidiaries commercially reasonable efforts to: : (ai) conduct their respective businesses its business only in the ordinary course of business, consistent with past practice; (ii) not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and usual (iii) preserve intact its business organization, properties and assets, keep available the services of its officers and other key employees, maintain in effect all Company Material Contracts, and preserve its relationships with customers, licensees, suppliers and other Persons with which they have business relations. By way of amplification and not limitation, except as expressly permitted by this Agreement or as set forth on Schedule 4.1 of the Company Disclosure Schedule, neither the Company nor the Company Subsidiary shall, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed): (i) amend their Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization or otherwise; (ii) issue, sell, transfer, pledge, dispose of or encumber any shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, of the Company or the Company Subsidiary (except for the issuance of shares of Company Common Stock upon the exercise of Company Stock Options or Company Warrants); (iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or any equity interest in or securities of any of its Subsidiaries, other than (i) repurchases of Company Common Stock pursuant to any right of repurchase pursuant to Restricted Stock Agreements between the Company and the holder of such shares of Company Common Stock and (ii) in connection with any “cashless exercise” of any Company Stock Options in accordance with the terms of the Company Stock Plans; (iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except for (A) sales of inventory in the ordinary course of business and consistent with past practice(B) sales of equipment in the ordinary course of business where, in the case of clause (B) only, any such sales do not exceed $100,000 individually or $250,000 in the aggregate; (b) not (i) amend or propose to amend their respective certificates of incorporation or bylaws, (ii) split, combine or reclassify their outstanding capital stock or (iiiv) declare, set aside or pay any dividend or other distribution payable (whether in cash, stockstock or other securities or property, property or otherwise, any combination thereof) in respect of any of its capital stock or other equity interests (except for that the payment of Company Subsidiary may declare and pay cash dividends or distributions to the Company by a wholly-owned subsidiary of the Company); (cvi) not issuesplit, sell, pledge combine or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that (i) the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereof, (ii) the Company may issue shares of Company Common Stock (or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings in the ordinary course of business (other than pursuant to credit facilities) or borrowings under the existing credit facilities of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), (ii) redeem, purchase, acquire or offer to purchase or acquire reclassify any shares of its capital stock or other securities or equity interests, or, except as set forth in Section 4.1(b)(ii) above, issue any optionsother securities in respect of, warrants in lieu of or rights to acquire any in substitution for shares of its capital stock or any security convertible into or exchangeable for its capital stock, equity interests; (iiivii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets in the ordinary course of business and expenditures for fixed or capital assets in the ordinary course of business and other than as set forth in the proviso in this Section 6.1(d)consistent with past practice, (vi) sell, transfer, lease, license, sublicense, mortgage, pledge, encumber, grant or otherwise dispose of any Company Intellectual Property Rights, or encumber amend or modify in any material respect any existing material agreements with respect to any Company Intellectual Property Rights; (viii) acquire (by merger, consolidation, acquisition of stock or assets or businesses otherwise) an interest in any corporation, limited liability company, partnership, joint venture or other business organization or division thereof; (ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than (A) sales guarantees of businesses or assets bank debt of the Company’s Subsidiaries entered into in the ordinary course of business, (B) sales or endorse or otherwise as an accommodation become responsible for the obligations of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowingsany Person, or (vii) except as contemplated by the following provisomake any loans, advances or enter into any binding contractfinancial commitments or lease commitments, agreement, commitment except in each case as otherwise permitted under any loan or arrangement with respect credit agreement to any which the Company or the Company Subsidiary is a party as of the foregoing; date of this Agreement, provided, however, that notwithstanding such amounts as otherwise permitted under such loan or credit agreement shall not exceed $100,000 in the foregoing aggregate; (x) make any capital expenditures which, when added together with all other than subsections (iii) and (iv) capital expenditures made by the Company since the date of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition Agreement (other than those acquisitions disclosed in capital expenditures set forth on Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not 4.1), exceed $10 million and such acquisition is accretive 200,000; (xi) take or permit to the earnings per share of the Company. For purposes of the foregoing, be taken any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contraryaction to: (A) increase the Company will not acquire compensation payable to its officers or agree employees, except for increases in salary or wages required by agreements entered into prior to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation date of the Mergerthis Agreement; (B) the Company will not acquire grant any additional severance or agree to acquire termination pay to, or enter into any assets employment or businesses if such assets or businesses are not in industries in which the Company currently operatesseverance agreements with, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisitionits officers; and (C) the Company will not acquire grant any severance or agree to acquire all termination pay to, or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with severance agreement with, any directors, officers or key employees, except in the ordinary course and consistent with past practiceemployee; provided, however, that the Company and its subsidiaries shall in no event (D) enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annum; collective bargaining agreement; (hE) not adoptestablish, enter into or amend any pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, health careemployment, employment termination, severance or other employee benefit plan, agreement, trust, fund fund, policy or arrangement for the benefit or welfare of any employees of its directors, officers or retirees generallyemployees; (F) pay any bonuses in amounts greater than those accrued on the Company’s balance sheet through December 31, 2005 and as contemplated under the Company’s bonus program in effect as of December 31, 2005; or (G) hire any employee at a level of Vice President or above or with an annual base salary in excess of $125,000, or promote any employee to Vice President or above (except in order to fill those positions that are set forth on Schedule 4.1(xi) hereto). (xii) make any changes to the personnel or business policies of the Company; (xiii) change any accounting policies or procedures (including procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP; (xiv) create, incur, suffer to exist or assume any Lien on any of its material properties, facilities or other assets, other than any Lien for Taxes not yet due and any Lien that would not reasonably be expected to have a Company Material Adverse Effect; (xv) other than in the ordinary course of businessbusiness and consistent with past practice, (A) enter into any Company Material Contract other than a Company Material Contract that is terminable by Company with not more than 60 days prior written notice and without payment of any financial termination fee or penalty; (B) modify, amend or transfer in any material respect or terminate (other than in accordance with its terms) any Company Material Contract or waive, release or assign any material rights or claims thereto or thereunder; (C) enter into or extend any lease with respect to real property; or (D) initiate or participate in any new research, clinical trials or clinical trial or development programs; (xvi) enter into any agreement, or amend the terms of any existing agreement, which grants to any Person exclusive supply, manufacturing, production, marketing or distribution rights with respect to any of its products or technologies; (xvii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto; (xviii) except as set forth on Schedule 4.1 of the Company Disclosure Schedule, engage in settlement discussions with respect to, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements (A) that do not involve any liability or obligation on the part of the Company or the Company Subsidiary, or (B) involving only the payment of cash not in excess of $500,000 in the aggregate and no admission being made with respect to (i) any criminal wrongdoing or (ii) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights; (xix) except as contemplated by Section 6.1(c), (ii) 1.9 or as required by the Company Stock Plans, accelerate or otherwise amend the terms of any outstanding options under the Company Stock Plans; (xx) fail to comply with changes maintain in applicable lawfull force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies; (iiixxi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its Affiliates) would be reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code; (xxii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action would reasonably be expected to result in either (A) any of the foregoing involving representations and warranties of the Company set forth in Section 2 of this Agreement becoming untrue in any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof, material respect or (ivB) any of the conditions to the Closing set forth in Section 6 of this Agreement not being satisfied as required pursuant to an existing contractual arrangement or agreementof the Closing Date; (ixxiii) other than in the ordinary course of business and consistent with past practice, enter any agreement with respect to Company Intellectual Property Rights or with respect to Company Intellectual Property Rights or with respect to the intellectual property of any third party, or enter into any collaboration, co-marketing or co-promotion agreement regarding any of the Company’s compounds or otherwise extend, modify or amend any rights with respect to the foregoing, in each case, other than with respect to any such agreement that is terminable by the Company with not more than 60 days prior written notice and without payment of any termination fee or penalty; or (xxiv) enter into any agreement or contract to do any of the foregoing. Notwithstanding the foregoing, nothing contained in this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control or direct the operations of the Company or any of its Subsidiaries prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and the Company Subsidiary’s operations. If the Company desires to take an action that requires the prior written consent of Parent pursuant to this Section 4.1(a), the Company shall deliver to Parent a written request for such written consent, accompanied by a reasonably detailed description of the action sought to be taken and reasonable documentation and other information supporting the Company’s request. If Parent reasonably seeks any additional documentation or other information in order to decide whether to approve the Company’s request, then the Company shall supply such additional documentation or other information to Parent as promptly as reasonably practicable. Parent shall use commercially reasonable efforts to maintain approve or deny the Company’s request within five Business Days after Parent has received all documentation and other information supporting the Company’s request, including any additional documentation or other information sought by Parent. The Company shall provide any request pursuant to this Section 4.1(a) in accordance with financially responsible insurance companies insurance on Schedule 4.1(a) of the Company Disclosure Schedule, as well as to the persons identified in Section 8.2 hereof in accordance with the procedures set forth therein. If no such consent or denial is received by the Company by the conclusion of such five Business Day period, Parent shall be deemed to have granted its tangible assets consent to the action set forth in such request. (b) During the Interim Period, the Company shall, and shall cause the Company Subsidiary to: (i) solicit and accept customer orders in the ordinary course of business; and (ii) cooperate with Parent in communicating with suppliers, collaborators, customers and licensors to facilitate the post-Closing integration of the business of the Company and the Company Subsidiary with the business of Parent and its businesses in such amounts and against such risks and losses as are consistent with past practice; and (j) not make, change or revoke any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authoritySubsidiaries.

Conduct of Business Pending the Merger. SECTION 6.1 Section 7.1 Conduct of Business by the Company Pending the Merger. Except Prior to the Effective Time, unless Parent shall otherwise agree in writing or except as otherwise contemplated by this Agreement or disclosed in Section 6.1 of the Company Disclosure Schedule, after the date hereof and prior to the Closing Date or earlier termination of this Agreement, unless Parent shall otherwise agree in writing, : (i) the Company shall, and shall cause its subsidiaries to: (a) conduct , carry on their respective businesses in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, and shall, and shall cause its subsidiaries to, use their reasonable efforts to preserve intact their present business organizations and preserve their relationships with sponsors, sanctioning bodies, customers, suppliers and others having business dealings with them in an attempt to maintain, unimpaired at the Effective Time, their goodwill and on-going businesses. The Company shall, and shall cause its subsidiaries to, (a) maintain its books, accounts and records in the usual course of business and manner consistent with past practice; (b) comply in all material respects with all laws, ordinances and regulations of Governmental Entities applicable to the Company and its subsidiaries; (c) maintain and keep its material properties and equipment in good repair, working order and condition, ordinary wear and tear excepted; (d) take all reasonable action to maintain its material agreements in full force and effect and not take any action or fail to take any action which would constitute a material breach or default thereunder; and (e) perform in all material respects its obligations under all material contracts and commitments to which it is a party or by which it is bound, provided that a failure to comply with clauses (b) through (e) above shall not be a breach hereof unless such action or inaction has had or would reasonably be expected to have a Company Material Adverse Effect; (bii) the Company shall not and shall not propose or agree to (iA) sell or pledge or agree to sell or pledge any capital stock owned by it in any of its subsidiaries (except in connection with its revolving lines of credit), (B) amend its charter or propose to amend their respective certificates of incorporation or bylawsBy-laws, (iiC) increase the size of its Board of Directors, (D) split, combine or reclassify their its outstanding capital stock or (iii) issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for the outstanding shares of stock of the Company, or declare, set aside aside, authorize or pay any dividend or other distribution payable in cash, stockstock or property, property or otherwise(E) directly or indirectly redeem, purchase or otherwise acquire or agree to redeem, purchase or otherwise acquire any shares of Company stock except for as provided in the payment Right of dividends or distributions First Refusal Agreement dated August 8, 1997 by and among Midwest Facility Investments, Inc., a Florida corporation, Penske Motorsports, Inc., a Delaware corporation, and various shareholders of the Company (the "ROFR Agreement"); (iii) the Company shall not, nor shall it permit any of its subsidiaries other than to the Company by a wholly-owned or to another subsidiary of the Company; , to, (cA) not issue, sell, pledge deliver or dispose of, sell or agree to issue, sell, pledge deliver or dispose of, sell any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their capital of, its respective stock of any class class, any indebtedness having the right to vote on any matter on which the Company's shareholders may vote or any debt option, rights or equity warrants to acquire, or securities convertible into into, exercisable for or exchangeable for such capital stockfor, except that (i) the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereof, (ii) the Company may issue shares of Company Common Stock (stock other than issuances, deliveries or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares sales of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms obligations outstanding as of the agreements relating thereto; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings in the ordinary course date of business (other than pursuant to credit facilities) or borrowings this Agreement under the existing credit facilities Company Employee Benefit Plans and under the warrants set forth on Section 5.2 of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereof, Disclosure Schedules; (B) borrowings acquire, lease or dispose or agree to refinance existing indebtedness on terms which are reasonably acceptable to Parentacquire, lease or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), (ii) redeem, purchase, acquire or offer to purchase or acquire dispose of any shares of its capital stock assets or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any other assets or businesses other than expenditures for current assets in the ordinary course of business and expenditures for fixed or capital assets in the ordinary course of business and other than as set forth in the proviso in this Section 6.1(d), (vi) sell, pledge, dispose of or encumber any material assets or businesses other than (A) sales of businesses or assets in the ordinary course of business, (B) sales of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, ; (C) sales incur additional indebtedness or encumber or grant a security interest in any asset or enter into any other material transaction other than in each case in the ordinary course of businesses or assets with aggregate 1997 revenues of less than $5 million, and business; (D) pledges acquire or encumbrances pursuant agree to Existing Credit Facilities acquire by merging or consolidating with, or by purchasing a substantial equity interest in, or by any other manner, any business or any corporation, partnership, association or other permitted borrowings, business organization or division thereof; or (viiE) except as contemplated by the following proviso, enter into any binding contract, agreement, commitment or arrangement with respect to any of the foregoing; providedprovided that the prohibitions in clauses (B), however(C) and (E) shall not apply to matters contemplated by Section 7.1 (iii) of the Company Disclosure Schedule; (iv) the Company shall not, that notwithstanding nor shall it permit any of its subsidiaries to, except as required to comply with applicable law and except as provided in Sections 8.5 or 9.3 hereof, enter into any new (or amend any existing) Company Employee Benefit Plan or any new (or amend any existing) employment, severance or consulting agreement, grant any general increase in the compensation of current or former directors, officers or employees (including any such increase pursuant to any bonus, pension, profit sharing or other plan or commitment) or grant any increase in the compensation payable or to become payable to any director, officer or employee, except in any of the foregoing cases in accordance with preexisting contractual provisions or in the ordinary course of business consistent with past practice; (v) the Company shall not, nor shall it permit any of its subsidiaries to, take or cause to be taken any action, whether before or after the Effective Time, which would disqualify the Merger as a "reorganization" within the meaning of Section 368(a) of the Code: and (vi) the Company shall not, nor shall it permit any of its subsidiaries to, amend, modify, terminate, waive or permit to lapse any material right of first refusal (other than subsections in connection with the ROFR Agreement), preferential right, right of first offer, or any other material right of the Company or any of its subsidiaries. Section 7.2 Conduct of Business by Parent Pending the Merger. Prior to the Effective Time, unless the Company shall otherwise agree in writing or except as otherwise required by this Agreement: (i) Parent shall, and shall cause its subsidiaries to, carry on their respective businesses in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and shall, and shall cause its subsidiaries to, use their reasonable efforts to preserve intact their present business organizations and preserve their relationships with sponsors, sanctioning bodies, customers, suppliers and others having business dealings with them to the end that their goodwill and ongoing businesses shall be unimpaired at the Effective Time. Parent shall, and shall cause its subsidiaries to, (a) maintain insurance coverages and its books, accounts and records in the usual manner consistent with past practice; (b) comply in all material respects with all laws, ordinances and regulations of Governmental Entities applicable to Parent and its subsidiaries; (c) maintain and keep its material properties and equipment in good repair, working order and condition, ordinary wear and tear expected: (d) maintain its material agreements in full force and effect and not take any action or fail to take any action which would constitute a material breach or default thereunder; and (e) perform in all material respects its obligations under all material contracts and commitments to which it is a party or by which it is bound; (ii) Parent shall not and shall not propose or agree to (A) sell or pledge or agree to sell or pledge any capital stock owned by it in any of its subsidiaries, (B) amend its Certificate of Incorporation or Bylaws, except as contemplated by this Agreement, or (C) combine or reclassify its outstanding 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 capital stock of Parent, or declare, set aside, authorize or pay any dividend or other distribution payable in cash, stock, property or otherwise (other than the Parent Quarterly Dividend), provided that the foregoing shall not prohibit Parent from announcing or consummating a stock split; (iii) and (iv) of this except as disclosed in Section 6.1(d)), the Company shall not be prohibited from acquiring any assets 7.2 to Parent's Disclosure Schedule or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long that are primarily engaged in the same business as that conducted by Parent and its subsidiaries as of the date of this Agreement and any financing transactions or issuances of securities related thereto which, in each case, do not require the approval of the shareholders of Parent, Parent shall not, and shall not permit any of its subsidiaries to, (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Scheduleissue, deliver or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire sell or agree to issue, deliver or sell any additional shares of, or rights of any kind to acquire any assets shares of, its respective capital stock of any class, any indebtedness having the right to vote on any matter on which Parent's shareholders may vote or businesses if such acquisition any options, rights or agreement may reasonably be expected warrants to delay the consummation acquire, or securities convertible into, exercisable for or exchangeable for, shares of the Mergercapital stock other than issuances, deliveries or sales of Parent securities under Parent Employee Benefit Plans; (B) the Company will not acquire acquire, lease or dispose or agree to acquire acquire, lease or dispose of any capital assets or businesses if such any other assets or businesses are not in industries in which where the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent with past practice; provided, however, that the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of amount involved exceeds $100,000 per annum; (h) not adopt, enter into or amend any pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any employees or retirees generally, 10,000,000 other than in the ordinary course of business; (C) incur additional indebtedness or encumber or grant a security interest in any asset or enter into any other material transaction where the amount involved exceeds $20,000,000 other than in each case in the ordinary course of business; (D) acquire or agree to acquire by merging or consolidating with, except or by purchasing a substantial equity interest in, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof where the amount involved exceeds $25,000,000; or (iE) as contemplated by Section 6.1(c)enter into any contract, (ii) as required agreement, commitment or arrangement with respect to comply with changes in applicable law, (iii) any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof, or foregoing; (iv) Parent shall not, nor shall it permit any of its subsidiaries or affiliates to, take or cause to be taken any action, whether before or after the Effective Time, which would disqualify the Merger as required pursuant to an existing contractual arrangement or agreement; (ia "reorganization" within the meaning of Section 368(a) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses in such amounts and against such risks and losses as are consistent with past practiceof the Code; and (jv) not makeParent shall not, change nor shall it permit any of its subsidiaries to, amend, modify, terminate, waive or revoke permit to lapse any material Tax election right of first refusal, preferential right, right of first offer, or make any other material agreement right of Parent or settlement regarding Taxes with any taxing authorityof its subsidiaries.

Conduct of Business Pending the Merger. SECTION 6.1 Section 7.01 Conduct of Business by the Company Company, Holdco and the Merger Subs Pending the Merger. Except Mergers. (a) The Company agrees that, between the date of this Agreement and the SPAC Merger Effective Time or the earlier termination of this Agreement, except as otherwise (1) expressly contemplated by any other provision of this Agreement or disclosed any Ancillary Agreement, (2) set forth in Section 6.1 7.01(a) of the Company Disclosure Schedule, after or (3) required by applicable Law (including (x) as may be requested or compelled by any Governmental Authority and (y) COVID-19 Measures), unless SPAC shall otherwise consent in writing (which consent shall not be unreasonably conditioned, withheld or delayed): (i) the Company shall conduct its business in the ordinary course of business and in a manner consistent with past practice; and (ii) the Company shall use its commercially reasonable efforts to preserve substantially intact the current business organization of the Company, to keep available the services of the current officers, key employees and consultants of the Company and to preserve the current relationships of the Company with customers, Suppliers and other persons with which the Company has significant business relations. (b) By way of amplification and not limitation, except as (1) expressly contemplated by any other provision of this Agreement or any Ancillary Agreement, (2) set forth in Section 7.01(b) of the Company Disclosure Schedule, or (3) required by applicable Law (including (x) as may be requested or compelled by any Governmental Authority and (y) COVID-19 Measures), the Company shall not, and shall cause each of Holdco and the Merger Subs not to, between the date hereof of this Agreement and prior to the Closing Date SPAC Merger Effective Time or the earlier termination of this Agreement, unless Parent directly or indirectly, do any of the following without the prior written consent of SPAC (which consent shall not be unreasonably conditioned, withheld or delayed): (i) amend or otherwise agree change its certificate of incorporation or bylaws or equivalent organizational documents; (ii) form or create any subsidiaries; (iii) issue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (A) any shares of any class of capital stock of the Company, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including any phantom interest), of the Company; provided that none of the following shall require the consent of SPAC: (1) the exercise or settlement of any outstanding Company Options as of the date hereof, (2) the grants of Company Options, or (3) the issuance of Company Common Stock in writingconnection with the Conversion; or (B) any material assets of the Company; (iv) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock; (v) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock, other than redemptions of equity securities from former employees upon the terms set forth in the underlying agreements governing such equity securities; (vi) (A) acquire (including by merger, consolidation, or acquisition of stock or assets or any other business combination) any corporation, partnership, other business organization or any division thereof in an amount in excess of $100,000; or (B) incur any Indebtedness or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the Company shallobligations of any person, and shall cause or make any loans or advances, or intentionally grant any security interest in any of its subsidiaries to: (a) conduct their respective businesses assets, in each case, except in the ordinary and usual course of business and consistent with past practice; (bvii) not (i) amend or propose to amend their respective certificates of incorporation or bylaws, (ii) split, combine or reclassify their outstanding capital stock or (iii) declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise, except for the payment of dividends or distributions to the Company by a wholly-owned subsidiary of the Company; (c) not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that (i) the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereof, (ii) the Company may issue shares of Company Common Stock (or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings grant any material increase in the ordinary course of business (other than pursuant compensation, incentives or benefits payable or to credit facilities) become payable to any current or borrowings under the existing credit facilities former director, officer, employee or consultant of the Company or any as of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereofof this Agreement, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets increases in the ordinary course base compensation of business and expenditures for fixed or capital assets in the ordinary course grants of business and other than as set forth in the proviso in this Section 6.1(d), (vi) sell, pledge, dispose of or encumber any material assets or businesses other than (A) sales of businesses or assets bonuses to employees in the ordinary course of business, (B) sales enter into any new, or materially amend any existing Service Agreement or severance or termination agreement with any current or former director, officer, employee or consultant whose compensation would exceed, on an annualized basis, $200,000, (C) except as required under the terms of businesses or assets any Plan disclosed in Section 6.1 4.11(a) of the Company Disclosure Schedule, (C) sales of businesses accelerate or assets with aggregate 1997 revenues of less than $5 millioncommit to accelerate the funding, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowingspayment, or (vii) except as contemplated by vesting of any compensation or benefits including any Company Options, amend the following provisoperiod of exercisability of Company Options or reprice Company Options granted or authorize cash payments in exchange for any Company Options granted, enter into any binding contract, agreement, commitment or arrangement in each case with respect to any of the foregoing; providedcurrent or former director, howeverofficer, that notwithstanding the foregoing employee or consultant or (D) hire or otherwise enter into any new employment, consulting or similar arrangement with any person or terminate any current or former director, officer, employee or consultant whose compensation would exceed, on an annualized basis, $200,000; (viii) other than subsections (iii) and (iv) as required by Law or pursuant to the terms of an agreement entered into prior to the date of this Agreement and reflected on Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A4.11(a) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, grant any severance or (B) the aggregate value of consideration paid termination pay to, any director or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share officer of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (eix) use all reasonable efforts adopt, amend and/or terminate any Plan except (x) as may be required by applicable Law or is necessary in order to preserve intact their respective business organizations consummate the Transactions or (y) in the event of annual renewals of health and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreementwelfare programs; (fx) subject to restrictions imposed by applicable lawexcept in the ordinary course of business, confer with one make any material tax election, amend a material Tax Return or more representatives of Parent to report operational matters of materiality and the general status of ongoing operationssettle or compromise any material United States federal, state, local or non-United States income tax liability; (gxi) not enter into materially amend, or amend modify or consent to the termination (excluding any employmentexpiration in accordance with its terms) of any Material Contract or amend, severancewaive, special pay arrangement modify or consent to the termination (excluding any expiration in accordance with respect its terms) of the Company’s material rights thereunder, in each case in a manner that is adverse to termination of employment or other similar arrangements or agreements with any directors, officers or key employeesthe Company, except in the ordinary course and consistent with past practice; providedof business, howeveror waive, that delay the Company and its subsidiaries shall in no event enter into exercise of, release or amend assign any written employment agreements providing for annual base salary in excess of $100,000 per annummaterial rights or claims thereunder; (hxii) not adopt, transfer or exclusively license to any person Company IP or enter into grants to transfer or amend license to any pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any employees or retirees generallyperson future patent rights, other than in the ordinary course of business, except (i) as contemplated by Section 6.1(c), (ii) as required to comply business consistent with changes in applicable law, (iii) any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreementpast practices; (ixiii) use commercially reasonable efforts intentionally permit any material item of Company IP to lapse or to be abandoned, invalidated, dedicated to the public, or disclaimed, or otherwise become unenforceable or fail to perform or make any applicable filings, recordings or other similar actions or filings, or fail to pay all required fees and taxes required or advisable to maintain with financially responsible insurance companies insurance on and protect its tangible assets interest in each and its businesses in such amounts and against such risks and losses as are consistent with past practice; andevery material item of Company IP; (jxiv) not makeexcept as required by law or US GAAP, change or revoke revalue any of its assets in any material Tax election manner or make any material change in accounting methods, principles or practices; (xv) make capital expenditures in excess of previously budgeted amounts; (xvi) take, agree to take, or fail to take, any action that would reasonably be expected to prevent the Mergers from qualifying for the Intended Tax Treatment; or (xvii) enter into any agreement or settlement regarding Taxes with otherwise make a binding commitment to do any taxing authorityof the foregoing.

Conduct of Business Pending the Merger. SECTION 6.1 Conduct (a) The Company covenants and agrees that, between the date hereof and the earlier to occur of Business by the Company Pending Effective Time or such earlier time as this Agreement is terminated in accordance with Article VIII (such period being hereinafter referred to as the Merger. Except “Interim Period”), except as otherwise contemplated set forth on Schedule 4.1(a) or expressly required by this Agreement or disclosed unless Buyer shall otherwise consent in Section 6.1 writing (which consent shall not be unreasonably withheld or delayed), the Company and each of its Subsidiaries: (i) shall conduct their Businesses only in the Ordinary Course of Business; (ii) shall use commercially reasonable efforts consistent in all material respects with past practice and policies to maintain the Assets and properties of the Company Disclosure Scheduleand its Subsidiaries in their current condition, after normal wear and tear excepted; and (iii) shall use their commercially reasonable efforts to preserve intact their business organizations, properties and Assets, keep available the date hereof services of their executive officers and prior to the Closing Date or earlier termination of this Agreement, unless Parent shall otherwise agree in writing, the Company shallkey employees, and shall cause its subsidiaries to: (a) conduct their respective businesses in the ordinary maintain satisfactory relationships with material licensors, suppliers, contractors, distributors, customers and usual course of others having material business and consistent relationships with past practice;them. (b) Without limiting the foregoing, except as set forth on Schedule 4.1(a), or as expressly permitted or required by this Agreement, neither the Company nor any of its Subsidiaries shall, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of Buyer (which consent shall not be unreasonably withheld or delayed): (i) amend its certificate of incorporation, bylaws or propose to amend their respective certificates of incorporation other equivalent Organizational Documents, or bylawsotherwise alter its corporate structure through merger, liquidation, reorganization, restructuring or otherwise; (ii) split, combine or reclassify their outstanding capital stock or (iii) declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise, except for the payment of dividends or distributions to the Company by a wholly-owned subsidiary of the Company; (c) not issue, sell, pledge transfer, pledge, dispose of or dispose of, or agree to issue, sell, pledge or dispose of, encumber any additional shares ofof capital stock of any class, or any options, warrants warrants, convertible securities or other rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that (i) the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereof, (ii) the Company may issue shares of Company Common Stock (or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings in the ordinary course of business (other than pursuant to credit facilities) or borrowings under the existing credit facilities ownership interest of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company Subsidiaries; (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), (iiiii) redeem, purchase, acquire repurchase or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets in the ordinary course of business and expenditures for fixed or capital assets in the ordinary course of business and other than as set forth in the proviso in this Section 6.1(d), (vi) sell, pledge, dispose of or encumber any material assets or businesses other than (A) sales of businesses or assets in the ordinary course of business, (B) sales of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, or (vii) except as contemplated by the following proviso, enter into any binding contract, agreement, commitment or arrangement with respect to any of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any actionacquire, directly or indirectly, with any shares of capital stock of the intent Company; (iv) sell, transfer or dispose of any Assets other than in the Ordinary Course of Business, except for dividends or distributions of the Company’s Cash and Cash Equivalents prior to adversely impact the Measurement Time; (v) acquire, form or invest in (by merger, consolidation, acquisition of stock or Assets or otherwise), or make any further capital contribution or commitment or loan to, any corporation, limited liability company, partnership, joint venture or other business organization or division thereof other than its wholly-owned Subsidiaries; (vi) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the Ordinary Course of Business or borrowings under the Company’s revolving credit facility as may be necessary to provide financing necessary to complete the transactions contemplated by this Agreementand pursuant to the terms of the SPLLC JV Buyout Agreements; (fvii) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent with past practice; provided, however, that the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annum; (h) not adopt, enter into or amend any pension or retirement plan, trust or fund, except as required to comply with changes any applicable Law or any contract, agreement or Plan in applicable law effect on the date of this Agreement and not adopt, enter into described on Schedule 2.11(a) or Schedule 2.20: amend any Plan in any material respect or establish any bonusnew arrangement that would (if it were in effect on the date hereof) constitute a Plan, profit sharing, compensation, stock option, deferred compensation, health care, employment nor shall the Company or other employee benefit plan, agreement, trust, fund or arrangement for its Subsidiaries take any action to increase the benefit or welfare rate of any compensation of its employees or retirees generallyofficers, other than in the Ordinary Course of Business (including ordinary course renewals of business, except (i) as contemplated by Section 6.1(chealth and welfare benefit plans), (ii) as required to comply with changes in applicable law, (iii) any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreement; (iviii) use commercially reasonable efforts make any material change to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses in such amounts and against such risks and losses accounting procedures or practices, except as are consistent with past practice; andrequired by GAAP or applicable Law; (jix) not makecreate, incur, suffer to exist or assume any Lien, other than Permitted Liens, on any of its material Assets, except in the Ordinary Course of Business; (x) other than in the Ordinary Course of Business or as set forth on Schedule 4.1(a): (A) modify, amend or transfer in any material respect or terminate any Company Material Contract or waive, release or assign any material rights or claims thereto or thereunder; or (B) enter into any lease with respect to real property; (xi) change any material method of Tax accounting, make any new, or revoke change any existing, material Tax election or make settle or compromise any material Tax liability, enter into any closing agreement with respect to any material Tax or settlement regarding Taxes surrender any right to claim a material Tax refund or revoke (or cause or permit the termination of) the Company’s election to be treated as an S corporation within the meaning of Code Sections 1361 and 1362; (xii) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto, other than settlements that (A) involve only the payment of money by the Company or any taxing authority.of its Subsidiaries and

Conduct of Business Pending the Merger. SECTION 6.1 Conduct (i) The Company -------------------------------------- covenants and agrees that, between the date of Business by the Company Pending the Merger. Except as otherwise contemplated by this Agreement or disclosed in Section 6.1 of and the Company Disclosure Schedule, after the date hereof and prior to the Closing Date Effective Time or earlier termination of this Agreement, except as set forth on Schedule -------- 5.1(a) or unless Parent the Purchaser shall otherwise agree consent in writing, : ------ (a) the business of the Company shalland its Subsidiaries shall be conducted only in, and the Company shall not and shall cause its subsidiaries to: (a) conduct their respective businesses in Subsidiaries not to take any action except in, the ordinary and usual course of business and in a manner consistent with past practice;practice and in compliance in all material respects with all applicable Laws; and the Company will use its commercially reasonable efforts to preserve substantially intact the business organization of the Company and its Subsidiaries, to keep available the services of the present officers, employees and consultants of the Company and its Subsidiaries and to preserve the present relationships of the Company and its Subsidiaries with their respective customers, suppliers and other Persons with which the Company or any of its Subsidiaries has significant business relations. (b) not (i) amend or propose to neither the Company nor any of its Subsidiaries will amend their respective certificates Certificate of incorporation Incorporation or bylaws, By-Laws (iior comparable organizational documents); (c) split, combine or reclassify their outstanding capital stock or (iii) the Company will not declare, set aside or pay any dividend or other distribution payable in cash, securities or property with respect to its capital stock, property or otherwise, except for other than the payment of quarterly cash dividends or distributions to on the Shares not in excess of $0.07 per Share with usual record and payment dates in accordance with past dividend practice; and neither the Company by a wholly-owned subsidiary nor any of the Company; (c) not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that its Subsidiaries will (i) the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereofsplit, (ii) the Company may issue shares of Company Common Stock (combine or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings in the ordinary course of business (other than pursuant to credit facilities) or borrowings under the existing credit facilities of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire reclassify any of its capital stock or any security convertible into or exchangeable for its capital stock(ii) issue, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16")sell, (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets in the ordinary course of business and expenditures for fixed or capital assets in the ordinary course of business and other than as set forth in the proviso in this Section 6.1(d), (vi) selltransfer, pledge, dispose of or encumber any material assets additional shares of, or businesses securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class of the Company or any of its Subsidiaries, other than issuances of Shares pursuant to securities, options, warrants, calls, commitments or rights existing at the date hereof and previously disclosed to the Purchaser in writing (Aincluding as disclosed in the SEC Reports); (iii) sales incur any long-term indebtedness (whether evidenced by a note or other instrument, pursuant to a financing lease, sale-leaseback transaction, or otherwise) or incur short-term indebtedness other than, in each case, under lines of businesses credit existing on the date hereof, or assets in connection with the capital expenditures permitted by Section ------- 5.1(h) below; (iv) redeem, purchase or otherwise acquire, directly or ------ indirectly, any of its capital stock or other securities except as required by and in accordance with Restricted Stock Award Agreements existing on the date hereof; or (v) enter into, amend, terminate, renew or fail to use reasonable efforts to renew in any material respect any (x) Material Contract or (y) Identified Contract except, in each case, in the ordinary course of business, (B) sales of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, or (vii) except as contemplated by the following proviso, enter into any binding contract, agreement, commitment or arrangement with respect to any of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent with past practice; provided, however, that the limitations set forth in -------- Section 5.1(c) shall not apply to any transaction between the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annum;-------------- Subsidiaries. (hd) not neither the Company nor any of its Subsidiaries will, except for normal increases in the ordinary course of business consistent with past practice or pursuant to employment contracts in effect on the date hereof: (i) grant any increase in the compensation or benefits payable or to become payable by the Company or any of its Subsidiaries to any employee; (ii) adopt, enter into into, amend or amend otherwise increase, or accelerate the payment or vesting of the amounts, benefits or rights payable or accrued or to become payable or accrued under any pension bonus, incentive compensation, deferred compensation, severance, termination, change in control, retention, hospitalization or other medical, life, disability, insurance or other welfare, profit sharing, stock option, stock appreciation right, restricted stock or other equity based, pension, retirement or other employee compensation or benefit plan, trust program, agreement or fund, except as required to comply with changes in applicable law and not adopt, arrangement; or (iii) enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment or collective bargaining agreement or, except in accordance with the existing written policies of the Company or existing contracts or agreements and as disclosed on Schedule 5.1(d) of the Disclosure Schedule, grant any severance or --------------- termination pay to any officer, director or employee of the Company or any of its Subsidiaries; (e) neither the Company nor its Subsidiaries will change in any material manner the accounting principles used by it unless required by GAAP (or, if applicable with respect to Subsidiaries, foreign generally accepted accounting principles); (f) neither the Company nor any of its Subsidiaries shall acquire by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other employee benefit planmanner, agreementany business or any corporation, trustpartnership, fund association or arrangement other business organization or division thereof, or otherwise acquire any assets of any other Person (other than (i) as permitted by Section 5.1(h) or (ii) the -------------- purchase of assets from suppliers or vendors in the ordinary course of business consistent with past practice); (g) neither the Company nor any of its Subsidiaries shall sell, lease, license, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any of its assets except (i) the assets set forth on Schedule 5.1(g) of the Disclosure Schedule, (ii) --------------- immaterial assets in the ordinary course of business consistent with past practice; or (iii) inventory in the ordinary course of business consistent with past practice; (h) neither the Company nor any of its Subsidiaries will enter into commitments for capital expenditures involving more than $1,000,000 in the aggregate or as may be necessary for the benefit or welfare maintenance of any employees or retirees generallyexisting facilities, other than machinery and equipment in good operating condition and repair in the ordinary course of business, except (i) or as contemplated by Section 6.1(c), (ii) as required to comply with changes reflected in applicable law, (iii) any the capital plan of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after Company previously provided to the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreementPurchaser; (i) use commercially reasonable efforts neither the Company nor any of its Subsidiaries shall release any third party from its obligations (i) under any existing standstill agreement or arrangement relating to maintain a proposed Acquisition Proposal (as defined in Section ------- 5.2(a)), unless the Board of Directors of the Company determines in good faith ------- after consultation with financially responsible insurance companies insurance on its tangible assets outside counsel (who may be its regularly engaged outside counsel), that the failure to do so would result in a breach of its the fiduciary duties under applicable Law, or (ii) otherwise under any confidentiality or other similar agreement, except for modifications of any such obligations under existing commercial arrangements in the ordinary course of business consistent with past practice; (j) the Company and its businesses Subsidiaries shall not mortgage, pledge, hypothecate, grant any security interest in, or otherwise subject to any other lien on any of its properties or assets, except in the ordinary course of business consistent with past practice; (k) neither the Company nor its Subsidiaries shall compromise, settle, grant any waiver or release relating to or otherwise adjust any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), including any litigation, except for any such amounts compromise, settlement, waiver, release or adjustment (x) in the ordinary course of business consistent with past practice, (y) involving a payment by the Company or any of its Subsidiaries not in excess of $250,000 in the aggregate, or (z) set forth on Schedule 5.1(k) of the Disclosure Schedule, following prior --------------- notice to and against such risks consultation with the Purchaser; (l) except in the ordinary course of business consistent with past practice, neither the Company nor any of its Subsidiaries will make or rescind any express or deemed election or settle or compromise any material claim or material action relating to U.S. federal, state or local Taxes, or change any of its material methods of accounting or of reporting income or deductions for U.S. federal income tax purposes; (m) neither the Company nor any of its Subsidiaries will make any loans, advances or capital contributions to, or investments in, any other Person, except pursuant to and losses as in accordance with agreements existing on the date hereof that are described on Schedule 5.1(m) --------------- of the Disclosure Schedule and for loans, advances, capital contributions or investments between any wholly owned Subsidiary of the Company and the Company or another wholly owned Subsidiary of the Company and except for employee advances for expenses in the ordinary course of business consistent with past practice; andor (jn) not makeneither the Company nor any of its Subsidiaries will enter into an agreement, change contract, commitment or revoke arrangement to do any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authorityof the foregoing.

Conduct of Business Pending the Merger. SECTION 6.1 Conduct of Business by the Company Pending the Merger. Except as otherwise contemplated by this Agreement or disclosed in Section 6.1 of the Company Disclosure ScheduleAudentes has covenanted and agreed that, after the date hereof and prior to the Closing Date consummation of the Merger or earlier termination of this Agreementthe Merger Agreement except as set forth in the Disclosure Letter, as required by the express terms of the Merger Agreement or applicable law or unless Parent shall Astellas otherwise agree consents in writingwriting (which consent will not be unreasonably withheld, the Company shallconditioned or delayed), Audentes will, and shall will cause its subsidiaries to: to (ai) conduct their respective businesses business only in the ordinary and usual course of business and consistent with past practice; (b) not (i) amend or propose to amend their respective certificates of incorporation or bylaws, practice and (ii) splituse its commercially reasonable efforts to (1) preserve intact their respective present business organizations and assets, combine or reclassify their outstanding capital stock or (iii2) declarekeep available the services of its officers, set aside or pay any dividend or distribution payable employees and independent contractors, (3) maintain in casheffect all of its authorizations and (4) maintain satisfactory relationships with customers, stocklenders, property or otherwisesuppliers, licensors, licensees, distributors and others having material business relationships with Audentes. Xxxxxxxx has further agreed that, except as expressly provided for by the payment Merger Agreement or as set forth prior to execution of dividends or distributions the Merger Agreement in the Disclosure Letter, Audentes will not, and will not permit its subsidiaries to, prior to the Company by a wholly-owned subsidiary consummation of the Company; Merger or earlier termination of the Merger Agreement, either directly or indirectly do any of the following without the prior written consent of Astellas (c) which consent will not issuebe unreasonably withheld, conditioned or delayed): • sell, pledge or pledge, dispose of, assign, lease, license, dedicate to the public, or agree to issueotherwise transfer, sell, pledge or dispose ofcreate or incur any lien on, any additional shares of, of Audentes’ or its subsidiaries’ assets (including any intellectual property owned by or licensed to Audentes or any optionsof its subsidiaries), warrants securities, properties, interests or rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stockbusinesses, except that (i) the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereof, (ii) the Company may issue shares of Company Common Stock (or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A1) borrowings in the case of any intellectual property owned by or licensed to Audentes or any of its subsidiaries, any non-exclusive and non-material license granted by Audentes or any of its subsidiaries to vendors and other similar subcontractors working on Audentes’ or any of its subsidiaries’ behalf in the ordinary course of business consistent with past practice and (2) in the case of any other than pursuant to credit facilities) assets of Audentes or borrowings under the existing credit facilities of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereofsubsidiaries, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets in the ordinary course of business and expenditures for fixed consistent with past practice; • acquire (by merger, consolidation, acquisition of stock or capital assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, other than supplies in the ordinary course of business and other than as set forth in the proviso in this Section 6.1(d), (vi) sell, pledge, dispose of or encumber any material assets or businesses other than (A) sales of businesses or assets in the ordinary course of business, (B) sales of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, or (vii) except as contemplated by the following proviso, enter into any binding contract, agreement, commitment or arrangement with respect to any of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent with past practice; provided, however, that the Company and • merge or consolidate Audentes or any of its subsidiaries shall in no event enter into with any person or amend any written employment agreements adopt a plan of complete or partial liquidation or resolutions providing for annual base salary in excess of $100,000 per annum; (h) not adopta complete or partial liquidation, enter into or amend any pension or retirement plandissolution, trust or fundrestructuring, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment recapitalization or other employee benefit plan, agreement, trust, fund reorganization of Audentes or arrangement for the benefit or welfare any of any employees or retirees generally, its subsidiaries (other than in the ordinary course of businessMerger); • amend, except (i) as contemplated by Section 6.1(c)modify, (ii) as required to comply with changes in applicable lawwaive, (iii) rescind or otherwise change Audentes’ or any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreementits subsidiaries’ charter documents; (i) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses in such amounts and against such risks and losses as are consistent with past practice; and (j) not make, change or revoke any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authority.

Conduct of Business Pending the Merger. SECTION Section 6.1 Conduct of Business by the Company Pending the Merger. Except From the date hereof until the Effective Time, unless GSCP shall otherwise agree in writing, or except as otherwise contemplated by this Agreement or disclosed set forth in Section 6.1 of the Company Disclosure ScheduleLetter or as otherwise contemplated by this Agreement, after the Company and the Company Subsidiaries shall conduct their respective businesses solely in the ordinary course and shall use all commercially reasonable efforts to preserve intact their business organizations and relationships with third parties (including but not limited to their respective relationships with policyholders and agents), to keep available the services of their present officers and key employees, subject to the terms of this Agreement. Except as set forth in Section 6.1 of the Company Disclosure Letter or as otherwise provided in this Agreement, from the date hereof and until the Effective Time, without the prior to the Closing Date or earlier termination written consent of this Agreement, unless Parent shall otherwise agree in writing, the Company shall, and shall cause its subsidiaries toGSCP: (a) conduct their respective businesses the Company shall not and shall not permit any Company Subsidiary to adopt or propose any change in the ordinary and usual course its Articles of business and consistent with past practiceIncorporation or Bylaws; (b) the Company shall not (i) amend or propose to amend their respective certificates of incorporation or bylaws, (ii) split, combine or reclassify their outstanding capital stock or (iii) declare, set aside or pay any dividend or other distribution payable in cashwith respect to or acquire any shares of capital stock of the Company, or split, combine or reclassify any of the Company's capital stock, property or otherwise, except for the payment of dividends or distributions to and the Company by a wholly-owned subsidiary and the Company Subsidiaries shall not repurchase, redeem or otherwise acquire any shares of capital stock or other securities of, or other ownership interests in, the Company; (c) not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that (i) the Company may issue shares upon conversion of convertible securities shall not, and exercise of options and warrants outstanding on the date hereofshall not permit any Company Subsidiary to, merge or consolidate with any other person or (ii) the Company may issue shares of Company Common Stock (or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings except in the ordinary course of business after notice to GSCP) acquire a material amount of assets of any other person; (d) the Company shall not, and shall not permit any Company Subsidiary to, enter into or terminate any material contract, agreement, commitment, or understanding other than pursuant to credit facilities) or borrowings under the existing credit facilities of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect agreements entered into with unaffiliated third parties, on the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares an arms-length basis and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets in the ordinary course of business constituting marketing affiliation and expenditures for fixed sales agreements on terms comparable with its existing agreements of such nature; (e) the Company shall not, and shall not permit any Company Subsidiary to, sell, lease, license or capital otherwise surrender, relinquish or dispose of (i) any material facility owned or leased by the Company or any Company Subsidiary or (ii) any assets or property which are material to the Company and the Company Subsidiaries, taken as a whole, except pursuant to existing contracts or commitments, or in the ordinary course of business and other than as set forth in the proviso in this Section 6.1(d), (vi) sell, pledge, dispose of or encumber any material assets or businesses other than (A) sales of businesses or assets in the ordinary course of business, (B) sales of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant after notice to Existing Credit Facilities or other permitted borrowings, or (vii) except as contemplated by the following proviso, enter into any binding contract, agreement, commitment or arrangement with respect to any of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this AgreementGSCP; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent with past practice; provided, however, that the Company shall not, and its subsidiaries shall in no event enter into not permit any Company Subsidiary to, sell, lease, license or amend any written employment agreements providing for annual base salary in excess of $100,000 per annum; (h) not adoptotherwise surrender, enter into relinquish or amend any pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any employees or retirees generally, other than in the ordinary course of business, except (i) as contemplated by Section 6.1(c), (ii) as required to comply with changes in applicable law, (iii) any dispose of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreement; (i) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance assets described on its tangible assets and its businesses in such amounts and against such risks and losses as are consistent with past practice; and (j) not make, change or revoke any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authority.Schedule 6.1

Conduct of Business Pending the Merger. SECTION 6.1 5.1. Conduct of Business by the Company Pending the Merger. Except as otherwise contemplated by this Agreement or disclosed in Section 6.1 of the The Company Disclosure Schedulecovenants and agrees that, after the date hereof and prior to the Closing Date or earlier termination of this AgreementEffective Time, unless Parent shall otherwise agree consent in writing, the Company shall, and writing (which consent shall cause its subsidiaries tonot be unreasonably withheld or delayed) or except as expressly permitted or required pursuant to this Agreement: (a) conduct their respective The businesses of the Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practice;practices, and the Company and the Company Subsidiaries shall use all commercially reasonable efforts to maintain and preserve intact their respective business organizations and to maintain significant beneficial business relationships with suppliers, contractors, distributors, customers, licensors, licensees and others having business relationships with them to keep available the services of their current key officers and employees; and (b) Without limiting the generality of the foregoing Section 5.1(a), except as set forth in Section 5.1 of the Company Disclosure Letter and as contemplated by Section 2.4(a) -41- and Section 2.5, the Company shall not directly or indirectly, and shall not permit any of the Company Subsidiaries to, do any of the following: (i) acquire, sell, lease, transfer or dispose of any assets, rights or securities that are material to the Company and the Company Subsidiaries or terminate, cancel, materially modify or enter into any material commitment, transaction, line of business or other agreement, in each case outside of the ordinary course of business consistent with past practice or, in the case of acquisitions of oil and gas properties or interests therein, in excess of $20,000,000 in the aggregate; (ii) acquire by merging or consolidating with or by purchasing a substantial equity interest in or a substantial portion of the assets of, or by any other manner, any business, corporation, partnership, association or other business organization or division thereof; (iii) amend or propose to amend their respective certificates its articles of incorporation or bylawsbylaws or, in the case of the Company Subsidiaries, their respective constituent documents; (ii) split, combine or reclassify their outstanding capital stock or (iiiiv) declare, set aside or pay any dividend or other distribution payable in cash, capital stock, property or otherwiseotherwise with respect to any shares of its capital stock, except for other than the declaration and payment of regularly quarterly cash dividends or distributions to on its Convertible Preferred Stock outstanding on the Company by a wholly-owned subsidiary date hereof not in excess of those amounts specified in the Companycertificate of designations in respect thereof; (cv) not purchase, redeem or otherwise acquire, or offer to purchase, redeem or otherwise acquire, any shares of its capital stock, other equity securities, other ownership interests or any options, warrants or rights to acquire any such stock, securities or interests, other than in connection with the relinquishment of shares by employees and directors of the Company in payment of withholding tax upon the vesting of restricted stock; (vi) split, combine or reclassify any outstanding shares of its capital stock; (vii) except for (A) the Company Common Stock issuable upon exercise of options outstanding on the date hereof (or granted after the date hereof as permitted by this Agreement) and the vesting of restricted stock awards granted prior to the execution of this Agreement and (B) Company Common Stock issuable upon conversion of Convertible Preferred Stock outstanding on the date hereof, issue, sell, pledge dispose of or dispose ofauthorize, propose or agree to issuethe issuance, sell, pledge sale or dispose disposition by the Company or any of the Company Subsidiaries of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their capital stock of any class of, or any debt or equity securities convertible into or exchangeable for such any shares of, its capital stockstock of any class, except that (i) the Company may issue shares upon conversion or any other securities in respect of, in lieu of, or in substitution for any class of convertible securities and exercise of options and warrants its capital stock outstanding on the date hereof, (ii) the Company may issue shares of Company Common Stock (or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (dviii) not modify the terms of any existing indebtedness for borrowed money or security issued by the Company or any Company Subsidiary; -42- (iix) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings in the ordinary course of business (other than pursuant to credit facilities) or borrowings under the existing credit facilities of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereofmoney, (B) borrowings to refinance existing except indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets incurred in the ordinary course of business and expenditures letters of credit required under the Company's hedging agreements in order to satisfy margin requirements, but only if the amount of such indebtedness (not including such letters of credit), when added to all other indebtedness of the Company then outstanding (determined in accordance with GAAP), does not exceed $976,200,000; (x) assume, guarantee, endorse or otherwise as an accommodation become responsible for, the obligations of any other Person, or make any loans or advances, except (A) to or for fixed the benefit of the Company Subsidiaries or capital assets (B) for those not in excess of $5,000,000 in the ordinary course aggregate; (xi) create or assume any material Lien on any material asset; (xii) authorize, recommend or propose any material change in its capitalization; (xiii) (A) take any action with respect to the grant of business and or increase in any severance or termination pay to any current or former director, executive officer or employee of the Company or any Company Subsidiary, (B) execute any employment, deferred compensation or other similar agreement (or any amendment to any such existing agreement) with any such director, executive officer or employee of the Company or any Company Subsidiary, (C) increase the benefits payable under any existing severance or termination pay policies or employment agreements, (D) increase the compensation, bonus or other benefits of current or former directors, executive officers or employees of the Company or any Company Subsidiary, (E) adopt or establish any new employee benefit plan or amend in any material respect any existing employee benefit plan, (F) provide any material benefit to a current or former director, executive officer or employee of the Company or any Company Subsidiary not required by any existing agreement or employee benefit plan, other than as set forth in the proviso in this Section 6.1(dfor clauses (A), (viB) selland (D) above, pledgein the case of employees who are not directors and executive officers, dispose of or encumber any material assets or businesses other than (A) sales of businesses or assets in the ordinary course of business, or (BG) sales of businesses take any action that would result in its incurring any obligation for any payments or assets disclosed benefits described in Section 6.1 of the Company Disclosure Schedulesubsections (i), (Cii) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, or (vii) except as contemplated by the following proviso, enter into any binding contract, agreement, commitment or arrangement with respect to any of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and of Section 3.10(j) (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal without regard to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact whether the transactions contemplated by this Agreement are consummated) except to the extent required in a written contract or agreement in existence as of the date of this Agreement; (fxiv) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except than in the ordinary course and of business consistent with past practice; provided, however, that the Company and its subsidiaries shall in no event enter into execute or amend any written (other than as required by existing employee benefit plans or employment agreements providing for annual base salary in excess of $100,000 per annum; (hor by applicable law) not adopt, enter into or amend any pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonusemployment, profit sharingconsulting, compensationseverance or indemnification agreement between the Company or any of the Company Subsidiaries and any of their respective directors, stock optionofficers, deferred compensationagents, health careconsultants or employees, employment or any collective bargaining agreement or other obligation to any labor organization or employee incurred or entered into by the Company or any of the Company Subsidiaries (other than as required by existing employee benefit planplans or employment agreements or by applicable law); (xv) make any changes in its reporting for taxes or accounting methods other than as required by GAAP or applicable law; make or rescind any Tax election; make any change to its method or reporting income, agreementdeductions, trustor other Tax items for Tax purposes; settle or compromise any Tax liability or enter into any transaction with an affiliate outside the ordinary course of business if such transaction would give rise to a material tax liability; (xvi) settle, fund compromise or arrangement for otherwise resolve any litigation or other legal proceedings involving a payment of more than $100,000 in any one case by or to the benefit Company or welfare any of any employees or retirees generally, the Company Subsidiaries; (xvii) other than in the ordinary course of business, pay or discharge any claims, Liens or liabilities involving more than $5,000,000 individually or $10,000,000 in the aggregate, which are not reserved for or reflected on the balance sheets included in the Company Financial Statements; (xviii) write off any accounts or notes receivable in excess of $5,000,000; (xix) make or commit to make capital expenditures in excess of the aggregate budgeted amount set forth in the Company's fiscal 2004 capital expenditure plan previously provided to Parent, except as may be required to (iA) continue operations on the drilling, completion or plugging of any well or any well operations for which the Company has consented to participate and is required to continue to participate pursuant to applicable agreements or (B) conduct emergency operations on any well pipeline or other facility; (xx) except as contemplated by Section 6.1(c)6.13, make or assume any Hedges; (iixxi) except as required contemplated by Section 6.10, xxxer into new contracts to comply sell Hydrocarbons other than in the ordinary course of business at market pricing, but in no event any having a duration longer than three months; (xxii) fail to timely meet its royalty payment obligations in connection with changes its oil and gas leases to the extent such failure has or would reasonably be expected to have a Company Material Adverse Effect; (xxiii) enter into any agreement, arrangement or commitment that limits or otherwise restricts the Company or any Company Subsidiary, or that would reasonably be expected to, after the Effective Time, limit or restrict the Parent or any of its Subsidiaries or any of their respective affiliates or any successor thereto, from engaging or competing in applicable any line of business in which it is currently engaged or in any geographic area material to the business or operations of Parent or any of its Subsidiaries; (xxiv) terminate, amend, modify or waive any provision of any confidentiality or standstill agreement to which it is a party or fail to enforce, to the fullest extent permitted by law, the provisions of such agreement, including by obtaining injunctions to prevent any breaches of such agreement and to enforce specifically the terms and provisions thereof; (iiixxv) except as permitted by Section 6.10, knowingly take, or agree to commit to take, any action that would or would reasonably be expected to result in the failure of a condition set forth in Section 7.2(a) or (b) at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company, Parent, Merger Sub or the holders of shares of Company Common Stock to consummate the Merger in accordance with the terms hereof or materially delay such consummation; (xxvi) knowingly take any action that would or could reasonably be expected to disqualify the Merger as a reorganization within the meaning of Section 368(a) of the Code; or (xxvii) take or agree in writing or otherwise to take any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof, actions precluded by Sections 5.1(a) or (iv) as required pursuant to an existing contractual arrangement or agreement; (i) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses in such amounts and against such risks and losses as are consistent with past practice; and (j) not make, change or revoke any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authorityb).

Conduct of Business Pending the Merger. SECTION 6.1 4.1 Conduct of Business by of the Company Pending the Merger. Except as set forth in Section 4.1 of the Disclosure Schedule, the Company covenants and agrees that, during the period from the date hereof to the Effective Time (except as otherwise contemplated by this Agreement or disclosed in Section 6.1 of the Company Disclosure Schedule, after the date hereof and prior to the Closing Date or earlier termination terms of this Agreement), unless Parent shall otherwise agree in writingwriting in advance, the businesses of the Company shalland its Subsidiaries shall be conducted, in all material respects, only in, and the Company and its Subsidiaries shall cause not take any action except in, the ordinary course of business and in a manner consistent with past practice and, in all material respects, in compliance with applicable laws; and the Company and its subsidiaries toSubsidiaries shall each use its reasonable best efforts consistent with the foregoing to preserve substantially intact the business organization of the Company and its Subsidiaries, to keep available the services of the present officers, employees and consultants of the Company and its Subsidiaries and to preserve the present relationships of the Company and its Subsidiaries with customers, suppliers, advertisers, distributors and other persons with which the Company or any of its Subsidiaries has significant business relations. By way of amplification and not limitation, neither the Company nor any of its Subsidiaries shall (except as set forth in Section 4.1 of the Disclosure Schedule and except as otherwise contemplated by the terms of this Agreement), between the date of this Agreement and the Effective Time, directly or indirectly do, or propose or commit to do, any of the following without the prior written consent of Parent: (a) conduct their respective businesses make or commit to make any capital expenditures in excess of $500,000 in the aggregate, other than expenditures for routine maintenance and repair or pursuant to existing contracts or commitments or expenditures reflected in capital expenditure budgets disclosed in the Recent Company SEC Reports or supplied to Parent prior to the date of this Agreement; (b) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person (other than the Company or a wholly-owned Subsidiary of the Company) or enter into any "keep well" or other agreement to maintain the financial condition of another Person (other than the Company or a wholly-owned Subsidiary of the Company) or make any loans, or advances of borrowed money or capital contributions to, or equity investments in, any other Person (other than the Company or a wholly owned Subsidiary of the Company) or issue or sell any debt securities, other than borrowings under existing lines of credit in the ordinary and usual course of business and consistent with past practice; (b) not (i) amend or propose to amend their respective certificates its articles of incorporation or bylaws, bylaws or the charter or bylaws of any of its Subsidiaries; (ii) split, combine or reclassify their the outstanding shares of its capital stock or (iii) other ownership interests or declare, set aside or pay any dividend or distribution payable in cash, stock, stock or property or otherwisemake any other distribution with respect to such shares of capital stock or other ownership interests; (iii) redeem, except for purchase or otherwise acquire, directly or indirectly, any shares of its capital stock or other ownership interests other than in connection with the payment Stock Purchase Plan; or (iv) sell or pledge any stock of dividends or distributions to the Company by a wholly-owned subsidiary any of the Companyits Subsidiaries; (ci) not issueOther than upon exercise of options or stock units or pursuant to the Stock Purchase Plan, sellin each case disclosed in Section 2.3 of the Disclosure Schedule, pledge issue or dispose of, sell or agree to issue, sell, pledge issue or dispose of, sell any additional shares of, or grant, confer or award any options, warrants or rights of any kind to acquire any shares of their of, its capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that (i) the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereof, class; (ii) enter into any agreement, contract or commitment out of the Company may issue shares ordinary course of Company Common Stock (its business, to dispose of or warrants acquire, or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant relating to the proviso disposition or acquisition of, a segment of Section 6.1(d) and its business; (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings except in the ordinary course of business (other than pursuant to credit facilities) or borrowings under the existing credit facilities of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereofconsistent with past practice, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets in the ordinary course of business and expenditures for fixed or capital assets in the ordinary course of business and other than as set forth in the proviso in this Section 6.1(d), (vi) sell, pledge, dispose of or encumber any material Assets (including without limitation, any indebtedness owed to them or any claims held by them); or (iv) acquire (by merger, consolidation, acquisition of stock or assets or businesses otherwise) any corporation, partnership or other business organization or division thereof or any material Assets (other than (A) sales of businesses or assets inventory in the ordinary course of businessbusiness consistent with past practice) or make any material investment, (B) sales either by purchase of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities stock or other permitted borrowingssecurities, or (vii) except as contemplated by the following provisocontribution to capital, enter into in any binding contractcase, agreementin any material amount of property or assets, commitment in or arrangement with respect to any of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Actother Person; (e) use all reasonable efforts grant any severance or termination pay (other than pursuant to preserve intact their respective business organizations and goodwillpolicies or agreements in effect on the date hereof as disclosed in the Recent Company SEC Reports or set forth in Section 4.1(e) of the Disclosure Schedule) or increase the benefits payable under its severance or termination pay policies or agreements in effect on the date hereof or enter into any employment or severance agreement with any officer, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly director or indirectly, with the intent to adversely impact the transactions contemplated by this Agreementemployee; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into adopt or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent with past practice; provided, however, that the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annum; (h) not adopt, enter into or amend any pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or other arrangement for the benefit or welfare of any employees director, officer or retirees generallyemployee or increase in any manner the compensation or fringe benefits of any director, officer or employee or grant, confer, award or pay any forms of cash incentive, bonuses or other benefit not required by any existing plan, arrangement or agreement except as required by law; (g) enter into or amend any Contract for the purchase of inventory which is not cancelable within one (1) year without penalty, cost or liability, or any other Contract involving annual expenditures or liabilities in excess of $400,000 which is not cancelable within two (2) years without penalty, cost or liability; (h) enter into or modify any material collective bargaining agreements; (i) make any material change in its tax or accounting policies or any material reclassification of assets or liabilities except as required by law or GAAP; (j) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), except the payment, discharge or satisfaction of (i) liabilities or obligations in the ordinary course of business consistent with past practice or in accordance with the terms thereof as in effect on the date hereof or (ii) claims settled or compromised to the extent permitted by Section 4.1(l), or waive, release, grant or transfer any rights of material value or modify or change in any material respect any existing Contract, in each case other than in the ordinary course of business, except (i) as contemplated by Section 6.1(c), (ii) as required to comply with changes in applicable law, (iii) any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreement; (i) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses in such amounts and against such risks and losses as are business consistent with past practice; (k) settle or compromise any litigation, other than litigation not in excess of amounts reserved for in the most recent consolidated financial statements of the Company included in the Recent Company SEC Documents or, if not so reserved for, in an aggregate amount not in excess of $250,000 (provided in either case such settlement documents do not involve any material non-monetary obligations on the part of the Company and its Subsidiaries); (l) take any action (without regard to any action taken or agreed to be taken by Parent or any of its affiliates) with knowledge that such action would prevent (x) Parent from accounting for the business combination to be effected by the Merger as a pooling of interests or (y) the Merger from qualifying as a reorganization within the meaning of Sections 368(a)(1)(A) or 368(a)(2)(E) of the Code; and (jm) consummate any acquisition pursuant to any Contract disclosed pursuant to Section 2.15(i) other than in accordance with the terms so disclosed (including without waiver of any condition to the Company's obligations to consummate such acquisition), excluding insignificant deviations from such terms; or (n) take, or offer or propose to take, or agree to take in writing or otherwise, any of the actions described in Sections 4.1(a) through 4.1(m) or any action which would result in any of the conditions set forth in Article VI not make, change or revoke any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authoritybeing satisfied.

Conduct of Business Pending the Merger. SECTION 6.1 5.1. Conduct of Business by the Company Pending the Merger---------------------------------------------- Closing. Except From the date of this Agreement to the Effective Time, except as otherwise ------- expressly contemplated by this Agreement or disclosed in Section 6.1 of the Company Disclosure Schedule, after the date hereof and prior to the Closing Date or earlier termination of this Agreement, unless Parent shall otherwise agree in writing, the Company shall, and shall cause each of the Subsidiaries, to (i) carry on its subsidiaries respective businesses in the ordinary course, (ii) use all reasonable efforts to preserve intact its current business organizations and keep available the services of its current officers and key employees, (iii) use all reasonable efforts to preserve its relationships with customers, suppliers and other Persons with which it has business dealings, (iv) use all reasonable efforts to comply in all material respects with all laws and regulations applicable to it or any of its properties, assets or business and (v) use all reasonable efforts to maintain in full force and effect all the Company Permits necessary for such business; provided, however, that the foregoing shall not prevent the Company from borrowing under its existing credit agreements to satisfy any of its obligations to holders of Options under Section 2.9(a) hereof. Without limiting the generality of the foregoing, except as (x) expressly contemplated by this Agreement or (y) set forth in Schedule 5.1, the Company shall not, and shall cause each of the Subsidiaries not to: (a) conduct their respective businesses amend its Certificate of Incorporation or By-Laws or similar organizational documents or change the number of directors constituting its entire board of directors; (i) (A) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock, except that a wholly owned Subsidiary may declare and pay a dividend or make advances to its parent or the Company or (B) redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or other securities; (ii) issue, sell, pledge, dispose of or encumber any (A) additional shares of its capital stock, (B) securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock, or (C) of its other securities, other than Shares issued upon the exercise of Options outstanding on the date hereof in accordance with the Option Plans as in effect on the date hereof; or (iii) split, combine or reclassify any of its outstanding capital stock; (c) acquire or agree to acquire (A) by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof (including entities which are Subsidiaries) or (B) any assets, including real estate, except, with respect to both of clause (A) and (B) above, (x) purchases of inventory, equipment and supplies in the ordinary course of business consistent with past practice and usual (y) other purchases in the ordinary course of business consistent with past practice in an amount not involving more than $5.0 million for acquisitions in the United States and Canada and $2.0 million for acquisitions outside the United States and Canada; (d) authorize or make capital expenditures in the aggregate in excess of $13.1 million; (e) except in the ordinary course of business, amend or terminate any Company Material Contract, or waive, release or assign any material rights or claims thereunder; (f) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any property or assets other than (i) excess or obsolete assets or (ii) in the ordinary course of business and consistent with past practice; (b) not (i) amend enter into any employment or propose to amend their respective certificates of incorporation or bylaws, (ii) split, combine or reclassify their outstanding capital stock or (iii) declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwiseseverance agreement with or, except for the payment of dividends or distributions to the Company by a wholly-owned subsidiary of the Company; (c) not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that (i) the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereof, (ii) the Company may issue shares of Company Common Stock (or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms policies of the agreements relating thereto; (d) not (i) incur Company, grant any severance or become contingently liable with respect termination pay to any indebtedness for borrowed money other than (A) borrowings in the ordinary course of business (other than pursuant to credit facilities) officer or borrowings under the existing credit facilities director of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, Subsidiary; or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets in the ordinary course of business and expenditures for fixed or capital assets in the ordinary course of business and other than as set forth in the proviso in this Section 6.1(d), (vi) sell, pledge, dispose of or encumber any material assets or businesses other than (A) sales of businesses or assets in the ordinary course of business, (B) sales of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, or (vii) except as contemplated by the following proviso, enter into any binding contract, agreement, commitment or arrangement with respect to any of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire hire or agree to acquire hire any assets new or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent with past practice; provided, however, that the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annumadditional officers; (h) not adopt, enter into or amend any pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not law, (A) adopt, enter into into, terminate, amend or amend in increase the amount or accelerate the payment or vesting of any material respect benefit or award or amount payable under any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment Company Employee Benefit Plan or other employee benefit plan, agreement, trust, fund or arrangement for the current or future benefit or welfare of any employees or retirees generallydirector, officer, former employee or, other than in the ordinary course of businessbusiness consistent with past practice, except (i) as contemplated by Section 6.1(c)current employee, (iiB) as required to comply increase in any manner the compensation or fringe benefits of, or pay any bonus to, any director, officer or, other than in the ordinary course of business consistent with changes in applicable lawpast practice, employee, (iiiC) any other than benefits accrued through the date hereof and other than in the ordinary course of business for employees other than officers or directors of the foregoing involving Company, pay any such then existing plansbenefit not provided for under any Benefit Plan, agreements, trusts, funds or arrangements of any company acquired after (D) other than bonuses earned through the date hereofhereof and other than in the ordinary course of business for employees other than officers and directors, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or Company Employee Benefit Plan; provided that there shall be no grant or award to any director, officer or -------- employee of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or any removal of existing restrictions in any Company Employee Benefit Plans or agreements or awards made thereunder or (ivE) as required pursuant take any action to an existing contractual fund or in any other way secure the payment of compensation or benefits under any employee plan, agreement, contract or arrangement or agreementCompany Employee Benefit Plan; (i) use commercially reasonable efforts except in connection with any acquisition permitted pursuant to maintain this Section 5.1 or to satisfy its obligations to holders of Options pursuant to Section 2.9(a) hereof, incur or assume any long-term debt, or except in the ordinary course of business in amounts consistent with financially past practice, incur or assume any short-term indebtedness; (ii) incur or modify any material indebtedness or other liability; (iii) assume, guarantee, endorse or otherwise become liable or responsible insurance companies insurance on its tangible assets (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and its businesses in such amounts and against such risks and losses as are consistent with past practice; andor (iv) except for advances or prepayments in the ordinary course of business in amounts consistent with past practice, make any loans, advances or capital contributions to, or investments in, any other Person (other than to wholly owned Subsidiaries or customary loans or advances to employees in accordance with past practice); (j) not makechange of the accounting methods used by it unless required by generally accepted accounting principles; (k) other than in the ordinary course of business consistent with past practice, change or revoke make any material Tax election or settle or compromise any Tax liability; (i) settle or compromise any claim, litigation or other legal proceeding, other than in the ordinary course of business consistent with past practice in an amount not involving more than $1,000,000 or (ii) pay, discharge or satisfy any other claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of (A) any such other claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or (B) of any such other claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company; (m) except in the ordinary course of business consistent with past practice, waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement to which the Company or any Subsidiary is a party; (n) permit any insurance policy naming the Company or any Subsidiary as a beneficiary or a loss payable payee to be canceled or terminated without notice to Parent, except in the ordinary course of business and consistent with past practice or in connection with replacing such policy with a policy providing comparable coverage; (o) take or omit to take any action which would make any of the representations or warranties of the Company contained in this Agreement untrue and incorrect in any material agreement respect as of the date when made if such action had then been taken or settlement regarding Taxes with omitted, or would result in any taxing authorityof the conditions set forth in Annex I hereto or the conditions set forth in Article VII hereof not being satisfied; or (p) enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.

Conduct of Business Pending the Merger. SECTION 6.1 5.1 Conduct of Business by the Company Pending Company. During the Merger. Except period from the date of this Agreement to the Effective Time, except as otherwise contemplated by this Agreement, the Company shall use its commercially reasonable efforts to, and shall cause each of the Company Subsidiaries to use its commercially reasonable efforts to, carry on their respective businesses in the usual, regular and ordinary course, consistent with past practice, and use their commercially reasonable efforts to preserve intact their present business organizations, keep available the services of their present officers and employees and preserve their relationships with customers, suppliers and others having business dealings with them. Without limiting the generality of the foregoing, neither the Company nor any of the Company Subsidiaries will (except as expressly permitted by this Agreement or disclosed as contemplated by the transactions contemplated hereby, as set forth in Section 6.1 5.1 of the Company Disclosure Schedule, after the date hereof and prior or to the Closing Date or earlier termination of this Agreement, unless extent that Parent shall otherwise agree consent in writing, writing (it being understood that Parent shall respond within five (5) Business Days to the Company shall, and shall cause its subsidiaries to:Company’s communications soliciting such agreement from Parent)): (a) conduct their respective businesses in the ordinary and usual course of business and consistent with past practice; (b) not (i) amend or propose to amend their respective certificates of incorporation or bylaws, (ii) split, combine or reclassify their outstanding any shares of capital stock of the Company or (iiiii) declare, set aside or pay any dividend or other distribution payable (whether in cash, stock, or property or otherwiseany combination thereof) in respect of any shares of capital stock of the Company, except for for: (A) subject to Section 6.14, a regular, quarterly cash dividend at a rate not in excess of $0.3375 per share of Company Common Stock, declared and paid in accordance with past practice, and corresponding regular quarterly distributions payable to holders of OP Units; (B) distributions payable to holders of Series C Cumulative Redeemable Perpetual Preferred Units (the “Series C Units”); (C) dividends or distributions, declared, set aside or paid by any Company Subsidiary to the Company or any Company Subsidiary that is, directly or indirectly, wholly owned by the Company and (D) the acceleration of the payment of dividends or distributions to the Company by a wholly-owned subsidiary of the Company;regular, quarterly 2004 fourth quarter dividend into December 2004. (cb) not issueauthorize for issuance, sell, pledge issue or dispose of, sell or agree or commit to issue, sell, pledge issue or dispose of, any additional shares of, sell (whether through the issuance or any granting of options, warrants warrants, commitments, subscriptions, rights to purchase or rights of otherwise) any kind to acquire any shares of their capital stock of any class or any debt other securities or equity securities convertible into or exchangeable for such capital stockequivalents (including, except that without limitation, stock appreciation rights) other than the (i) issuance of shares of Company Common Stock upon the Company may issue shares upon conversion of convertible securities and exercise of options and warrants Company Options outstanding on the date hereofof this Agreement in accordance with their present terms, (ii) the Company may issue shares issuance of Company Common Stock (or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions and in accordance with the existing terms of the agreements relating theretoCompany ESPP in effect as of the date of this Agreement, (iii) under the Company Rights Agreement in accordance with its terms (iv) the issuance of Company Common Stock in exchange for OP Units pursuant to the Partnership Agreement or (v) the issuance of any stock of any class in connection with a redemption of the Series C Units; (c) except as set forth in Section 5.1(c) of the Company Disclosure Schedule (which sets forth a true, complete and correct list of all existing obligations in effect to purchase or sell real property and the purchases or sale price thereof), acquire, sell, lease, encumber, transfer or dispose of any assets outside the ordinary course of business which are material to the Company or any of the Company Subsidiaries (whether by asset acquisition, stock acquisition or otherwise), except pursuant to obligations in effect on the date hereof, provided that such transaction is consummated in accordance in all material respects with the provisions of such obligations, including but not limited to such purchase or sale price; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings except in the ordinary course of business (other than pursuant to credit facilitiesfacilities in existence as of the date hereof, incur any amount of indebtedness for borrowed money, guarantee any indebtedness, issue or sell debt securities, make any loans, advances or capital contributions, mortgage, pledge or otherwise encumber any material assets, or create or suffer any material lien thereupon, in excess of $1,000,000 individually, or in excess of $5,000,000 in the aggregate; (e) or borrowings except pursuant to any mandatory payments under the existing any credit facilities of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up to the existing borrowing limit existence on the date hereof, pay, discharge or satisfy any claims, liabilities or obligations (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parentabsolute, accrued, asserted or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(dunasserted, contingent or otherwise), (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets any payment, discharge or satisfaction in the ordinary course of business consistent with past practice; (f) change any of the accounting principles or practices used by it (except as required by GAAP, in which case written notice shall be provided to Parent and expenditures MergerCo prior to any such change); (g) except as required by law, (i) enter into, adopt, amend or terminate any Employee Program, (ii) enter into, adopt, amend or terminate any agreement, arrangement, plan or policy between the Company or any of the Company Subsidiaries and one or more of their directors or executive officers, or (iii) except for fixed or capital assets normal increases in the ordinary course of business and consistent with past practice, increase in any manner the compensation or fringe benefits of any non-executive officer or employee or pay any benefit not required by any Employee Program or arrangement as in effect as of the date hereof; (h) grant to any officer, director or employee the right to receive any new severance, change of control or termination pay or termination benefits, grant any increase in the right to receive any severance, change of control or termination pay or termination benefits or enter into any new employment, loan, retention, consulting, indemnification, termination, change of control, severance or similar agreement with any officer, director or employee other than the grant of compensation and fringe benefits to any non-executive officer or employee hired after the date of this Agreement; provided, however; that the Company may accelerate the vesting and/or the payment of any existing benefits or awards and/or make any amendments to existing benefits, agreements or awards in order to facilitate such accelerated vesting and/or payments; (i) except to the extent required to comply with its obligations hereunder or with applicable law, amend its articles of incorporation or bylaws, limited partnership or limited liability company agreements, or similar organizational or governance documents; (j) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization (other than the Merger or plans of complete or partial liquidation or dissolution of inactive Company Subsidiaries); (k) except as set forth in the proviso in this Section 6.1(d), (vi5.1(k) sell, pledge, dispose of or encumber any material assets or businesses other than (A) sales of businesses or assets in the ordinary course of business, (B) sales of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, or (vii) except as contemplated by provided that such settlement does not exceed the following proviso, enter into any binding contract, agreement, commitment or arrangement with respect to any of amounts accrued therefor in the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 most recent balance sheet of the Company Disclosure Scheduleset forth in the Company SEC Reports, settle or compromise any litigation (Bwhether or not commenced prior to the date of this Agreement) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed settlements or compromises for litigation where the amount paid (after giving effect to insurance proceeds actually received) in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) settlement or compromise does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act500,000; (el) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available amend any term of any outstanding security of the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in Company or any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this AgreementCompany Subsidiary; (fm) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent with past practice; provided, however, that the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annum; (h) not adopt, enter into or amend any pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any employees or retirees generally, other than in the ordinary course of business, except (i) as contemplated by Section 6.1(c)modify or amend any Material Contract to which the Company or any Company Subsidiary is a party or waive, (ii) as required to comply with changes in applicable law, (iii) release or assign any of the foregoing involving material rights or claims under any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreementMaterial Contract; (in) use commercially reasonable efforts authorize, commit to maintain with financially responsible insurance companies insurance on its tangible assets or make any equipment purchases or capital expenditures other than in the ordinary course of business and its businesses in such amounts and against such risks and losses as are consistent with past practice; andor (jo) not make, change or revoke enter into an agreement to take any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authorityof the foregoing actions.

Conduct of Business Pending the Merger. SECTION 6.1 Conduct Except as expressly permitted by clauses (a) through (r) of Business by the Company Pending the Merger. Except this Section 4.1 or as otherwise contemplated by this Agreement, during the period from the date of this Agreement or disclosed in Section 6.1 until the earlier of the Company Disclosure Schedule, after Effective Time or the date hereof and prior to the Closing Date or earlier termination of on which this AgreementAgreement is terminated, unless (x) Parent shall otherwise agree in writing, the Company shall, and shall cause its subsidiaries Subsidiaries to:, on the one hand, and (y) the Company shall, on the other hand, conduct, in all material respects, their business in the ordinary course of business consistent with past practice and, to the extent consistent therewith, use commercially reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall be materially unimpaired at the Effective Time. Without limiting the generality of the foregoing, and except as otherwise expressly contemplated by this Agreement, (x) Parent shall not, and shall not permit any of its Subsidiaries to, without the prior written consent of the Company (which shall not be unreasonably withheld, conditioned or delayed), and (y) the Company shall not, without the prior written consent Parent (which shall not be unreasonably withheld, conditioned or delayed): (a) conduct their respective businesses in the ordinary and usual course of business and consistent with past practice; (b) not (i) amend or propose to amend their respective certificates of incorporation or bylaws, (ii) split, combine or reclassify their outstanding capital stock or (iii) declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise, except for the payment of dividends or distributions to the Company by a wholly-owned subsidiary of the Company; (c) not issue, sell, pledge or dispose ofon, or agree to issuemake any other actual, sell, pledge constructive or dispose deemed distributions in respect of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such its capital stock, except that (i) the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereofor otherwise make any payments to its stockholders in their capacity as such, (ii) except for the Company may Reverse Stock Split, split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of Company Common Stock (its capital stock, or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (d) not (i) incur purchase, redeem or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings in the ordinary course of business (other than pursuant to credit facilities) or borrowings under the existing credit facilities of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parentotherwise acquire, or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d)modify or amend, (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any optionsother of its securities or any rights, warrants or options to acquire, any such shares or other securities; (i) authorize for issuance, issue, deliver, sell, pledge, dispose of, grant, transfer or otherwise encumber or agree or commit to issue, deliver, sell, pledge, dispose of, grant, transfer or encumber any shares of its capital stock, any other voting securities or equity equivalent or any securities convertible into or exchangeable for, or any rights, warrants or options of any kind to acquire, any such shares, voting securities, equity equivalent or convertible or exchangeable securities or (ii) enter into any amendment of any material term of any of its outstanding securities; (c) other than in connection with the Reverse Stock Split, amend the Parent Charter or the Parent Bylaws; (d) acquire or agree to acquire by merging or consolidating with, by purchasing a substantial portion of the assets of or equity in or by any other manner, any business or any corporation, limited liability company, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets; (e) sell, transfer, lease, license, mortgage, pledge, encumber or otherwise dispose of any of its properties or assets; (f) (i) incur, assume or modify any indebtedness for borrowed money, guarantee, endorse or otherwise become liable or responsible for (whether directly, contingently or otherwise), any such indebtedness for borrowed money of another Person or make any loans, advances or capital contributions to, or other investments in, any other Person, (ii) issue or sell any debt securities or warrants or other rights to acquire any of its capital stock debt securities, or any security convertible into or exchangeable for its capital stock, (iii) take enter into any action that would jeopardize arrangement having the treatment economic effect of any of the foregoing; (g) except in connection with this Agreement, alter (including through merger, liquidation, dissolution, reorganization, restructuring or recapitalization) the corporate structure or ownership of Parent or Merger as a pooling Sub; (h) enter into, adopt or amend any (i) Parent Plan or Company Plan for the purpose of interests under Opinion No. 16 of increasing benefits to Parent’s employees, or (ii) employment or consulting Contract; (i) increase the Accounting Principles Board ("APB No. 16")compensation or benefits payable or to become payable to its directors, (iv) take officers or fail to take any action which action or failure to take action would cause the Company or its stockholders employees (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets increases in the ordinary course of business and expenditures for fixed consistent with past practice in salaries or capital assets in the ordinary course wages of business and other than as set forth in the proviso in this Section 6.1(d), (viemployees who are not officers) sell, pledge, dispose of or encumber grant any material assets severance or businesses other than (A) sales of businesses or assets in the ordinary course of business, (B) sales of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowingstermination pay to, or (vii) except as contemplated by the following proviso, enter into any binding contract, agreement, commitment or arrangement with respect to any of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements severance Contract with, any current or agreements with any directorsformer director or officer, officers or key employeesestablish, except in the ordinary course and consistent with past practice; provided, however, that the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annum; (h) not adopt, enter into or amend or take action to enhance or accelerate any pension rights or retirement planbenefits under, trust or fundany labor, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, health careemployment, employment termination, severance or other employee benefit plan, agreementContract, trust, fund fund, policy or arrangement for the benefit or welfare of any employees current or retirees generallyformer director, officer or employee; (j) knowingly violate or knowingly fail to perform in any material respect any obligation or duty imposed upon it by any applicable material federal, state or local law, rule, regulation, guideline or ordinance; (k) make or adopt any change to its accounting methods, practices or policies (other than actions required to be taken by GAAP or under applicable law as communicated to it by its independent auditors); (l) prepare or file any Tax Return in a manner that is materially inconsistent with past practice or, on any such Tax Return, take any position, make or change any election or adopt any method that is materially inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods; (m) enter into, materially amend, cancel, terminate, extend or request any material change in, or agree to any material change in, any Parent Material Contract or Company Material Contract, as the case may be, other than in the ordinary course of businessbusiness consistent with past practice; (n) authorize, except or enter into any commitment for, capital expenditures; (io) as contemplated by Section 6.1(cwaive, release or assign any material right or claim or pay, discharge or satisfy any 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 consistent with past practice or in accordance with their terms; (iip) as required initiate any material litigation or arbitration proceeding or settle or compromise any material litigation or arbitration proceeding; (q) enter into any line of business other than the line of business in which it is currently engaged; or (r) authorize, recommend, publicly propose or announce an intention to comply with changes in applicable law, (iii) do any of the foregoing involving or enter into any such then existing plans, agreements, trusts, funds or arrangements Contract to do any of any company acquired after the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreement; (i) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses in such amounts and against such risks and losses as are consistent with past practice; and (j) not make, change or revoke any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authorityforegoing.

Conduct of Business Pending the Merger. SECTION 6.1 Conduct of Business by the Company Pending the Merger. (a) Except as otherwise contemplated expressly permitted by clauses (i) through (xvii) of this Section 4.1(a), during the period from the date of this Agreement or disclosed in Section 6.1 of through the Company Disclosure Schedule, after the date hereof and prior to the Closing Date or earlier termination of this Agreement, unless Parent shall otherwise agree in writingEffective Time, the Company shall, and shall cause each of its subsidiaries Subsidiaries to, in all material respects carry on its business in the ordinary course of its business as currently conducted and, to the extent consistent therewith, use reasonable best efforts to preserve intact its current business organizations, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, and except as otherwise expressly contemplated by this Agreement or as set forth in Section 4.1 of the Company Letter (with specific reference to the applicable subsection below), the Company shall not, and shall not permit any of its Subsidiaries to, without the prior written consent of Parent: (a) conduct their respective businesses in the ordinary and usual course of business and consistent with past practice; (b) not (i) amend or propose to amend their respective certificates of incorporation or bylaws, (ii) split, combine or reclassify their outstanding capital stock or (iiiA) declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise, except for the payment of dividends or distributions to the Company by a wholly-owned subsidiary of the Company; (c) not issue, sell, pledge or dispose ofon, or agree to issuemake any other actual, sell, pledge constructive or dispose deemed distributions in respect of, any additional shares of its capital stock, or otherwise make any payments to its stockholders in their capacity as such, (B) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or any optionsin substitution for shares of its capital stock, warrants (C) purchase, redeem or rights of any kind to otherwise acquire any shares of their capital stock of any class the Company or any debt other securities thereof or equity any rights, warrants or options to acquire any such shares or other securities convertible into or exchangeable for such (D) amend the Rights Agreement; (ii) issue, deliver, sell, pledge, dispose of or otherwise encumber any shares of its capital stock, except that any other voting securities or equity equivalent or any securities convertible into, or 50 any rights, warrants or options to acquire any such shares, voting securities, equity equivalent or convertible securities, other than (iA) the Company may issue shares upon conversion issuance of convertible securities and exercise of options and warrants outstanding on the date hereof, (ii) the Company may issue shares of Company Common Stock upon the exercise of Company Stock Options outstanding on the date of this Agreement in accordance with their current terms, (or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iiiB) the Company may issue issuance of shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms Stock Option Agreement and (C) the issuance of the agreements relating thereto; (d) not (i) incur or become contingently liable with respect Company Stock Options to any indebtedness for borrowed money other than (A) borrowings purchase up to 800,000 shares of Company Common Stock in the ordinary course of business (other than pursuant consistent with past practice to credit facilities) or borrowings under the existing credit facilities newly hired employees who are not officers of the Company or any of its subsidiaries as such facilities may be amended Subsidiaries (provided that no individual receives Company Stock Options to purchase in a manner that does not have a material adverse effect on the excess of 12,500 shares of Company Common Stock); (the "Existing Credit Facilities"iii) up amend its charter or by-laws or other comparable charter or organizational documents; (iv) acquire or agree to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parentacquire by merging or consolidating with, or (C) borrowings in connection with acquisitions as set forth in by purchasing a substantial portion of the proviso in this Section 6.1(d)assets of or equity in, (ii) redeemor by any other manner, purchaseany business or any corporation, limited liability company, partnership, association or other business organization or division thereof or otherwise acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights agree to acquire any of its capital stock or any security convertible into or exchangeable for its capital stockassets, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets acquired in the ordinary course of business and expenditures for fixed not material to the Company and its Subsidiaries taken as a whole; (v) sell, lease, license (as licensor of Intellectual Property Rights of the Company), mortgage, encumber or capital assets otherwise dispose any of its properties or assets, other than sales, leases or licenses of products or services in the ordinary course of business and other than not material to the Company and its Subsidiaries taken as set forth in the proviso in this Section 6.1(d), a whole; (vi) sellincur any indebtedness for borrowed money, pledgeguarantee any such indebtedness or make any loans, dispose of advances or encumber capital contributions to, or other investments in, any material assets or businesses other person, other than (A) sales indebtedness, loans, advances, capital 51 contributions and investments between the Company and any of businesses its wholly owned Subsidiaries or assets between any of such wholly owned Subsidiaries or cash management activities carried on in the ordinary course of businessbusiness consistent with past practice; (vii) alter (through merger, liquidation, reorganization, restructuring or in any other fashion) the corporate structure or ownership of the Company (other than as provided in Sections 4.1(a)(ii)(A), (B) sales and (C)) or any Subsidiary; (viii) enter into, adopt or amend any severance plan, agreement or arrangement, Company Plan or employment or consulting agreement, except as required by applicable law and except for entering into any consulting agreements in the ordinary course of businesses business consistent with past practice; (ix) increase the compensation payable or assets disclosed to become payable to its directors, officers or employees (except for increases in Section 6.1 the ordinary course of business consistent with past practice in salaries or wages of employees of the Company Disclosure Scheduleor any of its Subsidiaries who are not officers of the Company or any of its Subsidiaries) or grant any severance or termination pay to, or enter into or amend any employment or severance agreement with, any current or former director or officer of the Company or any of its Subsidiaries, or establish, adopt, enter into, or, except as may be required to comply with applicable law, amend or take action to enhance or accelerate any rights or benefits under, any labor, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any current or former director, officer or employee; (Cx) sales of businesses knowingly violate or assets knowingly fail to perform any obligation or duty imposed upon it or 52 any Subsidiary by any applicable material federal, state or local law, rule, regulation, guideline or ordinance; (xi) make any change to accounting policies or procedures (other than actions required to be taken by generally accepted accounting principles); (xii) prepare or file any Tax Return inconsistent with aggregate 1997 revenues of less than $5 millionpast practice or, and on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods; (Dxiii) pledges make any tax election or encumbrances settle or compromise any material federal, state, local or foreign income tax liability; (xiv) enter into, amend or terminate any noncompetition agreement or any agreement or contract pursuant to Existing Credit Facilities which any third party is granted marketing, distribution, material manufacturing or other permitted borrowingsany exclusive rights with respect to any Company product, process or technology; amend the Noncompetition Agreements or make or agree to make any new capital expenditure or expenditures which, individually, is in excess of $10,000,000 or, in the aggregate, are in excess of $60,000,000 at any time prior to October 31, 1998 (or in excess of $80,000,000 at any time); (xv) waive or release any material right or claim, or pay, discharge or satisfy any material claims, liabilities or obligations (viiabsolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in the most recent Company SEC Documents filed prior to the date hereof, or incurred in the ordinary course of business consistent with past practice; 53 (xvi) except as contemplated by initiate any litigation or arbitration proceeding or settle or compromise any material litigation or arbitration proceeding; or (xvii) authorize, recommend, propose or announce an intention to do any of the following provisoforegoing, or enter into any binding contract, agreement, commitment or arrangement with respect to do any of the foregoing; provided. (b) During the period from the date of this Agreement to the Effective Time of the Merger, howeverParent shall not, that notwithstanding and shall not permit any of its Subsidiaries to, without the foregoing prior written consent of the Company: (i) declare, set aside, or pay any cash dividends on, or make any other than subsections cash distributions in respect of, any capital stock of Parent; (ii) amend the Parent Charter or the Parent Bylaws; (iii) and alter (through liquidation, reorganization or restructuring) the corporate structure of Parent; or (iv) of this Section 6.1(d))authorize, the Company shall not be prohibited from acquiring recommend, propose or announce an intention to do any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent with past practice; provided, however, that the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annum; (h) not adopt, enter into or amend any pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment or other employee benefit plancontract, agreement, trust, fund commitment or arrangement for the benefit or welfare of any employees or retirees generally, other than in the ordinary course of business, except (i) as contemplated by Section 6.1(c), (ii) as required to comply with changes in applicable law, (iii) do any of the foregoing involving any such then existing plansforegoing. Notwithstanding the foregoing, agreements, trusts, funds nothing contained in this Agreement shall prohibit Parent from adopting a stockholder rights plan and issuing securities pursuant thereto or arrangements amending the Parent Charter to increase the number of any company acquired after shares authorized thereby or amending the date hereof, or (iv) as required pursuant Parent Bylaws to an existing contractual arrangement or agreement; (i) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses in such amounts and against such risks and losses as are consistent with past practice; and (j) not make, change or revoke any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authoritythe number of directors of Parent.

Conduct of Business Pending the Merger. SECTION 6.1 Conduct of Business by the Company Pending the Merger. Except as otherwise expressly contemplated by this Agreement Agreement, required by law or disclosed in Section 6.1 SECTION 5.01 of the Company Disclosure Schedule, after the date hereof and prior to the Closing Date or earlier termination of this AgreementEffective Time, unless Parent without Parent's consent (which shall otherwise agree in writingnot be unreasonably withheld), the Company shall, and shall cause its subsidiaries Subsidiaries to: (a) conduct their respective businesses in the ordinary and usual course of business and consistent with past practice; (b) not (i) amend or propose to amend their respective certificates of incorporation or bylawsbylaws or equivalent constitutional documents, (ii) split, combine or reclassify their outstanding capital stock or (iii) declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise, except for the payment of dividends or distributions to the Company or a Subsidiary of the Company by a wholly-owned subsidiary another Subsidiary of the Company; (c) not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that (i) the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereof, (ii) the Company may issue shares of capital stock of the Company Common Stock (or warrants or options to acquire A) upon exercise of Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) Options outstanding on May 31, 2003 and (iiiB) as required by the 401(k) Plan, the ESPP, the Directors' Plan, the DCP and the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions Rights Agreement as in accordance with effect on the existing terms of the agreements relating theretodate hereof; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money (including, for the sake of clarity, any letters of credit), other than (A) borrowings in the ordinary course of business (other than pursuant to credit facilities) or borrowings to fund working capital needs in the ordinary course of business under the existing credit facilities of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect Subsidiaries on the Company terms of those facilities as they exist on the date of this Agreement (the "Existing Credit FacilitiesEXISTING CREDIT FACILITIES") up in an aggregate amount for all such permitted borrowings not to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d)exceed $20,000,000 for any consecutive four business day period, (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stockstock other than in connection with the exercise of outstanding Company Options pursuant to the terms of the Company Option Plans and the relevant written agreements evidencing the grant of Company Options, or to use for the 401(k) Plan, the ESPP or the Directors' Plan, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any material acquisition of any assets or businesses other than expenditures for current assets in the ordinary course of business and expenditures for fixed or capital assets in the ordinary course of business and other with a value that is less than as set forth (A) $2,500,000 in the proviso aggregate during the forty-five (45) day period commencing on the date of this Agreement and (B) $4,500,000 in the aggregate during the ninety (90) day period commencing on the date of this Section 6.1(d), Agreement or (viiv) sell, pledge, lease, license dispose of or encumber any material assets or businesses other than (A) sales of businesses or assets in the ordinary course of business, (B) sales of businesses or assets any such transactions disclosed in Section 6.1 SECTION 5.01 of the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (DB) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, or (vii) except as contemplated by the following proviso, enter into any binding contract, agreement, commitment or arrangement with respect to any of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) sales of inventory and other current assets in the Company will not acquire or agree to acquire all or substantially all ordinary course of the business, assets, properties or capital stock of any entity business consistent with securities registered under the Securities Act or the Exchange Act;past practices. (e) use all reasonable best efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employeesemployees (other than terminations of services for cause), and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreementthem; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend or modify any employment, consulting, severance, retirement or special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employeesemployees or with any other persons, except (i) as required by previously existing contractual arrangements or applicable law or (ii) other employment agreements entered into with a person who is hired or promoted by the Company or one of its Subsidiaries after the date hereof in the ordinary course and of business whose annual base salary does not exceed $175,000; (g) not increase the salary, bonus, benefits or other compensation of any person except for increases in the ordinary course of business consistent with past practice; provided, however, that practice or except pursuant to contractual arrangements existing on the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess date of $100,000 per annumthis Agreement; (h) not adopt, enter into or amend or modify, in each of the latter two cases to materially increase benefits or obligations of any pension or retirement plan, trust or fundCompany Employee Benefit Plan, except as required pursuant to comply with changes in applicable law and not adoptexisting contractual arrangements, enter into this Agreement or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any employees or retirees generally, other than in the ordinary course of business, except (i) as contemplated by Section 6.1(c), (ii) as required to comply with changes in applicable law, (iii) any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreement; (i) use commercially reasonable efforts (A) not enter into any new contract or commitment providing for the purchase of goods or services by the Company or any of its Subsidiaries that is inconsistent with the Company's April 2003 forecast (a true, accurate, complete and current copy of which has been provided to maintain with financially responsible insurance companies insurance on Parent prior to the date of this Agreement) or has a term of more than one year and which is reasonably expected to involve payments to retailers of more than $3,000,000 per annum or payments to other third parties of more than $2,000,000 per annum, (B) not amend, modify or change in any material respect, or waive any material rights of the Company or any of its tangible assets and its businesses Subsidiaries or any material obligation of any third party under, any contract listed in such amounts and against such risks and losses as are consistent with past practice; andSECTION 4.11 of the Company Disclosure Schedule; (j) not make, change or revoke any material Tax election unless required by law or make any material agreement or settlement regarding Taxes with any taxing authorityauthority regarding any material amount of Taxes or which is reasonably likely to materially increase the obligations of the Company or the Surviving Corporation to pay Taxes in the future; (k) not defer the payment of accounts or trade payables, or seek to accelerate the payment of, or factor or otherwise similarly monetize, accounts or trade receivables, of the Company or any of its Subsidiaries, in either such case beyond or in advance (as the case may be) of the customary payment periods of the Company, such Subsidiary(ies) or such third parties for those payables or receivables; (l) not enter into any interest rate, currency or other swap or derivative transaction, other than in the ordinary course of business consistent with past practices and for BONA FIDE hedging purposes; (m) not take any action that would make any representation or warranty of the Company inaccurate in any material respect at any time before the Effective Time; (n) not (i) propose or make, or engage in any discussions or negotiations with respect to, any Settlement Decision (as defined in the CVR Agreement) or (ii) enter into any confidentiality agreement with any third party to the Litigation (as defined in the CVR Agreement) with respect thereto; or (o) not enter into an agreement, commitment or arrangement with respect to any of the foregoing.

Conduct of Business Pending the Merger. SECTION 6.1 Conduct (a) From the date of Business by this Agreement until the Company Pending earlier of the Merger. Except Effective Time and the termination of this Agreement in accordance with ARTICLE VII, except as otherwise expressly contemplated by this Agreement or disclosed Agreement, set forth in Section 6.1 4.01(a) of the Company Disclosure ScheduleLetter, after required by applicable Law, requested by Parent to be undertaken in connection with the date hereof and prior MDS Sale or consented to the Closing Date in writing by Parent (such consent not to be unreasonably withheld, conditioned or earlier termination of this Agreementdelayed), unless Parent shall otherwise agree in writing, (x) the Company shall, and shall cause each of its subsidiaries Subsidiaries to, carry on its business in the ordinary course consistent with past practice and shall use commercially reasonable efforts to (I) preserve substantially intact its current business organizations, (II) maintain its goodwill and preserve its relationships with significant customers and suppliers and other Persons with whom it has material business relationships in a manner consistent with past practice and (III) retain the services of its officers and key employees as of the date of this Agreement and (y) without limiting the foregoing, the Company shall not, and shall cause it Subsidiaries not to: (a) conduct their respective businesses in the ordinary and usual course of business and consistent with past practice; (b) not (i) amend or propose to amend their respective certificates of incorporation or bylaws, (ii) split, combine or reclassify their outstanding capital stock or (iii) declare, set aside or pay any dividend dividends on, or distribution payable make any other distributions (whether in cash, stockstock or property) in respect of, property any of its capital stock or otherwiseother voting securities or equity interests, except for the payment of other than cash dividends or distributions by a wholly owned Subsidiary of the Company to the Company by a wholly-or another wholly owned subsidiary Subsidiary of the Company; (cii) not issueadjust, sellsplit, pledge combine or dispose reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or agree to issuein substitution for shares of its capital stock, sellother than transactions solely between or among the Company and its wholly owned Subsidiaries; (iii) purchase, pledge redeem or dispose of, any additional shares of, or any options, warrants or rights of any kind to otherwise acquire any shares of their its or its Subsidiaries’ capital stock of any class or other securities or any debt or equity securities convertible into or exchangeable for such capital stockrights, except that (i) the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereof, (ii) the Company may issue shares of Company Common Stock (or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets any such shares or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other securities, other than (A) borrowings the withholding of Shares in the ordinary course of business (other than consistent with past practice to satisfy Tax obligations or the exercise price with respect to awards granted pursuant to credit facilities) or borrowings under the existing credit facilities of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereof, Equity Award Plans and (B) borrowings the acquisition by the Company in the ordinary course of business consistent with past practice of awards granted pursuant to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings the Company Equity Award Plans in connection with acquisitions the forfeiture of such awards or rights, in each case, with respect to awards that are outstanding as set forth of the date hereof and in accordance with their terms as of the proviso date hereof or granted after the date hereof in accordance with this Section 6.1(d)Agreement; (iv) issue, (ii) redeemdeliver, purchasesell, acquire pledge, dispose of, encumber or offer subject to purchase or acquire any Lien any shares of its capital stock stock, ownership interests, any other voting securities (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company), or any optionssecurities convertible into, exercisable or exchangeable for, or any rights, warrants or options to acquire, any such shares, ownership interests, voting securities or convertible securities or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units, other than upon the vesting or settlement of Restricted Shares, Company RSUs and Company Options granted under the Company Equity Award Plans that are outstanding as of the date hereof or granted after the date hereof in accordance with this Agreement, in each case, vested or settled in accordance with their terms; (v) amend, waive or rescind (A) the Company Articles of Incorporation or the Company Code of Regulations or (B) the comparable organizational or governing documents of any Subsidiary of the Company, other than, in the case of this clause (B), amendments that effect solely ministerial changes to acquire such documents; (vi) merge or consolidate with any Person, or purchase property or assets (including equity interests) of any Person, or make capital contributions to any Person, in each case, other than (A) purchases of inventory, equipment and other personal property (1) in the ordinary course of business or (2) for such purchases not in the ordinary course of business, in an amount not in excess of $1,000,000 in the aggregate, or (B) transactions solely between or among the Company and its wholly owned Subsidiaries; (vii) sell, license, lease, transfer, assign, divest, cancel, abandon or otherwise dispose of or permit a Lien (other than a Permitted Lien) to be placed upon any of its capital stock properties, rights or any security convertible into or exchangeable for its capital stockassets (including Company Intellectual Property) with a value in excess of $1,000,000 in the aggregate, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current (A) sales, licenses or other dispositions of assets in the ordinary course of business consistent with past practice, (B) sales, transfers and expenditures dispositions of obsolete, non-operating or worthless assets or properties, (C) sales, licenses, leases, transfers or other dispositions made in connection with any transaction between or among the Company and its wholly owned Subsidiaries or (D) pursuant to Contracts existing as of the date hereof; (viii) incur, create, assume, redeem, prepay, defease, cancel, or, in any material respect, modify any Indebtedness or enter into any arrangement having the economic effect of any of the foregoing, other than (A) borrowings and prepayments under the Company’s existing credit facilities that are made solely for fixed or working capital assets purposes in the ordinary course of business and other than as set forth in the proviso in this Section 6.1(d)consistent with past practice, (viB) sellthe incurrence, pledgeredemption, dispose prepayment, defeasance, cancellation or modification of Indebtedness of the Company or encumber a wholly owned Subsidiary of the Company to the Company or a wholly owned Subsidiary of the Company, (C) the incurrence, creation or assumption of Indebtedness to replace, renew, extend, refinance or refund any material assets existing Indebtedness on substantially the same or businesses other more favorable terms to the Company or a Subsidiary of the Company than such existing Indebtedness and (D) with respect to any Indebtedness not incurred, created, assumed, redeemed, prepaid, defeased, cancelled or modified in accordance with the foregoing clauses (A) sales through (C), the incurrence, creation, assumption, redemption, prepayment, defeasance, cancellation or modification of businesses Indebtedness not in excess of $1,000,000 in aggregate principal amount outstanding; (ix) subject to Section 5.16, settle Proceedings or assets investigations with a Governmental Entity or third party, in each case, threatened, made or pending against the Company or any of its Subsidiaries, in excess of $1,000,000 in the aggregate for all such Proceedings or investigations, other than the settlement of Proceedings or investigations made in the ordinary course of business or for an amount (excluding any amounts that are covered by any insurance policies of the Company or its Subsidiaries, as applicable) not in excess of the amount reflected or reserved therefor in the most recent financial statements (or the notes thereto) of the Company included in the Applicable SEC Reports; provided, however, that in no event shall the Company or any of its Subsidiaries settle any Proceeding or investigation if such settlement involves injunctive relief against the Company or any of its Subsidiaries or restricts the conduct of the Company’s business following the Effective Time; (x) except as required pursuant to the terms of any Company Benefit Plan or other written agreement disclosed to Parent in the Company Disclosure Letter, in each case, as in effect on the date hereof, (A) promote any officers or employees to a position of Vice President or more senior without first consulting with Parent and considering its views in good faith, (B) grant to any director or executive officer or employee any increase in compensation or pay, or award any bonuses or incentive compensation other than, in the case of non-executive employees, in the ordinary course of business consistent with past practice, (C) grant to any current or former director, executive officer or employee any increase in severance, change of control, retention or termination pay, (D) grant or amend any equity awards, (E) enter into any new, or modify any existing, employment, consulting, severance, retention or termination agreement with any (x) current or former director, (y) executive officer or (z) any other employee or individual consultant pursuant to which the annual base salary of such individual under such agreement exceeds $200,000, (F) establish, adopt, enter into, terminate, waive or amend in any material respect any collective bargaining agreement or material Company Benefit Plan or (G) take any action to accelerate any rights or benefits under any Company Benefit Plan; provided, however, that the foregoing shall not restrict the Company or any of its Subsidiaries from entering into or making available to newly hired employees or to employees in the context of promotions based on job performance or workplace requirements, in each case, in the ordinary course of business, plans, agreements, benefits and compensation arrangements (including incentive grants, but excluding any individual severance arrangements or any options or other equity awards) that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees in similar positions; (xi) other than as required (A) by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization or (B) sales by Law, including pursuant to SEC rule or policy, make any change in accounting methods, principles or practices affecting the consolidated assets, liabilities or results of businesses or assets disclosed in Section 6.1 operations of the Company Disclosure Schedulewhere such change would reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole; (xii) (A) make any material Tax election or change or rescind any material Tax election or Tax method of accounting, (B) settle or compromise any Tax liability or, with respect to any claim or assessment that does not relate to U.S. federal income Tax, consent to any claim or assessment relating to a material amount of Taxes, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, or (vii) except as contemplated by the following proviso, enter into any binding contract, agreement, commitment or arrangement with respect to any of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent with past practice; provided, however, that the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annum; (h) not adopt, enter into or amend any pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any employees or retirees generally, other than in the ordinary course of business, except (i) as contemplated by Section 6.1(c), (ii) as required to comply with changes in applicable law, (iii) any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreement; (i) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses in such amounts and against such risks and losses as are business consistent with past practice; and, file any amended Tax Return, (D) enter into any Tax allocation, sharing, indemnity or closing Contract or similar arrangement relating to a material amount of Taxes or (E) consent to any extension or waiver of the statute of limitations period applicable to any material Taxes; (jxiii) not makematerially amend or modify or cancel or terminate, change or revoke waive any material Tax election rights under, any Material Contract or make waive any material agreement rights with respect to any material Company Real Property; (xiv) enter into any Contract that would constitute a “Material Contract” under clauses (i), (iv), (v), (xiii) and (xv) of Section 3.01(i) had it been in existence prior to or settlement regarding Taxes on the date of this Agreement, except as otherwise expressly permitted under this Section 4.01(a); (xv) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization, other than the Merger and any other mergers, consolidations, restructurings, recapitalizations or other reorganizations solely between or among the Company and its wholly owned Subsidiaries; or (xvi) other than in the ordinary course of business consistent with past practice, make capital expenditures in excess of $1,000,000 in the aggregate other than in accordance with the Company’s capital expenditure plan previously provided to Parent; (xvii) fail to keep in force any taxing authorityInsurance Policy or comparable replacement or revised provisions providing insurance coverage with respect to the assets, operations and activities of the Company and its Subsidiaries as are currently in effect; or (xviii) authorize any of, or commit or agree to take any of, the foregoing actions prohibited pursuant to clauses (i) through (xvii) of this Section 4.01(a). (b) From the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement in accordance with ARTICLE VII, except as expressly permitted by this Agreement, neither Parent nor the Company shall, and each shall cause its respective Subsidiaries not to, take any action that is reasonably likely to prevent, or materially impair or delay, the consummation of the Merger.

Conduct of Business Pending the Merger. SECTION 6.1 6.01. Conduct of Business by the Company Pending the Merger. Except as otherwise contemplated by . (a) The Company agrees that, between the date of this Agreement or disclosed and the Effective Time, except as set forth in Section 6.1 6.01 of the Company Disclosure Schedule, after the date hereof and prior to the Closing Date or earlier termination of this Agreement, unless Parent shall otherwise agree consent in writing, the Company shall, and shall cause its subsidiaries to: (ai) conduct their respective the businesses of the Company and the Subsidiary shall be conducted only in, and the Company and the Subsidiary shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; and (ii) the Company shall use its reasonable best efforts to preserve substantially intact the business organization of the Company and the Subsidiary, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiary and to preserve the current relationships of the Company and the Subsidiary with customers, suppliers and other persons with which the Company or the Subsidiary has significant business relations. (b) By way of amplification and not limitation, except as expressly contemplated by any other provision of this Agreement or as set forth in Section 6.01 of the Company Disclosure Schedule, neither the Company nor the Subsidiary shall, between the date of this Agreement and the Effective Time, directly or indirectly, do, or propose to do, any of the following without the prior written consent of Parent: (i) amend or otherwise change its Articles of Incorporation or Bylaws or equivalent organizational documents; (ii) issue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (A) any shares of any class of capital stock of the Company or the Subsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including any phantom interest), of the Company or the Subsidiary (except for the issuance of up to a maximum of 233,766 Shares issuable pursuant to employee stock options outstanding on the date hereof) or (B) except in the ordinary course of business and in a manner consistent with past practice, any assets of the Company or the Subsidiary; (iii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock; (iv) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock; (A) acquire (including by merger, consolidation, or acquisition of stock or assets or any other business combination) any corporation, partnership, other business organization or any division thereof or any significant amount of assets; (B) except for borrowings and repayments under the Credit Agreement, incur or repay any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any person, or make any loans or advances, or grant any security interest in any of its assets; (C) enter into any contract or agreement other than in the ordinary course of business and consistent with past practice; (D) authorize, or make any commitment with respect to, any single capital expenditure which is in excess of $50,000 or capital expenditures which are, in the aggregate, in excess of $500,000 for the Company and the Subsidiary taken as a whole; or (E) enter into or amend any contract, agreement, commitment or arrangement with respect to any matter set forth in this Section 6.01(b)(v); (A) hire any additional executive level employees or increase the compensation payable or to become payable or the benefits provided to its directors, officers or employees, except for increases in the ordinary course of business and consistent with past practice in salaries or wages of employees of the Company or the Subsidiary who are not directors or officers of the Company, (B) grant any rights to severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company or of the Subsidiary, or (C) establish, adopt, enter into or amend any collective bargaining, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee; (vii) take any action, other than reasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures; (viii) make any tax election or settle or compromise any United States federal, state, local or non-United States income tax liability; (A) alter its collection or payment practices or (B) pay, discharge or satisfy any claim, liability or obligation (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 2002 Balance Sheet or subsequently incurred in the ordinary course of business and consistent with past practice; (bx) not (i) amend amend, modify or propose to amend their respective certificates of incorporation or bylaws, (ii) split, combine or reclassify their outstanding capital stock or (iii) declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise, except for the payment of dividends or distributions consent to the Company by a wholly-owned subsidiary termination of any Material Contract, or amend, waive, modify or consent to the termination of the Company's or the Subsidiary's rights thereunder; (cxi) not issue, sell, pledge commence or dispose of, or agree to issue, sell, pledge or dispose of, settle any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that (i) the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereof, (ii) the Company may issue shares of Company Common Stock (or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto;Action; or (dxii) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings in the ordinary course of business (other than pursuant to credit facilities) or borrowings under the existing credit facilities of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets in the ordinary course of business and expenditures for fixed or capital assets in the ordinary course of business and other than as set forth in the proviso in this Section 6.1(d), (vi) sell, pledge, dispose of or encumber any material assets or businesses other than (A) sales of businesses or assets in the ordinary course of business, (B) sales of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, or (vii) except as contemplated by the following provisoannounce an intention, enter into any binding contract, agreement, formal or informal agreement or otherwise make a commitment or arrangement with respect to do any of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent with past practice; provided, however, that the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annum; (h) not adopt, enter into or amend any pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any employees or retirees generally, other than in the ordinary course of business, except (i) as contemplated by Section 6.1(c), (ii) as required to comply with changes in applicable law, (iii) any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreement; (i) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses in such amounts and against such risks and losses as are consistent with past practice; and (j) not make, change or revoke any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authority.

Conduct of Business Pending the Merger. SECTION 6.1 Conduct of Business by the Company Pending the Merger. Except as otherwise contemplated expressly permitted by clauses (a) through (s) of this Section 4.1, during the period from the date of this Agreement or disclosed in Section 6.1 of until the Company Disclosure Schedule, after the date hereof and prior to the Closing Date or earlier termination of this Agreement, unless Parent shall otherwise agree in writingEffective Time, the Company shall, and shall cause each of its subsidiaries Subsidiaries to:, conduct, in all material respects, its business in the ordinary course of business consistent with past practice and, to the extent consistent therewith, use commercially reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall be materially unimpaired at the Effective Time. Without limiting the generality of the foregoing, and except (i) as otherwise expressly contemplated by this Agreement, (ii) as reasonably contemplated to comply with the Company’s or the Board of Directors’ of the Company fiduciary obligations in a manner consistent with Section 4.3, (iii) as required by the terms of any Contract set forth on Section 4.1 of the Company Letter, in each case existing on the date hereof between the Company or any of its Subsidiaries and any other Person or (iv) as otherwise set forth in Section 4.1 of the Company Letter, the Company shall not, and shall not permit any of its Subsidiaries to, without the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed): (a) conduct their respective businesses in the ordinary and usual course of business and consistent with past practice; (b) not (i) amend declare, set aside or propose pay any dividends on, or make any other actual, constructive or deemed distributions in respect of, any of its capital stock, or otherwise make any payments to amend its stockholders in their respective certificates capacity as such other than dividends or distributions from wholly owned Subsidiaries of incorporation the Company to the Company or bylawsother wholly owned Subsidiary of the Company, (ii) split, combine or reclassify their outstanding any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, (iii) purchase, redeem or otherwise acquire, or modify or amend, any shares of capital stock of the Company or any Subsidiary or any other securities thereof or any rights, warrants or options to acquire, any such shares or other securities or (iv) redeem the rights issued under the Company Rights Agreement or amend or terminate the Company Rights Agreement prior to the Effective Time other than in the case of Section 4.1(a)(i)-(iv), (A) to render the Company Rights Agreement inapplicable to the Merger, this Agreement, the Voting Agreements executed by stockholders of the Company and the transactions contemplated hereby and thereby, (B) as required to do so by a court of competent jurisdiction (in which case, to the extent permitted by such court of competent jurisdiction, the Company shall provide Parent with written notice at least three (3) Business Days prior to taking any such action), (C) to preserve the net operating losses of the Company following the Closing or (D) to effectuate the Merger and the transactions contemplated hereby; (b) except for transactions among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries (i) authorize for issuance, issue, deliver, sell, pledge, dispose of, grant, transfer or otherwise encumber or agree or commit to issue, deliver, sell, pledge, dispose of, grant, transfer or encumber any shares of its capital stock, any other voting securities or equity equivalent or any securities convertible into or exchangeable for, or any rights, warrants or options of any kind to acquire, any such shares, voting securities, equity equivalent or convertible or exchangeable securities, other than the issuance of Company Shares (and the associated Company Rights in accordance with the Rights Agreement) upon the exercise of Company Stock Options outstanding on the date of this Agreement, in each case, in accordance with their terms, (ii) enter into any amendment of any term of any of its outstanding securities or (iii) declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise, except for accelerate the payment vesting of dividends or distributions to the Company by a wholly-owned subsidiary of the Company; (c) not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or other rights of any kind to acquire any shares of their capital stock to the extent that such acceleration of vesting does not occur automatically under the terms of any class such interests or any debt plans governing such interests; (c) amend or equity securities convertible into publicly propose to amend its certificate of incorporation or exchangeable for such capital stock, except that (i) the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereof, (ii) the Company may issue shares of Company Common Stock (bylaws or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating theretoother comparable organizational documents; (d) not (i) incur acquire or become contingently liable with respect agree to acquire by merging or consolidating with, by purchasing a substantial portion of the assets of or equity in or by any indebtedness for borrowed money other manner, any business or any corporation, limited liability company, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets, other than (A) borrowings assets acquired in the ordinary course of business consistent with past practice and not material to the Company and its Subsidiaries, taken as a whole; (e) sell, transfer, lease, license (as licensor of Intellectual Property Rights of the Company), mortgage, pledge, encumber or otherwise dispose of any of its properties or assets, other than sales, leases, licenses or disposals of products or services in the ordinary course of business consistent with past practice and not material to the Company and its Subsidiaries, taken as a whole; (f) (i) incur, assume or modify any indebtedness for borrowed money, guarantee, endorse or otherwise become liable or responsible for (whether directly, contingently or otherwise), any such indebtedness for borrowed money of another Person or make any loans, advances or capital contributions to, or other investments in, any other Person, other than (A) indebtedness, obligations, loans, advances, capital contributions and investments between the Company and any of its wholly owned Subsidiaries or between any of such wholly owned Subsidiaries, (B) (x) letters of credit required under applicable Law to be issued in connection with the operation of the Company’s advance deposit wagering business or otherwise not exceeding $100,000 in the aggregate, (y) indebtedness incurred under the revolving portion of the Company’s existing credit facility and any other facility permitted pursuant to clause (C) and (z) other indebtedness incurred in the ordinary course of business not to exceed $100,000 in the aggregate (excluding any drawn letters of credit facilitiespermitted pursuant to this clause (B)); (C) refinancings, refundings or borrowings under replacements of indebtedness (including letters of credit permitted pursuant to clause (B)(x)), guarantees and investments in existence on the date hereof, provided that the outstanding principal amount is not materially increased thereby; and (D) indemnification advances to directors and officers pursuant to applicable Law, the Company Bylaws, and/or indemnification agreements existing credit facilities as of the date hereof; (ii) issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stockSubsidiaries, (iii) take enter into any action that would jeopardize the treatment “keep well” or other agreement to maintain any financial statement condition of another Person other than any of the Merger as a pooling of interests under Opinion No. 16 wholly owned Subsidiaries of the Accounting Principles Board ("APB No. 16"), Company or (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets in the ordinary course of business and expenditures for fixed or capital assets in the ordinary course of business and other than as set forth in the proviso in this Section 6.1(d), (vi) sell, pledge, dispose of or encumber any material assets or businesses other than (A) sales of businesses or assets in the ordinary course of business, (B) sales of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, or (vii) except as contemplated by the following proviso, enter into any binding contract, agreement, commitment or arrangement with respect to having the economic effect of any of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into alter (including through merger, liquidation, dissolution, reorganization, restructuring or amend any employment, severance, special pay arrangement with respect to termination recapitalization) the corporate structure or ownership of employment or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent with past practice; provided, however, that the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annumSubsidiary; (h) not adoptenter into, enter into adopt or amend any pension (x) Company Plan for the purpose of increasing benefits to the Company’s or retirement planits Subsidiaries’ employees, trust where as a result of such amendment or fundadoption, except as required applicable, the cost to comply with changes the Company of providing such increased benefits will exceed $250,000 in applicable law and not adopt, enter into the aggregate during the twelve months immediately following such amendment or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, adoption or (y) employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any employees or retirees generally, consulting Contract other than in the ordinary course of business, except except, in each case, as required by applicable Law or the terms of this Agreement; provided, however, that in the case of clauses (x) and (y), the Company agrees that it shall first consult with Parent prior to taking any such action that would otherwise be permitted without Parent's prior written consent pursuant to this Section 4.1(h) (it being understood and agreed that any breach by the Company of the proviso in this Section 4.1(h) shall not be taken into account for purposes of Section 6.3(a)); (i) as contemplated by Section 6.1(c)increase the compensation or benefits payable or to become payable to its directors, officers or employees (iiexcept for increases in the ordinary course of business consistent with past practice in salaries or wages of employees of the Company or any of its Subsidiaries who are not officers of the Company or any of its Subsidiaries) or grant any severance or termination pay to, or enter into or amend any employment or severance Contract with, any current or former director or officer of the Company or any of its Subsidiaries other than as required to comply with changes by Law, a Contract or any Company Plan in applicable law, (iii) any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after existence on the date hereof, or establish, adopt, enter into or, except as may be required to comply with applicable Law, amend or take action to enhance or accelerate any rights or benefits under, any labor, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, Contract, trust, fund, policy or arrangement for the benefit of any current or former director, officer or employee (ivwithout limiting the foregoing, for the avoidance of doubt, this Section 4.1(i) as required pursuant to an existing contractual arrangement shall not prohibit the Company or agreementits Subsidiaries from paying and/or accruing bonuses to, or with respect to, their respective employees in the ordinary course of business); (ij) use commercially reasonable efforts knowingly violate or knowingly fail to maintain perform in any material respect any obligation or duty imposed upon it or any Subsidiary by any applicable material federal, state or local Law, rule, regulation, guideline or ordinance; (k) make or adopt any change to its accounting methods, practices or policies (other than actions required to be taken by GAAP or under applicable Law as communicated to the Company by its independent auditors); (l) except as required by applicable Law, prepare or file any Tax Return in a manner that is materially inconsistent with financially responsible insurance companies insurance past practice or, on its tangible assets and its businesses any such Tax Return, take any position, make or change any election or adopt any method that is materially inconsistent with positions taken, elections made or methods used in such amounts and against such risks and losses as are preparing or filing similar Tax Returns in prior periods; (m) enter into, materially amend, cancel, terminate, extend or request any material change in, or agree to any material change in, any Company Contract, other than in the ordinary course of business consistent with past practice; and; (jn) not makefrom January 1, change 2010 through December 31, 2010, authorize, or revoke enter into any commitment for, capital expenditures exceeding $2,650,000 in the aggregate; (o) waive, release or assign any material Tax election right or make claim or pay, discharge or satisfy any 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 consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in the most recent Company SEC Documents filed prior to the date of this Agreement, or incurred in the ordinary course of business consistent with past practice; (p) initiate any material litigation or arbitration proceeding or settle or compromise any material litigation or arbitration proceeding; (q) enter into any agreement or settlement regarding Taxes arrangement that would be required to be reported by the Company pursuant to Item 404 of Regulation S-K promulgated by the SEC (subject to clauses (h) and (i) above, other than compensation arrangements with the Company’s and its Subsidiaries’ employees, officers and directors) or other agreements or arrangements in the ordinary course of business consistent with past practice; (r) (i) enter into (A) any taxing authoritymaterial line of business in the United States other than the line of business in the United States in which the Company and its Subsidiaries is currently engaged or (B) any line of business outside of the United States other than the line of business outside of the United States in which the Company and its Subsidiaries is currently engaged, in each case as of the date of this Agreement or (ii) distribute products or services (A) in the United States other than the products and services that the Company and its Subsidiaries are currently distributing in the United States or (B) to any country outside the United States other than the products and services that the Company and its Subsidiaries are currently distributing outside the United States, in each case as of the date of this Agreement; or (s) authorize, recommend, publicly propose or announce an intention to do any of the foregoing or enter into any Contract to do any of the foregoing.

Conduct of Business Pending the Merger. SECTION 6.1 6.01. Conduct of Business by the Company KSHC Entities Pending the KSHC Merger. Except as otherwise contemplated by this Agreement (including, without limitation, with respect to any action set forth under Article VIII or disclosed IX or otherwise in Section 6.1 of connection with the Company Transactions) or as set forth in the KSHC Disclosure Schedule, after during the period from the date hereof and prior of this Agreement to the Closing Date or earlier termination of this Agreement, unless Parent shall otherwise agree in writing, the Company Effective Time (i) KSHC shall, and shall cause each other KSHC Entity to, conduct its subsidiaries to: (a) conduct their respective businesses in the ordinary and usual course of business and consistent with past practice; (b) not (i) amend or propose to amend their respective certificates of incorporation or bylaws, (ii) split, combine or reclassify their outstanding capital stock or (iii) declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise, except for the payment of dividends or distributions to the Company by a wholly-owned subsidiary of the Company; (c) not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that (i) the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereof, (ii) the Company may issue shares of Company Common Stock (or warrants or options to acquire Company Common Stock) in connection with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and (iii) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings operations in the ordinary course of business substantially consistent with past practice, (ii) KSHC shall not, and shall cause each other KSHC Entity not to, enter into any Acquisition Proposal other than pursuant any KSHC Approved Acquisition and (iii) KSHC shall, and shall use all reasonable efforts to credit facilities) or borrowings under cause each other KSHC Entity to, seek to preserve intact its current business organizations, keep available the existing credit facilities service of its current officers and employees and preserve its relationships with customers, suppliers and other Persons having business dealings with it with the objective that their goodwill and ongoing businesses shall be unimpaired at the Effective Time. Without limiting the generality of the Company or any of its subsidiaries foregoing, and except as such facilities may be amended otherwise permitted in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up this Agreement prior to the existing borrowing limit on Effective Time, KSHC shall not, and shall not permit any other KSHC Entity to, without the date hereof, prior written consent of Parent (B) borrowings except to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection with acquisitions as the extent set forth in the proviso in this Section 6.1(dKSHC Disclosure Schedule): (a) issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class (including KSHC Common Stock), (ii) redeemor any securities or rights convertible into, purchaseexchangeable for, acquire or offer evidencing the right to subscribe for any shares of its capital stock, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any options, warrants securities or rights to acquire any of its capital stock or any security convertible into or into, exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets in the ordinary course of business and expenditures for fixed or capital assets in the ordinary course of business and other than as set forth in the proviso in this Section 6.1(d), (vi) sell, pledge, dispose of or encumber any material assets or businesses other than (A) sales of businesses or assets in the ordinary course of business, (B) sales of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowingsfor, or (vii) except as contemplated by evidencing the following proviso, enter into any binding contract, agreement, commitment or arrangement with respect right to any of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoingsubscribe for, any contingent, royalty and similar payments made in connection with acquisitions shares of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent with past practice; provided, however, that the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annum; (h) not adopt, enter into or amend any pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any employees or retirees generally, other than in the ordinary course of business, except (i) as contemplated by Section 6.1(c), (ii) as required to comply with changes in applicable law, (iii) any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreement; (i) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses in such amounts and against such risks and losses as are consistent with past practice; and (j) not make, change or revoke any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authority.its

Conduct of Business Pending the Merger. SECTION 6.1 Conduct of Business by the Company Pending the Merger. Except as otherwise contemplated expressly permitted by clauses (i) through (xxviii) of this Section 4.1, during the period from the date of this Agreement or disclosed in Section 6.1 of through the Company Disclosure Schedule, after the date hereof and prior to the Closing Date or earlier termination of this Agreement, unless Parent shall otherwise agree in writingEffective Time, the Company shall, and shall cause each of its subsidiaries Subsidiaries to, conduct its business in the ordinary course of business consistent with past practice and, to the extent consistent therewith, use reasonable best efforts to preserve intact its current business organization, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, and except as otherwise expressly contemplated by this Agreement or as set forth in Section 4.1 of the Company Letter (with specific reference to the applicable subsection below), the Company shall not, and shall not permit any of its Subsidiaries to, without the prior written consent of Parent: (a) conduct their respective businesses in the ordinary and usual course of business and consistent with past practice; (b) not (i) amend or propose to amend their respective certificates of incorporation or bylaws, (ii) split, combine or reclassify their outstanding capital stock or (iiiA) declare, set aside or pay any dividend dividends on, or distribution payable make any other actual, constructive or deemed distributions in cashrespect of, any of its capital stock, property or otherwiseotherwise make any payments to its shareholders in their capacity as such, except for other than dividends or distributions from the Company’s Subsidiaries to the Company and other than the payment of dividends or distributions to a one time cash dividend of $0.0625 per each outstanding share of Company Common Stock, which dividend was declared on February 24, 2012 and is payable by the Company by a wholly-owned subsidiary on April 6, 2012 to shareholders of record as of Xxxxx 0, 0000, (X) split, combine or reclassify any of its capital stock or issue or authorize the Company; (c) not issue, sell, pledge or dispose issuance of any other securities in respect of, in lieu of or agree to issuein substitution for shares of its capital stock or (C) purchase, sell, pledge redeem or dispose of, any additional shares of, or any options, warrants or rights of any kind to otherwise acquire any shares of their capital stock of any class the Company or its Subsidiaries or any debt other securities thereof or any rights, warrants or options to acquire, any such shares or other securities; (ii) authorize for issuance, issue, deliver, sell, pledge, dispose of, grant, transfer or otherwise encumber any shares of its capital stock, any other voting securities or equity equivalent or any securities convertible into or exchangeable for for, or any rights, warrants or options to acquire, any such capital stockshares, except that (i) voting securities, equity equivalent or convertible or exchangeable securities, other than the Company may issue shares upon conversion issuance of convertible securities and exercise of options and warrants outstanding on the date hereof, (ii) the Company may issue shares of Company Common Stock (or warrants or options to acquire upon the exercise of Company Common Stock) Stock Options outstanding on the date of this Agreement, in connection each case, in accordance with acquisitions of assets or businesses pursuant to the proviso of Section 6.1(d) and their current terms; (iii) amend any of its Organizational Documents or alter (through merger, liquidation, reorganization, restructuring or in any other fashion) the Company may issue shares of Company Common Stock pursuant to earnouts from previously completed transactions in accordance with the existing terms of the agreements relating thereto; (d) not (i) incur corporate structure or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings in the ordinary course of business (other than pursuant to credit facilities) or borrowings under the existing credit facilities ownership of the Company or any of its subsidiaries as such facilities may be amended in a manner that does not have a material adverse effect on the Company (the "Existing Credit Facilities") up to the existing borrowing limit on the date hereof, (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, or (C) borrowings in connection with acquisitions as set forth in the proviso in this Section 6.1(d), (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take any action that would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), Subsidiaries; (iv) take change its interest rate or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368(a) of the Code, (v) make any acquisition of any assets or businesses other than expenditures for current assets in the ordinary course of business and expenditures for fixed or capital assets in the ordinary course of business and other than as set forth in the proviso in this Section 6.1(d), (vi) sell, pledge, dispose of or encumber any material assets or businesses other than (A) sales of businesses or assets in the ordinary course of business, (B) sales of businesses or assets disclosed in Section 6.1 of the Company Disclosure Schedule, (C) sales of businesses or assets with aggregate 1997 revenues of less than $5 million, and (D) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, or (vii) except as contemplated by the following proviso, enter into any binding contract, agreement, commitment or arrangement fee pricing policies with respect to any of the foregoing; provided, however, that notwithstanding the foregoing (other than subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be prohibited from acquiring any assets Deposits or businesses or incurring or assuming indebtedness in connection with acquisitions of assets or businesses so long as (A) such acquisitions are disclosed in Section 6.1 of the Company Disclosure Schedule, or (B) the aggregate value of consideration paid or payable in connection with any such acquisition (other than those acquisitions disclosed in Schedule 6.1 of the Company Disclosure Schedule) including any funded indebtedness assumed and any Company Common Stock issued in connection with such acquisitions (valued for purposes of this limitation at a price per share equal to the price of the Company Common Stock on the date the agreement in respect of any such acquisition is entered into) does not exceed $10 million and such acquisition is accretive to the earnings per share of the Company. For purposes of the foregoing, any contingent, royalty and similar payments made in connection with acquisitions of businesses or assets shall be included as acquisition consideration and shall be deemed to have a value equal to their present value assuming a 8% per annum discount rate and assuming that all amounts payable for the first five years following consummation of the acquisitions (but not thereafter) are paid. Notwithstanding anything herein to the contrary: (A) the Company will not acquire or agree to acquire any assets or businesses if such acquisition or agreement may reasonably be expected to delay the consummation of the Merger; (B) the Company will not acquire or agree to acquire any assets or businesses if such assets or businesses are not in industries in which the Company currently operates, unless such assets or businesses are acquired incidental to an acquisition of businesses or assets that are in industries in which the Company currently operates and it is reasonable to acquire such incidental businesses or assets in connection with such acquisition; and (C) the Company will not acquire or agree to acquire all or substantially all of the business, assets, properties or capital stock of any entity with securities registered under the Securities Act or the Exchange Act; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement; (f) subject to restrictions imposed by applicable law, confer with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations; (g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent with past practice; provided, however, that the Company and its subsidiaries shall in no event enter into or amend any written employment agreements providing for annual base salary in excess of $100,000 per annum; (h) not adopt, enter into or amend any pension or retirement plan, trust or fund, except as required to comply with changes in applicable law and not adopt, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any employees or retirees generally, Loans other than in the ordinary course of business consistent with past practice provided, that the Company gives Parent notice of any changes made to such interest rate or fee pricing policies; (v) amend, terminate, waive or modify any of the terms of (A) any Company Loan or Company Deposit except in the ordinary course of business consistent with past practice and applicable the Company Bank policies and only to the extent that such amendment, termination, waiver or modification does not alter the terms of such Company Loan or Company Deposit in any material respect and is not adverse to the Company or Parent in any manner or (B) any Investment; (vi) (A) enter into any new line of business, amend, waive or modify its lending, investment, underwriting, risk and asset liability management and other banking and operating policies, (B) make any underwriting exceptions in making or renewing any consumer loans, except as required by applicable Laws, (iC) introduce any new loan or credit products (D) acquire any CDARS Deposits or make any of the Company Deposits CDARS Deposits, (E) enter into amend, terminate, waive or modify any Contract providing for any participation of or similar arrangement with respect to any Company Loan or (F) enter into amend, terminate, waive or modify any Contract providing for any servicing of any Company Loan by any third party; (vii) enter into or approve any Company Loan or a group of related Company Loans in excess of $250,000 in the aggregate, or enter into or approve any renewal of any existing Company Loan or group of related Company Loans in excess of $500,000 in the aggregate ; (viii) subject to clause (vii) immediately above, fail to make additional extensions of credit in the ordinary course of business consistent with past practices (subject to the Company’s customary credit underwriting qualifications); (ix) purchase or invest in any securities or other investments other than Xxxxxx Xxxx, having (A) a face amount of not more than $2,000,000, and (B) with a weighted average life of not more than three (3) years assuming a 200 basis point increase in interest rates; (x) close, sell, consolidate, or relocate any of the Company Bank’s branches; (xi) make any material change in any information technology system utilized by the Company or any of its Subsidiaries; (xii) (A) acquire or agree to acquire by merging or consolidating with, by purchasing a substantial portion of the assets of or equity in or by any other manner, any business or any corporation, limited liability company, partnership, association or other business organization or division thereof or otherwise acquire, or agree to acquire, any assets other than assets acquired in the ordinary course of business consistent with past practice and not material to the Company and its Subsidiaries, taken as a whole or (B) make or agree to make any new capital expenditure or expenditures which, individually, is in excess of $5,000 or, in the aggregate, are in excess of $25,000; (xiii) sell, transfer, lease, license (as licensor of Intellectual Property Rights of the Company or its Subsidiaries), mortgage, pledge, encumber or otherwise dispose of any of its properties or assets, other than sales of inventory in the ordinary course of business consistent with past practice and not material to the Company and its Subsidiaries, taken as a whole; (xiv) acquire, lease (as lessee) or sell or lease (as lessor) any real property other than the disposition of OREO for not less than 95% of the book value of such OREO as reflected on the books and records of the Company Bank; (xv) (A) incur, assume or modify any indebtedness for borrowed money, guarantee, endorse or otherwise become liable or responsible for (whether directly, contingently or otherwise) any such indebtedness or other obligations of another Person or make any loans or advances (other than Company Loans) or capital contributions to, any other Person, other than indebtedness, loans, advances, capital contributions and investments between the Company and its Subsidiaries and other than borrowings by the Company Bank from the Federal Home Loan Bank of Des Moines, Iowa with maturities not exceeding one year and at the Federal Reserve Discount Window, in each case in the ordinary course of business consistent with past practice, (B) issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or its Subsidiaries, (C) enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or (D) enter into any arrangement having the economic effect of any of the foregoing; (xvi) (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 compensation or benefits payable or to become payable to its directors, officers or employees, including any increase or change pursuant to any Company Plan, except in a manner which is consistent with the Company’s normal and customary past practices or (B) or establish, adopt, enter into, amend or take action to enhance or accelerate any rights or benefits under (or promise to take any such action(s)) any agreement, plan or arrangement that would constitute a Company Plan if it were in existence on the date hereof, except, in the case of each of clause (A) and clause (B), as required by Law or by any written Contract or any Company Plan in existence on the date hereof; (xvii) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $30,000; (xviii) knowingly violate or knowingly fail to perform any obligation or duty imposed upon the Company or its Subsidiaries by any applicable Law; (xix) make or adopt any change to its accounting methods, practices, policies or procedures (other than actions required to be taken by GAAP); (xx) make any material change in internal control over financial reporting; (xxi) fail to ensure that the charge-offs, write-downs and OREO established on the Company’s or any of its Subsidiaries’ books and records between the date hereof and the Closing Date will be established in accordance with the requirements of GAAP, consistently applied to the Company’s and its Subsidiaries’ past practice, and will properly reflect the losses incurred on outstanding Company Loans (including accrual interest receivable); (xxii) prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods, settle or compromise any claim relating to Taxes, enter into any closing agreement or similar agreement relating to Taxes, otherwise settle any dispute relating to Taxes, or request any ruling or similar guidance with respect to Taxes; (xxiii) (A) enter into, amend, modify or terminate any Company Contract, (B) waive, release or assign any rights under any Company Contract or (C) enter into, renew, or become subject to any Interest Rate Instrument whether for the account of the Company or any of its Subsidiaries or any of their respective customers; (xxiv) enter into or amend any Contract (A) that would, after the Effective Time, restrict Parent or any of its Subsidiaries (including the Company and its Subsidiaries) with respect to engaging in any line of business or in any geographical area or (B) that contains exclusivity, most favored nation pricing or other provisions or non-solicitation provisions; (xxv) waive or release any material right or claim or pay, discharge or satisfy any 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 consistent with past practice and applicable Company Bank policies or in accordance with their terms, of liabilities reflected or reserved against in the most recent Company SEC Documents filed prior to the date hereof or incurred in the ordinary course of business consistent with past practice; (xxvi) initiate, settle or compromise any Action; (xxvii) enter into any agreement or arrangement that would be required to be reported by the Company pursuant to Item 404 of Regulation S-K promulgated by the SEC; (xxviii) take any action that would reasonably be expected to, or omit to take any action where such omission would reasonably be expected to, prevent, materially delay or impede the consummation of the Merger or the other transactions contemplated by Section 6.1(c)this Agreement; or (xxix) authorize, (ii) as required recommend, propose or announce an intention to comply with changes in applicable law, (iii) do any of the foregoing involving or enter into any such then existing plans, agreements, trusts, funds or arrangements Contract to do any of any company acquired after the date hereof, or (iv) as required pursuant to an existing contractual arrangement or agreement; (i) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses in such amounts and against such risks and losses as are consistent with past practice; and (j) not make, change or revoke any material Tax election or make any material agreement or settlement regarding Taxes with any taxing authorityforegoing.