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

Conduct of Business Pending the Merger. SECTION 6.01. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. The Company agrees that, between the date of this Agreement and the Effective Time, unless Parent shall otherwise agree in writing, or except as expressly contemplated by this Agreement or described in Section 6.01 of the Disclosure Schedule, the businesses of the Company and the Subsidiaries of the Company shall be conducted only in, and the Company and the Subsidiaries of the Company shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; and the Company shall use its commercially reasonable best efforts consistent with its obligations under this Agreement to preserve substantially intact the business organization of the Company and the Subsidiaries of the Company, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries of the Company and to preserve the current relationships of the Company and the Subsidiaries of the Company with customers, suppliers and other persons with which the Company or any Subsidiary of the Company has significant business relations; PROVIDED THAT nothing in this Section 6.01 shall require the Company or the Subsidiaries of the Company to make any payments to any officer, employee, consultant or other person who is not otherwise entitled to receive such payments solely in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be in the ordinary course of business consistent with past practice. By way of amplification and not limitation, except as expressly contemplated by this Agreement and Section 6.01 of the Disclosure Schedule, neither the Company nor any Subsidiary of the Company 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) amend or otherwise change its Restated Certificate of Incorporation or By-laws or equivalent organizational documents; (b) issue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of any class of capital stock of the Company or any Subsidiary 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, without limitation, any phantom interest), of the Company or any Subsidiary of the Company (except for the securities issuable pursuant to the Warrants or Company Stock Options, in each case as set forth on Section 4.03 of the Disclosure Schedule) or (ii) any assets of the Company or any Subsidiary of the Company, except, in the case of (ii) 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 by any direct or indirect wholly owned Subsidiary of the Company to the Company or any other Subsidiary of the Company; (d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock; (e) (i) acquire (including, without limitation, 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; (ii) 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 or advances, or grant any security interest in any of its assets; (iii) enter into any contract or agreement that would be a Material Contract, (iv) enter into any distribution or manufacturing contract or agreement, other than contracts or agreements (including intellectual property contracts) entered into in the ordinary course of business and consistent with past practice; (v) authorize, or make any commitment with respect to, any capital expenditure in any manner not reflected in the capital budget of the Company attached as Section 6.01(e)(v) of the Disclosure Schedule; or (vi) enter into or amend any contract, agreement, commitment or binding arrangement with respect to any matter set forth in this Section 6.01(e); (f) take any action that would have the effect, directly or indirectly, of paying or discharging any of the Company Expenses for an amount in excess of $2,340,000 in the aggregate; (g) except as specifically contemplated or provided for in this Agreement, 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, wages, bonuses or incentives of employees of the Company or any Subsidiary of the Company who are not directors or officers of the Company, or grant 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 of any Subsidiary of the Company, or establish, adopt, enter into or amend any collective bargaining, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee; (h) change any of the accounting methods used by it unless required by GAAP; (i) make any tax election other than immaterial tax elections in the ordinary course consistent with past practice or settle or compromise any United States federal, state, local or non-United States material income tax liability; (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 any such liabilities in the ordinary course of business and consistent with past practice; (k) amend, modify or consent to the termination of any Material Contract, or amend, waive, modify or consent to the termination of the Company's or its Subsidiary's material rights thereunder, other than in the ordinary course of business and consistent with past practice; (l) commence or settle any Action; (m) fail to pay, discharge or satisfy any claim, liability or obligation in accordance with the ordinary course of business of the Company, consistent with past practice; or (n) announce an intention, enter into any formal or informal agreement or otherwise make a commitment, to do any of the foregoing.

Conduct of Business Pending the Merger. SECTION 6.01. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. (a) The Company covenants and agrees that, during the period from the date hereof until the earlier of the Effective Time and the date, if any, on which this Agreement is terminated pursuant to Section 7.1, except as expressly contemplated by this Agreement, as set forth in Section 5.1(a) of the Company Disclosure Schedule or as required by Law, or unless Parent shall otherwise consent in writing, the business of the Company and its Subsidiaries shall be conducted in the Ordinary Course of the Company’s Business, and in compliance in all material respects with applicable Law and the Company shall use its reasonable best efforts to preserve intact its business organization, and to preserve its present relationships with customers, suppliers, employees, licensees, licensors, partners and other Persons with which it or any of its Subsidiaries has significant business relations. (b) Without limiting the generality of the foregoing, between the date of this Agreement and the earlier of the Effective TimeTime and the date, unless Parent shall otherwise agree in writingif any, or on which this Agreement is terminated pursuant to Section 7.1, except as otherwise expressly contemplated by this Agreement or described Agreement, as set forth in Section 6.01 of the Disclosure Schedule, the businesses of 5.1(b) to the Company and the Subsidiaries of the Company shall be conducted only in, and the Company and the Subsidiaries of the Company shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; and the Company shall use its commercially reasonable best efforts consistent with its obligations under this Agreement to preserve substantially intact the business organization of the Company and the Subsidiaries of the Company, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries of the Company and to preserve the current relationships of the Company and the Subsidiaries of the Company with customers, suppliers and other persons with which the Company Disclosure Schedule or any Subsidiary of the Company has significant business relations; PROVIDED THAT nothing in this Section 6.01 shall require the Company or the Subsidiaries of the Company to make any payments to any officer, employee, consultant or other person who is not otherwise entitled to receive such payments solely in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be in the ordinary course of business consistent with past practice. By way of amplification and not limitation, except as expressly contemplated required by this Agreement and Section 6.01 of the Disclosure ScheduleLaw, neither the Company nor any Subsidiary of the Company shall, between the date of this Agreement and the Effective Time, directly or indirectly, do, or propose to do, any of the following its Subsidiaries shall without the prior written consent of Parent: (ai) amend or otherwise change its Restated Certificate of Incorporation the Company Charter or By-laws Company Bylaws or equivalent organizational documentsany similar governing instruments; (bii) issue, sell, transfer, pledge, redeem, accelerate rights under, dispose of, grant of or encumber, or authorize the issuance, sale, transfer, pledge, dispositionredemption, grant acceleration of rights under, disposition or encumbrance of, (i) any shares of any class of capital stock of the Company or any Subsidiary of the Companyclass, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of such capital stock, or any other ownership interest (including, without limitation, including any phantom interest)) in the Company or any of its Subsidiaries, except for the issuance of Shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options outstanding on the date of this Agreement, and the acceleration of vesting of Options as contemplated by the Option Plans and the issuance of Company Common Stock pursuant to, and in accordance with, the ESPP; (iii) sell, pledge, mortgage, dispose, lease, of or encumber any assets, tangible or intangible, of the Company or any Subsidiary of its Subsidiaries or suffer to exist any Lien thereupon other than (A) sales of assets not to exceed $50,000 in the aggregate and (B) sales of products in the Ordinary Course of the Company Company’s Business; (except for the securities issuable pursuant iv) with respect to the Warrants or Company Stock Options, in each case as set forth on Section 4.03 of the Disclosure Schedule) or (ii) any assets of Intellectual Property owned by the Company or any Subsidiary of its Subsidiaries and with respect to any rights to Intellectual Property granted under any IP Contract, (A) transfer, assign or license to any Person any rights to Intellectual Property, (B) abandon, permit to lapse or otherwise dispose of any Intellectual Property, (C) grant any Lien on any Intellectual Property, or (D) make any material change in any Intellectual Property that reasonably could be expected to impair such Intellectual Property or the Company, except, in the case of (ii) in the ordinary course of business and in a manner consistent ’s or its Subsidiaries’ rights with past practicerespect thereto; (cv) (A) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock, stock or property or otherwise, with any combination thereof) in respect to of any of its capital stock, except for dividends by any that a direct or indirect wholly owned Subsidiary of the Company may declare and pay a dividend to its parent, (B) split, combine or reclassify any of its capital stock or issue or authorize or propose the Company or issuance of any other Subsidiary securities in respect of, in lieu of the Company; (d) reclassify, combine, split, subdivide or redeemin substitution for shares of its capital stock, or purchase (C) purchase, repurchase, redeem or otherwise acquire, directly or indirectly, or permit any Subsidiary to purchase, repurchase, redeem or otherwise acquire, any of its capital stocksecurities or any securities of its Subsidiaries, or any option, warrant or right, to acquire any such securities, or propose to do any of the foregoing; (evi) (iA) (1) acquire (including, without limitation, by merger, consolidation, consolidation or acquisition of stock or assets or any other business combinationotherwise) any corporation, partnership, partnership or other business organization or any division thereof or any significant amount equity interest therein, in each case, with a value in excess of assets$10,000, (2) enter into any new line of business, other than development, testing or marketing of new products in the Ordinary Course of the Company’s Business, (3) make any capital contribution or investment in any joint venture, except as required pursuant to terms of a Material Contract in effect as of the date of this Agreement, or (4) create any Subsidiaries; (iiB) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, endorse or otherwise as an accommodation become responsible forfor (whether directly, contingently or otherwise), the material obligations of any personPerson (other than a wholly-owned Subsidiary), or make any loans or advances, or grant any security interest except in any the Ordinary Course of its assetsthe Company’s Business; (iiiC) enter into into, renew, fail to renew, amend or terminate any contract or agreement that would be a Material Contract, (iv) enter into any distribution or manufacturing contract or agreement, other than contracts or agreements material lease relating to real property (including intellectual property contracts) entered into in the ordinary course of business and consistent with past practiceany existing Material Real Property Leases); (vD) authorize, adopt or make implement any commitment with respect to, new stockholder rights plan; (E) authorize any capital expenditure expenditures or purchase of fixed assets which are in any manner not reflected excess of $50,000, for the Company and its Subsidiaries taken as a whole, except as previously budgeted and set forth in the capital budget Section 5.1(b) of the Company attached as Section 6.01(e)(v) of the Disclosure Schedule, and taking into consideration all future plans regarding the Company’s property, plant and equipment; or (viF) enter into or amend any contractContract, agreement, commitment or binding arrangement with respect to effect any matter set forth in of the matters prohibited by this Section 6.01(e5.1(b)(vi); (fvii) take any action that would have the effect, directly or indirectly, of paying or discharging any of the Company Expenses for an amount in excess of $2,340,000 in the aggregate; (gA) except as specifically contemplated or provided for in this Agreement, 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 (B) hire or promote any person as or to (as the ordinary course of business and consistent with past practice in salaries, wages, bonuses case may be) an executive officer or incentives of employees of the Company or appoint any Subsidiary of the Company who are not directors or officers director of the Company, (C) hire or promote any employee below officer except to fill a vacancy in the Ordinary Course of the Company’s Business, (D) make or forgive any loan or advance to employees or directors (other than loans or advances of reasonable relocation and travel expenses in the Ordinary Course of the Company’s Business), (E) except as may be required by Law or existing written agreements, grant any severance or termination pay to, or enter into any employment modify, amend, terminate or severance agreement withadopt, or promise to modify, amend, terminate or adopt, any director, officer or other employee of the Company or of any Subsidiary of the CompanyPlan, or any Contract, agreement or arrangement that would be a Plan, (F) establish, adopt, enter into or amend any collective bargainingbargaining agreement, bonuscompensation plan, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance program or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directorcurrent or former directors, officer officers or employee; (h) change any of the accounting methods used by it unless required by GAAP; (i) make any tax election other than immaterial tax elections in the ordinary course consistent with past practice or settle or compromise any United States federal, state, local or non-United States material income tax liability; (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 any such liabilities in the ordinary course of business and consistent with past practice; (k) amend, modify or consent to the termination of any Material Contract, or amend, waive, modify or consent to the termination of the Company's or its Subsidiary's material rights thereunder, other than in the ordinary course of business and consistent with past practice; (l) commence or settle any Action; (m) fail to pay, discharge or satisfy any claim, liability or obligation in accordance with the ordinary course of business employees of the Company, consistent any of its Subsidiaries, except as may be necessary to maintain proper qualification under the Code or other Law, (G) pay any discretionary bonuses to any officer of the Company, (H) make any awards of equity in the Company or any of its Subsidiaries or any rights to receive equity in the Company or any of its Subsidiaries, (I) amend any existing stock option or other equity-based compensation or enter into any agreement under which any stock option or other equity-based compensation would be required to be issued, except as permitted by Section 2.4, (J) except as set forth in writing by Parent for the express purpose of communications with past practice; or (n) announce an intentionemployees of the Company or any of its Subsidiaries, make any representation or commitment to, or enter into any formal or informal understanding with any employee of the Company or any of its Subsidiaries with respect to compensation, benefits, or terms of employment to be provided by Parent, Purchaser, or any of their Subsidiaries at or subsequent to the Closing, or (K) materially change any actuarial assumption or other assumption used to calculate funding obligations with respect to any pension or retirement plan, or change the manner in which contributions to any such plan are made or the basis on which such contributions are determined, except, in each case, as may be required by Law; (viii) take any action to change accounting policies or procedures (including procedures with respect to revenue recognition, payments of accounts payable and collection of accounts receivable), change any material assumption underlying, or method of calculating, any bad debt contingency or other reserve, except in each case as required to conform to GAAP or applicable Law; (ix) make, change or revoke any material Tax election or, except as required by applicable Law, change any method of Tax accounting, (B) enter into any settlement or compromise of any material Tax liability, (C) file any amended Tax Return with respect to any material Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax, (F) claim or surrender any right to claim a material Tax refund or (G) become a party to a transaction that constitutes a “reportable transaction” for purposes of Section 6011 of the Code and applicable Treasury regulations thereunder (or a similar provision of state Law); (x) fail to pay material accounts payable and other material obligations in the Ordinary Course of the Company’s Business other than those disputed in good faith; (xi) materially accelerate the collection of accounts receivable, modify the payment terms of any accounts receivable other than in the Ordinary Course of the Company’s Business, or sell, securitize, factor or otherwise transfer any accounts receivable; (xii) 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 or as expressly provided in this Agreement); (xiii) (A) at any time within the 90-day period before the Effective Time, without complying fully with the notice and other requirements of the WARN Act or any comparable foreign, state or local Law, effectuate (1) a “plant closing” (as defined in the WARN Act or any comparable state or local law) affecting any single site of employment or one or more facilities or operating units within any single site of employment of the Company or any of its Subsidiaries; or (2) a “mass layoff” (as defined in the WARN Act or any comparable state or local law) at any single site of employment or one or more facilities or operating units within any single site of employment of the Company or any of its Subsidiaries, nor (B) otherwise terminate or lay off employees in such numbers as to give rise to material liability under any applicable laws respecting the payment of severance pay, separation pay, termination pay, pay in lieu of notice of termination, redundancy pay, or the payment of any other compensation, premium, or penalty upon termination of employment, reduction of hours, or temporary or permanent layoffs; (xiv) (A) authorize, enter into, renew, extend, terminate or amend, or waive, release or assign any material rights or claims with respect to (x) any Contract or arrangement with revenues or payments in excess of $75,000 in any Contract year other than in the Ordinary Course of the Company’s Business, unless such Contract or arrangement is terminable without payment or penalty upon the Company or its Subsidiaries giving no more than thirty (30) days’ notice, (y) any joint venture, partnership or other similar arrangement, or (z) any Material Contract other than in the Ordinary Course of the Company’s Business, or (B) engage in any transaction or series of transactions with any Affiliate which would constitute a related party transaction under the rules and regulations of the SEC or the Company’s policy governing such transactions; (xv) agree to or otherwise settle, compromise or otherwise resolve in whole or in part any litigation, actions, suits, actual, potential or threatened claims, investigations or proceedings, whether pending on the date hereof or hereafter made or brought, which settlement or compromise would, individually or in the aggregate, result in (A) amounts payable to or by the Company or its Subsidiaries in excess of $30,000 or (B) any other administrative action brought by, or civil settlements with, any Governmental Entity; (xvi) take any action that would reasonably be expected to result in any of the conditions to the Offer set forth in Annex I not being satisfied; (xvii) make a commitmentany material change to timing or size of orders of product shipped to customers, trade, or distributors other than in the Ordinary Course of the Company’s Business; or (xviii) authorize or make any commitment to do any of the foregoing.

Conduct of Business Pending the Merger. SECTION 6.01Section 5.01 Conduct of Business by the Company Pending the Merger. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. The Company agrees that, between From the date hereof until the earlier of the Effective Time and the termination of this Agreement and pursuant to ARTICLE VIII, except as set forth in Section 5.01 of the Effective TimeCompany Disclosure Schedule, unless Parent shall otherwise agree in writingas required by applicable Law, or except as expressly provided in or contemplated by this Agreement or described in Section 6.01 of the Disclosure ScheduleAgreement, the businesses of the Company and the Subsidiaries of (A) the Company shall be conducted only in, and use commercially reasonable efforts to conduct the Company and the Subsidiaries business of the Company shall not take any action except in, Group Companies in the ordinary course of business in all material respects and in a manner use its commercially reasonable efforts, consistent with past practice; and the Company shall use its commercially reasonable best efforts consistent with its obligations under this Agreement , to preserve substantially intact the its business organization of the Company organizations and the Subsidiaries of the Company, relationships with third parties and to keep available the services of its present officers and employees, and (B) without limiting the current officersgenerality of clause (A), employees and consultants except with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company shall not, nor shall it permit any of the Company Group Companies to: (a) amend its memorandum and the articles of association or equivalent organizational documents; (b) (i) split, combine or reclassify any shares in its share capital, (ii) declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its share capital, except for dividends by any of its direct or indirect wholly-owned Subsidiaries or (iii) redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any share capital or registered capital of the Company and to preserve the current relationships of the Company and the Subsidiaries of the Company with customers, suppliers and other persons with which the Company or any Subsidiary other Group Company, other than the acquisition by the Company of its securities in connection with the forfeiture of Company Options or repurchase of unvested Company Restricted Shares, the acquisition by the Company of its securities in connection with the net exercise of Company Options in accordance with the terms thereof, the forfeiture of shares to satisfy tax withholding with respect to any Company Equity Awards or the transfer or other disposition of securities between or among the Company and its direct or indirect wholly owned Subsidiaries; (c) issue, deliver or sell, or authorize the issuance, delivery or sale of, any shares of any share capital or registered capital of the Company has significant or any other Group Company (including any Company Equity Award), other than the issuance of any share capital or registered capital of the Company pursuant to the Company Equity Awards outstanding as of the date hereof, the transfer or other disposition of securities between or among the Company and its direct or indirect wholly owned Subsidiaries, or pursuant to existing contracts or commitments; (d) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses with a value in excess of US$500,000 in any single transaction or series of related transactions, other than (i) pursuant to existing contracts or commitments or (ii) in the ordinary course of business; (e) sell, lease or otherwise transfer any of its assets, securities, properties, interests or businesses with a value in excess of US$500,000 in any single transaction or series of related transactions, other than (i) pursuant to existing contracts or commitments or (ii) in the ordinary course of business; (f) make any material loans, advances or capital contributions to, or investments in, any other person, other than in the ordinary course of business relations; PROVIDED THAT nothing or in this Section 6.01 shall require an amount not in excess of US$500,000 in any single transaction or series of related transactions or between the Group Companies; (g) incur any indebtedness for borrowed money or guarantees thereof with an amount in excess of US$500,000 in any single transaction or series of related transactions, other than (i) any indebtedness or guarantee incurred in the ordinary course of business or (ii) incurred between the Company and any of its direct or indirect wholly owned Subsidiaries or between any of such direct or indirect wholly owned Subsidiaries; (h) other than expenditures necessary to maintain existing assets in good repair, authorize or make any commitment with respect to, any capital expenditures which are in excess of US$500,000; (i) make any material change to the Company’s methods of accounting, except as required to conform to changes in statutory or regulatory accounting rules or GAAP or regulatory requirements related thereto; (j) settle, or offer or propose to settle, (i) any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company or the Subsidiaries any of its Subsidiaries, (ii) any shareholder litigation or dispute against the Company or any of its officers or directors or (iii) any litigation, arbitration, proceeding or dispute that relates to the Transactions, in each case other than any settlement (A) in the ordinary course of business or pursuant to existing contracts or commitments, (B) requiring the Company and its Subsidiaries to pay monetary damages not exceeding US$500,000, and (C) not involving the admission of any material wrongdoing by the Company or any of its Subsidiaries; (k) make or change any payments material Tax election, amend any material Tax return (except as required by applicable Law), enter into any closing agreement with respect to a material amount of Tax, surrender any officerright to claim a material refund of Taxes, employee, consultant settle or other person who is not otherwise entitled finally resolve any controversy with respect to receive such payments solely in order to keep available the services ofa material amount of Tax, or preserve change any current relationship withTax accounting period for purposes of a material Tax or material method of Tax accounting or Tax accounting period, or take any such personaction outside the ordinary course of business that could reasonably be expected to result in the Company or any of its Subsidiaries being required to include a material item of income in, unless such payments would be or exclude a material deduction from, a Tax return for a period beginning after the Closing Date; (l) except in the ordinary course of business consistent with past practice. By way , enter into, amend or modify, in any material respect, or terminate, or waive any material rights under, any Material Contract (or Contract that would be a Material Contract if such Contract had been entered into prior to the date hereof); (m) engage in the conduct of amplification and not limitation, except as expressly contemplated by this Agreement and Section 6.01 any new line of the Disclosure Schedule, neither business material to the Company nor and its Subsidiaries, taken as a whole; (n) fail to make in a timely manner any Subsidiary filings with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder; (o) (A) transfer, sell, assign, mortgage, surrender, encumber, grant any security interest in, divest, cancel, disclaim, abandon, allow to lapse or expire (including by failure to pay required fees but except in the ordinary course of prosecution before Governmental Authority), dedicate to the Company shall, between the date of this Agreement and the Effective Time, directly or indirectly, dopublic, or propose otherwise dispose of, any Company Owned Intellectual Property, other than cancellation, abandonment, allowing to do, lapse or expire such Company Owned Intellectual Property that is no longer used or useful in any of the following without Company’s or its Subsidiaries’ respective businesses or pursuant to Contracts in effect prior to the prior written consent of Parent: date hereof; (aB) amend or otherwise change its Restated Certificate of Incorporation or By-laws or equivalent organizational documents; (b) issue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of any class of capital stock of the Company or any Subsidiary of the Company, or any options, warrants, convertible securities licenses 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 of the Company (except for the securities issuable pursuant to the Warrants or Company Stock OptionsContracts, in each case as set forth on Section 4.03 case, that are material to the business of the Disclosure Schedule) or (ii) any assets of the Company or any Subsidiary of the Group Company, except, in the case of (ii) to any third party except non-exclusive licenses in the ordinary course of business or pursuant to Contracts in effect prior to the date hereof; (C) disclose to or allow to be disclosed to or discovered by any Person any trade secrets material to the business of any Group Company except pursuant to valid and appropriate non-disclosure or license agreements or pursuant to obligations to maintain the security and confidentiality thereof arising by operation of law; or (D) fail to continue to follow and practice the intellectual property, information security, and privacy measures, policies and procedures of the Company or its Subsidiaries in a manner substantially the same manner, consistent with past practice; (cp) declareexcept as required by any Share Incentive Plan, set asideCompany Employee Plan, make or pay any dividend Company Employee Agreement in effect on the date hereof, as required by applicable Law, (A) increase the compensation, bonus, pension, welfare or other distribution, payable in cash, stock, property or otherwise, with respect to benefits of any of its capital stockCompany Personnel, except for dividends by any direct or indirect wholly owned Subsidiary of the Company to the Company or any other Subsidiary of the Company; (d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock; (e) (i) acquire (including, without limitation, 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; (ii) 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 or advances, or grant any security interest in any of its assets; (iii) enter into any contract or agreement that would be a Material Contract, (iv) enter into any distribution or manufacturing contract or agreement, other than contracts or agreements (including intellectual property contracts) entered into in the ordinary course of business and consistent with past practicepractice which increases, payment or awards, in the aggregate, do not cause an increase in the labor costs of the Group Companies, taken as a whole, by more than 5%; (vB) authorizegrant any severance or termination pay, or make any commitment with respect to, any capital expenditure in any manner not reflected in the capital budget of the Company attached as Section 6.01(e)(v) of the Disclosure Scheduleretention pay; or (viC) enter into or amend any contractemployment, agreement, commitment or binding arrangement with respect to any matter set forth in this Section 6.01(e); (f) take any action that would have the effect, directly or indirectly, of paying or discharging any of the Company Expenses for an amount in excess of $2,340,000 in the aggregate; (g) except as specifically contemplated or provided for in this Agreement, 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, wages, bonuses or incentives of employees of the Company or any Subsidiary of the Company who are not directors or officers of the Company, or grant any severance or termination pay to, or enter into any employment consulting or severance agreement withor arrangement with any of its present directors, any director, officer or other employee of the Company or of any Subsidiary of the Companyofficers, or key employees; or (E) 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 director, officer or employee; (h) change any of the accounting methods used by it unless required by GAAP; (i) make any tax election other than immaterial tax elections in the ordinary course consistent with past practice or settle or compromise any United States federal, state, local or non-United States material income tax liability; (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 any such liabilities in the ordinary course of business and consistent with past practice; (k) amend, modify or consent to the termination of any Material Contract, or amend, waive, modify or consent to the termination of the Company's or its Subsidiary's material rights thereunder, other than in the ordinary course of business and consistent with past practice; (l) commence or settle any Action; (m) fail to pay, discharge or satisfy any claim, liability or obligation in accordance with the ordinary course of business of the Company, consistent with past practiceShare Incentive Plan; or (nq) announce an intentionagree, enter into any formal resolve or informal agreement or otherwise make a commitment, commit to do any of the foregoing.

Conduct of Business Pending the Merger. SECTION 6.01. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. The Company agrees that, between (a) From the date hereof until the earlier of (i) the Effective Time and (ii) the date of any termination of this Agreement and the Effective Timepursuant to Section 8.1, unless Parent shall otherwise agree in writing, or except as expressly contemplated otherwise consented to by Parent in writing (such consent not to be unreasonably withheld, conditioned or delayed), and except as otherwise contemplated, required or permitted by this Agreement or described in Section 6.01 of the Disclosure ScheduleAgreement, the businesses of the Company and the Subsidiaries of (A) the Company shall be conducted conduct business only in, and the Company and the its Subsidiaries of the Company shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; practice and (B) the Company shall use its commercially reasonable best efforts consistent with its obligations under this Agreement to preserve substantially intact the business organization of the Company and the Subsidiaries of the Company, to keep available the services of the its current officers, officers and employees and consultants of the Company and the Subsidiaries of the Company and to preserve preserve, in all material respects, the current relationships of the Company and the Subsidiaries of the Company with customers, suppliers suppliers, licensors, licensees, distributors and other persons Persons with which the Company 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 contemplated, required or permitted by this Agreement, applicable Law or the terms of any Company Benefit Plan or as consented to by Parent in writing (such consent not to be unreasonably withheld, conditioned or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier of (i) 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 adopt any amendments to, the Company’s or its Subsidiaries’ respective certificate of incorporation or bylaws or comparable organizational documents; (ii) 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, convertible, exchangeable or exercisable securities, rights of any kind to purchase or otherwise) any securities in respect of, in lieu of or in substitution for shares of its capital stock, voting securities or any other equity interests or Company Stock Rights or other interests or securities in Subsidiaries that would be Company Stock Rights if they were interests or securities in the Company; (iii) 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 required pursuant to the terms of any Company Benefit Plan (as then in effect) or any agreement subject to any such Company Benefit Plan (as then in effect); (iv) other than dividends or distributions made by any direct or indirect wholly-owned Subsidiary of the Company has significant business relations; PROVIDED THAT nothing in this Section 6.01 shall require 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 or other equity interests, split, combine or reclassify any shares of capital stock or other equity interests of the Company or its Subsidiaries, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any such shares of capital stock or other equity interests, or make any other distribution in respect of such shares of capital stock or other equity interests; (v) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries; (vi) (A) except as reasonably necessary or appropriate in order to comply with municipal platting, planning, construction and development codes or requirements in the ordinary course of business (but in no event for an amount that exceeds $100,000) incur Indebtedness for 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, in each case, other than the incurrence of Indebtedness under, and in accordance with, the Existing Loan Documents secured solely by Owned Real Property, Leased Real Property or JV Owned Real Property in the ordinary course of business consistent with past practice (provided that, in the event that any borrowing will exceed $500,000 under any Existing Loan Document, the Company shall give Parent reasonable advance notice prior to the incurrence of any such Indebtedness), (B) make any loans or advances to any Person, make any material change in its existing borrowing or lending arrangements for or on behalf of any Person or enter into any “keep well” or similar agreement to maintain the financial condition of another entity, (C) acquire, or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company to make any payments to any officerCompany), employee, consultant by purchase or other person who is not otherwise entitled to receive such payments solely acquisition of stock or other equity interests (other than in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be a fiduciary capacity in the ordinary course of business consistent with past practice. By way of amplification and not limitation), except as expressly contemplated whether by this Agreement and Section 6.01 of the Disclosure Schedulemerger, neither the Company nor any Subsidiary of the Company shallconsolidation, between the date of this Agreement and the Effective Time, directly asset purchase or indirectly, doother business combination, or propose by formation of any joint venture or other business organization or by contributions to do, capital; (D) mortgage or pledge any of the following without the prior written consent of Parent: (a) amend its or otherwise change its Restated Certificate of Incorporation Subsidiaries assets, tangible or By-laws or equivalent organizational documents; (b) issue, sell, pledge, dispose of, grant or encumberintangible, or authorize create or suffer to exist any material Lien (other than Permitted Liens) thereupon; or (E) prepay any Indebtedness for borrowed money or issue or amend the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares terms of any class of capital stock debt securities of the Company or any Subsidiary 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, without limitation, any phantom interest), of the Company or any Subsidiary of the Company (except for the securities issuable pursuant to the Warrants or Company Stock Options, in each case as set forth on Section 4.03 of the Disclosure Schedule) or (ii) any assets of the Company or any Subsidiary of the Company, except, in the case of (ii) in the ordinary course of business and in a manner consistent with past practiceits Subsidiaries; (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 by any direct or indirect wholly owned Subsidiary of the Company to the Company or any other Subsidiary of the Company; (d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock; (evii) (i) acquire (including, without limitation, 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; (ii) 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 or advances, or grant any security interest in any of its assets; (iiiA) enter into any contract or agreement that would be a Material Contract, (iv) enter into any distribution or manufacturing contract or agreement, other than contracts or agreements (including intellectual property contracts) entered into in the ordinary course of business and consistent with past practice; (v) authorize, or make any commitment with respect to, any capital expenditure in any manner not reflected in the capital budget of the Company attached as Section 6.01(e)(v) of the Disclosure Schedule; or (vi) enter into or amend any contract, agreement, commitment or binding arrangement with respect to any matter set forth in this Section 6.01(e); (f) take any action that would have the effect, directly or indirectly, of paying or discharging any of the Company Expenses for an amount in excess of $2,340,000 in the aggregate; (g) except as specifically contemplated or provided for in this Agreement, 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, wages, bonuses or incentives of employees of the Company or any Subsidiary of the Company who are not directors or officers of the Company, or grant 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 of any Subsidiary of the Company, or establishinto, adopt, enter into amend, modify or amend terminate any collective bargainingemployment, bonus, profit-profit sharing, thrift, compensation, stock severance, termination, option, restricted stockappreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, termination, severance or other planCompany Benefit Plan or employee benefit arrangement, agreement, trust, plan, fund, policy Contract or other arrangement for the benefit compensation, benefit, or welfare of any current or former employee, director or consultant of the Company or any of its Subsidiaries, (B) otherwise take any action to cause to accelerate the payment, funding, right to payment or vesting of any compensation or benefits (except as required pursuant to this Agreement) or grant any increases to the compensation, severance or benefits of any current or former employee, director or consultant of the Company or any of its Subsidiaries or pay any bonus or special remuneration (whether in cash, equity or otherwise) to any current or former employee, consultant, independent contractor or director, ; (C) hire or terminate (without cause) any employee or service provider of the Company or its Subsidiaries with an aggregate annual compensation opportunity of $100,000 or more; or (D) appoint any Person to a position of executive officer or employeedirector of the Company or its Subsidiaries; (hviii) except as may be specifically required under a Company Benefit Plan, grant, confer, award, or modify the terms of any options, convertible securities, restricted stock, phantom shares, equity-based compensation or other rights to acquire, or denominated in, any of the Company’s or any of its Subsidiaries’ capital stock or other voting securities or equity interests (except as may be required by the terms of any unexercisable options or other equity awards outstanding on the date of this Agreement); (ix) other than transactions required pursuant to existing Contracts as in effect on the date hereof and disclosed in the Company Disclosure Letter, (A) acquire, lease (as lessee) or license (as licensee) any property or assets; or (B) other than the sale of lots owned by the Company as of the date hereof in the ordinary course of business consistent with past practice, sell, lease (as lessor), license (as licensor) or dispose of any property or assets (including, for the avoidance of doubt, any Owned Real Property), in each case of clause (A) or clause (B), with an individual value greater than $100,000; (x) 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 methods principles or practices used by it unless required by or fail to maintain all financial books and records in all material respects in accordance with GAAP; (ixi) make (A) make, change or revoke any tax Tax election other than immaterial tax elections that would be reasonably expected to adversely affect in any material respect the ordinary course consistent with past practice Tax liability of the Company or any of its Subsidiaries, (B) change any material Tax accounting method, (C) settle or compromise any United States material U.S. federal, state, local or non-United States U.S. Tax liability, (D) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material income tax liabilityTaxes, (E) file any amended material Tax Return with respect to any Tax, or (F) surrender any right to a refund of material Taxes; (jxii) pay(A) enter into, discharge renew, extend or satisfy any material claim, liability or obligation terminate (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the paymenttermination or expiration of a Material Contract as in effect as of the date hereof pursuant to its terms) any Material Contract (or any Contract that would have been a Material Contract if it had been in effect on the date hereof, discharge or satisfaction of but specifically excluding any such liabilities Material Real Property Leases), except in the ordinary course of business and consistent with past practice; practice with respect to (k1) amendany such Material Contract described solely in clause (iv) of the definition of “Material Contract” or (2) subject to clauses (ix) and (xxi) of this Section 6.1(b), modify any sale agreement; or consent (B) make any material amendment or change to the termination any such Material Contract (including any waiver, release, compromise or assignment of material rights or claims thereunder, but specifically excluding any Material ContractReal Property Leases), or amend, waive, modify or consent to the termination of the Company's or its Subsidiary's material rights thereunder, other than except in the ordinary course of business and consistent with past practicepractice with respect to any amendment or change that would not itself alone result in such Contract being a Material Contract (other than pursuant to clause (iv) of the definition of “Material Contract”) and which amendment or change does not involve payments to or from the Company or any of its Subsidiaries of more than $200,000 during any twelve-month period; (lxiii) commence except as required by applicable Law, recognize or settle certify any Actionlabor union, labor organization, works council, or group of employees of the Company or its Subsidiaries as the bargaining representative for any employees of the Company or its Subsidiaries; (mxiv) fail 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 (A) are reflected or reserved against in full in the Company Financial Statements, (B) are covered by insurance policies or (C) otherwise do not involve the payment of money in excess of $150,000 in the aggregate, in each case where the settlement, compromise, discharge or satisfaction of which does not include any obligation to be performed by the Company or its Subsidiaries following the Effective Time; (xv) enter into any Contract or arrangement between the Company or any of its Subsidiaries, on the one hand, and any Affiliates of Company (other than its Subsidiaries), on the other hand; (xvi) fail to use reasonable best efforts to maintain in accordance full force and effect the existing insurance policies or to replace such insurance policies with reasonably comparable insurance policies, to the extent available on commercially reasonable terms, covering the Company, its Subsidiaries and their respective properties, assets and businesses; (xvii) form any new joint ventures or materially modify the terms of any existing joint ventures with third parties; (xviii) amend or modify the compensation terms or any other obligations of Company contained in the engagement letter with JMP Securities LLC in a manner adverse to Company or any of its Subsidiaries or the Surviving Entity or engage other financial advisers in connection with the transactions contemplated by this Agreement or the Related Agreements; (xix) other than in the ordinary course of business consistent with past practice, initiate or consent to (A) any material zoning reclassification of any Owned Real Property or Leased Real Property or (B) any material change to any approved site plan, special use permit, planned unit development approval or other land use entitlement affecting any Owned Real Property or Leased Real Property; (xx) other than in the ordinary course of business consistent with past practice, enter into, renew, modify, amend or terminate, or waive, release, compromise or assign any material rights or claims under, any Material Real Property Lease (or any lease for real property that, if existing as of the date of this Agreement, would be a Material Real Property Lease) or enter into any other lease of real property with a term in excess of one year; (xxi) other than in the ordinary course of business consistent with past practice, sell, license, mortgage, pledge, assign, transfer, dispose of, abandon, or encumber, or effect a deed in lieu of foreclosure with respect to, any Owned Real Property or other property or assets (except for Permitted Liens), in each case, with an individual value greater than $100,000 (or, in the case of Intellectual Property, that is material to the Company); (xxii) enter into any new line of business; (xxiii) (A) purchase any “non-core” asset or right (e.g., mineral rights, surface rights, multifamily or other developed residential or commercial property, real property held primarily for the purpose of resource extraction, groundwater leases or timberland assets) or any other asset or right not purchased in furtherance of the Company and its Subsidiaries’ core community development business or (B) invest or spend or commit to invest or spend any amounts with respect to such “non-core” assets other than as may reasonably be required in the ordinary course of business consistent with past practice or to preserve the value of such assets or to prepare them for sale; (xxiv) make, authorize, enter into any commitment for, or make a capital contribution to any Joint Venture for, any new capital expenditure (such new capital expenditures being referred to hereinafter as the “Capital Expenditures”), other than Capital Expenditures in the ordinary course of business consistent with past practice for continuation of development of existing phases of Owned Real Property and JV Owned Real Property currently under construction and in an amount not to exceed, in each case, 110% of the aggregate budgeted amount as reflected in the applicable property level budget of the Company, consistent with past practicecopies of which are attached as Section 6.1(b)(xxiv) of the Company Disclosure Letter; or (nxxv) announce an intention, enter into any formal or informal agreement or otherwise make a commitment, Contract to do any of the foregoing or make any formal or informal arrangement or understanding, whether or not binding, with respect to any of the foregoing.

Conduct of Business Pending the Merger. SECTION 6.01. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGERSection 5.01 Conduct of Business by the Company Pending the Merger. The Company agrees that, between from the date hereof until the earlier of the Effective Time and termination of this Agreement and pursuant to Article VIII, except as (x) required by applicable Law, (y) set forth in Section 5.01 of the Effective TimeCompany Disclosure Schedule or (z) expressly contemplated or permitted by this Agreement, unless Parent shall otherwise agree consent in writingwriting (which consent shall not be unreasonably withheld, conditioned or except as expressly contemplated by this Agreement or described in Section 6.01 of the Disclosure Scheduledelayed), (i) the businesses of the Company and the Subsidiaries of the Company Group Companies shall be conducted only in, and the Company and the Subsidiaries of the Company shall not take any action except in, in the ordinary course of business and in a manner consistent with past practice; and , (ii) the Company shall use its commercially reasonable best efforts consistent with its obligations under this Agreement to preserve substantially intact the assets and business organization of the Company and the Subsidiaries of the CompanyGroup Companies in all material respects, to keep available the services of the current officers, officers and key employees and consultants of the Company and the Subsidiaries of the Company Group Companies and to preserve maintain in all material respects the current relationships of the Company and the Subsidiaries of the Company Group Companies with existing customers, suppliers and other persons with which any Group Companies has material business relations as of the date hereof and (iii) the Company or any Subsidiary shall as promptly as practicable after the date hereof make the registrations set forth in Section 5.01(iii) of the Company has significant business relations; PROVIDED THAT nothing Disclosure Schedule with respect to SAFE Rules and Regulations (or any successor law, rule or regulation). Without limiting the generality of the foregoing paragraph, from the date hereof until the earlier of the Effective Time and termination of this Agreement pursuant to Article VIII, except as (x) required by applicable Law, (y) set forth in this Section 6.01 shall require the Company or the Subsidiaries 5.01 of the Company to make any payments to any officer, employee, consultant Disclosure Schedule or other person who is not otherwise entitled to receive such payments solely in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be in the ordinary course of business consistent with past practice. By way of amplification and not limitation, except as (z) expressly contemplated or permitted by this Agreement and Section 6.01 of the Disclosure ScheduleAgreement, neither the Company nor shall not and shall not permit any Subsidiary of the other Group Company shall, between the date of this Agreement and the Effective Timeto, directly or indirectly, do, do or propose to do, do any of the following without the prior written consent of Parent:Parent (which consent shall not be unreasonably withheld, conditioned or delayed): (a) amend or otherwise change its Restated Certificate memorandum and articles of Incorporation or By-laws association or equivalent organizational documents; (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, (i) any shares of any class of capital stock any Group Company (other than in connection with (A) the exercise of any Company Options or Company RSs in accordance with the Share Incentive Plan, (B) the withholding of Company securities to satisfy Tax obligations with respect to Company Options or Company RSs, (C) the acquisition by the Company of its securities in connection with the forfeiture of Company Options or any Subsidiary Company RSs or (D) the acquisition by the Company of its securities in connection with the Companynet exercise of Company Options in accordance with the terms thereof, or any options, warrants, securities convertible securities into any share capital or other rights of any kind to acquire any shares of such capital stockshares, or any other ownership interest (including, without limitation, including any phantom interest), of the Company or any Subsidiary of the Company (except for the securities issuable pursuant to the Warrants or Company Stock Options, in each case as set forth on Section 4.03 of the Disclosure ScheduleGroup Company) or (ii) any property or assets (whether real, personal or mixed, and including leasehold interests and intangible property) of any Group Company with a value or purchase price (including the Company or any Subsidiary value of the Companyassumed liabilities) in excess of $30,000,000, except, in the case of (ii) except in the ordinary course of business and in a manner consistent with past practicebusiness; (c) declare, set aside, make or pay any dividend or other distribution, payable in cash, stockshares, property or otherwise, with respect to any of its capital stock, except for shares (other than dividends by or other distributions from any direct or indirect wholly owned Subsidiary of the Company to the Company or any of its other Subsidiary of the CompanySubsidiaries); (d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its share capital stockor securities or other rights exchangeable into or convertible or exercisable for any of its share capital (other than the purchase of Shares to satisfy obligations under the Share Incentive Plan, including the withholding of Shares in connection with the exercise of Company Options or Company RSs in accordance with the terms and conditions of such Company Options or Company RSs (as applicable)); (e) (i) acquire (includingeffect or commence any liquidation, without limitationdissolution, by scheme of arrangement, merger, consolidation, amalgamation, restructuring, reorganization or similar transaction involving any Group Company, or create any new Subsidiary (other than creating any new Subsidiary in the PRC by a Group Company that (i) is incorporated in the PRC and (ii) does not require any capital injection (directly or indirectly) from outside the PRC after the date hereof), other than as contemplated by this Agreement; (f) acquire, whether by purchase, merger, consolidation, scheme of arrangement, amalgamation or acquisition of stock or assets or otherwise, any other business combinationassets, securities or properties, in aggregate, with a value or purchase price (including the value of assumed liabilities) in excess of $30,000,000 in any corporation, partnership, other business organization transaction or any division thereof or any significant amount related series of assets; transactions; (iig) incur or guarantee any indebtedness for borrowed money or issue of any debt securities or assume, guarantee or endorse, or otherwise become responsible person except for, the obligations incurrence or guarantee of indebtedness (i) under any personGroup Company’s existing credit facilities as in effect on the date hereof in an aggregate amount not to exceed the maximum amount authorized under the Contracts evidencing such Indebtedness (including any renewal, extension, refinancing or make any loans replacement of such Contracts on substantially the same or advances, similar terms) or grant any security interest (ii) not in any an aggregate amount in excess of its assets; $10,000,000; (iiih) enter into any contract or agreement that would be a Material Contract, (iv) enter into any distribution or manufacturing contract or agreement, other than contracts or agreements (including intellectual property contracts) entered into expenditures necessary to maintain assets in the ordinary course of business and good repair consistent with the past practice; (v) , authorize, or make any commitment with respect to, any single capital expenditure that is in any manner not reflected excess of $15,000,000 or capital expenditures that are, in the capital budget aggregate, in excess of $30,000,000 for the Group Companies taken as a whole; (i) except as required pursuant to any Company Employee Plan or 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, officer, employee or consultant of any Group Company other than the hiring or termination of employees or consultants below the vice president level or its equivalent (e.g. the head of business unit) or with an annual compensation of less than $150,000, (ii) grant or provide any severance or termination payments or benefits to any director or officer of any Group Company except as required by applicable Law, (iii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to any director or officer of any Group Company except such increases or payments, in the aggregate, do not cause an increase in the labor costs of the Group Companies, taken as a whole, by more than 5%, (iv) make any new equity awards to any director, officer or employee of any Group Company, (v) establish, adopt, amend or terminate any Company Employee Plan or materially amend the terms of any outstanding Company Options, (vi) take any action to voluntarily accelerate the vesting of Company Options to the extent not already required in the Share Incentive Plan or contemplated by this Agreement or (vii) forgive any loans to directors, officers or employees of any Group Company; (j) issue or grant any Company Option or Company RSs to any person under the Share Incentive Plan; (k) make any changes with respect to 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 statutory or regulatory accounting rules or GAAP or regulatory requirements with respect thereto; (l) enter into, amend, modify, consent to the termination of, or waive any material rights under, any Material Contract (or any Contract that would be a Material Contract if such Contract had been entered into prior to the date hereof) that calls for annual aggregate payments of $30,000,000 or more that cannot be terminated without material surviving obligations or material penalty upon notice of 90 days or less; (m) enter into, amend, modify, consent to the termination of, or waive any material rights under, any Control Agreements (or any Contract that would be a Control Agreement if such Contract had been entered into prior to the date hereof), except as contemplated by Section 6.16 of the Company attached Disclosure Schedule or as necessary to satisfy the Reorganization Condition Actions (and not otherwise inconsistent with Section 6.01(e)(v) 6.16 of the Company Disclosure Schedule; or (vi) enter into or amend any contract, agreement, commitment or binding arrangement with respect to any matter set forth in this Section 6.01(e); (fn) take enter into any action that would have Contract between the effect, directly Company or indirectly, of paying or discharging any of its Subsidiaries, on the Company Expenses for an amount one hand, and any of their directors or executive officers, on the other hand, in excess each case required to be disclosed pursuant to Item 7B or Item 19 of $2,340,000 in Form 20-F under the aggregateExchange Act (except as permitted under Section 5.01(i)); (go) except as specifically contemplated terminate or provided for cancel, let lapse, or amend or modify in this Agreementany material respect, increase the compensation payable or to become payable or the benefits provided to its directors, officers or employees, except for increases other than renewals in the ordinary course of business and consistent with past practice business, any material insurance policies maintained by it that is not promptly replaced by a comparable amount of insurance coverage; (p) commence any Action for a claim of more than US$30,000,000 (excluding any Action seeking for an injunctive relief or other similar equitable remedies) or settle any Action other than any settlement involving the payment of monetary damages not in salariesexcess of $30,000,000; (q) permit any Intellectual Property owned by any Group Company to lapse or to be abandoned, wages, bonuses or incentives of employees of the Company or any Subsidiary of the Company who are not directors or officers of the Companydedicated, or grant disclaimed, fail to perform or make any severance applicable filings, recordings or termination pay toother similar actions or filings, or fail to pay all required fees and Taxes required or advisable to maintain and protect its interest in each and every item of Intellectual Property owned by any Group Company; (r) fail to make in a timely manner any filings or registrations with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder; (s) enter into any employment Contract involving the acquisition from another person or severance agreement withdisposition to another person, any directordirectly or indirectly (by merger, officer or other employee of the Company or of any Subsidiary of the Company, or establish, adopt, enter into or amend any collective bargaining, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee; (h) change any of the accounting methods used by it unless required by GAAP; (i) make any tax election other than immaterial tax elections in the ordinary course consistent with past practice or settle or compromise any United States federal, state, local or non-United States material income tax liability; (j) pay, discharge or satisfy any material claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent license or otherwise), of assets or capital stock or other equity interests of another person that contains (i) a put, call or similar right pursuant to which any Group Company could be required to purchase or sell, as applicable, any equity interests of any person or assets that have a fair market value or purchase price of more than $30,000,000 or (ii) any earn-out or similar payment payable by any Group Company with a maximum potential earn-out or similar payment that, as reasonably estimated by the Company, individually, could reasonably be expected to result in payments by any Group Company of more than $30,000,000, to any Third Party (in the case of each of clauses (i) and (ii), other than the paymentContracts in respect of acquisitions or dispositions of inventory, discharge or satisfaction of any such liabilities properties and other assets in the ordinary course of business and consistent with past practicebusiness); (kt) amend, modify or consent engage in the conduct of any new line of business material to the termination of any Material ContractCompany and its Subsidiaries, or amend, waive, modify or consent to the termination of the Company's or its Subsidiary's material rights thereunder, other than in the ordinary course of business and consistent with past practicetaken as a whole; (lu) commence make or change any material Tax election, materially amend any Tax return (except as required by applicable Law), enter into any material closing agreement with respect to Taxes, surrender any right to claim a material refund of Taxes, settle or finally resolve any Action; (m) fail material controversy with respect to pay, discharge Taxes or satisfy materially change any claim, liability or obligation in accordance with the ordinary course method of business of the Company, consistent with past practiceTax accounting; or (nv) announce an intention, enter into any formal or informal agreement or otherwise make a commitment, to do any of the foregoing.

Conduct of Business Pending the Merger. SECTION 6.01. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. The Section 5.1 Conduct of Business of the Company agrees that, between Pending the Merger. (a) Between the date of this Agreement and the Effective Time, except as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise agree consent in writingwriting (which consent shall not be unreasonably withheld, delayed or except as expressly contemplated by this Agreement or described in Section 6.01 of conditioned), (A) the Disclosure Schedule, the businesses business of the Company and the Subsidiaries of the Company its subsidiaries shall be conducted only in, and the Company and the Subsidiaries of the Company shall not take any action except in, the in its ordinary course of business and in a manner consistent with past practice; and the Company shall use its commercially reasonable best efforts consistent with to preserve substantially intact its business organization, and material business relationships, (B) the Company shall perform its obligations under this Agreement to preserve substantially intact Agreement, and (C) without limiting the business organization of the Company and the Subsidiaries of the Company, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries of the Company and to preserve the current relationships of the Company and the Subsidiaries of the Company with customers, suppliers and other persons with which the Company or any Subsidiary of the Company has significant business relations; PROVIDED THAT nothing in this Section 6.01 shall require the Company or the Subsidiaries of the Company to make any payments to any officer, employee, consultant or other person who is not otherwise entitled to receive such payments solely in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be in the ordinary course of business consistent with past practice. By way of amplification and not limitation, except as expressly contemplated by this Agreement and Section 6.01 of the Disclosure Scheduleforegoing, neither the Company nor any Subsidiary of the Company its subsidiaries 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: (ai) amend or otherwise change its Restated Certificate of Incorporation or By-laws Laws or equivalent organizational documentsany similar governing instruments; (bii) issue, deliver, sell, pledge, dispose of, grant of or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) encumber any shares of any class of capital stock of the Company stock, ownership interests or any Subsidiary of the Companyvoting securities, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of such capital stock, or any other ownership interest interests or any voting securities (includingincluding but not limited to stock appreciation rights, without limitation, any phantom intereststock or similar instruments), of the Company or any Subsidiary of the Company its subsidiaries (except for (A) the securities issuable pursuant to issuance of Common Shares upon the Warrants exercise of Options or Company Stock Optionsin connection with other stock-based awards outstanding as of the date of this Agreement, in each case as set forth on Section 4.03 case, in accordance with the terms of the Disclosure Schedule) any Company Stock Option Plan, or (iiB) any assets of issuances in accordance with the Company or any Subsidiary of the Company, except, in the case of (ii) in the ordinary course of business and in a manner consistent with past practiceRights Plan); (ciii) 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, stock (except for dividends any dividend or distribution by any direct or indirect wholly owned Subsidiary a subsidiary of the Company to the Company or any other Subsidiary another wholly owned subsidiary of the Company); (div) reclassify, combine, split, subdivide or subdivide, redeem, or purchase or otherwise acquireacquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), directly or indirectlyreclassify, combine, split or subdivide any capital stock or other ownership interests of any of its capital stockthe Company’s subsidiaries; (ev) make any acquisition of (i) acquire (including, without limitation, whether by merger, consolidation, consolidation or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any corporation, partnership or other business organization or division thereof; (vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or any other business combinationotherwise) any corporation, partnership, partnership or other business organization or any division thereof or otherwise sell or dispose of any significant amount assets, other than sales or dispositions in the ordinary course of assets; business or pursuant to existing Contracts; (iivii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract; (viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule; (ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money or issue any debt securities money, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans loans, advances or advancescapital contributions to any other person (other than a subsidiary of the Company), or grant any security interest in any of its assets; (iii) enter into any contract or agreement that would be a Material Contract, (iv) enter into any distribution or manufacturing contract or agreementeach case, other than contracts or agreements (including intellectual property contracts) entered into in the ordinary course of business and consistent with past practice; (v) authorize, pursuant to letters of credit or make any commitment with respect to, any capital expenditure in any manner not reflected in the capital budget of the Company attached as Section 6.01(e)(v) of the Disclosure Schedule; or (vi) enter into or amend any contract, agreement, commitment or binding arrangement with respect to any matter set forth in this Section 6.01(e)otherwise; (f) take any action that would have the effect, directly or indirectly, of paying or discharging any of the Company Expenses for an amount in excess of $2,340,000 in the aggregate; (gx) except to the extent required under any Employee Benefit Plan or as specifically contemplated or provided for in this Agreementrequired by applicable law, (A) increase the compensation payable or to become payable or the fringe benefits provided to of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for increases offers of employment in the ordinary course of business and consistent with past practice in salaries, wages, bonuses or incentives of with employees of the Company or any Subsidiary of the Company who are not directors or officers of the Companyofficers, or grant 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 of any Subsidiary of the Company, or (D) establish, adopt, enter into or amend in any collective bargaining, material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any 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 amounts to any director, officer or employeeemployee other than as set forth in Section 3.24 of the Company Disclosure Schedule; (hxi) make any change in any of the accounting methods used by it unless required by GAAPprinciples, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto; (ixii) make any tax election other than immaterial tax elections in the ordinary course consistent with past practice or settle or compromise any United States federal, state, local or non-United States material income tax liability; (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 any such liabilities in the ordinary course of business and consistent or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with past practicerespect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund; (kxiii) amendsettle or compromise any litigation, modify other than settlements or consent compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008; (xiv) waive any right of value material to the termination of Company or any Material Contract, or amend, waive, modify or consent to the termination subsidiary of the Company's ; (xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent; (xvi) except as may be required by generally accepted accounting principles, revalue any portion of its Subsidiary's material rights thereunderassets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business and consistent with past practice; (lxvii) commence or settle materially change any Actionof its business policies; (mxviii) fail to pay, discharge or satisfy any claim, liability or obligation other than in accordance with the ordinary course of business of the Company, consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or (nxix) announce an intention, enter into any formal or informal agreement or otherwise make a commitment, agree to do take any of the foregoingactions described in Section 5.1(a)(i) through Section 5.1(a)(xviii). (b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange. (c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.

Conduct of Business Pending the Merger. SECTION 6.01. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. The Company agrees thatExcept as expressly permitted by clauses (i) through (xix) of this Section 4.1, between during the period from the date of this Agreement and through the Effective Time, unless Parent the Company shall, and shall otherwise agree cause each of its Subsidiaries to, in writingall material respects carry on its business in the ordinary course of its business as currently conducted and, or 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 described as set forth in Section 6.01 of the Disclosure Schedule, the businesses 4.1 of the Company and Letter (with specific reference to the Subsidiaries of applicable subsection below), the Company shall be conducted only innot, and the Company and the Subsidiaries of the Company shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; and the Company shall use its commercially reasonable best efforts consistent with its obligations under this Agreement to preserve substantially intact the business organization of the Company and the Subsidiaries of the Company, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries of the Company and to preserve the current relationships of the Company and the Subsidiaries of the Company with customers, suppliers and other persons with which the Company or any Subsidiary of the Company has significant business relations; PROVIDED THAT nothing in this Section 6.01 shall require the Company or the Subsidiaries of the Company to make any payments to any officer, employee, consultant or other person who is not otherwise entitled to receive such payments solely in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be in the ordinary course of business consistent with past practice. By way of amplification and not limitation, except as expressly contemplated by this Agreement and Section 6.01 of the Disclosure Schedule, neither the Company nor any Subsidiary of the Company shall, between the date of this Agreement and the Effective Time, directly or indirectly, do, or propose to do, permit any of the following its Subsidiaries to, without the prior written consent of Parent: (ai) amend (A) declare, set aside or pay any dividends on, or make any other actual, constructive or deemed distributions in respect of, any of its capital stock, or otherwise change make any payments to its Restated Certificate stockholders in their capacity as such other than dividends or distributions from wholly owned Subsidiaries of Incorporation the Company, (B) split, combine or By-laws reclassify any of its capital stock or equivalent organizational documents; (b) issue, sell, pledge, dispose of, grant or encumber, issue or authorize the issuance, sale, pledge, disposition, grant or encumbrance issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, (iC) purchase, redeem or otherwise acquire any shares of any class 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 (D) amend the Company Rights Agreement; (ii) issue, deliver, sell, pledge, dispose of the Companyor otherwise encumber any shares of its capital stock, any other voting securities or equity equivalent or any securities convertible into, or any optionsrights, warrantswarrants or options to acquire, any such shares, voting securities, equity equivalent or convertible securities securities, other than the issuance of shares of Company Common Stock upon the exercise of Company Stock Options outstanding on the date of this Agreement and pursuant to the Company Stock Purchase Plan, in each case, in accordance with their current terms; (iii) amend its certificate of incorporation or bylaws or other rights comparable organizational documents; (iv) 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 kind 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 shares of such capital stockassets, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary of the Company (except for the securities issuable pursuant to the Warrants or Company Stock Options, in each case as set forth on Section 4.03 of the Disclosure Schedule) or (ii) any than assets of the Company or any Subsidiary of the Company, except, in the case of (ii) acquired in the ordinary course of business and in a manner consistent with past practicepractice and not material to the Company and its Subsidiaries, taken as a whole; (cv) declaresell, set asidetransfer, make lease, license (as licensor of Intellectual Property Rights of the Company), mortgage, pledge, encumber or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to otherwise dispose of any of its capital stockproperties or assets, except for dividends by any direct other than sales, leases or indirect wholly owned Subsidiary licenses of products or services in the Company ordinary course of business consistent with past practice and not material to the Company or any other Subsidiary of the Companyand its Subsidiaries, taken as a whole; (d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock; (e) (i) acquire (including, without limitation, 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; (iivi) incur any indebtedness for borrowed money or issue any debt securities or assumemoney, guarantee or endorse, or otherwise become responsible for, the obligations of any person, such indebtedness or make any loans loans, advances or capital contributions to, or other investments in, any other Person, other than indebtedness, loans, advances, or grant any security interest in capital contributions and investments between the Company and any of its assets; wholly owned Subsidiaries or between any of such wholly owned Subsidiaries; (iiivii) enter into any contract alter (through merger, liquidation, reorganization, restructuring or agreement that would be a Material Contract, (iv) enter into any distribution or manufacturing contract or agreement, other than contracts or agreements (including intellectual property contracts) entered into in the ordinary course of business and consistent with past practice; (v) authorize, or make any commitment with respect to, any capital expenditure in any manner not reflected in other fashion) the capital budget corporate structure or ownership of the Company attached as Section 6.01(e)(v) of the Disclosure Schedule; or any Subsidiary; (viviii) enter into into, adopt or amend any contractseverance plan or material Contract, agreementCompany Plan or employment or consulting Contract, commitment or binding arrangement with respect to any matter set forth in this Section 6.01(e)except as required by applicable law, including the Company Stock Option Plans; (fix) take any action that would have the effect, directly or indirectly, of paying or discharging any of the Company Expenses for an amount in excess of $2,340,000 in the aggregate; (g) except as specifically contemplated or provided for in this Agreement, increase the compensation payable or to become payable or the benefits provided to its directors, officers or employees, employees (except for increases in the ordinary course of business and consistent with past practice in salaries, wages, bonuses salaries or incentives wages of employees of the Company or any Subsidiary of its Subsidiaries who are not officers of the Company who are not directors or officers any of the Company, its Subsidiaries) or grant any severance or termination pay to, or enter into or amend any employment or severance agreement Contract with, any director, current or former director or officer or other employee of the Company or any of any Subsidiary of the Companyits Subsidiaries, or establish, adopt, enter into or, except as may be required to comply with applicable law, amend or amend take action to enhance or accelerate any collective bargainingrights or benefits under, any labor, bonus, profit-profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreementContract, trust, fund, policy or arrangement for the benefit of any current or former director, officer or employee; (hx) change knowingly violate or knowingly fail to perform any of the accounting methods used obligation or duty imposed upon it or any Subsidiary by it unless required by GAAPany applicable material federal, state or local law, rule, regulation, guideline or ordinance; (ixi) make or adopt any tax election change to its accounting methods, practices or policies (other than immaterial tax elections in the ordinary course consistent actions required to be taken by GAAP); (xii) 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; (xiii) settle or compromise any United States material federal, state, local or non-United States material foreign income tax liability; (jxiv) enter into, amend or terminate any Company Contract, other than entering into or amending customer contracts in the ordinary course of business so long as (A) the amount involved does not exceed $150,000, and (B) such customer contract or amendment thereto does not provide for rates which are more than 20% below the average billing rate for the then most recently completed fiscal quarter; (xv) enter into any Contract (A) that would, after the Effective Time, restrict Parent 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 non-solicitation provisions with respect to any customer or supplier that would, after the Effective Time, apply to Parent or any of its Subsidiaries; (xvi) make or agree to make any new capital expenditure or expenditures which, individually, is in excess of $10,000 or, in the aggregate, are in excess of $50,000; (xvii) waive or release any material right or claim or pay, discharge or satisfy any material claimclaims, liability liabilities or obligation obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such liabilities satisfaction, in the ordinary course of business and consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in the most recent Company SEC Documents filed prior to the date hereof, or incurred in the ordinary course of business consistent with past practice; (kxviii) amend, modify initiate any litigation or consent to the termination of any Material Contract, or amend, waive, modify or consent to the termination of the Company's or its Subsidiary's material rights thereunder, other than in the ordinary course of business and consistent with past practice; (l) commence arbitration proceeding or settle or compromise any Action; (m) fail to pay, discharge material litigation or satisfy arbitration proceeding or any claim, liability or obligation in accordance with the ordinary course of business of the Company, consistent with past practiceclaim involving intellectual property; or (nxix) authorize, recommend, propose or announce an intention, intention to do any of the foregoing or enter into any formal or informal agreement or otherwise make a commitment, Contract to do any of the foregoing.

Conduct of Business Pending the Merger. SECTION 6.01Section 6.1 Conduct of Business by the Company Pending the Merger. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. The Company agrees that, between the date of this Agreement and Prior to the Effective TimeDate, unless Parent shall otherwise agree in writing: (i) the Company 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 diligent 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 to the end that their goodwill and ongoing businesses shall be unimpaired at the Effective Date. The Company shall, and shall cause its subsidiaries to, (A) maintain insurance coverages and its books, accounts and records in the usual manner consistent with prior practices; (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 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, in each case other than where the failure to so maintain, comply or perform, either individually or in the aggregate, would not result in a Company Material Adverse Effect; (ii) except as required by this Merger Agreement or as permitted pursuant to Section 7.10 hereof, the Company shall not and shall not propose 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 Restated Certificate of Incorporation or Bylaws, (C) split, 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 the Company, or declare, set aside or pay any dividend or other distribution payable in cash, stock or property (other than Regular Company Dividends), or (D) directly or indirectly redeem, purchase or otherwise acquire or agree to redeem, purchase or otherwise acquire any shares of Company capital stock; (iii) the Company shall not, nor shall it permit any of its subsidiaries to, (A) except as expressly contemplated required by this Agreement Merger Agreement, issue, deliver or described in Section 6.01 sell or agree to issue, deliver or sell any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class, any Indebtedness or any option, rights or warrants to acquire, or securities convertible into, shares of capital stock other than issuances of Company Common Stock pursuant to the exercise of employee stock options outstanding on the date hereof or the conversion of Company Series C Preferred Stock, Company Series B Preferred Stock or Indebtedness of the Company; (B) acquire, lease or dispose or agree to acquire, lease or dispose of any capital assets or any other assets 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 other than in each case in the ordinary course of business; (D) acquire or agree to 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 business organization or division thereof, in each case in this Clause (D) which are material, individually or in the aggregate, to the Company and its subsidiaries taken as a whole, except that the Company may create new wholly owned subsidiaries in the ordinary course of business; or (E) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing; (iv) except as set forth in the Company Disclosure Schedule, the businesses of the Company and the Subsidiaries of the Company shall be conducted only innot, nor shall it permit, any of its subsidiaries to, except as required to comply with applicable law and except as provided in Section 7.5 hereof, (A) adopt, enter into, terminate or amend any bonus, profit sharing, compensation, severance, termination, stock option, pension, retirement, deferred compensation, employment or other Company Benefit Plan, agreement, trust, fund or other arrangement for the Company and benefit or welfare of any director, officer or current or former employee, (B) increase in any manner the Subsidiaries compensation or fringe benefit of the Company shall not take any action director, officer or employee (except in, for normal increases in the ordinary course of business and in a manner that are consistent with past practice; practice and that, in the Company shall use its commercially reasonable best efforts consistent with its obligations under this Agreement aggregate, do not result in a material increase in benefits or compensation expense to preserve substantially intact the business organization of the Company and its subsidiaries relative to the Subsidiaries level in effect prior to such amendment), (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 Company Benefit Plan (including, without limitation, the grant of the Companystock options, to keep available the services of the current officersstock appreciation rights, employees and consultants of the Company and the Subsidiaries of the Company and to preserve the current relationships of the Company and the Subsidiaries of the Company with customersstock based or stock related awards, suppliers and other persons with which the Company performance units or any Subsidiary of the Company has significant business relations; PROVIDED THAT nothing in this Section 6.01 shall require the Company restricted stock, or the Subsidiaries removal of existing restrictions in any benefit plans or agreements or awards made thereunder), (E) take any action to fund or in any other way secure the payment of compensation or benefits under any employee plan, agreement, contract or arrangement or Company to make any payments to any officer, employee, consultant or Benefit Plan other person who is not otherwise entitled to receive such payments solely in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be than in the ordinary course of business consistent with past practice. By way of amplification and not limitation, except as expressly contemplated by this Agreement and Section 6.01 of the Disclosure Schedule, neither the Company nor any Subsidiary of the Company shall, between the date of this Agreement and the Effective Time, directly or indirectly, do, or propose to do(F) adopt, any of the following without the prior written consent of Parent: (a) enter into, amend or otherwise change its Restated Certificate of Incorporation or By-laws or equivalent organizational documents; (b) issue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of any class of capital stock of the Company or any Subsidiary 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, without limitation, any phantom interest), of the Company or any Subsidiary of the Company (except for the securities issuable pursuant to the Warrants or Company Stock Options, in each case as set forth on Section 4.03 of the Disclosure Schedule) or (ii) any assets of the Company or any Subsidiary of the Company, except, in the case of (ii) 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 by any direct or indirect wholly owned Subsidiary of the Company to the Company or any other Subsidiary of the Company; (d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock; (e) (i) acquire (including, without limitation, 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; (ii) 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 or advances, or grant any security interest in any of its assets; (iii) enter into any contract or agreement that would be a Material Contract, (iv) enter into any distribution or manufacturing contract or agreement, other than contracts or agreements (including intellectual property contracts) entered into in the ordinary course of business and consistent with past practice; (v) authorize, or make any commitment with respect to, any capital expenditure in any manner not reflected in the capital budget of the Company attached as Section 6.01(e)(v) of the Disclosure Schedule; or (vi) enter into or amend terminate any contract, agreement, commitment or binding arrangement with respect to any matter set forth in this Section 6.01(e); (f) take any action that would have the effect, directly or indirectly, of paying or discharging any of the Company Expenses for an amount in excess of $2,340,000 in the aggregate; (g) except as specifically contemplated or provided for in this Agreement, 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, wages, bonuses or incentives of employees of the Company or any Subsidiary of the Company who are not directors or officers of the Company, or grant 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 of any Subsidiary of the Company, or establish, adopt, enter into or amend any collective bargaining, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee; (h) change any of the accounting methods used by it unless required by GAAP; (i) make any tax election other than immaterial tax elections in the ordinary course consistent with past practice or settle or compromise any United States federal, state, local or non-United States material income tax liability; (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 any such liabilities in the ordinary course of business and consistent with past practice; (k) amend, modify or consent to the termination of any Material Contract, or amend, waive, modify or consent to the termination of the Company's or its Subsidiary's material rights thereunder, other than in the ordinary course of business and consistent with past practice; (l) commence or settle any Action; (m) fail to pay, discharge or satisfy any claim, liability or obligation in accordance with the ordinary course of business of the Company, consistent with past practice; or (n) announce an intention, enter into any formal or informal agreement or otherwise make a commitment, to do any of the foregoing; (v) the Company shall not, nor shall it permit any of its subsidiaries to, make any investments in non-investment grade securities provided, however, that the Company will be permitted to create new wholly owned subsidiaries in the ordinary course of business; and (vi) 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 Date, which would disqualify the Merger as a "pooling of interests" for accounting purposes or as a "reorganization" within the meaning of Section 368(a) of the Code. Section 6.2 Conduct of Business by Parent and Sub Pending the Merger.

Conduct of Business Pending the Merger. SECTION 6.01. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. (a) The Company covenants and agrees that, except as contemplated by this Agreement, between the date of this Agreement and the Effective Time, unless Parent the Buyer shall otherwise agree in writing, or except as expressly contemplated by this Agreement or described in Section 6.01 of the Disclosure Schedule, the businesses of the Company and the Subsidiaries Business of the Company shall be conducted only inin the Company, and the Company and the Subsidiaries of the Company shall not take any action except in, the usual, regular and ordinary course of business and the Company will generally conduct its business in a manner consistent with past practice; substantially the same way as heretofore conducted, and without limiting the foregoing, the Company will continue to operate in the same geographic markets serving the same market segments. The Company shall use its commercially reasonable best efforts consistent with its obligations under this Agreement to preserve substantially intact the business organization of the Company and the Subsidiaries of the Company, to keep available the present services of the current officers, employees and consultants of the Company and the Subsidiaries of the Company and to preserve the current relationships of the Company and the Subsidiaries goodwill of the Company with customers, suppliers and other persons with which the Company or any Subsidiary has business relationships. Without limiting the generality of the Company has significant business relations; PROVIDED THAT nothing in this Section 6.01 shall require foregoing, the Company or shall: (i) maintain in full force and effect all contracts of insurance and indemnity specified in any Schedule hereto; (ii) repair and maintain all of its tangible properties and assets in accordance with its usual and ordinary repair and maintenance standards; (iii) continue to apply in full the Subsidiaries of same rigorous credit review process used by the Company prior to make any payments the Closing in determining the extent to any officer, employee, consultant which it will extend credit to customers or other person who is not otherwise entitled to receive such payments solely in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be potential customers in the ordinary course of business; (iv) notify the Buyer of any material emergency or other material change in the operation of its business consistent with past practice. or properties and of any governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated). (b) By way of amplification and not limitationlimitation of clause (a) above, except as expressly contemplated by this Agreement and Section 6.01 of the Disclosure Schedule, neither the Company nor any Subsidiary of the Company shall, shall not between the date of this Agreement and the Effective Time, directly or indirectly, indirectly do, or propose publicly announce an intention to do, any of the following without the prior written consent of Parent:Buyer through one of its authorized representatives (which representatives shall be each of its Chief Executive Officer, President and Chief Financial Officer): (ai) amend or otherwise change its Restated Certificate of Incorporation Organizational Documents or By-laws or equivalent organizational documents; (bii) issue, deliver, sell, pledge, dispose of, grant or grant, encumber, or authorize the issuance, delivery, sale, pledge, disposition, grant or encumbrance of, (i) any shares of any class of capital stock of the Company or any Subsidiary Equity Interests of the Company, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stockEquity Interests, or any other ownership interest (includinginterest, without limitation, any phantom interest), of the Company or any Subsidiary of the Company (except for the securities issuable pursuant to the Warrants or Company Stock Options, in each case as set forth on Section 4.03 of the Disclosure Schedule) or (ii) any assets of the Company or any Subsidiary of the Company, except, in the case of (ii) in the ordinary course of business and in a manner consistent with past practice; (c) declare, set aside, make or pay enter into any dividend or other distribution, payable in cash, stock, property or otherwise, agreement with respect to any of its capital stockthe foregoing, except for dividends by any direct or indirect wholly owned Subsidiary other than in connection with the Stock Warrant Agreement and upon exercise of the Company Stock Options; (iii) make any distribution (by way of dividend or otherwise) with respect to its Equity Interests; (iv) split, combine or reclassify any of its Equity Interests or issue or authorize or propose the Company issuance of any other securities in respect of, in lieu of or in substitution for its Equity Interests; (v) repurchase, redeem or otherwise acquire any Equity Interests of the Company, or any other Subsidiary securities convertible into or exercisable for any of the Equity Interests of the Company; (dvi) reclassify, combine, split, subdivide enter into any new line of business or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stockmaterially expand the business currently conducted by the Company; (e) (ivii) acquire (including, without limitationor agree to acquire, by merger, consolidationmerging or consolidating with, or acquisition by purchasing an equity interest in or a portion of stock the assets of, or assets or by any other manner, any business combination) or any corporation, partnership, other business organization or any division thereof or any significant material amount of assets; ; (iiviii) incur any indebtedness for borrowed money money, increase the aggregate amounts owed under the Company's existing credit facilities or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any personindividual, corporation or other entity, or make any loans loan or advances, advance; (ix) lower or grant any security interest otherwise alter its credit card fraud review process (as more fully described in any of its assets; (iii) enter into any contract or agreement that would be a Material Contract, (iv) enter into any distribution or manufacturing contract or agreement, other than contracts or agreements (including intellectual property contracts) entered into in the ordinary course of business and consistent with past practice; (v) authorize, or make any commitment with respect to, any capital expenditure in any manner not reflected in the capital budget of the Company attached as Section 6.01(e)(v) of the Disclosure Schedule; or (vi) enter into or amend any contract, agreement, commitment or binding arrangement with respect to any matter set forth in this Section 6.01(eExhibit 6.01); (fx) take authorize any action that would have the effect, directly or indirectly, capital expenditures of paying or discharging any of the Company Expenses for an amount in excess of more than $2,340,000 25,000 in the aggregateaggregate approved by Xxxxx); (gxi) except as specifically contemplated (A) (x) adopt, amend, renew or provided for in this Agreementterminate any plan or any agreement, increase arrangement, plan or policy between the compensation payable Company and one or to become payable more of its current or the benefits provided to its former directors, officers or employees, except for increases or (y) increase in any manner the ordinary course compensation or fringe benefits of business and consistent with past practice in salaries, wages, bonuses or incentives of employees of the Company or any Subsidiary of the Company who are not directors or officers of the Company, or grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or other employee or pay any benefit not required by any plan or agreement as in effect as of the Company date hereof (including, without limitation, the granting of stock options, stock appreciation rights, restricted stock, restricted stock units or of performance units or shares); or (B) enter into, modify or renew any Subsidiary employment, severance or other agreement with any director, officer or employee of the Company, or establish, adopt, enter into or amend any collective bargaining, bonus, profit-profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance severance, retention or other plan, agreement, trust, fund, policy or arrangement providing for the any benefit of to any director, officer or employee; (hxii) change pay any bonus or any compensation other than base compensation, except for payments of bonuses and other incentive compensation to sales personnel pursuant to and consistent with the accounting methods used written sales incentive plan which has been provided to and approved by it unless required by GAAPBuyer; (ixiii) take any action with respect to accounting methods, principles or practices, other than changes required by applicable law or GAAP or regulatory accounting as concurred in by the Company's independent accountants; (xiv) make any tax election other than immaterial tax elections in the ordinary course consistent with past practice or settle or compromise any United States federal, state, local or non-United States material income foreign tax liability; (jxv) pay, discharge or satisfy any material claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise)obligation, other than the payment, discharge or satisfaction of any such liabilities satisfaction, in the ordinary course of business and consistent with past practice; (kxvi) amendsell, modify lease, encumber, assign or consent otherwise dispose of, or agree to sell, lease, encumber, assign or otherwise dispose of, any of its material assets, properties or other rights or agreements; (xvii) take any action that is intended or reasonably can be expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect, or any of the conditions to the consummation of the Merger and the other transactions contemplated by this Agreement set forth in Article IX not being satisfied in any material respect, or in any material violation of any provision of this Agreement; (xviii) enter into or renew, amend or terminate, or give notice of a proposed renewal, amendment or termination of or make any Material Contractcommitment with respect to, (A) any contract, agreement or amend, waive, modify lease for office space or consent operations space to which the termination of Company is a party or by which the Company's Company or its Subsidiary's material rights thereunderproperties is bound; (B) any lease, contract or agreement other than in the ordinary course of business and consistent with past practicepractice including renewals of leases to existing tenants of the Company ; (C) regardless of whether consistent with past practices, any lease, contract, agreement or commitment involving an aggregate payment by or to the Company of more than $10,000 or requiring performance by the Company of any obligations at any time more than one year after the time of execution; (lxix) commence enter into an agreement, contract, or settle commitment that, if entered into prior to the date hereof, would be required to be listed on a Schedule delivered to Buyer pursuant to the terms of this Agreement, including without limitation, any Actionarrangement or contract with respect to web site development or operations; marketing, promotion, affiliate and advertising, including search engine referrals and Internet private labeling; fulfillment operations; or telephone, credit card or freight carrier services; (mxx) fail amend, terminate or change in any material respect any lease, contract, undertaking, arrangement or other commitment listed in any Schedule (including without limitation its arrangements and contracts with respect to payweb site development and operations; marketing, discharge promotion, affiliate and advertising, including search engine referrals and Internet private labeling; fulfillment operations; and telephone, credit card or satisfy freight carrier services) or knowingly do any claimact or omit to do any act, liability or obligation in accordance with the ordinary course permit an act or omission to act, that will cause a breach of business of the Companyany such lease, consistent with past practice; orcontract, undertaking, arrangement or other commitment; (nxxi) announce an intention, change its pricing policies or its policies with respect to freight rates charged to customers; (xxii) enter into any formal transaction with an Insider; or informal agreement or otherwise make a commitment, (xxiii) agree to do any of the foregoing.

Conduct of Business Pending the Merger. SECTION 6.01. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER4.1 Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, between during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, unless Parent shall otherwise agree in writing, or except as expressly contemplated by this Agreement or described in Section 6.01 of the Disclosure Schedule, the businesses of the Company and the Subsidiaries of the Company shall be conducted conduct its business only in, and the Company and the Subsidiaries of the Company shall not take any action except in, the ordinary course of business and in a manner consistent with past practicepractice other than actions taken by the Company in contemplation of the Merger; and the Company shall use its commercially all reasonable best commercial efforts consistent with its obligations under this Agreement to preserve substantially intact the business organization of the Company and the Subsidiaries of the Company, to keep available the services of the current present officers, employees and consultants of the Company and the Subsidiaries of the Company and to preserve the current present relationships of the Company and the Subsidiaries of the Company with customers, suppliers and other persons with which the Company or any Subsidiary of the Company has significant business relations; PROVIDED THAT nothing in this Section 6.01 shall require the Company or the Subsidiaries of the Company to make any payments to any officer, employee, consultant or other person who is not otherwise entitled to receive such payments solely in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be in the ordinary course of business consistent with past practice. By way of amplification and not limitation, except as expressly contemplated by this Agreement and Section 6.01 of the Disclosure ScheduleAgreement, neither the Company nor any Subsidiary of shall not, during the Company shall, between 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, indirectly do, or propose to do, any of the following without the prior written consent of Parent: (a) amend or otherwise change its Restated Certificate the Articles of Incorporation or By-laws or equivalent organizational documentsLaws of the Company except pursuant to the Merger Agreement; (b) issue, sell, pledge, dispose of, grant of or encumber, or authorize the issuance, sale, pledge, disposition, grant disposition or encumbrance of, (i) any shares of any class of capital stock of the Company or any Subsidiary of the Companyclass, 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 of ) in the Company (except for the securities issuance of shares of Company Common Stock issuable pursuant to that certain stock option agreement for the Warrants or purchase of 352 shares of Company Common Stock Options, in each case as set forth on Section 4.03 of (the Disclosure Schedule) or (ii) any assets of the Company or any Subsidiary of the Company, except, in the case of (ii) in the ordinary course of business and in a manner consistent with past practice"Option")); (c) sell, pledge, dispose of or encumber any assets (tangible or intangible) of the Company except for (i) dispositions of obsolete or worthless assets and (ii) sales of immaterial assets not in excess of $25,000 in the aggregate; (i) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock, stock or property or otherwise, with any combination thereof) in respect to of any of its capital stockstock (other than distributions in respect of S Corporation tax liabilities consistent with past practice), (ii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock (except for dividends by any direct or indirect wholly owned Subsidiary the issuance of the shares of Company Common Stock issuable pursuant to the Company Option) or any other Subsidiary (iii) amend the terms or change the period of the Company; (d) reclassifyexercisability of, combinepurchase, splitrepurchase, subdivide or redeem, or purchase redeem or otherwise acquire, any of its securities including without limitation, shares of Company Common Stock or any option, warrant or right, directly or indirectly, to acquire shares of Company Common Stock, or propose to do any of its capital stockthe foregoing; (e) (i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets or any other business combinationassets) any corporation, partnership, partnership or other business organization or any division thereof or any significant amount of assetsthereof; (ii) except in the ordinary course of business and under the Company's revolving line of credit, incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, endorse or otherwise as an accommodation become responsible for, the obligations of any personperson or, or except in the ordinary course of business consistent with past practice, make any loans or advances, or grant any security interest in any of its assets; (iii) enter into or amend any material contract or agreement that would be a Material Contract, (expect with respect to the Deere & Co. consulting services agreement and consistent with the terms as previously discussed with Parent); (iv) enter into authorize any distribution capital expenditures or manufacturing contract or agreementpurchase of fixed assets which are, other than contracts or agreements (including intellectual property contracts) entered into in the ordinary course aggregate, in excess of business and consistent with past practice; (v) authorize, or make any commitment with respect to, any capital expenditure in any manner not reflected in $50,000 for the capital budget of the Company attached as Section 6.01(e)(v) of the Disclosure ScheduleCompany; or (viv) enter into or amend any contract, agreement, commitment or binding arrangement with respect to effect any matter set forth in of the matters prohibited by this Section 6.01(e4.1(e); (f) take any action that would have the effect, directly or indirectly, of paying or discharging any of the Company Expenses for an amount in excess of $2,340,000 in the aggregate; (g) except as specifically contemplated or provided for in this Agreement, 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, wages, bonuses or incentives of employees of the Company or any Subsidiary of the Company who are not directors or officers of the Company, or grant any severance or termination pay to, or enter into any employment or severance agreement with, with any director, officer or other employee of the Company or of any Subsidiary of the Company, or establish, adopt, enter into or amend any collective bargaining, bonus, profit-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 directorcurrent or former directors, officer officers or employeeemployees, except, in each case, as may be required by law; (g) take any action to change accounting policies or procedures (including, without limitation, procedures with respect to revenue recognition, payments of accounts payable and collection of accounts receivable); (h) change any of the accounting methods used by it unless required by GAAP; (i) make any material tax election other than immaterial tax elections in the ordinary course consistent inconsistent with past practice or settle or compromise any United States material federal, state, local or non-United States material income foreign tax liabilityliability or agree to an extension of a statute of limitations; (ji) pay, discharge or satisfy any material claimclaims, liability liabilities or obligation obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of any such business and consistent with past practice of liabilities reflected or reserved against in the Financial Statements or incurred in the ordinary course of business and consistent with past practice; (k) amend, modify or consent to the termination of any Material Contract, or amend, waive, modify or consent to the termination of the Company's or its Subsidiary's material rights thereunder, other than in the ordinary course of business and consistent with past practice; (l) commence or settle any Action; (m) fail to pay, discharge or satisfy any claim, liability or obligation in accordance with the ordinary course of business of the Company, consistent with past practice; or (nj) announce an intentiontake, enter into any formal or informal agreement agree in writing or otherwise make a commitmentto take, to do any of the foregoingactions described in Sections 4.1 (a) through (i) above, or any action which would make any of the representations or warranties of the Company contained in this Agreement untrue or incorrect or prevent the Company from performing or cause the Company not to perform its covenants hereunder.

Conduct of Business Pending the Merger. SECTION 6.016.01 Conduct of Business by the Company Pending the Merger. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. The Except as set forth in Section 6.01 of the Company agrees thatDisclosure Schedule, between permitted by this Agreement, required by Law, consented to in writing by Parent (such consent not to be unreasonably withheld, conditioned or delayed) or for any actions taken reasonably and in good faith in response to COVID-19 or COVID-19 Measures or in connection with the November 3, 0000 Xxxxxx Xxxxxx federal elections and the results thereof, during the period from the date of this Agreement and to the Effective Time, unless Parent shall otherwise agree in writing(provided that, or for the avoidance of doubt, except as expressly contemplated by set forth in the following paragraph of this Agreement Section 6.01 or described expressly set forth in Section 6.01 of the Company Disclosure Schedule, the Company is not permitted to take any actions in response to COVID-19 or COVID-19 Measures or in connection with the November 3, 0000 Xxxxxx Xxxxxx federal elections and the results thereof that would otherwise not be permitted by the following paragraph of this Section 6.01), the Company shall, and shall cause each of its Subsidiaries to (i) use reasonable best efforts to conduct the businesses of the Company and its Subsidiaries in all material respects in the Subsidiaries ordinary course of business; (ii) use commercially reasonable efforts to preserve materially intact its current business organization and to preserve in all material respects its relationships of the Company shall be conducted only inand its Subsidiaries with significant Franchisees and the franchise system as a whole, key employees and its material suppliers, licensors, licensees, distributors, wholesalers, lessors and others having significant business dealings with the Company or any of its Subsidiaries and (iii) comply in all material respects with applicable Law, and in each case of clauses (i) and (ii); provided that, for the Company and the Subsidiaries avoidance of doubt, the Company shall not be obligated to take any action that would not be permitted by the following paragraph of this Section 6.01 and the failure to not take any action not permitted by the following paragraph of Section 6.01 shall not be deemed a breach of this sentence of Section 6.01. Without limiting the generality of the foregoing, except inas set forth in Section 6.01 of the Company Disclosure Schedule, expressly required by this Agreement, required by Law or Contract, as consented to in writing by Parent (such consent not to be unreasonably withheld, conditioned or delayed and shall be deemed to be given if, within five (5) Business Days after the Company has provided to Parent a written request for consent, Parent has not rejected such request in writing), during the period from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any Subsidiary of the Company to: (a) declare, authorize, establish a record date for, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or other equity, property or a combination thereof) in respect of, any of its capital stock, other than dividends or distributions by a wholly-owned Subsidiary of the Company to its parent; (b) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in lieu of or in substitution for shares of its capital stock; (c) repurchase, redeem or otherwise acquire any shares of its capital stock or any options, warrants, rights, convertible or exchangeable securities, stock-settled performance units or other rights to acquire any such shares or other rights that give the holder thereof any economic interest of a nature accruing to the holders of such shares, other than (i) the acquisition by the Company of Shares in connection with the surrender of Shares by holders of Company Stock Options in order to pay the exercise price thereof, (ii) the withholding of Shares to satisfy Tax obligations with respect to awards granted pursuant to the Company Stock Plans, (iii) the acquisition by the Company of Shares pursuant to a repurchase plan that was publicly announced prior to the date hereof and (iv) the acquisition by the Company of Company Stock Options, Restricted Stock Units and Performance Stock Units in connection with the forfeiture of such awards pursuant to their respective terms; (d) issue, deliver or sell any shares of its capital stock or other voting securities or equity interests, any options, warrants, rights, convertible or exchangeable securities, stock-settled performance units or other rights to acquire any such shares, securities, interests or other rights that give the holder thereof any economic interest of a nature accruing to the holders of such shares or securities, other than (i) upon the exercise or settlement of awards under the Company Stock Plans outstanding on the date of this Agreement (or granted following the date of this Agreement to the extent permitted by this Section 6.01(d)) in accordance with their present terms and (ii) issuances of Restricted Stock Units as set forth on Section 6.01(d) of the Company Disclosure Schedule; (e) amend the Company Charter or the Company By-laws or the comparable organizational documents of any Subsidiary of the Company; (f) acquire, directly or indirectly, whether by purchase, merger, consolidation or acquisition of stock or assets or otherwise, (A) any other person (or all or substantially all of the assets of any person) or (B) any assets, real property, securities, properties, interests, or businesses that are material to the Company and its Subsidiaries, taken as a whole, other than (x) transactions between the Company and its wholly-owned Subsidiaries, and (y) purchases of raw materials, supplies, equipment, inventory and third party software in the ordinary course of business (it being understood and agreed that the acquisition of any other person (or all or substantially all of the assets of any person) is not in a manner consistent with past practice; and the ordinary course of business); (g) sell, transfer, lease, license, sublicense, abandon or otherwise dispose of any properties or assets that are material to the Company shall use and its commercially reasonable best efforts consistent with its obligations under this Agreement to preserve substantially intact the business organization Subsidiaries, taken as a whole (including capital stock or other ownership interests of any Subsidiary of the Company and any joint venture to which the Subsidiaries of the Company, Company or any Company Subsidiary is a party and is material to keep available the services of the current officers, employees and consultants of the Company and its Subsidiaries, taken as a whole, and intangible property), other than (i) sales or other dispositions of products and inventory in the Subsidiaries ordinary course of business, (ii) sales or other dispositions of equipment or Intellectual Property that is no longer used in the Company and to preserve the current relationships operations of the Company and the Subsidiaries of the Company with customers, suppliers and other persons with which the Company or any Subsidiary of the Company has significant business relations; PROVIDED THAT nothing or (iii) the non-exclusive licensing or sublicensing of Intellectual Property in this Section 6.01 shall require the ordinary course of business; (h) (i) incur any indebtedness for borrowed money, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any Subsidiary of the Company or guarantee any such indebtedness or any debt securities of another person or enter into any “keep well” or similar agreement to maintain any financial statement condition of another person (other than the Company or any wholly-owned Subsidiary of the Company) (collectively, “Indebtedness”), other than (A) the incurrence of Indebtedness not prohibited by the Securitization Agreement in an amount not to exceed $3,000,000 in the aggregate; provided, that any such Indebtedness is incurred pursuant to one or more borrowings under Class A-1 Notes (as defined in the Securitization Agreement) issued as of the date of this Agreement, (B) intercompany Indebtedness between the Company and a wholly-owned Subsidiary or between wholly-owned Subsidiaries of the Company Company, in each case, permitted or not prohibited by the Securitization Agreement and the Management Agreement and (C) other than Indebtedness incurred pursuant to make any payments to any officerClass A-1 Notes in accordance with clause (A), employeeother Indebtedness incurred, consultant assumed or other person who is not otherwise entitled to receive such payments solely in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be entered into in the ordinary course of business consistent with past practice. By way (including any borrowings under the Company’s existing credit facilities and in respect of amplification letters of credit) permitted by the Securitization Agreement and the Management Agreement in an amount not limitationto exceed $3,000,000 in the aggregate or (ii) make any loans or capital contributions to, or investments in, any other person, in an aggregate amount of $3,000,000 or more for all such investments, other than to any wholly-owned Subsidiary of the Company; (i) except as expressly required by applicable Law or the terms of any Plan currently in effect, as contemplated by this Agreement and Section 6.01 of Agreement, or as otherwise set forth in the Company Disclosure Schedule, neither (i) increase the compensation, bonus, severance or termination pay payable or that could become payable by the Company nor or any Subsidiary of its Subsidiaries to any current or former directors or vice presidents or more senior employees, (ii) enter into any employment, consulting, severance, retention or termination agreement or arrangement with any director or executive officer of the Company, (iii) establish, adopt or enter into or amend in any material respect any collective bargaining agreement or other agreement with a labor union, works council or similar organization, (iv) establish, adopt, enter into, materially modify or terminate any Plan other than amendments to such Plan in the ordinary course of business and renewals of Plans that are health, welfare and insurance plans in the ordinary course of business, (v) act to accelerate or fund or in any other way secure any rights or benefits under any Plan to the extent not already provided in any such Plan, (vi) pay any bonus to any of the current or former directors, officers, employees or individual consultants of the Company shallor its Subsidiaries, between other than annual bonuses payable in respect of fiscal year 2020 (“2020 Annual Bonuses”) as set forth on Section 6.01(i) of the Company Disclosure Schedule, (vii) promote any employee who is an officer to a position more senior than such employee’s position as of the date of this Agreement and the Effective Time, directly or indirectly, doAgreement, or propose promote a non-officer employee to doan officer position, (viii) grant any new awards under any Plan except as contemplated by Section 6.01(d) of this Agreement, (ix) take any action to amend, waive or accelerate any rights or benefits under any Plan, (x) grant, amend or modify any equity or equity-based awards, (x) hire or terminate without cause any vice president or more senior employee, or (xi) forgive any loans, or issue any loans (other than loans under any Plan intended to qualify under Section 401(k) of the Code and routine travel and business advances issued in the ordinary course of business), to directors, officers, or employees of the Company or any of the following without the prior written consent of Parent: (a) amend or otherwise change its Restated Certificate of Incorporation or By-laws or equivalent organizational documentsSubsidiaries; (bj) issuesettle any Action, sell, pledge, dispose of, grant in each case involving or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of any class of capital stock of against the Company or any Subsidiary of the Company, other than (i) the settlement of Actions that require payments by the Company or any optionsSubsidiary of the Company (net of insurance proceeds) in an amount not to exceed, warrantsin the aggregate, convertible securities $4,000,000, (ii) the settlement of Actions disclosed, reflected or reserved against in the most recent financial statements (or the notes thereto) of the Company included in the SEC Documents for an amount not materially in excess of the amount so disclosed, reflected or reserved and, in each case of clauses (i) and (ii), that do not involve the imposition of restrictions on the business or operations of the Company or any of its Subsidiaries that, in each case, materially interfere with the operations of the Company and its Subsidiaries, taken as a whole and (iii) settlements permitted pursuant to Section 7.11; (k) make any material change in accounting methods, principles or practices by the Company or any Company Subsidiary materially affecting the consolidated assets, liabilities or results of operations of the Company, except as required (i) by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization or (ii) by Law; (l) (i) adopt a plan of merger, consolidation, complete or partial liquidation, dissolution, restructuring, recapitalization 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), reorganization of the Company or any Subsidiary of the Company (except for the securities issuable pursuant to the Warrants other than reorganizations solely by or Company Stock Options, in each case as set forth on Section 4.03 among wholly-owned Subsidiaries of the Disclosure ScheduleCompany) or (ii) enter into a new line of business or new franchise system; (m) change, revoke or rescind any assets material election relating to Taxes, make any material amendment with respect to any material Tax Return, settle or compromise any material Tax liability for an amount that exceeds the amount disclosed, reflected or reserved against in the financial statements contained in the SEC Documents, request any rulings from or the execution of any closing agreement with any Governmental Authority (except in connection with a settlement of a Tax liability for an amount that does not exceed the Company amount disclosed, reflected or reserved against in the financial statements contained in the SEC Documents), change an annual accounting period for Tax purposes, or change any Subsidiary of the Companymaterial accounting method for Tax purposes, except, in each case, for actions taken in the case ordinary course of business or required by Law; (n) make any capital expenditures, other than (i) capital expenditures in accordance with the annual budget for 2020 provided prior to the date hereof by the Company to Parent, (ii) maintenance capital expenditures and required repairs and expenditures 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 by any direct or indirect wholly owned Subsidiary of the Company to the Company or any other Subsidiary of the Company; (d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock; (e) (i) acquire (including, without limitation, 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; (ii) 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 or advances, or grant any security interest in any of its assets; (iii) enter into any contract or agreement that would be a Material Contract, (iv) enter into any distribution or manufacturing contract or agreement, other than contracts or agreements (including intellectual property contracts) entered into in capital expenditures taken outside of the ordinary course of business and consistent with past practice; in an amount not to exceed, in the aggregate, $5,000,000; (vo) authorizevoluntarily (i) terminate, materially amend or modify, or make waive material rights or material claims under any commitment with respect to, any capital expenditure in any manner not reflected in the capital budget of the Company attached as Section 6.01(e)(v) of the Disclosure Schedule; Selected Contract or (viii) enter into or amend any contract, agreement, commitment or binding arrangement with respect to any matter set forth in this Section 6.01(e); (f) take any action Contract that would have been considered a Selected Contract if it had been entered into prior to the effect, directly or indirectly, date of paying or discharging any of the Company Expenses for an amount in excess of $2,340,000 in the aggregate; (g) except as specifically contemplated or provided for in this Agreement, 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, wages, bonuses or incentives of employees of the Company or any Subsidiary of the Company who are not directors or officers of the Company, or grant 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 of any Subsidiary of the Company, or establish, adopt, enter into or amend any collective bargaining, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee; (h) change any of the accounting methods used by it unless required by GAAP; (i) make any tax election other than immaterial tax elections in the ordinary course consistent with past practice or settle or compromise any United States federal, state, local or non-United States material income tax liability; (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 any such liabilities in the ordinary course of business and consistent with past practice; (k) amend, modify or consent to the termination of any Material Contract, or amend, waive, modify or consent to the termination of the Company's or its Subsidiary's material rights thereundereach case, other than in the ordinary course of business (provided that in all cases the Company shall provide reasonable advance notice to, and consistent with past practicereasonably consult with, Parent prior to taking any such actions described in this clause (o)); (lp) commence enter into any material Contract that would, to the Knowledge of the Company, bind Affiliates of the Surviving Company (other than the Company, the Surviving Company or settle any ActionSubsidiaries of the Company or the Surviving Company) following the Closing; (mq) (i) fail to payuse commercially reasonable efforts to renew or maintain insurance policies maintained by the Company or any Company Subsidiary or comparable replacement policies, discharge or satisfy any claim, liability or obligation other than in accordance with the ordinary course of business or (ii) form any captive insurance program; (r) make any material change to the terms of the Company’s or any of its Subsidiaries’ system-wide policies or procedures with respect to (i) franchisee royalty or other fees and charges, consistent with past practiceor maintenance of the Funds or (ii) franchisee incentives or franchisee economic assistance, in each case, other than in the ordinary course of business (provided that in all cases the Company shall provide reasonable advance notice to, and reasonably consult with, Parent prior to any taking such material actions in this clause (r)); (s) except as required by any Contract entered into, and made available to Parent, prior to the date of this Agreement, open any restaurant in a country where the Company or any Company Subsidiary does not currently have an owned or franchised restaurant or otherwise engage in any other operations in any country in which the Company or any Company Subsidiary does not currently conduct other operations; or (nt) announce an intentionauthorize any of, enter into or commit or agree to take any formal or informal agreement or otherwise make a commitmentof, to do any of the foregoingforegoing actions in the preceding clauses (a) – (q).

Conduct of Business Pending the Merger. SECTION 6.015.01. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGERConduct of Business by the Company Pending the Merger. The Company covenants and agrees that, between the date of this Agreement and the Effective Time, unless Parent shall otherwise agree in writing, or except as expressly contemplated writing (requests for which may be made by this Agreement or described in Section 6.01 of the Disclosure Scheduletelephone request to Arthur Bruskin at (631) 962-2000, the businesses of the Company and the Subsidiaries of the Company shall be conducted itx Xxxxxxxxxxxx shaxx xx xxxxxxxxd only in, and the Company and the its Subsidiaries of the Company shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; and the Company shall use its commercially reasonable best efforts consistent with its obligations under this Agreement to preserve substantially intact the business organization of the Company and the Subsidiaries of the Companyits Subsidiaries, to keep available the services of the current officers, employees and consultants of the Company and the its Subsidiaries of the Company and to preserve the current relationships of the Company and the its Subsidiaries of the Company with customers, suppliers and other persons with which the Company or any Subsidiary of the Company its Subsidiaries has significant business relations; PROVIDED THAT nothing in this Section 6.01 shall require the Company or the Subsidiaries of the Company to make any payments to any officer, employee, consultant or other person who is not otherwise entitled to receive such payments solely in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be in the ordinary course of business consistent with past practice. By way of amplification and not limitation, except as expressly contemplated by this Agreement and Section 6.01 of the Disclosure ScheduleAgreement, neither the Company nor any Subsidiary of the Company its Subsidiaries 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, which consent shall not be unreasonably withheld, conditioned or delayed: (a) amend or otherwise change its Restated Certificate of Incorporation or By-laws or equivalent organizational documents; (b) issue, sell, pledge, dispose of, grant sell or encumber, contract for the issuance or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of any class of the capital stock of the Company or any securities convertible into or exchangeable for shares of capital stock of the Company or any Subsidiary of the Company, or any optionssecurities, warrants, convertible securities options or other rights to purchase any of the foregoing (except pursuant to the exercise of options currently outstanding under the Company Stock Option Plans and pursuant to the exercise of options to purchase shares of Company Common Stock under the Employee Stock Purchase Plan); (b) amend the terms of the Plans or any kind to acquire outstanding security, option or warrant; (c) purchase or redeem any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary stock of the Company (except for the securities issuable pursuant acquisition of shares from holders of options in full or partial payment of the exercise price payable by such holder upon exercise of such options to the Warrants or Company Stock Options, extent permitted under the terms of such options as in each case as set forth effect on Section 4.03 of the Disclosure Schedule) or (ii) any assets of the Company or any Subsidiary of the Company, except, in the case of (ii) in the ordinary course of business and in a manner consistent with past practicedate hereof); (cd) declare, set aside, make or pay any dividend or other distribution, payable in cash, stockstock or other securities, property or otherwise, with respect to any of its capital stock, except for dividends by any direct or indirect wholly owned Subsidiary of the Company to the Company or any other Subsidiary of the Company; (d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its 's capital stock; (e) (i) acquire (including, without limitation, 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; (ii) 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 or advances, or grant any security interest in amend any of the charter documents, bylaws or other organizational documents of the Company or its assets; Subsidiaries; (iiif) enter into any contract or agreement that which if entered into prior to the date hereof would be a Material Contract, (iv) enter into any distribution or manufacturing contract or agreement, other than contracts or agreements (including intellectual property contracts) entered into in the ordinary course of business and consistent with past practice; (v) authorize, or make any commitment with respect to, any capital expenditure in any manner not reflected in the capital budget of the Company attached as Section 6.01(e)(v) of the Disclosure Schedule; or (vi) enter into or amend any contract, agreement, commitment or binding arrangement with respect to any matter set forth in this Section 6.01(e); (f) take any action that would have the effect, directly or indirectly, of paying or discharging any of the Company Expenses for an amount in excess of $2,340,000 in the aggregate; (g) except as specifically contemplated incur or provided for in this Agreement, increase the compensation payable guarantee any material indebtedness or to become payable or the benefits provided to its directors, officers or employees, except for increases in incur any other liabilities outside the ordinary course of business and consistent with past practice in salaries, wages, bonuses or incentives of employees of the Company or any Subsidiary of the Company who are not directors or officers of the Company, or grant 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 of any Subsidiary of the Company, or establish, adopt, enter into or amend any collective bargaining, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employeebusiness; (h) change any of the accounting methods used by it unless except as required by GAAP; (i) make any tax election other than immaterial tax elections in the ordinary course consistent to comply with past practice applicable Laws or settle or compromise any United States federal, state, local or non-United States material income tax liability; (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 any such liabilities in the ordinary course of business and consistent with past practice; (k) amend, modify or consent pursuant to the termination terms of existing plans or policies, adopt or amend any Material Contractemployee benefit plan, enter into any employment contract, settle any employment dispute, pay or agree to pay any severance, special bonus or special remuneration, including but not limited to change of control payments, to any director or employee, or amendincrease the salaries, waive, modify wage rates or consent to the termination compensation of the Company's or its Subsidiary's material rights thereunderdirectors or, other than in the ordinary course of business and consistent business, its employees; (i) enter into any material agreement with past practicerespect to the Company's Intellectual Property or with respect to the Intellectual Property of any third party; (j) make or change a material election in respect of Taxes, amend a Tax Return, adopt or change an accounting method in respect of Taxes, enter into a Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement, settle or compromise any claim or assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes with any Governmental Authority; (k) acquire an equity interest in any entity; (l) commence authorize or settle make any Actioncapital expenditures in excess of $50,000 in the aggregate; (m) fail make any loans to pay, discharge any third party; (n) initiate or satisfy participate in any claim, liability new clinical trials; (o) make any material changes to personnel or obligation other business policies of the Company; (p) hire any employees except in accordance with the ordinary course of business of the Company, consistent with past practicebusiness; or (nq) announce an intention, enter into any formal or informal agreement or otherwise make a commitment, agree to do any of the foregoing. Notwithstanding the foregoing, the Company shall be permitted prior to the Effective Time to distribute $250,000 among all of its employees as of the date hereof (other than any employee that is a party to a change of control agreement with the Company), which amount will be allocated between all such employees in amounts to be determined by the CEO of the Company, in consultation with the CEO of the Parent.

Conduct of Business Pending the Merger. SECTION 6.016.1. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGERConduct of Business of the Company Pending the Merger. The Company covenants and agrees that, between the date of except as expressly permitted or contemplated by this Agreement and or as set forth in Section 6.1 of the Company Disclosure Letter, until the Effective Time, unless the Parent shall otherwise agree in writing, or except as expressly contemplated writing prior to the taking of any action otherwise prohibited by the terms of this Agreement or described in Section 6.01 of the Disclosure Schedule6.1, the businesses of the Company and the Subsidiaries of the Company shall be conducted only inshall, and the Company shall cause REI Barbados to, conduct its operations and the Subsidiaries of the Company shall not take any action except in, business in the ordinary and usual course of business business, and in a manner consistent with past practice; practice and the Company shall use its commercially reasonable best efforts consistent with its obligations under this Agreement to preserve intact its business organizations' goodwill, maintain in effect all existing material qualifications, licenses, permits, approvals and other authorizations, substantially intact the business organization of the Company and the Subsidiaries of the Companycomply with all applicable Laws, to keep available the services of its present executive officers and key employees, and preserve the current officersgoodwill and business relationships with suppliers, employees distributors, customers and consultants others having business relationships with it. Without limiting the generality of the foregoing, and except as otherwise expressly permitted by this Agreement or as set forth in Section 6.1 of the Company and the Subsidiaries of the Company and Disclosure Letter, prior to preserve the current relationships of the Company and the Subsidiaries of the Company with customers, suppliers and other persons with which the Company or any Subsidiary of the Company has significant business relations; PROVIDED THAT nothing in this Section 6.01 shall require the Company or the Subsidiaries of the Company to make any payments to any officer, employee, consultant or other person who is not otherwise entitled to receive such payments solely in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be in the ordinary course of business consistent with past practice. By way of amplification and not limitation, except as expressly contemplated by this Agreement and Section 6.01 of the Disclosure Schedule, neither the Company nor any Subsidiary of the Company 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 the Parent, the Company will not, and will cause REI Barbados not to: (a) except to the extent required by Law or the rules and regulations of The Nasdaq Stock Market, amend or otherwise change its Restated Certificate the articles of Incorporation incorporation or By-laws or equivalent organizational documentsbylaws of the Company; (b) issueissue or authorize or propose the issuance of, sell, pledge, pledge or dispose of, grant or encumberotherwise create, or agree to issue or authorize or propose the issuance, sale, pledge, dispositionpledge or disposition of, grant or encumbrance otherwise create any additional shares of, or any Options to acquire any shares of, its capital stock or any debt or equity securities convertible into or exchangeable for such capital stock or accelerate any right to convert or exchange or acquire any securities of the Company for any such shares or ownership interest or take any action to cause to be exercisable any otherwise unexercisable option under any Company Stock Option granted under any Company Option Plan, other than (i) the issuance of 1,010,101 shares of Company Common Stock upon the conversion of the Convertible Notes, (ii) any such issuance pursuant to the exercise of Company Stock Options granted prior to the date hereof under the Company Option Plans, in accordance with their respective terms as in effect on the date hereof, (iii) the issuance of shares of Company Common Stock pursuant to the Company ESPP in accordance with its terms as in effect on the date hereof in accordance with Section 3.2(g). (c) purchase, redeem or otherwise acquire or retire, or offer to purchase, redeem or otherwise acquire or retire, (i) any shares of any class of its capital stock of the Company (including any Options with respect to its capital stock and any security convertible or any Subsidiary of the Company, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such exchangeable into its capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary of the Company (except for the securities issuable pursuant to the Warrants or Company Stock Options, in each case as set forth on Section 4.03 of the Disclosure Schedule) or (ii) any assets of the Company or any Subsidiary of the Company, except, in the case of (ii) in the ordinary course of business and in a manner consistent with past practicelong-term debt; (cd) 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 by any direct or indirect wholly owned Subsidiary of the Company to the Company or any other Subsidiary of the Company; (d) subdivide, reclassify, combinerecapitalize, split, subdivide combine or redeem, or purchase or otherwise acquire, directly or indirectly, exchange any of its shares of capital stockstock or otherwise change its capitalization as it exists on the date hereof; (e) (i) acquire (including, without limitation, by merger, consolidation, incur 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; (ii) incur become contingently liable with respect to any indebtedness for borrowed money or the deferred purchase price for property or services or pursuant to any capital lease or other financing or guarantee any such indebtedness or issue any debt securities or assume, guarantee or endorsesecurities; (f) except as may be required by applicable Laws, or otherwise as contemplated by this Agreement, (i) increase the compensation payable or to become responsible for, the obligations of any personpayable to, or make enter into any loans employment agreement with, its executive officers or advancesemployees, or except to non-executive officers in the ordinary course of business consistent with past practice; (ii) grant any security interest in severance or termination pay to any director, executive officer or employee of its assetsthe Company or REI Barbados, except pursuant to existing Company Benefit Plans; (iii) enter into any contract severance agreement with any director, executive officer or agreement that would be a Material Contract, employee; or (iv) except as required by applicable Laws, establish, adopt, enter into into, terminate, withdraw from or amend in any distribution material respect or manufacturing contract take action to accelerate or agreementwaive (or otherwise diminish) any rights or benefits under any Company Benefit Plan or any other plan, program or arrangement, or any material employment policy; (g) take any action, other than contracts or agreements (including intellectual property contracts) entered into reasonable actions in the ordinary course of business and consistent with past practice; (v) authorize, or make any commitment with respect to, any capital expenditure in any manner not reflected in the capital budget of the Company attached as Section 6.01(e)(v) of the Disclosure Schedule; or (vi) enter into or amend any contract, agreement, commitment or binding arrangement with respect to accounting policies or procedures (including Tax accounting policies, procedures and elections relating to Taxes that would apply to the Company after the Merger), except as may be required by generally accepted accounting principles, or settle any matter set forth material Audit, make any material Tax election or settle any material Tax liability or, except as required by Law, amend in this Section 6.01(e)any material respect any material Tax Return; (fh) take any action that would have the effectacquire or agree to acquire by merging or consolidating with, directly or indirectly, of paying by purchasing an equity interest in or discharging any a portion of the Company Expenses for an amount in excess of $2,340,000 in the aggregateassets of, or by any other manner, any business or any corporation, partnership, association or other business entity; (gi) except as specifically contemplated mortgage or provided for in this Agreementotherwise encumber or subject to any Lien, increase the compensation payable or to become payable sell, transfer or the benefits provided to otherwise dispose of (by merger or otherwise), any of its directorsproperties or assets, officers or employees, except for increases other than encumbrances and Liens that are incurred in the ordinary course of business and consistent with past practice in salariesand sales, wages, bonuses or incentives transfers and dispositions of employees of the Company or any Subsidiary of the Company who are not directors or officers of the Company, or grant 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 of any Subsidiary of the Company, or establish, adopt, enter into or amend any collective bargaining, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee; (h) change any of the accounting methods used by it unless required by GAAP; (i) make any tax election other than immaterial tax elections in the ordinary course consistent with past practice or settle or compromise any United States federal, state, local or non-United States material income tax liability; (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 any such liabilities inventory in the ordinary course of business and consistent with past practice; (j) settle or compromise any material pending or threatened Litigation; (k) make any advance, loan, extension of credit or capital contribution to, or purchase or acquire (by merger or otherwise) any stock, bonds, notes, debentures or other securities of, or any assets constituting a business unit of, or make any other investment in, any person, firm or entity, except (a) extensions of trade credit and endorsements of negotiable instruments and other negotiable documents in the ordinary course of business, (b) investments in cash and cash equivalents, and (c) payroll and travel advances in the ordinary course of business; (l) make any capital expenditures in the aggregate for the Company and REI Barbados in excess of the amounts specified in the Company's budget for capital expenditures, a true and complete copy of which has previously been delivered to the Parent; (m) waive, amend or allow to lapse any term or condition of any confidentiality or "standstill" agreement to which the Company is a party; (n) enter into (a) any Contracts with distributors or sales agents other than Contracts terminable without penalty on less than 30 days' notice, (b) any Contracts to distribute products for others or which restrict the ability of the Company, REI Barbados or the Company's affiliates to compete or (c) any other Contracts that would constitute Material Contracts; or amend any of the foregoing agreements as they exist on the date hereof; (o) amend, modify change or consent waive (or exempt any person or entity from the effect of) the Rights Agreement, or redeem the Rights, except in connection with the transactions contemplated under this Agreement or the Ancillary Documents; (p) change any of the accounting principles or practices used by the Company; (q) effect any material change in the Company's advertising, product promotion or brand support policies or programs or commit to any significant new product promotion or advertising campaign; (r) effect any material change in the termination Company's billing practices or sales terms, or cause or permit a material acceleration or delay in the manufacture, shipment or sale of inventory, the collection of accounts or notes receivable or the payment of accounts or notes payable; (s) enter into any Contracts for Derivatives; (t) waive, relinquish, release or terminate any right or claim, including any such right or claim under any Material Contract, or amend, waive, modify or consent to the termination of the Company's or its Subsidiary's material rights thereunder, other than except in the ordinary course of business and consistent with the customary past practice; (l) commence or settle any Action; (m) fail to pay, discharge or satisfy any claim, liability or obligation in accordance with the ordinary course of business practice of the Company, consistent with past practiceor permit any rights of material value to use any Intellectual Property to lapse or be forfeited; (u) take any action to cause the Company Common Stock to be delisted from the NASDAQ National Market prior to the completion of the Offer; (v) take any action that would reasonably be expected to result in the conditions contained in Section 8.2(a) or 8.2(b) not to be satisfied; or (nw) announce an intentionauthorize any of, enter into or commit or agree to take any formal or informal agreement or otherwise make a commitmentof, to do any of the foregoingforegoing actions.

Conduct of Business Pending the Merger. SECTION 6.01. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. 5.01 Conduct of Business by the Company Pending the Merger The Company agrees that, between the date of this Agreement and the Effective Time, unless Parent shall otherwise agree in writing, or except as expressly contemplated by any other provision of this Agreement or described as set forth in Section 6.01 5.01 of the Company Disclosure Schedule, unless Parent shall otherwise consent in writing: (i) the businesses of the Company and the its Subsidiaries of the Company shall be conducted only in, and the Company and the its Subsidiaries of the Company shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; and and (ii) the Company shall use its commercially all reasonable best efforts consistent with its obligations under this Agreement to preserve substantially intact the business organization of the Company and the Subsidiaries of the CompanySubsidiaries, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries of the Company and to preserve the current relationships of the Company and the Subsidiaries of the Company with customers, suppliers and other persons with which the Company or any Subsidiary of the Company has significant business relations; PROVIDED THAT nothing in . From the date of this Section 6.01 shall require Agreement until the Company or earlier of (i) the Subsidiaries Effective Time and (ii) the termination of the Company to make any payments to any officer, employee, consultant or other person who is not otherwise entitled to receive such payments solely in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be in the ordinary course of business consistent with past practice. By way of amplification and not limitation, except as expressly contemplated by this Agreement and Section 6.01 of the Disclosure ScheduleAgreement, neither the Company nor any Subsidiary of the Company 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 ParentParent and except as otherwise expressly contemplated herein: (a) amend or otherwise change its Restated Certificate of Incorporation or By-laws or equivalent organizational documents; (b) issue, sell, pledge, dispose of, grant or encumber, or otherwise subject to any Lien, or authorize the such issuance, sale, pledge, disposition, grant or encumbrance of, or subjection to, any such Lien, (i) any shares of any class of capital stock of the Company or any Subsidiary of the CompanySubsidiary, 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 of the Company (except for the securities issuance of Shares issuable pursuant to employee stock options outstanding on the Warrants or date of this Agreement and granted under Company Stock Options, Option Plans in each case as set forth effect on Section 4.03 the date of the Disclosure Schedulethis Agreement) or (ii) any assets of the Company or any Subsidiary of the CompanySubsidiary, except, in the case of (ii) except in the ordinary course of business and in a manner consistent with past practicepractice and except for Liens in favor of Parent or Purchaser; (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 the declaration and payment of dividends by any direct or indirect a wholly owned Subsidiary of the Company solely to the Company or any other Subsidiary of the Companyits parent corporation; (d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock; (e) (i) acquire (including, without limitation, 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; (ii) incur any indebtedness for borrowed money indebtedness, whether secured or unsecured and whether under a new or existing credit facility (except borrowings from Parent or Purchaser) 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; (iii) enter into any contract or agreement that would be a Material Contract, (iv) enter into any distribution or manufacturing contract or agreement, other than contracts or agreements (including intellectual property contracts) entered into in the ordinary course of business and consistent with past practice; (viv) authorize, or make any commitment with respect to, any capital expenditure in any manner which is not reflected specifically referred to in the capital expenditure budget attached hereto as Section 5.01(e) of the Company attached as Section 6.01(e)(vDisclosure Schedule (the "Company Capital Budget") or, to the extent not included in the Company Capital Budget, any single capital expenditure in excess of $10,000 or capital expenditures in the Disclosure Scheduleaggregate in excess of $100,000; or (viv) enter into or amend any contract, agreement, commitment or binding arrangement with respect to any matter set forth in this Section 6.01(e5.01(e); (fi) take hire any action that would have additional employees except to fill current vacancies or vacancies arising after the effectdate of this Agreement, directly (ii) make any offers to any employee of an employment position other than the employment position he or indirectlyshe currently holds, except for offers of paying an employment position made in the ordinary course of business and consistent with past practice in connection with the promotion or discharging demotion of any employee of the Company Expenses for an amount in excess or any of $2,340,000 in its Subsidiaries who is not a director or officer of the aggregate; Company, (giii) except as specifically contemplated or provided for in this Agreement, 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, wages, bonuses salaries or incentives wages of employees of the Company or any Subsidiary of the Company its Subsidiaries who are not directors or officers of the Company, or (iv) grant any new or additional retention, severance or termination pay to, or enter into any employment new or additional employment, bonus, change of control or severance agreement with, any director, officer or other employee of the Company or of any Subsidiary of the Companyits Subsidiaries, or (v) establish, adopt, enter into into, terminate or amend any collective bargainingPlan or establish, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance adopt or other enter into any plan, agreement, program, policy, trust, fund, policy 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 employeeemployee except as required by this Agreement or the Transactions contemplated hereby, or as required by ERISA, the Code or to otherwise comply with applicable Law, (vi) loan or advance money or other property to any current or former director, officer or employee of the Company or any of its Subsidiaries, (vii) grant any equity or equity based awards (provided that equity awards may be transferred in accordance with the applicable plan document or agreement) or (viii) hire or engage any consultant to perform services for a rate of compensation which would be in excess of $25,000 on an annual basis or which is not terminable upon notice of 30 days or less; (g) effectuate a "plant closing" or "mass layoff," as those terms are defined in WARN (determined without regard to terminations of employment occurring on or after the Effective Time); (h) change take any action, other than reasonable and usual actions in the ordinary course of the business and consistent with past practice and other than actions required to be taken in response to changes in GAAP or in Law, with respect to accounting methods used by it unless required by GAAPpolicies or procedures; (i) make make, revoke or change any tax material Tax election other than immaterial tax elections in the ordinary course consistent with past practice or material method of Tax accounting, file any amended Tax Return (unless required by Law), enter into any closing agreement relating to a material amount of Taxes, settle or compromise any United States federalmaterial liability with respect to Taxes or consent to any material claim or assessment relating to Taxes or any waiver of the statute of limitations for any such claim or assessment; provided, statethat in the case of the filing of any amended Tax Return, local the Company or non-United States material income tax liabilitythe relevant Subsidiary shall deliver a copy of such amended Tax Return to Parent at least 30 days prior to filing for Parent's review and consent; (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 any such liabilities in the ordinary course of business and consistent with past practice, unless such payment, discharge or satisfaction is made in accordance with the terms of such claim, liability or obligation as such terms exist on the date of this Agreement; (k) amendpay accounts payable, modify utilize cash, draw down on lines of credit, delay or consent to the termination of any Material Contractaccelerate capital expenditures, or amend, waive, modify or consent to the termination of the Company's or its Subsidiary's material rights thereunderincur expenditures on research and development, other than in the ordinary course of business and consistent with past practice; (l) amend or modify in any material respect, or consent to the termination of, any Material Contract, or amend, waive or modify in any material respect, or consent to the termination of, the Company's or any Subsidiary's rights thereunder; (m) commence or settle any Action, other than the settlement of Actions involving payments by the Company or its Subsidiaries not to exceed $100,000 with respect to any individual Action or $250,000 in aggregate settlements; (mi) fail abandon, sell, assign, or grant any security interest in or to payany item of the Owned Intellectual Property, discharge Licensed Intellectual Property or satisfy IP Agreements, (ii) grant to any claimthird party any license, liability sublicense or obligation covenant not to sue with respect to any Owned Intellectual Proxxxty or Licensed Intellectual Property, other than in accordance with the ordinary course of business of the Company, consistent with past practice, (iii) develop, create or invent any Intellectual Property jointly with any third party (other than such joint development, creation or invention with a third party that is in progress as of the date hereof), (iv) disclose, or allow to be disclosed, any confidential Owned Intellectual Property, unless such Owned Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against disclosure thereof, or (v) fail to perform or cause to be performed all applicable filings, recordings and other acts, and pay or caused to be paid all required fees and taxes, to maintain and protect its interest in each and every item of the Owned Intellectual Property and the Licensed Intellectual Property; (o) fail to make in a timely manner any filings with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder; (p) enter into any contract or agreement with any director or officer of the Company or any Subsidiary or any of their respective affiliates (including any immediate family member of such person) or any other affiliate of the Company or any Subsidiary; or (nq) announce an intention, enter into any formal or informal agreement or otherwise make a commitment, to do any of the foregoing.

Conduct of Business Pending the Merger. SECTION 6.01Section 4.1 Conduct of Business by the Companies Pending the Merger. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. The Company agrees that, between During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, each Company covenants and agrees that, unless Parent shall otherwise agree in writing, or except as expressly contemplated by this Agreement or described in Section 6.01 of the Disclosure Schedule, the businesses of the Company and the Subsidiaries of the such Company shall be conducted conduct its business only in, and the Company and the Subsidiaries of the such Company shall not take any action except in, the ordinary course of business and in a manner consistent with past practicebusiness; and the such Company shall use its commercially reasonable best commercial efforts consistent with its obligations under this Agreement to (i) preserve substantially intact the its business organization of the Company organization, (ii) pay its trade payables and the Subsidiaries of the Companyother liabilities in accordance with their terms as they became due, to (iii) collect its receivables and other claims in full in accordance with their terms, as they become due, (iv) keep available the services of the current each of its present officers, employees and consultants consultants, (v) take all reasonable action in the ordinary course of business necessary to prevent the loss, cancellation, abandonment forfeiture or expiration of any Company Intellectual Property, and the Subsidiaries (vi) preserve each of the Company and to preserve the current its present relationships of the Company and the Subsidiaries of the Company with customers, suppliers and other persons with which the Company or any Subsidiary of the such Company has significant business relations; PROVIDED THAT nothing in this Section 6.01 shall require the Company or the Subsidiaries of the Company to make any payments to any officer, employee, consultant or other person who is not otherwise entitled to receive such payments solely in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be in the ordinary course of business consistent with past practice. By way of amplification and not limitation, except as expressly contemplated by this Agreement and Section 6.01 Agreement, neither of the Disclosure Schedule, neither the Company nor any Subsidiary of the Company Companies shall, between 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, indirectly do, or propose to do, any of the following without the prior written consent of Parent: (a) amend or otherwise change its Restated Certificate Articles of Incorporation or By-laws or equivalent organizational documentsLaws; (b) issue, sell, pledge, dispose of, grant of or encumber, or authorize the issuance, sale, pledge, disposition, grant disposition or encumbrance of, (i) any shares of any class of its capital stock of the Company or any Subsidiary of the Companyclass, or any options, warrants, convertible securities or other rights of any kind (including Stock Purchase Rights) to acquire any shares of such its capital stock, or any other ownership interest (including, without limitation, any phantom interest), ) of either of the Company Companies; (c) sell, lease, assign, transfer, pledge, dispose of or encumber any Subsidiary of the Company its assets (whether real, personal or intellectual property) (except for the securities issuable pursuant to the Warrants or Company Stock Options, in each case as set forth on Section 4.03 (i) sales of the Disclosure Schedule) or (ii) any assets of the Company or any Subsidiary of the Company, except, in the case of (ii) in the ordinary course of business business; and in a manner consistent with past practice;(ii) dispositions of obsolete or worthless assets). (ci) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock, stock or property or otherwise, with any combination thereof) in respect to of any of its capital stock, except for dividends by (ii) split, combine or reclassify any direct of its capital stock or indirect wholly owned Subsidiary issue or authorize or propose the issuance of the Company to the Company or any other Subsidiary securities in respect of, in lieu of or in substitution for shares of its capital stock or (iii) amend the Company; (d) reclassifyterms of, combinerepurchase, split, subdivide or redeem, or purchase redeem or otherwise acquire, directly or indirectlyacquire for value, any of its capital stocksecurities, or propose to do any of the foregoing; (e) sell, transfer, license, sublicense or otherwise dispose of any Company Intellectual Property Rights, or amend or modify any existing agreements with respect to any Company Intellectual Property Rights or Third Party Intellectual Property Rights, other than nonexclusive licenses in the ordinary course of business; (i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets or any other business combinationassets) any corporation, partnership, partnership or other business organization or any division thereof or any significant amount of assetsthereof; (ii) incur any indebtedness for borrowed money or representing the deferred purchase price of any property or assets or issue any debt securities or assume, guarantee or endorse, endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances, advances to or grant any security interest investments in any of its assets; (iii) enter into any contract or agreement that would be a Material Contractperson, (iv) enter into any distribution or manufacturing contract or agreement, other than contracts or agreements (including intellectual property contracts) entered into except in the ordinary course of business and consistent with past practicebusiness; (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; (iv) assume, guarantee, endorse or otherwise in anyway be or become responsible or liable for, directly or indirectly, any contingent obligation; (v) authorize, enter into or make amend any commitment with respect to, contract or agreement other than in the ordinary course of business; (vi) authorize any capital expenditure in any manner not reflected expenditures or purchase of fixed assets which are, in the capital budget aggregate, in excess of $10,000 for the Company attached Companies, taken as Section 6.01(e)(va whole; (vii) enter into any agreement or become liable under any agreement for the lease, hire or use of the Disclosure Scheduleany real or personal property; or (viviii) enter into or amend any contract, agreement, commitment or binding arrangement with respect to any matter set forth in this Section 6.01(e); (f) take any action that would have the effect, directly or indirectly, of paying or discharging effect any of the Company Expenses for an amount in excess of $2,340,000 in the aggregatematters prohibited by this Section 4.1(f); (g) except as specifically contemplated or provided for in this Agreement, increase the compensation payable or to become payable or the benefits provided to its directors, any of their officers or employees, employees (except for such increases as may be set forth in the ordinary course of business and consistent with past practice in salaries, wages, bonuses or incentives of employees employment agreements for each of the Company or any Subsidiary of the Company who are not directors or officers of the Company, Holders attached hereto as Exhibits A-C) or grant 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 of any Subsidiary either of the CompanyCompanies, or establish, adopt, enter into or amend any collective bargaining, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employeeEmployee Plan; (h) change take any of the accounting methods used by it unless 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 tax material Tax election other than immaterial tax elections in the ordinary course consistent inconsistent with past practice practices or settle or compromise any United States material, federal, state, local or non-United States material income foreign tax liabilityliability 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 such Company; (j) pay, discharge or satisfy any material claimprincipal of any debt with a maturity of more than one year, liability for borrowed money or obligation 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 (subject to any subordination provisions applicable 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)) other than debt with a maturity of more than one year for borrowed money or for the deferred purchase price of property or services, other than the payment, discharge or satisfaction of any such liabilities in the ordinary course of business and consistent with past practice; (k) amend, modify of liabilities reflected or consent to reserved against on the termination Balance Sheet of any Material Contract, such Company or amend, waive, modify or consent to the termination of the Company's or its Subsidiary's material rights thereunder, other than incurred in the ordinary course of business and consistent with past practicebusiness; (l) commence liquidate or settle dissolve itself (or suffer any Action;liquidation or dissolution); or (m) fail to paytake, discharge or satisfy any claim, liability or obligation agree in accordance with the ordinary course of business of the Company, consistent with past practice; or (n) announce an intention, enter into any formal or informal agreement writing or otherwise make a commitmentto take, to do any of the foregoingactions described in Sections 4.1(a) through (l) above, or any action which would make any of the representations or warranties contained in Article 2 of this Agreement untrue or incorrect or prevent either Company from performing or cause either Company not to perform its covenants hereunder or result in any of the conditions to the Merger set forth herein not being satisfied.

Conduct of Business Pending the Merger. SECTION 6.01. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. (a) The Company covenants and agrees that, between the date hereof and the earlier to occur of the Effective Time or such earlier time as this Agreement and is terminated in accordance with Article X (such period being hereinafter referred to as the Effective Time“Interim Period“), except as expressly required by this Agreement or unless Parent shall otherwise agree consent in writing, which consent shall not be unreasonably withheld, conditioned or except as expressly contemplated by this Agreement or described in Section 6.01 of the Disclosure Scheduledelayed, the businesses Company: (i) shall conduct its business only in the ordinary course of business, consistent with past practice and according to the Company plans and the Subsidiaries of the Company shall be conducted only in, and the Company and the Subsidiaries of the Company budgets previously delivered to Parent; (ii) shall not take any action action, or fail to take any action, except in, in the ordinary course of business and in a manner business, consistent with past practice; and the Company (iii) shall use its commercially reasonable best efforts consistent with its obligations under this Agreement to preserve substantially intact the its business organization of the Company organization, properties and the Subsidiaries of the Companyassets, to keep available the services of the current its officers, employees and consultants of the consultants, maintain in effect all Company Material Contracts and the Subsidiaries of the Company and to preserve the current relationships of the Company and the Subsidiaries of the Company with its relationships, customers, licensees, suppliers and other persons Persons with which the Company or any Subsidiary of the Company it has significant business relations; PROVIDED THAT nothing in this Section 6.01 shall require the Company or the Subsidiaries of the Company to make any payments to any officer, employee, consultant or other person who is not otherwise entitled to receive such payments solely in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be in the ordinary course of business consistent with past practice. By way of amplification and not limitation, except as expressly contemplated permitted by this Agreement and Section 6.01 of the Disclosure ScheduleAgreement, neither the Company nor any Subsidiary of shall not, during the Company shall, between the date of this Agreement and the Effective TimeInterim Period, directly or indirectly, do, or propose to do, do any of the following without the prior written consent of Parent: (ai) amend or otherwise change its Restated Certificate of Incorporation Incorporation, Bylaws or By-laws or other equivalent organizational documents, or otherwise alter its corporate structure through merger, liquidation, reorganization or otherwise; (bii) issue, selltransfer, pledge, dispose of, grant pledge or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) encumber any shares of any class of capital stock of the Company or any Subsidiary of the Companyclass, 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 of the Company (except for the securities issuable pursuant to the Warrants or Company Stock Options, in each case as set forth on Section 4.03 of the Disclosure Schedule) or (ii) any assets of the Company or any Subsidiary of the Company, except, in except pursuant to the case exercise of (ii) in Company Options or Company Warrants outstanding on the ordinary course date of business and in a manner consistent with past practiceSigning; (ciii) 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 by any direct or indirect wholly owned Subsidiary of the Company to the Company or any other Subsidiary of the Company; (d) reclassify, combine, split, subdivide or redeem, or purchase repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company (except for the repurchase of Company Common Stock pursuant to the Company Option Plan); (iv) transfer, lease, license, mortgage, pledge, encumber or incur or assume any Lien on any properties, facilities, equipment or other tangible or intangible assets; (v) declare, set aside or pay any dividend or other distribution in respect of any of its capital stockstock or other equity interests; (evi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests; (ivii) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets or any other business combinationotherwise) any corporation, partnership, other business organization or any division thereof or any significant amount of assets; Person; (iiviii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, endorse or otherwise become responsible for, for the obligations of any personPerson, or make any loans loans, advances or advancesenter into any financial commitments, except as otherwise permitted under any loan or credit agreement to which the Company is a party as of the date of this Agreement; (ix) authorize any capital expenditure in excess of $25,000 individually or $50,000 in the aggregate; (x) take or permit to be taken any action to: (A) increase employee compensation or grant any security interest severance or termination compensation, except in any of its assets; (iii) enter into any contract or agreement that would be a Material Contract, (iv) enter into any distribution or manufacturing contract or agreement, other than contracts or accordance with agreements (including intellectual property contracts) entered into prior to the date of this Agreement or otherwise in the ordinary course of business and consistent with past practice; (v) authorize, or make any commitment with respect to, any capital expenditure in any manner not reflected in the capital budget of the Company attached as Section 6.01(e)(v) of the Disclosure Schedule; or (viB) enter into any collective bargaining agreement; (C) hire or amend terminate any contractemployees, agreementindependent contractors or consultants, commitment having a total salary or binding arrangement with respect to any matter set forth in this Section 6.01(e); (f) take any action severance package that would have the effect, directly or indirectly, of paying or discharging any of the Company Expenses for an amount is individually in excess of $2,340,000 in the aggregate; (g) except as specifically contemplated or provided for in this Agreement, 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, wages, bonuses or incentives of employees of the Company or any Subsidiary of the Company who are not directors or officers of the Company100,000, or grant any severance that collectively is in excess of $100,000; or termination pay to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company or of any Subsidiary of the Company, or (D) establish, adopt, enter into or amend in any collective bargaining, material respect any bonus, profit-profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy policy, agreement or arrangement for the benefit of any directorof its directors, officer officers or employeeemployees; (hxi) change any of the accounting methods used by it policies or procedures unless required by statutory accounting principles or GAAP; (ixii) make take any tax election other than immaterial tax elections in action that (without regard to any action taken, or agreed to be taken, by Parent or any of its Affiliates) would be considered reasonably likely to prevent the ordinary course consistent with past practice or settle or compromise any United States federal, state, local or non-United States material income tax liabilityMerger from qualifying as a reorganization within the meaning of section 368(a) of the Code; (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 any such liabilities in the ordinary course of business and consistent with past practice; (k) amend, modify or consent to the termination of any Material Contract, or amend, waive, modify or consent to the termination of the Company's or its Subsidiary's material rights thereunder, other than in the ordinary course of business and consistent with past practice; (l) commence or settle any Action; (mxiii) fail to paymake any expenditures that are necessary and sufficient to maintain or, discharge to the extent budgeted or satisfy any claim, liability or obligation in accordance consistent with the ordinary course of business past practice of the Company, consistent with past practiceimprove the conditions of the properties, facilities and equipment of the Company, including, without limitation, budgeted expenditures relating to maintenance, repair and replacement; (xiv) take any action or fail to take any action permitted by this Agreement if such action or failure to take action would result in either: (A) any of the representations and warranties of the Company set forth in Article III of this Agreement becoming untrue or (B) any of the conditions to the Closing set forth in Article VII not being satisfied; (xv) expend more than $425,000 of cash in excess of receipts in any calendar month; or (nxvi) authorize, recommend, propose, announce an intention, or enter into any formal agreement, contract, commitment or informal agreement or otherwise make a commitment, arrangement to do any of the foregoing.

Conduct of Business Pending the Merger. SECTION 6.01. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER4.1 Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, between during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, unless Parent shall otherwise agree in writing, or writing and except as expressly otherwise contemplated by this Agreement or described in Section 6.01 of the Company Disclosure Schedule, the Company shall conduct its business and shall cause the businesses of the Company and the Subsidiaries of the Company shall its subsidiaries to be conducted only in, and the Company and the Subsidiaries of the Company shall not take any action except in, in all material respects in the ordinary course of business and business; and, except as set forth in a manner consistent with past practice; and the Company Disclosure Schedule, the Company shall use its commercially all reasonable best commercial efforts consistent with its obligations under this Agreement to preserve substantially intact the business organization of the Company and the Subsidiaries of the Companyits subsidiaries taken as a whole, to keep available the services of the current present key officers, employees and consultants of the Company and the Subsidiaries of the Company its subsidiaries taken as a whole and to preserve the current present relationships of the Company and the Subsidiaries of the Company its subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary of the Company its subsidiaries has significant business relations; PROVIDED THAT nothing in this Section 6.01 shall require the Company or the Subsidiaries of the Company to make any payments to any officer, employee, consultant or other person who is not otherwise entitled to receive such payments solely in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be in the ordinary course of business consistent with past practice. By way of amplification and not limitation, except as expressly contemplated by this Agreement and Section 6.01 of the Disclosure ScheduleAgreement, neither the Company nor any Subsidiary of the Company its subsidiaries shall, between 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, indirectly do, or propose to do, any of the following without the prior written consent of Parent: (a) amend or otherwise change its Restated the Certificate of Incorporation or By-laws Laws of the Company or equivalent organizational documentsany of its subsidiaries, except for the currently proposed amendment to increase the authorized Company Common Stock to 50,000,000 shares; (b) except as set forth in Section 4.1(b) of the Company Disclosure Schedule, issue, sell, pledge, dispose of, grant of or encumber, or authorize the issuance, sale, pledge, disposition, grant disposition or encumbrance of, (i) any shares of any class of capital stock of the Company or any Subsidiary of the Companyclass, 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 ) in the Company or any Subsidiary of the Company its subsidiaries. (except for the securities issuable pursuant to the Warrants c) sell, pledge, dispose of or Company Stock Options, in each case as set forth on Section 4.03 of the Disclosure Schedule) or (ii) encumber any assets of the Company or any Subsidiary of the Company, except, in the case its subsidiaries (except for (i) sales of (ii) assets in the ordinary course of business and in a manner consistent with past practice, (ii) dispositions of obsolete or worthless assets, and (iii) sales of other assets not in excess of $250,000 in the aggregate); (cd) except as set forth in Section 4.1(d) of the Company Disclosure Schedule, (i) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock, stock or property or otherwise, with any combination thereof) in respect to of any of its capital stock, except for dividends by any direct or indirect that a wholly owned Subsidiary subsidiary of the Company may declare and pay a dividend to its parent, (ii) split, combine or reclassify any of its capital stock or issue or authorize or propose the Company or issuance of any other Subsidiary securities in respect of, in lieu of the Company; (d) reclassify, combine, split, subdivide or redeemin substitution for shares of its capital stock, or purchase (iii) amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any subsidiary to purchase, repurchase, redeem or otherwise acquire, any of its securities or any securities of its subsidiaries, including, without limitation, shares of Company Common Stock or any option, warrant or right, directly or indirectly, to acquire shares of Company Common Stock, including the Stock Options, or enter into any agreement to do any of its capital stockthe foregoing; (e) except as set forth in Section 4.1(e) of the Company Disclosure Schedule, (i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets assets) any business or any other business combination) any corporation, partnership, partnership or other business organization or any division thereof or any significant amount of assetsdivision; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, endorse or otherwise as an accommodation become responsible for, the obligations of any personperson or, or except in each case in the ordinary course of business consistent with past practice, make any loans or advances; (iii) enter into or amend any contract or agreement other than in the ordinary course of business; (iv) authorize any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $500,000 for the Company and its subsidiaries taken as a whole; or (v) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 4.1(e); (f) except as set forth in Section 4.1(f) of the Company Disclosure Schedule, (i) increase the compensation payable or to become payable to its executive officers, directors or employees except in the ordinary course of business consistent with past practice; (ii) grant any additional severance or termination pay to, or grant enter into any security interest in new employment or severance agreements with, any director, executive officer or current employee of the Company or its assetssubsidiaries; (iii) enter into any contract employment or severance agreement that would be a Material Contract, with any new employees of the Company or its subsidiaries except in the ordinary course of business consistent with past practice; or (iv) establish, adopt, enter into or amend any distribution collective bargaining, profit sharing, thrift, restricted stock, pension, retirement, deferred compensation or manufacturing contract severance plan, trust, fund or agreementpolicy for the benefit of current or former directors, officers or employees of the Company or any of its subsidiaries, except, in each case, as may be required by law; (g) except as required under generally accepted accounting principles, take any action to change in any material respect the accounting policies or procedures (including, without limitation, procedures with respect to revenue recognition, payments of accounts payable and collection of accounts receivable) of the Company or any subsidiary (except in the case of subsidiaries to conform to the Company's policies and procedures); (h) except as set forth in Section 4.1(h) of the Company Disclosure Schedule, make any tax election inconsistent with past practice or settle or compromise any federal, state, local or foreign tax liability or agree to an extension of a statute of limitations, in each case which would be material to the Company and its subsidiaries taken as a whole; (i) except as set forth in Section 4.1(i) of the Company Disclosure Schedule, pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) material to the Company and its subsidiaries taken as a whole, other than contracts the payment, discharge or agreements (including intellectual property contracts) entered into satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements contained in the Company SEC Reports filed prior to the date of this Agreement or incurred in the ordinary course of business and consistent with past practice; (v) authorize, or make any commitment with respect to, any capital expenditure in any manner not reflected in the capital budget of the Company attached as Section 6.01(e)(v) of the Disclosure Schedule; or (vi) enter into or amend any contract, agreement, commitment or binding arrangement with respect to any matter set forth in this Section 6.01(e); (f) take any action that would have the effect, directly or indirectly, of paying or discharging any of the Company Expenses for an amount in excess of $2,340,000 in the aggregate; (g) except as specifically contemplated or provided for in this Agreement, 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, wages, bonuses or incentives of employees of the Company or any Subsidiary of the Company who are not directors or officers of the Company, or grant 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 of any Subsidiary of the Company, or establish, adopt, enter into or amend any collective bargaining, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee; (h) change any of the accounting methods used by it unless required by GAAP; (i) make any tax election other than immaterial tax elections in the ordinary course consistent with past practice or settle or compromise any United States federal, state, local or non-United States material income tax liability;or (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 any such liabilities in the ordinary course of business and consistent with past practice; (k) amend, modify or consent to the termination of any Material Contracttake, or amend, waive, modify or consent to the termination of the Company's or its Subsidiary's material rights thereunder, other than agree in the ordinary course of business and consistent with past practice; (l) commence or settle any Action; (m) fail to pay, discharge or satisfy any claim, liability or obligation in accordance with the ordinary course of business of the Company, consistent with past practice; or (n) announce an intention, enter into any formal or informal agreement writing or otherwise make a commitmentto take, to do any of the foregoingactions described in Sections 4.1 (a) through (i) above.

Conduct of Business Pending the Merger. SECTION 6.016.1 Conduct of Business of the Company Pending the Merger. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. The Company agrees that, between From the date of this Agreement until the earlier of the Effective Time and the Effective Timetermination of this Agreement in accordance with Article IX, except as otherwise expressly permitted or required by this Agreement, as set forth in Section 6.1 of the Company Disclosure Schedule, as required by applicable Laws or unless Parent shall otherwise agree consent in writingwriting (which consent shall not be unreasonably withheld, conditioned or except as expressly contemplated by this Agreement or described in Section 6.01 of delayed), (a) (i) the Disclosure Schedule, the businesses business of the Company and the Subsidiaries of the Company its subsidiaries shall be conducted only in, and the Company and the Subsidiaries of the Company shall not take any action except in, in the ordinary course of business and in a manner consistent with past practice; practice and good utility practice and (ii) the Company and its subsidiaries shall use its their respective commercially reasonable best efforts consistent with its obligations under this Agreement to (x) preserve substantially intact the business organization of the Company and its Significant Subsidiaries, and (y) maintain their respective relationships with Governmental Entities, customers, suppliers, contractors, distributors, creditors, lessors and other third parties that have material business dealings with the Subsidiaries of the Company, to keep available the services of the current officers, employees and consultants Company or such subsidiary of the Company and its key employees, (b) the Subsidiaries Company shall not, and it shall cause each of its Affiliates not to, directly or indirectly, take any action (including any action with respect to a third-party) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement or their respective ability to satisfy their obligations hereunder, (c) the Company shall, and shall cause each subsidiary of the Company to, subject to circumstances beyond the Company’s reasonable control, make the capital expenditures as and when required to preserve the current relationships of the Company and the Subsidiaries of the Company with customers, suppliers and other persons with which be made based on any approved allocation to the Company or any Subsidiary of its subsidiaries by the Regional Transmission Organizations, as part of the transmission planning process, (d) without limiting the foregoing, the Company shall not, and shall cause each subsidiary of the Company has significant business relations; PROVIDED THAT nothing in this Section 6.01 shall require not to: (i) amend or otherwise change the Company Articles of Incorporation or the Subsidiaries Company Bylaws or the equivalent organizational documents of any Significant Subsidiary, in each case in any material respect; (ii) make any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all of the Company to assets), or make any payments to investment in any officerinterest in, employeeany Person, consultant corporation, partnership or other person who is not otherwise entitled business organization or division thereof or any assets, in each case, except for (A) purchases of equipment, inventory and other assets or pursuant to receive such payments solely construction, operation and/or maintenance contracts, in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be each case in the ordinary course of business consistent with past practice. By way of amplification and good utility practice or pursuant to existing Contracts or (B) acquisitions or investments that do not limitation, except as expressly contemplated by this Agreement and Section 6.01 of exceed $100,000,000 in the Disclosure Schedule, neither the Company nor any Subsidiary of the Company 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) amend or otherwise change its Restated Certificate of Incorporation or By-laws or equivalent organizational documentsaggregate; (biii) issue, sell, pledge, dispose of, grant or encumber, issue or authorize the issuance, sale, pledge, dispositiontransfer, grant subject to any Lien, sell, or encumbrance dispose of, (i) any shares of any class of capital stock of the Company stock, ownership interests or any Subsidiary of the Companyvoting securities, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of such capital stock, or any other ownership interest interests or any voting securities (includingincluding stock appreciation rights, without limitation, any phantom intereststock or similar instruments), of the Company or any Subsidiary of its subsidiaries (except (A) for the issuance of shares of Company Common Stock upon the exercise, vesting or settlement of Options, Restricted Stock, Performance Shares or Equivalent Performance Shares outstanding as of the Capitalization Date or pursuant to the ESPPs, (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) for the grant of Restricted Stock on terms and conditions consistent with Section 6.1(d)(iii)(C) of the Company Disclosure Schedule, (D) for the issuance into notional accounts of additional Equivalent Performance Shares in accordance with the terms of the grant agreements relating to Performance Shares outstanding as of the Capitalization Date, or (E) for pledges or Liens relating to any indebtedness incurred in compliance with Section 6.1(d)(x); (iv) reclassify, combine, split, subdivide or amend the terms of, redeem, purchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or any of its Significant Subsidiaries (except (A) for the securities issuable pursuant acquisition of shares of Company Common Stock tendered by directors or employees in connection with a cashless or net settled exercise of Options or in order to pay the Warrants exercise price or Company Stock Taxes in connection with the exercise, vesting or settlement of Options, Restricted Stock or Performance Shares or (B) in each case connection with a share repurchase program in effect as set forth on Section 4.03 of the Disclosure Scheduledate hereof); (v) other than Permitted Liens or (ii) Liens relating to any indebtedness incurred in compliance with Section 6.1(d)(x), create or incur any Lien in excess of $50,000,000 in the aggregate of notional debt on any material assets of the Company or its subsidiaries (other than subsidiaries acquired following the date hereof); (vi) make any Subsidiary loans or advances to any Person (other than the Company or any of the Company, except, in the case of (iiits wholly-owned subsidiaries) other than in the ordinary course of business or not in excess of $25,000,000 in the aggregate; (vii) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell, assign, exclusively license, allow to expire, or dispose of any material assets, rights or properties other than (A) sales, dispositions or licensing of equipment and/or inventory and other assets in a manner the ordinary course of business consistent with past practicepractice or pursuant to Company Material Contracts in effect on the date hereof or (B) other sales, assignments, exclusive licenses, expirations or dispositions of assets, rights or properties to the Company or of assets, rights or properties with a value of less than $100,000,000 in the aggregate; (cviii) 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 stockstock (except (A) the Company may continue the declaration and payment of regular quarterly cash dividends on Company Common Stock, except not to exceed the amount set forth on Section 6.1(d)(viii) of the Company Disclosure Schedule, with usual record and payment dates for such dividends in accordance with past dividend practice and (B) for any dividend or distribution by any direct or indirect wholly owned Subsidiary a subsidiary of the Company to the Company or any other Subsidiary wholly owned subsidiary of the Company); (dix) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock; (e) (i) acquire (including, without limitation, 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; (ii) 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 or advances, or grant any security interest in any of its assets; (iii) enter into any contract or agreement that would be a Material Contract, (iv) enter into any distribution or manufacturing contract or agreement, other than contracts or agreements (including intellectual property contracts) entered into in the ordinary course of business and consistent with past practice; (v) authorizeor as required by Law, enter into, terminate, modify or make any commitment with respect to, any capital expenditure amend in any manner not reflected in the capital budget of the material respect any Company attached as Section 6.01(e)(v) of the Disclosure Schedule; or (vi) enter into or amend any contract, agreement, commitment or binding arrangement with respect to any matter set forth in this Section 6.01(e)Material Contract; (f) take any action that would have the effect, directly or indirectly, of paying or discharging any of the Company Expenses for an amount in excess of $2,340,000 in the aggregate; (gx) except as specifically contemplated or provided for in this Agreement, increase the compensation payable or to become payable or the benefits provided to its directors, officers or employees, except for increases borrowings in the ordinary course of business under the Company’s and its subsidiaries’ Credit Facilities, except for issuances under the Company’s Commercial Paper Program and except for intercompany loans between the Company and any of its wholly owned subsidiaries or between any wholly owned subsidiaries, incur or repay indebtedness for borrowed money, or modify in any material respect in a manner adverse to the Company or Ultimate Parent or any of its subsidiaries the terms of any such indebtedness for borrowed money, or assume, guarantee or endorse the obligations of any Person (other than a wholly owned subsidiary of the Company), other than (A) indebtedness incurred in the ordinary course of business not to exceed $50,000,000 in the aggregate, (B) pursuant to letters of credit in the ordinary course of business, (C) (a) to finance the activities of the Company and its subsidiaries, or (b) in replacement or refinancing of existing indebtedness for borrowed money, which with respect to the Company’s existing indebtedness matures within ninety (90) days of such replacement or refinancing, in each case as disclosed in the 2016 Financing Plan in Annex 6.1(i) of the Company Disclosure Schedule; provided, that (1) the terms (including covenants and default terms, but excluding interest rate, original issue discount, call protection and other financial terms) of such indebtedness are, in the reasonable determination of the Company, consistent with past practice in salariesthen current market terms or, wagessolely with respect to the replacement or refinancing of existing indebtedness, bonuses no more restrictive, when taken as a whole, to the Company or incentives its applicable subsidiary than the terms of employees the existing indebtedness that is being replaced or refinanced and, with respect to both subsections (C)(a) and (C)(b) above, shall not include any prohibition or restriction or condition restricting the ability of the Company or any Subsidiary of its subsidiaries, as applicable, to pay dividends or other distributions or to make or repay loans or advances to the Company who are not directors Ultimate Parent other than (x) restrictions applicable only during the continuance of a default or officers event of default under the relevant agreement and (y) the restriction set forth in the Term Loan Credit Agreement of the Company, dated as of December 20, 2013, which permits the payment of dividends or other distributions if, after giving effect thereto, the rating of the debt of the Company or any of its subsidiaries, as applicable, shall be BBB— or higher, and any restriction on change of ownership or control shall include an exception for the Merger and (2) any financing of the activities of the Company and its subsidiaries so incurred under subsection (C)(a) may not exceed the aggregate principal amount set forth in the 2016 Financing Plan in Annex 6.1(i) of the Company Disclosure Schedule, and any replacement or refinancing indebtedness so incurred must not exceed the aggregate principal amount of the indebtedness being replaced or refinanced, plus any accrued and unpaid interest on and premiums, fees, costs and expenses paid in connection with such repayment or refinancing, (D) guarantees by the Company or its subsidiaries of indebtedness of its subsidiaries, or (E) any commodity, currency, sale or hedging agreements in the ordinary course, consistent with past practice and good utility practice which can be terminated on ninety (90) days or less notice; provided, that any indebtedness incurred in accordance with this Section 6.1(d)(x) shall not reasonably be expected to adversely affect Ultimate Parent’s, Parent’s or Merger Sub’s ability to consummate the Financing; (1) except as required by the existing terms of a Company Plan or as set forth on Section 6.1(d)(xi) of the Company Disclosure Schedule, (A) increase the compensation or benefits of any of its officers (except in the ordinary course of business, including pursuant to the Company’s regular merit review process), (B) grant any severance or termination pay toto any of its officers (except in the ordinary course of business), (C) enter into, amend, change or enter into revise any employment employment, change in control, consulting or severance agreement with, any director, or arrangement with the chief executive officer or other employee of the Company or any of his direct reports or terminate the chief executive officer of the Company or any of his direct reports other than for cause (as defined under the applicable employment agreement), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to 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 applicable Laws, (E) take any action to amend, waive or accelerate the vesting criteria or vesting requirements of payment of any Subsidiary of compensation or benefit under any Company Plan or remove any existing restrictions in any Company Plans or awards made thereunder or (F) take any action to accelerate the Companypayment, or to fund or in any other way secure the payment, of compensation or benefits under any Company Plan, to the extent not already provided in any such Company Plan or (2) establish, adopt, enter into or amend in any material respect or terminate any Company Plan, enter into, amend or terminate any collective bargaining, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance bargaining agreement or other planagreement with a labor union, agreement, trust, fund, policy works council or arrangement for the benefit of any director, officer or employeesimilar organization; (hxii) make any material change in any of the accounting methods used by it unless required by GAAPprinciples, except as may be appropriate to conform to statutory or regulatory accounting rules or GAAP or regulatory requirements with respect thereto; (ixiii) make any tax election other than immaterial tax elections in the ordinary course consistent with past practice or settle or compromise any United States federal, state, local or non-United States material income tax liability; (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 any such liabilities in the ordinary course of business and consistent with past practice; (k) amend, modify or consent to the termination of any Material Contract, or amend, waive, modify or consent to the termination of the Company's or its Subsidiary's material rights thereunder, other than in the ordinary course of business and consistent with past practiceor as required by applicable Law or GAAP, (A) make or change any material Tax election, (B) surrender any material claim for a refund of Taxes, (C) enter into any agreement materially affecting Taxes due for any taxable period ending after the Closing Date, (D) settle or compromise any material liability for Taxes, or (E) amend in a material respect any Tax Return; (lxiv) commence or settle any Action; (m) fail to pay, discharge or satisfy any claim, liability or obligation other than in accordance with the ordinary course of business or as required by applicable Law, enter into or amend in any material respect any collective bargaining agreement with any labor organization representing any Company Employees; (xv) waive, release, assign, discharge, settle, satisfy or compromise any material litigation, other than the waiver, release, assignment, discharge, settlement, satisfaction or compromises of litigation where the amount paid does not exceed $25,000,000 in the aggregate or, if greater, does not materially exceed the total incurred case reserve amount for such matter maintained by the Company and/or its subsidiaries as in effect prior to the date of this Agreement; (xvi) merge or consolidate the Company or any of its subsidiaries with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, restricting, recapitalization or other reorganization of the Company or any of its subsidiaries; (xvii) make or commit any capital expenditures, in the period from the date hereof until December 31, 2016, or in the twelve (12) month period ending December 31, 2017, that in the aggregate exceed the Company’s capital expenditures budget as disclosed in Section 6.1(d)(xvii) of the Company Disclosure Schedule for such period; provided, consistent however, that notwithstanding the foregoing, the Company and its subsidiaries shall be permitted to make emergency capital expenditures in any amount (A) required by a Governmental Entity or (B) that the Company determines is incurred in connection with past practicethe repair or replacement of facilities destroyed or damaged due to casualty or accident or natural disaster or other force majeure event necessary to maintain or restore safe, adequate and reliable electric transmission service; provided, further, that the Company shall use commercially reasonable efforts to consult with Parent prior to making or agreeing to make any such expenditure described in clauses (A) or (B) above; or (nxviii) announce an intentionagree, enter into any formal authorize or informal agreement or otherwise make a commitment, commit to do any of the foregoing.foregoing actions described in Section 6.1(d)(i) through Section 6.1(d)(xvii); and

Conduct of Business Pending the Merger. SECTION 6.015.01. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGERConduct of Business by the Company Pending the Merger. The Company agrees that, between the date of this Agreement and the Effective Time, unless Parent shall otherwise agree in writing, or except as expressly contemplated by any other provision of this Agreement or described as set forth in Section 6.01 5.01 of the Company Disclosure Schedule, unless Parent shall otherwise consent in writing: (a) the businesses of the Company and the its Subsidiaries of the Company shall be conducted only in, and the Company and the its Subsidiaries of the Company shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; and and (b) the Company shall use its commercially reasonable best efforts consistent with its obligations under this Agreement to preserve substantially intact the business organization of the Company and the Subsidiaries of the CompanySubsidiaries, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries of the Company and to preserve the current relationships of the Company and the Subsidiaries of the Company with customers, suppliers and other persons Persons with which the Company or any Subsidiary of the Company has significant business relations; PROVIDED THAT nothing in this Section 6.01 shall require the Company or the Subsidiaries of the Company to make any payments to any officer, employee, consultant or other person who is not otherwise entitled to receive such payments solely in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be in the ordinary course of business consistent with past practice. By way of amplification and not limitation, except Except as expressly contemplated by any other provision of this Agreement and or as set forth in Section 6.01 5.01 of the Company Disclosure Schedule, neither the Company nor any Subsidiary of the Company 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) amend or otherwise change its Restated Certificate of Incorporation or By-laws or equivalent organizational documents; (b) issue, sell, pledge, dispose of, grant or encumber, or authorize the such issuance, sale, pledge, disposition, grant grant, or encumbrance of, : (i) any shares of any class of capital stock of the Company or any Subsidiary of the CompanySubsidiary, 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 of the Company (except for the securities issuance of Shares issuable pursuant to employee stock options outstanding on the Warrants or date of this Agreement and granted under Company Stock Options, Option Plans in each case as set forth effect on Section 4.03 the date of the Disclosure Schedule) or this Agreement); or (ii) any assets of the Company or any Subsidiary of the CompanySubsidiary, except, in the case of (ii) except 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 by any direct or indirect wholly owned Subsidiary of the Company to the Company or any other Subsidiary of the Company; (d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock; (e) (i) acquire (including, without limitation, 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; ; (ii) 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 personPerson, or make any loans or advances, or grant any security interest in any of its assets; or (iii) enter into or amend any contract or agreement that would be a Material Contract, (iv) enter into with respect to any distribution or manufacturing contract or agreementmatter set forth in this Section 5.01(e), other than contracts or agreements (including intellectual property contracts) entered into in the ordinary course of business and consistent with past practice; (i) hire any additional employees other than in the ordinary course of business, except (A) to fill vacancies arising after the date of this Agreement; (vB) authorize, to hire non-executive employees for the Company's Beijing office; or (C) to meet increased production demand. (ii) make any commitment with respect tooffers to any employee of an employment position other than the employment position he or she currently holds, any capital expenditure in any manner not reflected except for offers of an employment position made in the capital budget ordinary course of business and consistent with past practice in connection with the promotion or demotion of any employee of the Company attached as Section 6.01(e)(v) or any of its Subsidiaries who is not a director or officer of the Disclosure Schedule; or (vi) enter into or amend any contract, agreement, commitment or binding arrangement with respect to any matter set forth in this Section 6.01(e)Company; (fiii) take any action that would have the effect, directly or indirectly, of paying or discharging any of the Company Expenses for an amount in excess of $2,340,000 in the aggregate; (g) except as specifically contemplated or provided for in this Agreement, 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, wages, bonuses salaries or incentives wages of employees of the Company or any Subsidiary of the Company its Subsidiaries who are not directors or officers of the Company, or grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or other employee ; (iv) except as set forth in Section 5.01 of the Company Disclosure Schedule, grant any loan, advance, extensions of credit to current or former employees or forgiveness or deferral of any Subsidiary loans due from any employee, other than any loan, advance or extension of credit to a current employee in circumstances and in amounts consistent with past practice, in any event not to exceed $10,000 for any one employee and $25,000 in the Company, or aggregate; (v) establish, adopt, enter into into, terminate or amend any collective bargainingPlan or establish, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance adopt or other enter into any plan, agreement, program, policy, trust, fund, policy 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 employeeemployee except as required by this Agreement or the Transactions contemplated hereby, or as required by ERISA, the Code or to otherwise comply with applicable Law; (hvi) change grant any of equity or equity based awards (provided that equity awards may be transferred in accordance with the accounting methods used by it unless required by GAAPapplicable plan document or agreement); (ig) make any tax election other than immaterial tax elections enter into, amend or modify in the ordinary course consistent with past practice or settle or compromise any United States federal, state, local or non-United States material income tax liability; (j) pay, discharge or satisfy any material claimrespect, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such liabilities in the ordinary course of business and consistent with past practice; (k) amend, modify or consent to the termination of of, any Material Contract, or amend, waivewaive or modify in any material respect, modify or consent to the termination of of, the Company's or its any Subsidiary's material rights thereunder, thereunder other than in the ordinary course of business and consistent with past practice; (h) fail to make in a timely manner any material filings with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder; (i) change any Tax election, annual tax accounting period, or method of tax accounting, file amended Tax Returns or claims for Tax refunds by the Company or its Subsidiaries, enter into a closing agreement relating to Taxes or any settlement of any Tax claim, audit or assessment; (j) make any changes in its accounting methods, principles or practices currently in effect, except as required by changes in GAAP or by Regulation S-X under the Exchange Act, in each case as concurred in by its independent public accountants; (k) 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 Transactions); (l) commence except as required by applicable Law or settle GAAP, revalue in any Action;material respect any of its assets, including writing down the value of inventory in any material manner, or writing-off notices or accounts receivable in any material manner; or (m) fail to payauthorize, discharge agree or satisfy any claim, liability or obligation in accordance with the ordinary course of business of the Company, consistent with past practice; or (n) announce an intention, enter into any formal or informal agreement or otherwise make a commitment, commit to do any of the foregoing.

Conduct of Business Pending the Merger. SECTION 6.01. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. (a) The Company covenants and agrees that, except as contemplated by this Agreement, between the date of this Agreement and the Effective Time, unless Parent the Buyer shall otherwise agree in writing, or except as expressly contemplated by this Agreement or described in Section 6.01 of the Disclosure Schedule, the businesses of the Company and the Subsidiaries Business of the Company shall be conducted only inin the Company, and the Company and the Subsidiaries of the Company shall not take any action action, except inin the usual, the regular and ordinary course of business and the Company will generally conduct its business in a manner consistent with past practice; substantially the same way as heretofore conducted, and without limiting the foregoing, the Company will continue to operate in the same geographic markets serving the same market segments. The Company shall use its commercially reasonable best efforts consistent with its obligations under this Agreement to preserve substantially intact the business organization of the Company and the Subsidiaries of the Company, to keep available the present services of the current officers, employees and consultants of the Company and the Subsidiaries of the Company and to preserve the current relationships of the Company and the Subsidiaries goodwill of the Company with customers, suppliers and other persons with which the Company or any Subsidiary has business relationships. Without limiting the generality of the Company has significant business relations; PROVIDED THAT nothing in this Section 6.01 shall require foregoing, the Company or shall: (i) maintain in full force and effect all contracts of insurance and indemnity specified in any Company Disclosure Schedule hereto; (ii) repair and maintain all of its tangible properties and assets in accordance with its usual and ordinary repair and maintenance standards; (iii) continue to apply in full the Subsidiaries of same rigorous credit review process used by the Company prior to make any payments the Closing in determining the extent to any officer, employee, consultant which it will extend credit to customers or other person who is not otherwise entitled to receive such payments solely in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be potential customers in the ordinary course of business; (iv) notify the Buyer of any material emergency or other material change in the operation of its business consistent with past practice. or properties and of any governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated). (b) By way of amplification and not limitationlimitation of clause (a) above, except as expressly contemplated by this Agreement and Section 6.01 of the Disclosure Schedule, neither the Company nor any Subsidiary of the Company shall, shall not between the date of this Agreement and the Effective Time, directly or indirectly, indirectly do, or propose publicly announce an intention to do, any of the following without the prior written consent of Parent:the Buyer through one of its authorized representatives (which representatives shall be each of its Chief Executive Officer, President and Chief Financial Officer): (ai) amend or otherwise change its Restated Certificate of Incorporation Organizational Documents or By-laws or equivalent organizational documents; (bii) issue, deliver, sell, pledge, dispose of, grant or grant, encumber, or authorize the issuance, delivery, sale, pledge, disposition, grant or encumbrance of, (i) any shares of any class of capital stock of the Company or any Subsidiary Equity Interests of the Company, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stockEquity Interests, or any other ownership interest (includinginterest, without limitation, any phantom interest), of the Company or any Subsidiary of the Company (except for the securities issuable pursuant to the Warrants or Company Stock Options, in each case as set forth on Section 4.03 of the Disclosure Schedule) or (ii) any assets of the Company or any Subsidiary of the Company, except, in the case of (ii) in the ordinary course of business and in a manner consistent with past practice; (c) declare, set aside, make or pay enter into any dividend or other distribution, payable in cash, stock, property or otherwise, agreement with respect to any of its capital stockthe foregoing, except for dividends by any direct or indirect wholly owned Subsidiary other than upon exercise of the Company Stock Options; (iii) make any distribution (by way of dividend or otherwise) with respect to its Equity Interests; (iv) split, combine or reclassify any of its Equity Interests or issue or authorize or propose the Company issuance of any other securities in respect of, in lieu of or in substitution for its Equity Interests; (v) repurchase, redeem or otherwise acquire any Equity Interests of the Company, or any other Subsidiary securities convertible into or exercisable for any of the Equity Interests of the Company; (dvi) reclassify, combine, split, subdivide enter into any new line of business or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stockmaterially expand the business currently conducted by the Company; (e) (ivii) acquire (including, without limitationor agree to acquire, by merger, consolidationmerging or consolidating with, or acquisition by purchasing an equity interest in or a portion of stock the assets of, or assets or by any other manner, any business combination) or any corporation, partnership, other business organization or any division thereof or any significant material amount of assets; ; (iiviii) incur any indebtedness for borrowed money money, increase the aggregate amounts owed under the Company's existing credit facilities or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any personindividual, corporation or other entity, or make any loans loan or advances, advance; (ix) lower or grant otherwise alter its credit card fraud review process; (x) authorize any security interest capital expenditures of more than $10,000 in any of its assets; the aggregate (iii) enter into any contract or agreement that would be a Material Contract, (iv) enter into any distribution or manufacturing contract or agreement, other than contracts or agreements (including intellectual property contractsexpenditures listed in Section 6.01(b)(x) entered into in the ordinary course of business and consistent with past practice; (v) authorize, or make any commitment with respect to, any capital expenditure in any manner not reflected in the capital budget of the Company attached as Section 6.01(e)(v) of Disclosure Schedule and previously approved by the Disclosure Schedule; or (vi) enter into or amend any contract, agreement, commitment or binding arrangement with respect to any matter set forth in this Section 6.01(eBuyer); (fxi) take (A) (x) adopt, amend, renew or terminate any action that would have the effectplan or any agreement, directly arrangement, or indirectly, of paying or discharging any of policy between the Company Expenses for an amount in excess and one or more of $2,340,000 in the aggregate; (g) except as specifically contemplated its current or provided for in this Agreement, increase the compensation payable or to become payable or the benefits provided to its former directors, officers or employees, except for increases or (y) increase in any manner the ordinary course compensation or fringe benefits of business and consistent with past practice in salaries, wages, bonuses or incentives of employees of the Company or any Subsidiary of the Company who are not directors or officers of the Company, or grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or other employee or pay any benefit not required by any plan or agreement as in effect as of the Company date hereof (including, without limitation, the granting of stock options, stock appreciation rights, restricted stock, restricted stock units or of performance units or shares); or (B) enter into, modify or renew any Subsidiary employment, severance or other agreement with any director, officer or employee of the Company, or establish, adopt, enter into or amend any collective bargaining, bonus, profit-profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance severance, retention or other plan, agreement, trust, fund, policy or arrangement providing for the any benefit of to any director, officer or employee; (hxii) change pay any bonus or any compensation other than base compensation, except for payments of bonuses and other incentive compensation to sales personnel pursuant to and consistent with the accounting methods used written sales incentive plan which has been provided to and approved by it unless required by GAAPthe Buyer; (ixiii) take any action with respect to accounting methods, principles or practices, other than changes required by applicable law or GAAP or regulatory accounting as concurred in by the Company's independent accountants; (xiv) make any tax Tax election other than immaterial tax elections in the ordinary course consistent with past practice or settle or compromise any United States federal, state, local or non-United States material income foreign tax liability; (jxv) pay, discharge or satisfy any material claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise)obligation, other than the payment, discharge or satisfaction of any such liabilities satisfaction, in the ordinary course of business and consistent with past practice; (kxvi) amendsell, modify lease, encumber, assign or consent otherwise dispose of, or agree to sell, lease, encumber, assign or otherwise dispose of, any of its material assets, properties or other rights or agreements; (xvii) take any action that is intended or reasonably can be expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect, or any of the conditions to the consummation of the Merger and the other transactions contemplated by this Agreement set forth in Article IX not being satisfied in any material respect, or in any material violation of any provision of this Agreement; (xviii) enter into or renew, amend or terminate, or give notice of a proposed renewal, amendment or termination of or make any Material Contractcommitment with respect to, (A) any contract, agreement or amend, waive, modify lease for office space or consent operations space to which the termination of Company is a party or by which the Company's Company or its Subsidiary's material rights thereunderproperties is bound; (B) any lease, contract or agreement other than in the ordinary course of business and consistent with past practicepractice including renewals of leases to existing tenants of the Company ; (C) regardless of whether consistent with past practices, any lease, contract, agreement or commitment involving an aggregate payment by or to the Company of more than $10,000 or requiring performance by the Company of any obligations at any time more than one year after the time of execution; (lxix) commence enter into an agreement, contract, or settle commitment that, if entered into prior to the date hereof, would be required to be listed on a Schedule delivered to the Buyer pursuant to the terms of this Agreement, including without limitation, any Actionarrangement or contract with respect to web site development or operations; marketing, promotion, affiliate and advertising, including search engine referrals and Internet private labeling; fulfillment operations; or telephone, credit card or freight carrier services; (mxx) fail to payamend, discharge terminate or satisfy change in any claimmaterial respect any lease, liability contract, undertaking, arrangement or obligation other commitment listed in accordance with the ordinary course of business any Section of the CompanyCompany Disclosure Schedule (including without limitation its arrangements and contracts with respect to web site development and operations; marketing, consistent promotion, affiliate and advertising, including search engine referrals and Internet private labeling; fulfillment operations; and telephone, credit card or freight carrier services) or knowingly do any act or omit to do any act, or permit an act or omission to act, that will cause a breach of any such lease, contract, undertaking, arrangement or other commitment; (xxi) change its pricing policies or its policies with past practicerespect to freight rates charged to customers; (xxii) enter into any transaction with a Company Insider; or (nxxiii) announce an intention, enter into any formal or informal agreement or otherwise make a commitment, agree to do any of the foregoing.

Conduct of Business Pending the Merger. SECTION 6.01. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGERConduct of Business by the Company Pending the Merger. The Company agrees that, between During the period from the date of this Agreement and continuing until the earlier to occur of the termination of this Agreement or the Effective Time, the Company covenants and agrees that, unless Parent shall otherwise agree in writingwriting and unless otherwise expressly permitted hereunder, or except as expressly contemplated by this Agreement or described in Section 6.01 of the Disclosure Schedule, Company shall conduct its business and shall cause the businesses of the Company and the Subsidiaries of the Company shall its subsidiaries to be conducted only inconducted, and the Company and the Subsidiaries of the Company its subsidiaries shall not take any action except inexcept, in the ordinary course of business and in a manner consistent with past practice; and the Company shall use its commercially reasonable best commercial efforts consistent with its obligations under this Agreement to preserve substantially intact the business organization of the Company and the Subsidiaries of the Companyits subsidiaries, to keep available the services of the current present officers, employees and consultants of the Company and the Subsidiaries of the Company its subsidiaries, and to preserve the current present relationships of the Company and the Subsidiaries of the Company its subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary of the Company its subsidiaries has significant business relations; PROVIDED THAT nothing in this Section 6.01 shall require the Company or the Subsidiaries of the Company to make any payments to any officer, employee, consultant or other person who is not otherwise entitled to receive such payments solely in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be in the ordinary course of business consistent with past practice. By way of amplification and not limitation, except as expressly contemplated by this Agreement and Section 6.01 of the Disclosure Schedule, neither the Company nor any Subsidiary of the Company its subsidiaries shall, between during the period from the date of this Agreement and continuing until the earlier to occur of the termination of this Agreement or the Effective Time, directly or indirectly, indirectly do, or propose to do, any of the following without the prior written consent of Parent, unless otherwise expressly permitted hereunder: (a) amend or otherwise change the Company's or any of its Restated Certificate subsidiaries' Articles of Incorporation or By-laws Laws, or other equivalent organizational documents; (b) issue, sell, pledge, dispose of, grant of or encumber, or authorize the issuance, sale, pledge, disposition, grant disposition or encumbrance of, (i) any shares of any class of capital stock of the Company or any Subsidiary of the Companyclass, 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 Company, any of its subsidiaries or any Subsidiary of the Company affiliates (except for the securities issuable issuance of Shares pursuant to the Warrants exercise of Options under the Stock Option Plans, which Options are outstanding on the date hereof); (c) sell, pledge, dispose of or Company Stock Options, in each case as set forth on Section 4.03 of the Disclosure Schedule) or (ii) encumber any assets of the Company or any Subsidiary of the Company, except, in the case its subsidiaries (except for (i) sales of (ii) assets in the ordinary course of business and in a manner consistent with past practicepractice and (ii) dispositions of obsolete or worthless assets); (cd) amend or change the period (or permit any acceleration, amendment or change) of exercisability of Options granted under the Stock Option Plans or the Stock Purchase Plan or other than as expressly provided in Section 7.03(b), authorize cash payments in exchange for any such Options; (e) (i) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock, stock or property or otherwise, with any combination thereof) in respect to of any of its capital stock, except for dividends by any direct or indirect that a wholly owned Subsidiary subsidiary of the Company may declare and pay a dividend to its parent, (ii) split, combine or reclassify any of its capital stock or issue or authorize or propose the Company or issuance of any other Subsidiary securities in respect of, in lieu of or in substitution for shares of its capital stock or (iii) amend the Company; (d) reclassifyterms of, combinerepurchase, split, subdivide or redeem, or purchase redeem or otherwise acquire, directly or indirectlypermit any subsidiary to repurchase, redeem or otherwise acquire, any of its capital stocksecurities or any securities of its subsidiaries, or propose to do any of the foregoing; (ef) sell, transfer, license, sublicense or otherwise dispose of any material Company Intellectual Property (other than in the ordinary course of business consistent with past practice) or amend or modify any existing agreements with respect to any material Company Intellectual Property or third party Intellectual Property rights; (i) acquire (including, without limitation, by merger, consolidation, consolidation or acquisition of stock or assets or any other business combinationassets) any corporation, partnership, partnership or other business organization or any division thereof or any significant amount of assetsthereof; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances, or grant any security interest advances except to employees in any of its assetsthe ordinary course consistent with past practice; (iii) enter into or amend any contract or agreement that would be a Material Contract, (iv) enter into any distribution or manufacturing contract or agreement, other than contracts or agreements (including intellectual property contracts) entered into in the ordinary course of business business; (iv) authorize or make any capital expenditures or purchases of fixed assets that are not currently budgeted and consistent with past practice; that in the aggregate, exceeds $500,000 (v) authorize, terminate any Material Contract or make amend any commitment with respect to, any capital expenditure in any manner not reflected in the capital budget of the Company attached as Section 6.01(e)(v) of the Disclosure Scheduleits material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder); or (vi) enter into or amend any contract, agreement, commitment or binding arrangement with respect to effect any matter set forth in of the matters prohibited by this Section 6.01(e6.01(g); (fh) take any action that would have the effect, directly or indirectly, of paying or discharging any of the Company Expenses for an amount in excess of $2,340,000 in the aggregate; (g) except as specifically contemplated or provided for in this Agreement, 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 salariesofficers, wages, bonuses or incentives of employees of the Company or any Subsidiary of the Company who are not directors or officers of the Company, or grant any severance or termination pay to, or enter into any employment or severance agreement withwith any employee, any director, director or officer or other employee of the Company or any of any Subsidiary of the Company, its subsidiaries or establish, adopt, enter into into, terminate, 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; Employee Plan (h) change any of the accounting methods used by it unless except as may otherwise be required by GAAPapplicable law); (i) take any action, other than as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable); (j) make any tax material Tax election other than immaterial tax elections in the ordinary course consistent inconsistent with past practice or settle or compromise any United States federalmaterial Tax liability, stateexcept to the extent the amount of any such settlement or compromise has been reserved for on the consolidated financial statements contained in the Company SEC Reports, local or non-United States material income tax liabilitywould not have a Company Material Adverse Effect; (jk) pay, discharge discharge, settle, or satisfy any material claimlawsuits, liability claims, liabilities or obligation obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such liabilities in the ordinary course of business and consistent with past practice; (k) amend, modify practice of liabilities reflected or consent to reserved against in the termination of any Material Contract, or amend, waive, modify or consent to the termination financial statements of the Company's Company or its Subsidiary's material rights thereunder, other than incurred in the ordinary course of business and consistent with past practice; (l) commence except as may be required by law, take any action to terminate or settle amend any ActionEmployee Plan; (m) fail to pay, discharge or satisfy permit any claim, liability or obligation material increase in accordance with the ordinary course number of business employees of the CompanyCompany or any of its subsidiaries employed by the Company or any of its subsidiaries, consistent with past practiceas the case may be, on the date hereof; or (n) announce an intentiontake or fail to take, enter into any formal or informal agreement agree in writing or otherwise make a commitmentto take or fail to take, to do any of the foregoingactions described in Section 6.01(a) through (m) above, or any action which would make any of the representations or warranties of the Company contained in this Agreement untrue or incorrect or prevent the Company from performing or cause the Company not to perform its covenants hereunder or result in any of the conditions to the Merger set forth herein not being satisfied.

Conduct of Business Pending the Merger. SECTION 6.01. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. The Company agrees that(a) Except as required by this Agreement, between during the period from the date of this Agreement and through the Effective Time, unless Parent shall otherwise agree in writing, or except as expressly contemplated by this Agreement or described in Section 6.01 of the Disclosure Schedule, the businesses of the Company and the Subsidiaries of the Company shall be conducted only inshall, and the Company and the shall cause each of its Subsidiaries of the Company shall not take any action except into, conduct its business in the ordinary course of its business and in a manner consistent with past practice; practice and the Company shall in compliance with all material applicable Laws and all material governmental authorizations, and use its commercially reasonable best efforts consistent with its obligations under this Agreement to preserve substantially intact the its present business organization organization, maintain in effect all of the Company its foreign, federal, state and the Subsidiaries of the Companylocal licenses, to permits, consents, franchises, approvals and authorizations, keep available the services of the current officersits directors, officers and employees and consultants of the Company and the Subsidiaries of the Company and to preserve the current maintain satisfactory relationships of the Company and the Subsidiaries of the Company with its customers, lenders, suppliers and other persons others having material business relationships with which it. Without limiting the Company or any Subsidiary generality of the Company has significant business relations; PROVIDED THAT nothing in this Section 6.01 shall require foregoing and to the Company or the Subsidiaries of the Company to make any payments to any officerfullest extent permitted by applicable Law, employee, consultant or other person who is not otherwise entitled to receive such payments solely in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be in the ordinary course of business consistent with past practice. By way of amplification and not limitation, except as expressly contemplated by this Agreement and Section 6.01 of the Disclosure Schedule, neither the Company nor any Subsidiary of the Company shall, between from the date of this Agreement and until the Effective Time, directly except as otherwise required by this Agreement or indirectlyas set forth in Section 4.1 of the Company Letter, dothe Company shall not, or propose to do, and shall not permit any of the following its Subsidiaries to, without the prior written consent of Parent: (ai) amend (A) other than regularly scheduled dividends with respect to the Company Series B Preferred Stock consistent with the Company’s past practice with respect to payment date and amount, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or any combination thereof) in respect of, any shares of its capital stock or other securities, or otherwise change make any payments to its Restated Certificate stockholders in their capacity as such other than dividends or distributions by Subsidiaries to other Subsidiaries or to the Company, (B) split, combine or reclassify any shares of Incorporation its capital stock or By-laws or equivalent organizational documents; (b) issue, sell, pledge, dispose of, grant or encumber, issue or authorize the issuance, sale, pledge, disposition, grant or encumbrance issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (iC) purchase, redeem or otherwise acquire any shares of any class of capital stock of the Company or any Subsidiary of the Company, its Subsidiaries or any optionsother securities thereof or any rights, warrants, convertible securities warrants or other rights of any kind options to acquire any such shares or other securities other than the cancellation of such capital stock, Company Stock Options in connection with the exercise thereof or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary of the Company (except for the securities issuable pursuant to the Warrants or Company Stock Options, in each case as set forth on Section 4.03 of the Disclosure Schedule) or Rights Agreement; (ii) (A) issue, deliver, sell, pledge, dispose of or otherwise encumber, or authorize the issuance, delivery, sale, pledge, disposal or encumbrance of, any assets Company Securities or Company Subsidiary Securities, other than (1) the issuance of shares of Company Common Stock upon the exercise of Company Stock Options that are outstanding on the date of this Agreement in accordance with the terms of those options on the date of this Agreement and (2) issuances pursuant to the Rights Agreement or (B) amend any term of any Company Security or any Company Subsidiary Security (in each case, whether by merger, consolidation or otherwise); (iii) amend its charter or by-laws or other comparable charter or organizational documents (whether by merger, consolidation or otherwise); (iv) (A) acquire or agree to acquire, (including by merger, consolidation or acquisition of the Companystock or assets) any interest in any business or any corporation, exceptlimited liability company, in the case partnership, association or other business organization or division thereof or any material amount of assets from any other Person (ii) other than purchases of inventory in the ordinary course of business and or in accordance with Section 4.1(a)(x)), (B) merge or consolidate with any other Person or (C) adopt a manner plan of complete or partial liquidation, dissolution, recapitalization or restructuring; (v) sell, lease, license, mortgage, encumber or otherwise dispose of any Subsidiary or any material amount of securities, properties or assets, other than the sale of inventory or obsolete equipment in the ordinary course of business consistent with past practicepractice or pursuant to existing Contracts or commitments disclosed in Section 4.1 of the Company Letter; (cvi) declare(A) create, set asideincur, make assume, suffer to exist or pay any dividend or other distribution, payable in cash, stock, property or otherwise, otherwise be liable with respect to any of its capital stock, except for dividends by any direct or indirect wholly owned Subsidiary of the Company to the Company or any other Subsidiary of the Company; (d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock; (e) (i) acquire (including, without limitation, 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; (ii) 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 or advances, or grant any security interest in any of its assets; (iii) enter into any contract or agreement that would be a Material Contract, (iv) enter into any distribution or manufacturing contract or agreement, guarantees thereof other than contracts or agreements (including intellectual property contracts) entered into in the ordinary course of business and on terms consistent with past practice; (v) authorizepractices in an amount not to exceed $100,000 in the aggregate, provided that all such indebtedness for borrowed money must be prepayable at any time by the Company without penalty or premium, or (B) make any commitment with respect loan, advance, investment or capital contribution to, or other investment in, either by purchase of stock or securities, contributions to capital, property transfers, or purchase of any property or assets of any Person, other than loans, advances, investments and capital expenditure contributions to or in any manner not reflected its wholly-owned Subsidiaries made in the capital budget ordinary course of business consistent with past practices and other than advances of expenses to employees and consultants in the ordinary course of business; (vii) (A) grant or increase any severance or termination pay to (or amend any existing arrangement with) any of their respective directors, officers or employees other than as required pursuant to existing Company Plans, (B) increase benefits payable under any severance or termination pay policies or employment agreements existing as of the Company attached as Section 6.01(e)(v) date of the Disclosure Schedule; or this Agreement, (viC) enter into any employment, consulting, deferred compensation or amend other similar agreement (or any contract, agreement, commitment or binding arrangement with respect amendment to any matter set forth in this Section 6.01(e); (fsuch existing agreement) take any action that would have the effect, directly or indirectly, of paying or discharging with any of the Company Expenses for an amount in excess of $2,340,000 in the aggregate; (g) except as specifically contemplated or provided for in this Agreement, increase the compensation payable or to become payable or the benefits provided to its their respective directors, officers or employees, except for increases in the ordinary course of business and consistent with past practice in salaries, wages, bonuses or incentives of employees of the Company or any Subsidiary of the Company who are not directors or officers of the Company, or grant 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 of any Subsidiary of the Company, or (D) establish, adopt, enter into adopt or amend (except as required by applicable Law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, severance, compensation, stock option, restricted stockstock or other benefit plan or arrangement covering any of their respective directors, officers or employees, other than benefit arrangements (other than collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, employmentseverance, terminationcompensation, severance stock option, restricted stock plans or other plan, agreement, trust, fund, policy or arrangement for arrangements) with employees in the benefit ordinary course of any director, officer or employeebusiness; (hviii) change any increase the compensation, bonus or other benefits payable or to become payable to its directors, executives or employees, other than in the ordinary course of the accounting methods used by it unless required by GAAPbusiness consistent with past practice as to timing and amount; (ix) transfer or agree to transfer any employee from working for the Company or any of its Subsidiaries (other than to the Company or any of its Subsidiaries) or induce any employee to resign such employee’s employment with the Company or any of its Subsidiaries; (x) incur any capital expenditures or any obligations or liabilities in respect thereof, other than (i) make expenditures with respect to commitments in existence on the date of this Agreement which, in the case of material commitments in an amount in excess of $25,000, are set forth in Section 4.1(a)(x) of the Company Letter, or (ii) in an amount in excess of $100,000 individually or $250,000 in the aggregate; (xi) create or incur any tax election Lien on any material asset other than any immaterial tax elections Lien incurred in the ordinary course of business consistent with past practices; (xii) (A) enter into any Contract that would have been a Company Material Contract were the Company or any of its Subsidiaries a party or subject thereto on the date of this Agreement other than in the ordinary course consistent with past practice practices or settle (B) terminate or compromise amend, in any United States federalmaterial respect which would reasonably be expected to be detrimental to the Company or any of its Subsidiaries, state, local any such Contract or non-United States any Company Material Contract or waive any material income tax liabilityright thereunder; (jxiii) terminate, renew, suspend, abrogate, amend or modify in any material respect any Company Permit, other than renewals, amendments or modifications in the ordinary course of business; (xiv) make any change in any method of accounting or accounting principles or practice, except for any such change required by reason of a concurrent change in GAAP or Regulation S-X under the Exchange Act, as approved by the Company’s independent public accountants; (xv) settle, or offer or propose to settle, (A) any litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any of its Subsidiaries that is material to the Company and its Subsidiaries, taken as a whole or involving a payment by the Company or its Subsidiaries in excess of $100,000, (B) any stockholder litigation or dispute against the Company or any of its officers or directors, or (C) any litigation, arbitration, proceeding or dispute that relates to the Transactions; (xvi) grant any license with respect to Intellectual Property of the Company other than non-exclusive licenses granted in the ordinary course of business consistent with past practices or take any action or omit to take any action or make any filing or pay any fee that would reasonably be expected to cause any material Intellectual Property of the Company used or held for use in its business to expire or become invalidated, abandoned or dedicated to the public domain; (xvii) pay, discharge or satisfy any material claimclaims, liability liabilities or obligation obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction satisfaction, in the ordinary course of any such business and consistent with past practice, of liabilities and obligations reflected or reserved against in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practice; (kxviii) amend, modify fail to use reasonable efforts to maintain existing material insurance policies or consent comparable replacement policies to the termination of any Material Contract, or amend, waive, modify or consent to the termination of the Company's or its Subsidiary's material rights thereunder, other than in the ordinary course of business and consistent with past practiceextent available for a similar reasonable cost; (lxix) commence take any action that would make any representation or settle warranty of the Company hereunder inaccurate in any Actionmaterial respect at, or as of any time before, the Effective Time or would materially delay the Closing; (mxx) except as required by Law, (A) make any material Tax election or take any material position on any material Tax Return filed on or after the date of this Agreement or adopt any material accounting method that is inconsistent with elections made, positions taken or methods used in preparing or filing similar Tax Returns in prior periods or (B) settle or resolve any material Tax controversy; (xxi) enter into any lease or sublease of real property (whether as lessor, sublessor, lessee or sublessee) or change, terminate or fail to pay, discharge exercise any right to renew any lease or satisfy any claim, liability or obligation in accordance with the ordinary course sublease of business of the Company, consistent with past practicereal property; or (nxxii) announce an intentionagree, enter into any formal resolve or informal agreement or otherwise make a commitment, commit to do any of the foregoing.

Conduct of Business Pending the Merger. SECTION 6.01. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. The Company agrees that, between (a) From the date hereof until the earlier of (i) the Effective Time and (ii) the date of any termination of this Agreement and the Effective Timepursuant to Section 8.1, unless Parent shall otherwise agree in writing, or except as expressly contemplated otherwise consented to by Parent in writing (such consent not to be unreasonably withheld, conditioned or delayed), and except as otherwise contemplated, required or permitted by this Agreement or described in Section 6.01 of the Disclosure ScheduleAgreement, the businesses of the Company and the Subsidiaries of (A) the Company shall be conducted conduct business only in, and the Company and the its Subsidiaries of the Company shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; practice and (B) the Company shall use its commercially reasonable best efforts consistent with its obligations under this Agreement to preserve substantially intact the business organization of the Company and the Subsidiaries of the Company, to keep available the services of the its current officers, officers and employees and consultants of the Company and the Subsidiaries of the Company and to preserve preserve, in all material respects, the current relationships of the Company and the Subsidiaries of the Company with customers, suppliers suppliers, licensors, licensees, distributors and other persons Persons with which the Company 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 contemplated, required or permitted by this Agreement, applicable Law or the terms of any Company Benefit Plan or as consented to by Parent in writing (such consent not to be unreasonably withheld, conditioned or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier of (i) 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 adopt any amendments to, the Company’s or its Subsidiaries’ respective certificate of incorporation or bylaws or comparable organizational documents; (ii) 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, convertible, exchangeable or exercisable securities, rights of any kind to purchase or otherwise) any securities in respect of, in lieu of or in substitution for shares of its capital stock, voting securities or any other equity interests or Company Stock Rights or other interests or securities in Subsidiaries that would be Company Stock Rights if they were interests or securities in the Company; (iii) 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 required pursuant to the terms of any Company Benefit Plan (as then in effect) or any agreement subject to any such Company Benefit Plan (as then in effect); (iv) other than dividends or distributions made by any direct or indirect wholly-owned Subsidiary of the Company has significant business relations; PROVIDED THAT nothing in this Section 6.01 shall require 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 or other equity interests, split, combine or reclassify any shares of capital stock or other equity interests of the Company or its Subsidiaries, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any such shares of capital stock or other equity interests, or make any other distribution in respect of such shares of capital stock or other equity interests; (v) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries; (vi) (A) except as reasonably necessary or appropriate in order to comply with municipal platting, planning, construction and development codes or requirements in the ordinary course of business (but in no event for an amount that exceeds $100,000), incur Indebtedness for 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, in each case, other than the incurrence of Indebtedness under, and in accordance with, the Existing Loan Documents secured solely by Owned Real Property, Leased Real Property or JV Owned Real Property in the ordinary course of business consistent with past practice (provided that, in the event that any borrowing will exceed $500,000 under any Existing Loan Document, the Company shall give Parent reasonable advance notice prior to the incurrence of any such Indebtedness), (B) make any loans or advances to any Person, make any material change in its existing borrowing or lending arrangements for or on behalf of any Person or enter into any “keep well” or similar agreement to maintain the financial condition of another entity, (C) acquire, or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company to make any payments to any officerCompany), employee, consultant by purchase or other person who is not otherwise entitled to receive such payments solely acquisition of stock or other equity interests (other than in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be a fiduciary capacity in the ordinary course of business consistent with past practice. By way of amplification and not limitation), except as expressly contemplated whether by this Agreement and Section 6.01 of the Disclosure Schedulemerger, neither the Company nor any Subsidiary of the Company shallconsolidation, between the date of this Agreement and the Effective Time, directly asset purchase or indirectly, doother business combination, or propose by formation of any joint venture or other business organization or by contributions to do, capital; (D) mortgage or pledge any of the following without the prior written consent of Parent: (a) amend its or otherwise change its Restated Certificate of Incorporation Subsidiaries assets, tangible or By-laws or equivalent organizational documents; (b) issue, sell, pledge, dispose of, grant or encumberintangible, or authorize create or suffer to exist any material Lien (other than Permitted Liens) thereupon; or (E) prepay any Indebtedness for borrowed money or issue or amend the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares terms of any class of capital stock debt securities of the Company or any Subsidiary 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, without limitation, any phantom interest), of the Company or any Subsidiary of the Company (except for the securities issuable pursuant to the Warrants or Company Stock Options, in each case as set forth on Section 4.03 of the Disclosure Schedule) or (ii) any assets of the Company or any Subsidiary of the Company, except, in the case of (ii) in the ordinary course of business and in a manner consistent with past practiceits Subsidiaries; (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 by any direct or indirect wholly owned Subsidiary of the Company to the Company or any other Subsidiary of the Company; (d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock; (evii) (i) acquire (including, without limitation, 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; (ii) 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 or advances, or grant any security interest in any of its assets; (iiiA) enter into any contract or agreement that would be a Material Contract, (iv) enter into any distribution or manufacturing contract or agreement, other than contracts or agreements (including intellectual property contracts) entered into in the ordinary course of business and consistent with past practice; (v) authorize, or make any commitment with respect to, any capital expenditure in any manner not reflected in the capital budget of the Company attached as Section 6.01(e)(v) of the Disclosure Schedule; or (vi) enter into or amend any contract, agreement, commitment or binding arrangement with respect to any matter set forth in this Section 6.01(e); (f) take any action that would have the effect, directly or indirectly, of paying or discharging any of the Company Expenses for an amount in excess of $2,340,000 in the aggregate; (g) except as specifically contemplated or provided for in this Agreement, 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, wages, bonuses or incentives of employees of the Company or any Subsidiary of the Company who are not directors or officers of the Company, or grant 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 of any Subsidiary of the Company, or establishinto, adopt, enter into amend, modify or amend terminate any collective bargainingemployment, bonus, profit-profit sharing, thrift, compensation, stock severance, termination, option, restricted stockappreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, termination, severance or other planCompany Benefit Plan or employee benefit arrangement, agreement, trust, plan, fund, policy Contract or other arrangement for the benefit compensation, benefit, or welfare of any current or former employee, director or consultant of the Company or any of its Subsidiaries, (B) otherwise take any action to cause to accelerate the payment, funding, right to payment or vesting of any compensation or benefits (except as required pursuant to this Agreement) or grant any increases to the compensation, severance or benefits of any current or former employee, director or consultant of the Company or any of its Subsidiaries or pay any bonus or special remuneration (whether in cash, equity or otherwise) to any current or former employee, consultant, independent contractor or director, ; (C) hire or terminate (without cause) any employee or service provider of the Company or its Subsidiaries with an aggregate annual compensation opportunity of $100,000 or more; or (D) appoint any Person to a position of executive officer or employeedirector of the Company or its Subsidiaries; (hviii) except as may be specifically required under a Company Benefit Plan, grant, confer, award, or modify the terms of any options, convertible securities, restricted stock, phantom shares, equity-based compensation or other rights to acquire, or denominated in, any of the Company’s or any of its Subsidiaries’ capital stock or other voting securities or equity interests (except as may be required by the terms of any unexercisable options or other equity awards outstanding on the date of this Agreement); (ix) other than as contemplated by the forecast set forth in Section 6.1(b)(ix) of the Company Disclosure Letter or transactions required pursuant to existing Contracts as in effect on the date hereof and disclosed in the Company Disclosure Letter, (A) acquire, lease (as lessee) or license (as licensee) any property or assets; or (B) sell, lease (as lessor), license (as licensor) or dispose of any property or assets (including, for the avoidance of doubt, any Owned Real Property), in each case, with an individual value greater than $100,000 (provided that, with respect to the sale of lots in the ordinary course of business consistent with past practice which would otherwise require the consent of Parent pursuant to this clause (ix), the Company shall only be required to provide Parent with 48 hours’ advance notice of any such sale and, in the event Parent fails to respond within such period, Parent’s consent shall be deemed to have been granted); (x) 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 methods principles or practices used by it unless required by or fail to maintain all financial books and records in all material respects in accordance with GAAP; (ixi) make (A) make, change or revoke any tax Tax election other than immaterial tax elections that would be reasonably expected to adversely affect in any material respect the ordinary course consistent with past practice Tax liability of the Company or any of its Subsidiaries, (B) change any material Tax accounting method, (C) settle or compromise any United States material U.S. federal, state, local or non-United States U.S. Tax liability, (D) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material income tax liabilityTaxes, (E) file any amended material Tax Return with respect to any Tax, or (F) surrender any right to a refund of material Taxes; (jxii) pay(A) enter into, discharge renew, extend or satisfy any material claim, liability or obligation terminate (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the paymenttermination or expiration of a Material Contract as in effect as of the date hereof pursuant to its terms) any Material Contract (or any Contract that would have been a Material Contract if it had been in effect on the date hereof, discharge or satisfaction of but specifically excluding any such liabilities Material Real Property Leases), except in the ordinary course of business and consistent with past practice; practice with respect to (k1) amendany such Material Contract described solely in clause (iv) of the definition of “Material Contract” that does not involve payments to or from the Company or any of its Subsidiaries of more than $200,000 during any twelve-month period or (2) subject to clauses (ix) and (xxi) of this Section 6.1(b), modify any sale agreement; or consent (B) make any material amendment or change to the termination any such Material Contract (including any waiver, release, compromise or assignment of material rights or claims thereunder, but specifically excluding any Material ContractReal Property Leases), or amend, waive, modify or consent to the termination of the Company's or its Subsidiary's material rights thereunder, other than except in the ordinary course of business and consistent with past practicepractice with respect to any amendment or change that would not itself alone result in such Contract being a Material Contract (other than pursuant to clause (iv) of the definition of “Material Contract”) and which amendment or change does not involve payments to or from the Company or any of its Subsidiaries of more than $200,000 during any twelve-month period; (lxiii) commence except as required by applicable Law, recognize or settle certify any Actionlabor union, labor organization, works council, or group of employees of the Company or its Subsidiaries as the bargaining representative for any employees of the Company or its Subsidiaries; (mxiv) fail 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 (A) are reflected or reserved against in full in the Company Financial Statements, (B) are covered by insurance policies or (C) otherwise do not involve the payment of money in excess of $150,000 in the aggregate, in each case where the settlement, compromise, discharge or satisfaction of which does not include any obligation to be performed by the Company or its Subsidiaries following the Effective Time; (xv) enter into any Contract or arrangement between the Company or any of its Subsidiaries, on the one hand, and any Affiliates of Company (other than its Subsidiaries), on the other hand; (xvi) fail to use reasonable best efforts to maintain in accordance full force and effect the existing insurance policies or to replace such insurance policies with reasonably comparable insurance policies, to the extent available on commercially reasonable terms, covering the Company, its Subsidiaries and their respective properties, assets and businesses; (xvii) form any new joint ventures or materially modify the terms of any existing joint ventures with third parties; (xviii) amend or modify the compensation terms or any other obligations of Company contained in the engagement letter with JMP Securities LLC in a manner adverse to Company or any of its Subsidiaries or the Surviving Entity or engage other financial advisers in connection with the transactions contemplated by this Agreement; (xix) other than in the ordinary course of business consistent with past practice, initiate or consent to (A) any material zoning reclassification of any Owned Real Property or Leased Real Property or (B) any material change to any approved site plan, special use permit, planned unit development approval or other land use entitlement affecting any Owned Real Property or Leased Real Property; (xx) other than in the ordinary course of business consistent with past practice, enter into, renew, modify, amend or terminate, or waive, release, compromise or assign any material rights or claims under, any Material Real Property Lease (or any lease for real property that, if existing as of the date of this Agreement, would be a Material Real Property Lease) or enter into any other lease of real property with a term in excess of one year; (xxi) other than in the ordinary course of business consistent with past practice, sell, license, mortgage, pledge, assign, transfer, dispose of, abandon, or encumber, or effect a deed in lieu of foreclosure with respect to, any Owned Real Property or other property or assets (except for Permitted Liens), in each case, with an individual value greater than $100,000 (or, in the case of Intellectual Property, that is material to the Company); (xxii) enter into any new line of business; (xxiii) (A) purchase any “non-core” asset or right (e.g., mineral rights, surface rights, multifamily or other developed residential or commercial property, real property held primarily for the purpose of resource extraction, groundwater leases or timberland assets) or any other asset or right not purchased in furtherance of the Company and its Subsidiaries’ core community development business or (B) invest or spend or commit to invest or spend any amounts with respect to such “non-core” assets other than as may reasonably be required in the ordinary course of business consistent with past practice or to preserve the value of such assets or to prepare them for sale; (xxiv) make, authorize, enter into any commitment for, or make a capital contribution to any Joint Venture for, any new capital expenditure (such new capital expenditures being referred to hereinafter as the “Capital Expenditures”), other than Capital Expenditures in the ordinary course of business consistent with past practice for continuation of development of existing phases of Owned Real Property and JV Owned Real Property currently under construction and in an amount not to exceed, in each case, 110% of the aggregate budgeted amount for the applicable quarter as reflected in the applicable property level budget of the Company, consistent with past practicecopies of which are attached as Section 6.1(b)(xxiv) of the Company Disclosure Letter; or (nxxv) announce an intention, enter into any formal or informal agreement or otherwise make a commitment, Contract to do any of the foregoing or make any formal or informal arrangement or understanding, whether or not binding, with respect to any of the foregoing.

Conduct of Business Pending the Merger. SECTION 6.016.1 Conduct of the Business Pending the Merger. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. The Company agrees that, between Between the date of this Agreement and the earlier of (1) the Effective Time, unless Parent shall otherwise agree in writing, or except as expressly contemplated by this Agreement or described in Section 6.01 Time and (2) the date upon which Purchaser’s designees constitute a majority of the Disclosure Schedulemembers on the Company Board pursuant to Section 7.3 (the “Control Date”), (i) the Company shall, and shall cause the Company Subsidiaries to, conduct the businesses of the Company and the Company Subsidiaries of the Company shall be conducted only in, and the Company and the Subsidiaries of the Company shall not take any action except in, in the ordinary course of business and in a manner consistent with past practicepractice and in compliance in all material respects with all applicable Laws; and (ii) the Company shall use its commercially reasonable best efforts consistent with its obligations under this Agreement to preserve substantially intact the business organization of the Company and the Subsidiaries of the CompanyCompany Subsidiaries, to keep available the services of the current officers, employees and consultants of the Company and the Company Subsidiaries of the Company and to preserve the current relationships of the Company and the Company Subsidiaries of the Company with its customers, suppliers suppliers, distributors, licensors, licensees and other persons with which the Company or any Subsidiary of the Company Subsidiaries has significant business relations; PROVIDED THAT nothing in this Section 6.01 shall require (iii) the Company shall, and shall cause the Company Subsidiaries to, maintain the Company Owned Real Property and Company Leased Real Property in substantially the same condition as the same exist on the date of this Agreement (reasonable wear and tear excepted), (iv) upon reasonable request by Purchaser, the Company shall, or shall cause the Company Subsidiaries to, deliver any written notice necessary to exercise a renewal option with respect to those leases of Company Leased Real Property that require that such notice of renewal be delivered prior to the Effective Time, and (v) the Company shall not, and shall cause the Company Subsidiaries not to, take any action that would adversely affect or delay in any material respect the ability of either Parent or the Company to make obtain any payments to necessary approvals of any officer, employee, consultant regulatory agency or other person who is not otherwise entitled to receive such payments solely in order to keep available Governmental Authority required for the services ofTransactions. In addition, or preserve any current relationship with, any such person, unless such payments would be in the ordinary course of business consistent with past practice. By way of amplification and not limitationin limitation of the foregoing, except as (x) expressly contemplated by this Agreement and Agreement, (y) set forth in Section 6.01 6.1 of the Disclosure ScheduleSchedule or (z) as required in compliance with all applicable Laws, neither the Company nor any Subsidiary of the Company Subsidiaries 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:Parent (which shall not be unreasonably withheld or delayed): (a) amend or otherwise change its Restated Certificate of Incorporation or By-laws or equivalent organizational documents; (b) issue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of any class of capital stock of the Company or any Subsidiary of the CompanyCompany Subsidiaries, 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, including any phantom interestinterest and including any Company RSUs or voting securities), of the Company or any Subsidiary of the Company (Subsidiaries, except for (i) the securities issuable issuance in the ordinary course of business of Company Stock Options for the purchase of up to 25,000 Company Shares and Company RSUs for the issuance of up to 10,000 Company Shares for employees hired after the date hereof, (ii) the issuance of Company Shares pursuant to exercises of the Company Stock Options or vesting of Company RSUs outstanding on the date hereof as disclosed in Section 4.3(b) in accordance with the terms of those options or Company RSUs on the date of this Agreement) and (iii) subject to Section 3.7, issuance of Company Shares pursuant to the Warrants Company ESPP; (c) transfer, lease, sell, pledge, license, dispose of or Company Stock Options, in each case as set forth on Section 4.03 of the Disclosure Schedule) encumber any material assets or (ii) any assets properties of the Company or any Subsidiary of the CompanyCompany Subsidiaries, except, in the case of (ii) except in the ordinary course of business and in a manner consistent with past practice; (cd) 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 stock (other than dividends or distributions made by any direct or indirect wholly owned a Company Subsidiary of the Company to the Company or any other Subsidiary of the Companyanother Company Subsidiary); (de) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock; (e) (i) acquire acquire, directly or indirectly (including, without limitation, 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 other business, or any equity interest in any person or any material amount (individually or collectively) of assets; (ii) incur any indebtedness for borrowed money or issue any debt securities securities, or assume, guarantee or endorse, or otherwise become responsible forfor (contingently or otherwise), the obligations of any person, or make any loans or advances, or grant any security interest in any the aggregate in excess of its assets$500,000; (iii) enter into make any contract loans, advances or agreement that would be a Material Contractcapital contributions, (iv) enter into any distribution except for employee loans or manufacturing contract or agreementadvances for travel expenses and extended payment terms for customers, other than contracts or agreements (including intellectual property contracts) entered into in each case subject to applicable Law and only in the ordinary course of business and consistent with past practicebusiness; (viv) make, authorize, or make any commitment with respect toto (A) any single capital expenditure or other expenditure that is, individually, in excess of $500,000 or (B) collectively, in the aggregate for the Company and the Company Subsidiaries taken as a whole in excess of $2,000,000; (v) make or direct to be made any capital expenditure investments or equity investments in any manner not reflected entity, other than investments in the capital budget of the any wholly-owned Company attached as Section 6.01(e)(v) of the Disclosure ScheduleSubsidiary; or (vi) enter into or amend any contract, agreementContract, commitment or binding arrangement with respect to any matter set forth in this Section 6.01(e6.1(f); (f) take any action that would have the effect, directly or indirectly, of paying or discharging any of the Company Expenses for an amount in excess of $2,340,000 in the aggregate; (g) except as specifically contemplated or provided for in this Agreement, (i) increase the compensation payable or to become payable (including bonus grants) or increase or accelerate the vesting of any benefits provided provided, or pay or award any payment or benefit not required as of the date hereof by a Plan as existing on the date hereof and disclosed in Section 4.10(a) of the Company Disclosure Schedule, to its directors, officers or employeesemployees or other service providers, except for increases in the ordinary course of business and consistent with past practice in salaries, wages, bonuses or incentives of employees of the Company or any Subsidiary of the Company who are not directors or officers of the Company, or (ii) grant any severance or termination pay or benefits to, or enter into any employment employment, severance, retention, change in control, consulting or severance agreement termination Contract with, any director, officer or other employee or other service providers of the Company or of any Subsidiary of the CompanyCompany Subsidiary, subject to sub-Section 6.1(g)(v) below, other than offer letters, employment agreements, or consulting agreements entered into in the ordinary course of business that are terminable at will and without liability to the Company or any Company Subsidiary, (iii) 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, agreementContract, trust, fund, policy or arrangement for the benefit of any director, officer or employeeemployee or other service providers, (iv) pay or make, or agree to pay or make, any accrual or other arrangement for, or take, or agree to take, any action to fund or secure payment of, any severance pension, indemnification, retirement allowance, or other benefit, or (v) hire, elect or appoint any officer, director or employee holding a position of vice president or above; (h) change except as publicly announced prior to the date hereof, announce, implement or effect any reduction in labor force greater than five percent (5%) of the accounting methods used by it unless required by GAAPtotal Company headcount, lay-off, early retirement program, severance program or other program or effort concerning the termination of employment of employees of the Company or any Company Subsidiary, other than routine employee terminations; (i) make any tax election other than immaterial tax elections enter into a new line of business that (A) is material to the Company and the Company Subsidiaries taken as a whole, or (B) represents a category of revenue that is not discussed in Item 1 of the ordinary course consistent with past practice or settle or compromise any United States federalCompany’s Annual Report on Form 10-K for the fiscal year ended January 31, state, local or non-United States material income tax liability2009; (j) take any action, other than reasonable actions in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures (including procedures with respect to the payment of accounts payable and collection of accounts receivable, and the revaluation of any assets); (k) make or change any election, change an annual accounting period, adopt or change any accounting period, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or assessment relating to the Company or any of the Company Subsidiaries, surrender any right to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of the Company Subsidiaries, destroy or dispose of any books and records with respect to Tax matters relating to periods beginning before the Effective Time and for which the statute of limitations is still open or under which a record retention agreement is in place with a Governmental Authority if such election, adoption, change, amendment, agreement, settlement, surrender, consent, waiver, destruction or disposal would have the effect of materially increasing the Tax liability of the Company or any of the Company Subsidiaries for any period ending after the Effective Time or materially decreasing any Tax attribute of the Company or any of the Company Subsidiaries existing on the Effective Time; (l) settle, pay, discharge or satisfy any material claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including any litigation, arbitration or other Action, other than (i) the payment, discharge or satisfaction of any such liabilities satisfaction, in the ordinary course of business and consistent with past practice; (k) amend, modify of liabilities reflected or consent to reserved against in the termination of any Material Contract, 2009 Balance Sheet or amend, waive, modify or consent to the termination of the Company's or its Subsidiary's material rights thereunder, other than subsequently incurred in the ordinary course of business and consistent with past practice; , (lii) commence those that involve only the payment or settle receipt of money (and not the assumption of any Actionliability or obligation, including, the grant to any Third Party of any license, covenant not to xxx, immunity or other right with respect to or under any of the Owned Company Intellectual Property) in an amount less than $500,000; provided, that in connection with such payment the Company shall have received a complete and unconditional release against the Company and the Company Subsidiaries, or (iii) settlements in connection with routine customer audits that involve (x) the receipt of $500,000 or less by the Company and (y) the granting of continued use rights with respect to Company Products or products or services of the Company or any Company Subsidiary; (m) fail enter into any Contract or amendment that would be a Company Material Contract, amend or modify in any material respect or consent to paythe termination of any Company Material Contract, discharge or satisfy amend or modify in any claimmaterial respect, liability waive or obligation consent to the termination of the Company’s or any Company Subsidiary’s rights thereunder or waive, release, or consent to the termination of any claims or rights of material value to the Company or any Company Subsidiary; provided, however, that for all purposes of this Section 6.1(m), the definition of “Material Contract:” (i) shall not include the category of Contracts referenced in accordance Section 4.17(a)(xvi); (ii) shall not include Contracts entered into with customers of the Company on terms consistent with the Company’s past contracting practices with similarly situated customers; and (iii) all references to $500,000 in Section 4.17(a)(i) and Section 4.17(a)(vii) with respect to any customer contracts shall be deemed to refer to $2,000,000; (n) enter into (i) any material Contract with new or existing suppliers or customers with a term of greater than thirty-six (36) months, (ii) any Contract with existing suppliers or customers other than on terms consistent with the Company’s or the applicable Company Subsidiary’s existing Contracts with such suppliers or customers, as applicable, as disclosed to Parent prior to the date hereof, or (iii) any Contract with new suppliers or customers other than on terms that are consistent with the Company’s past contracting practices with similarly situated suppliers or customers, as applicable; (o) enter into any Contracts (i) under which Company or any Company Subsidiary grants or agrees to grant to any Third Party any assignment, license, covenant, release, immunity or other right with respect to any Intellectual Property or Intellectual Property Rights (other than non-exclusive licenses of Software granted to customers in the ordinary course of business consistent with Company’s past practice), (ii) under which Company or any Company Subsidiary establishes with any Third Party a joint venture, strategic relationship, or partnership pursuant to which Company agrees to develop or create any Intellectual Property, products or services; (iii) under which Company or any Company Subsidiary agrees to create or develop any Intellectual Property, products, or services with any Third Party that designs, develops, or manufactures or has manufactured microprocessors, microprocessor cores, netbooks, or personal computers; (iv) that will cause or require (or purport to cause or require) the Surviving Corporation or Parent or any of its Affiliates to (A) grant to any Third Party any license, covenant not to xxx, immunity or other right with respect to or under any of the CompanyIntellectual Property or Intellectual Property Rights of Parent or any of its Affiliates; or (B) be obligated to pay any royalties or other amounts, or offer any discounts, to any Third Party (other than, with respect to the Surviving Corporation only, in connection with non-exclusive licenses of Software entered into in the ordinary course of business consistent with past practice); (p) enter into or amend any Contract pursuant to which any other party is granted, or that otherwise constrains or subjects the Company or any Company Subsidiary or Parent or any of its Subsidiaries to, any non-competition, “most-favored nation”, exclusive marketing or other exclusive rights of any type or scope or that otherwise restricts the Company or any Company Subsidiary or, upon completion of the Offer or any other Transaction, Parent or any of its subsidiaries, from engaging or competing in any line of business or in any location; or enter into or amend any Contract with respect to joint ventures, partnerships or material strategic alliances; or, other than in the ordinary course of business consistent with past practices, enter into or amend any Contract with respect to future services requirements; (q) enter into any lease, sublease or license for real property or material operating lease other than the entry into leases with respect to real property spaces of less than 8,000 square feet and a term of less than two (2) years; (r) terminate, cancel, amend or modify any insurance coverage policy maintained by Company or any of the Company Subsidiaries that is not promptly replaced by a comparable amount of insurance coverage; (s) enter into or amend or otherwise modify any Contract or arrangement with persons that are affiliates or are executive officers or directors of the Company; (t) commence any material Action; (u) enter into, participate in, establish or join any new standards-setting organization, university or industry bodies or consortia, or other multi-party special interest groups or activities; (v) incur any non-employee expense (travel, facilities, other) that was not previously budgeted in the FY 2010 Annual Operating Plan set forth in Section 6.1(v) of the Disclosure Schedule; or (nw) announce an intention, enter into any formal or informal agreement Contract or otherwise make a commitment, commitment to do any of the foregoing.

Conduct of Business Pending the Merger. SECTION 6.015.1 Conduct of Business Pending the Merger. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. The Company agrees eTrato and the Shareholders covenant and agree that, between the date of this Agreement and prior to the Effective Time, unless Parent Quepasa shall otherwise agree in writing, writing or except as otherwise expressly contemplated or permitted by this Agreement or described in Section 6.01 of the Disclosure Schedule, the Agreement: (a) The businesses of the Company and the Subsidiaries of the Company eTrato shall be conducted only in, and the Company and the Subsidiaries of the Company shall not take any action except in, in the ordinary course of business course, on an arm's length basis and in a manner consistent accordance in all material respects with all applicable laws, rules and regulations and past custom and practice; eTrato shall maintain its facilities in good operating condition, ordinary wear and the Company tear excepted; and eTrato shall use its commercially reasonable best efforts consistent with its obligations under this Agreement to preserve substantially intact the its business organization of the Company and the Subsidiaries of the Companygoodwill, to keep available the services of the current officersits officers and employees as a group and maintain satisfactory relationships with suppliers, employees distributors, customers and consultants of the Company and the Subsidiaries of the Company and to preserve the current others having business relationships of the Company and the Subsidiaries of the Company with customers, suppliers and other persons with which the Company or any Subsidiary of the Company has significant business relations; PROVIDED THAT nothing in this Section 6.01 it; (b) eTrato shall require the Company or the Subsidiaries of the Company to make any payments to any officer, employee, consultant or other person who is not otherwise entitled to receive such payments solely in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be in the ordinary course of business consistent with past practice. By way of amplification and not limitation, except as expressly contemplated by this Agreement and Section 6.01 of the Disclosure Schedule, neither the Company nor any Subsidiary of the Company shall, between the date of this Agreement and the Effective Timenot, directly or indirectly, do, do or propose permit to do, occur any of the following without the prior written consent of Parent: following: (a) amend or otherwise change its Restated Certificate of Incorporation or By-laws or equivalent organizational documents; (bi) issue, sell, pledge, dispose of, grant of or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, encumber (iA) any additional shares of any class of capital stock of the Company or any Subsidiary of the Companyof, or any options, warrants, convertible securities conversion privileges or other rights of any kind to acquire any shares of, any of such its capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary of the Company (except for the securities issuable pursuant to the Warrants or Company Stock Options, in each case as set forth on Section 4.03 of the Disclosure Schedule) or (iiB) any assets of the Company or any Subsidiary of the Companyits assets, except, in the case of (ii) except in the ordinary course of business and in a manner consistent with past practice; business; (cii) amend or propose to amend its Restated Certificate of Incorporation or Bylaws; (iii) split, combine or reclassify any outstanding shares of eTrato Common Stock, or declare, set aside, make aside or pay any dividend or of other distribution, distribution payable in cash, stock, property or otherwise, otherwise with respect to any shares of its capital stock, except for dividends by any direct or indirect wholly owned Subsidiary of the Company to the Company or any other Subsidiary of the Company; eTrato Common Stock; (div) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly acquire or indirectly, offer to acquire any shares of its capital stock; eTrato Common Stock or other securities of eTrato; (e) (iv) acquire (including, without limitation, by merger, exchange, consolidation, or acquisition of stock or assets or any other business combinationotherwise) any corporation, partnership, joint venture or other business organization or any division thereof or any significant amount of assetsmaterial assets thereof; (iivi) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, except the obligations borrowing of any person, or make any loans or advances, or grant any security interest in any of its assets; (iii) enter into any contract or agreement that would be a Material Contract, (iv) enter into any distribution or manufacturing contract or agreement, other than contracts or agreements (including intellectual property contracts) entered into working capital in the ordinary course of business and consistent with past practice; (vvii) authorize, or make any commitment with respect to, any capital expenditure in any manner not reflected in the capital budget investments other than short-term United States Treasury obligations or short-term certificates of the Company attached as Section 6.01(e)(v) deposit of the Disclosure Schedulea commercial bank or trust company; or (viviii) enter into or amend propose to enter into, or modify or propose to modify, any contract, agreement, commitment arrangement or binding arrangement understanding with respect to any matter of the matters set forth in this Section 6.01(e5.1(b); (fc) take any action that would have the effecteTrato shall not, directly or indirectly, enter into or modify any contract, agreement or understanding, written or oral, that involves consideration or performance of paying eTrato of a value exceeding $50,000 or discharging any of the Company Expenses for an amount in excess of $2,340,000 in the aggregatea term exceeding one year; (gd) except Except as specifically contemplated required by law, rule or provided for in this Agreementregulation, increase the compensation payable eTrato shall not (i) enter into or to become payable modify any employment, severance or the benefits provided to its directors, officers similar agreements or employees, except for increases in the ordinary course of business and consistent with past practice in salaries, wages, bonuses or incentives of employees of the Company or any Subsidiary of the Company who are not directors or officers of the Companyarrangements with, or grant any bonuses, salary increases, severance or termination pay to, any officers or enter into directors or consultants; or (ii) take any employment or severance agreement with, any director, officer or other employee of action with respect to the Company or grant of any Subsidiary bonuses, salary increases, severance or termination pay or with respect to any increase of benefits payable in effect on the Company, or establish, adopt, enter into date hereof; (e) eTrato shall not adopt or amend any collective bargaining, bonus, profit-profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance employment or other employee benefit plan, trust, fund or group arrangement for the benefit or welfare of any employees or any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, employment or other employee benefit plan, agreement, trust, fund, policy fund or arrangement arrangements for the benefit or welfare of any director, officer or employee;; and (hf) change any of the accounting methods used by it unless required by GAAP; eTrato (i) make shall not take any tax election action which would render, or which reasonably may be expected to render, any representation or warranty made by it in this Agreement untrue at, or at any time prior to, the Effective Time; and (ii) shall notify Quepasa of any emergency or other than immaterial tax elections change in the ordinary normal course consistent with past practice of its business or settle or compromise any United States federal, state, local or non-United States material income tax liability; (j) pay, discharge or satisfy any material claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than in the payment, discharge or satisfaction operation of its properties and of any governmental or third party complaints, investigations or hearings (or communications indicating that the same may be contemplated) if such liabilities emergency, change, complaint, investigation or hearing would reasonably be expected to be material, alone or in the ordinary course of business and consistent with past practice; (k) amendaggregate, modify or consent to the termination business, operations or financial condition of any Material ContracteTrato or to eTrato's, or amend, waive, modify or consent to the termination of the CompanyQuepasa's or its Subsidiarythe Merger Sub's material rights thereunder, other than in ability to consummate the ordinary course of business and consistent with past practice; (l) commence or settle any Action; (m) fail to pay, discharge or satisfy any claim, liability or obligation in accordance with the ordinary course of business of the Company, consistent with past practice; or (n) announce an intention, enter into any formal or informal agreement or otherwise make a commitment, to do any of the foregoingtransactions contemplated by this Agreement.

Conduct of Business Pending the Merger. SECTION 6.015.1. CONDUCT OF BUSINESS BY OF THE COMPANY PENDING THE MERGER. The Company agrees that, between MERGER During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, unless Parent the Company agrees as to itself and each of its Subsidiaries (except to the extent that Acquiror shall otherwise agree consent in writing) to carry on its business in the ordinary course in substantially the same manner as previously conducted, to pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, in the ordinary course in substantially the same manner as previously paid, to pay or perform its other obligations when due in the ordinary course in substantially the same manner as previously paid or performed, to maintain insurance coverages and its books, accounts and records in the usual manner consistent with past practices, to comply in all material respects with all applicable laws, ordinances and regulations of Governmental Entities, to maintain and keep its properties and equipment in good repair, working order and condition (except ordinary wear and tear), and, to the extent consistent with such business, use all reasonable efforts consistent with past practices and policies to preserve intact its present business organization, keep available the services of its present officers and key employees and preserve its relationships with customers, suppliers, distributors, and others having business dealings with it. Without limiting the generality of the foregoing and except as expressly contemplated by this Agreement Agreement, or described as specifically disclosed in Section 6.01 5.1 of the Company Disclosure Schedule, during the businesses of the Company and the Subsidiaries of the Company shall be conducted only in, and the Company and the Subsidiaries of the Company shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; and the Company shall use its commercially reasonable best efforts consistent with its obligations under this Agreement to preserve substantially intact the business organization of the Company and the Subsidiaries of the Company, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries of the Company and to preserve the current relationships of the Company and the Subsidiaries of the Company with customers, suppliers and other persons with which the Company or any Subsidiary of the Company has significant business relations; PROVIDED THAT nothing in this Section 6.01 shall require the Company or the Subsidiaries of the Company to make any payments to any officer, employee, consultant or other person who is not otherwise entitled to receive such payments solely in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be in the ordinary course of business consistent with past practice. By way of amplification and not limitation, except as expressly contemplated by this Agreement and Section 6.01 of the Disclosure Schedule, neither the Company nor any Subsidiary of the Company shall, between 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 ParentAcquiror (which will not be unreasonably withheld or delayed), the Company shall not and shall not permit any of its Subsidiaries to: (a) amend adopt or otherwise change propose any amendment to its Restated Certificate certificate of Incorporation incorporation or By-laws bylaws or equivalent comparable charter or organizational documentsdocuments except as contemplated by this Agreement; (b) (i) issue, pledge or sell, pledge, dispose of, grant or encumber, propose or authorize the issuance, sale, pledge, disposition, grant pledge or encumbrance sale of, (i) any additional shares of any class of capital stock of any class (other than upon exercise of Company Stock Rights outstanding on the Company or any Subsidiary date of this Agreement upon payment of the Companyexercise price thereof or upon any exchange of Exchangeable Shares), or securities convertible into capital stock of any class, or any optionssubscriptions, warrantsrights, warrants or options to acquire any convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest securities in respect of, in lieu of, or in substitution for, shares of Company Stock outstanding on the date hereof, (includingii) amend, without limitationwaive or otherwise modify any of the terms of any option, any phantom interest), warrant or stock option plan of the Company or any Subsidiary of its Subsidiaries, including without limitation, the Company (except for Stock Rights and the securities issuable pursuant to the Warrants or Company Stock OptionsPlans, or authorize cash payments in each case as set forth on Section 4.03 exchange for any options granted under any of the Disclosure Schedule) such plans, or (iiiii) adopt or implement any assets of the Company or any Subsidiary of the Company, except, in the case of (ii) in the ordinary course of business and in a manner consistent with past practicestockholder rights plan; (c) declare, set aside, make aside or pay any dividend or other distribution, payable distribution (whether in cash, stock, securities or property or otherwise, with any combination thereof) in respect to of any class or series of its capital stock, except for dividends by stock other than between any direct or indirect wholly wholly-owned Subsidiary of the Company to (or the Canadian Sub) and the Company or any other wholly-owned Subsidiary of the Company; Company (d) reclassify, combine, split, subdivide or redeemthe Canadian Sub), or purchase or otherwise acquire, directly or indirectly, any shares of its capital stock (other than the Exchangeable Shares pursuant to the exchange rights thereof); (d) split, combine, subdivide, reclassify or redeem, purchase or otherwise acquire, or propose to redeem or purchase or otherwise acquire, any shares of its capital stock, or any of its other securities (other than the Exchangeable Shares pursuant to the exchange rights thereof); (e) increase the compensation or fringe benefits payable or to become payable to its directors, officers or employees (i) acquire whether from the Company or any of its Subsidiaries), or pay any benefit not required by any existing plan or arrangement (including, without limitation, by merger, consolidation, or acquisition the granting of stock options, stock appreciation rights, shares of restricted stock or assets or any other business combinationperformance units) any corporation, partnership, other business organization or any division thereof or any significant amount of assets; (ii) 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 or advances, or grant any security interest in any of its assets; (iii) enter into any contract or agreement that would be a Material Contract, (iv) enter into any distribution or manufacturing contract or agreement, other than contracts or agreements (including intellectual property contracts) entered into in the ordinary course of business and consistent with past practice; (v) authorize, or make any commitment with respect to, any capital expenditure in any manner not reflected in the capital budget of the Company attached as Section 6.01(e)(v) of the Disclosure Schedule; or (vi) enter into or amend any contract, agreement, commitment or binding arrangement with respect to any matter set forth in this Section 6.01(e); (f) take any action that would have the effect, directly or indirectly, of paying or discharging any of the Company Expenses for an amount in excess of $2,340,000 in the aggregate; (g) except as specifically contemplated or provided for in this Agreement, 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, wages, bonuses or incentives of employees of the Company or any Subsidiary of the Company who are not directors or officers of the Company, or grant any severance or termination pay toto (except pursuant to existing agreements or policies previously disclosed in writing to Acquiror, which shall be interpreted and implemented in a manner consistent with past practice), or enter into any employment or severance agreement with, any director, officer or other employee of the Company or any of any Subsidiary of the Company, its Subsidiaries or establish, adopt, enter into into, or amend any collective bargaining, bonus, profit-profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, savings, welfare, deferred compensation, employment, termination, severance or other employee benefit plan, agreement, trust, fund, policy or arrangement for the benefit or welfare of any directordirectors, officer officers or employeecurrent or former employees, including any Benefit Arrangement, Pension Plan or Welfare Plan, except (i) to the extent required by applicable law or regulation, (ii) pursuant to any collective bargaining agreements or Company Employee Plan as in effect on the date of this Agreement consistent with past practices, (iii) for salary and benefit increases in the ordinary course of business consistent with past practice to employees other than executive officers of the Company, (iv) pursuant to Section 2.8 or (v) the grant of options consistent with past practice to new or promoted employees other than executive officers, which options represent in the aggregate the right to acquire no more than 500,000 shares (net cancellations) of Company Common Stock; (f) (i) sell, pledge, lease, dispose of, grant, encumber, or otherwise authorize the sale, pledge, disposition, grant or encumbrance of any of the properties or assets of the Company or any of its Subsidiaries (including stock of Subsidiaries), except for (A) sales of assets in the ordinary course of business, (B) sales of assets aggregating less than $5,000,000, (C) sales of accounts receivable under agreements with Fleet Bank and Sanwa Bank in effect as of the date hereof consistent with past practice, (D) sales of marketable securities aggregating less than $20,000,000, and (E) sales of assets under sale/leaseback arrangements with Fleet Bank in effect as of the date hereof consistent with past practice, or (ii) acquire (including, without limitation, by merger, consolidation, lease or acquisition of stock or assets) any corporation, partnership, other business organization or any division thereof (or a substantial portion of the assets thereof) or any other assets, except for acquisitions of assets in the ordinary course of business and except for acquisitions involving an aggregate purchase price not in excess of $10,000,000; (g) (i) incur, assume or pre-pay any debt for borrowed money, other than pursuant to credit agreements, accounts receivable facilities, factoring arrangements and sale/leaseback arrangements in effect as of the date hereof consistent with past practice, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person (other than wholly-owned subsidiaries), (iii) make any loans, advances or capital contributions to, or investments in, any other person (including advances to employees), except 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 or which are reasonable, necessary, in the ordinary course and consistent with past practice, or (iv) enter into any "keep well" or other agreement to maintain the financial condition of another entity (other than the Company or any of its wholly-owned Subsidiaries); (h) change authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolution of the Company or any of its Subsidiaries, other than in connection with the accounting methods used by it unless required by GAAPdissolution, merger or liquidation of inactive Subsidiaries; (i) make or rescind any tax material express or deemed election other than immaterial tax elections relating to Taxes, settle or compromise any material claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, amend any material Tax Return except in the ordinary course of business consistent with past practice practice, or settle except as may be required by applicable law, make any change to any of its material methods of reporting income or compromise deductions (including, without limitation, any United States federal, state, local change to its methods or nonbasis or write-United States material offs of accounts receivable) for federal income tax liabilitypurposes from those employed in the preparation of its federal income tax return for the taxable year ending January 3, 1998; (j) pay, discharge or satisfy any material claimclaims, liability liabilities or obligation obligations (absolute, accrued, asserted or asserted, unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such liabilities in the ordinary course of business and consistent with past practice; (k) amend, modify practice of liabilities reflected or consent to reserved against in the termination of any Material Contract, or amend, waive, modify or consent to the termination consolidated financial statements of the Company's or its Subsidiary's material rights thereunder, other than in the ordinary course of business and consistent with past practice; (l) commence or settle any Action; (m) fail to pay, discharge or satisfy any claim, liability or obligation in accordance with the ordinary course of business of the Company, consistent with past practice; or (n) announce an intention, enter into any formal or informal agreement or otherwise make a commitment, to do any of the foregoing.

Conduct of Business Pending the Merger. SECTION 6.01Section 5.1 Conduct of Business of the Company Pending the Merger. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. The Company agrees that, between During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, unless Parent the Company agrees as to itself and each of its Subsidiaries, except to the extent that BPW shall otherwise agree consent in writingadvance in writing (which consent shall not be unreasonably withheld), or as expressly required or permitted by this Agreement or the Ancillary Agreements (including amendment and restatement of the $150M Revolving Credit Agreement and the concurrent termination of the Support Letters), or as otherwise indicated in Section 5.1 of the Company Disclosure Schedule, or to the extent required by applicable law or a Governmental Entity of competent jurisdiction, to carry on its business in the ordinary course in substantially the same manner as previously conducted in all material respects and use commercially reasonable efforts to preserve intact its present business organization and advantageous business relationships and keep available the services of its current officers and employees. Without limiting the generality of the foregoing and except as expressly contemplated by this Agreement or described in Section 6.01 the Ancillary Agreements (including amendment and restatement of the Disclosure Schedule, $150M Revolving Credit Agreement and the businesses concurrent termination of the Support Letters) or expressly set forth on Section 5.1 of the Company Disclosure Schedule or the extent required by applicable law or a Governmental Entity of competent jurisdiction, during the period from the date of this Agreement and continuing until the Subsidiaries earlier of the Company termination of this Agreement or the Effective Time, without the prior written consent of BPW (which consent shall not be conducted only inunreasonably withheld), and the Company and the Subsidiaries of the Company shall not take and shall not permit any action except in, of its Subsidiaries to: (a) adopt or propose any amendment to its Organizational Documents; (b) other than grants of Company Stock Rights to new non-executive officer hires in the ordinary course of business and in a manner consistent with past practice; practice and except as required to consummate the Merger and the Company shall use its commercially reasonable best efforts consistent Warrant Exchange Offer and the transactions related thereto and to comply with its obligations under this Agreement and the Ancillary Agreements, (i) issue, pledge or sell (other than upon exercise of Company Stock Rights outstanding on the date of this Agreement upon payment of the exercise price thereof and withholding of any Taxes required to preserve substantially intact be withheld), or propose or authorize the business organization issuance, pledge or sale of, or grant any Company Stock Rights or other awards with respect to shares of Company Common Stock or make any other agreements with respect to, any of its shares of capital stock or any other of its securities, (ii) amend, waive or otherwise modify any of the terms of any option, warrant or stock option plan of the Company or any of its Subsidiaries, including the Company Stock Rights and the Company Stock Plans, or authorize cash payments in exchange for any Company Stock Rights granted under any of such plans, or (iii) adopt or implement any stockholder rights plan; (c) declare, set aside or pay any dividend or make any other distribution or payment with respect to any shares of its stock or beneficial interests (including any dividend distribution payable in, or otherwise make a distribution of, shares of capital stock of any existing or subsequently formed Subsidiary of the Company), except dividends, contributions or distributions made by or to the Company by or from any Subsidiary of the Company; (d) split, combine, subdivide, reclassify or redeem, purchase or otherwise acquire, or propose to redeem or purchase or otherwise acquire, any shares of its stock or beneficial interests, or any of its other securities; (e) except pursuant to (x) applicable law or (y) the terms of a Company Employee Plan as in effect on the date hereof, (i) increase in any manner the compensation or benefits payable or to become payable to any of its or its Subsidiaries’ current or former directors, officers or employees (whether from the Company or any of its Subsidiaries), or pay any amounts or benefits to, or increase any amounts payable to, any such individual not required by any Company Employee Plan, (ii) become a party to, establish, adopt, enter into, materially amend, commence participation in, terminate or commit itself to the adoption of any collective bargaining agreement or Company Employee Plan (or any arrangement which would have been a Company Employee Plan had it been in effect as of the date of this Agreement), (iii) provide any funding for any rabbi trust or similar arrangement or in any other way secure the payment of compensation or benefits under any Company Employee Plan, (iv) accelerate the vesting of or lapsing of restrictions with respect to any stock-based compensation or other long-term incentive compensation under any Company Employee Plans or (v) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Employee Plan or 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 applicable law; (f) (i) lease, license, transfer, exchange or swap, mortgage (including securitizations), or otherwise dispose (whether by way of merger, consolidation, sale of stock or assets, or otherwise) of any material portion of its properties or Assets, including the capital stock of Subsidiaries (it being understood that the foregoing shall not prohibit the sale of inventory in the ordinary course of business), except for (A) dispositions of Assets with a fair market value of less than $1,000,000, (B) transactions between any Subsidiary of the Company and the Subsidiaries of the Company, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries of the Company and to preserve the current relationships of the Company and the Subsidiaries of the Company with customers, suppliers and other persons with which the Company or any another Subsidiary of the Company has significant business relations; PROVIDED THAT nothing in this Section 6.01 shall require or (C) dispositions of excess inventory, property, leases, licenses, or other Assets or Fixtures and Equipment that the Company considers obsolete or the Subsidiaries unnecessary (including assets and licenses that were previously used by its J. Xxxx business or to support its J. Xxxx business), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization; (g) except as required under any Material Contracts as in effect as of the Company date hereof or as expressly contemplated by the Ancillary Agreements, or, to make any payments to any officer, employee, consultant or other person who is not otherwise entitled to receive such payments solely in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be extent in the ordinary course of business consistent with past practice. By way , related to any vendor financing arrangement or existing proprietary charge card arrangements in amounts that do not exceed $5,000,000 in the aggregate, (i) incur or assume any Indebtedness, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of amplification and not limitationany other Person (other than a Company Subsidiary), (iii) make any acquisition of any other Person (other than a Company Subsidiary) or business or make or acquire any loans, advances or capital contributions to, or investments in, any other Person (other than a Company Subsidiary) (including advances to employees), except as expressly contemplated by this Agreement and Section 6.01 of the Disclosure Schedulefor acquisitions, neither the Company nor loans, advances, capital contributions or investments between any Subsidiary of the Company 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) amend or otherwise change its Restated Certificate of Incorporation or By-laws or equivalent organizational documents; (b) issue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of any class of capital stock of the Company or any another Subsidiary 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, without limitation, any phantom interest), of the Company or any Subsidiary of the Company (except for the securities issuable pursuant to the Warrants or Company Stock Options, in each case as set forth on Section 4.03 of the Disclosure Schedule) or (ii) any assets of the Company or any Subsidiary of the Company, except, in the case of (ii) 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 by any direct or indirect wholly owned Subsidiary of the Company to the Company or any other Subsidiary of the Company; (d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock; (e) (i) acquire (including, without limitation, 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; (ii) 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 or advances, or grant any security interest in any of its assets; (iii) enter into any contract or agreement that would be a Material Contract, (iv) enter into any distribution “keep well” or manufacturing contract other agreement to maintain the financial condition of another entity (other than the Company or agreementany of its Subsidiaries); (h) make, alter, revoke or rescind any material express or deemed election relating to Taxes, settle or compromise any material Action, amend in any material respect any material Tax Return except in each case as required by law, file any income Tax Return that claims a deduction for or otherwise uses a net operating loss, or except as may be required by, or in order to conform to, applicable law, make any change to any of its material methods of reporting income or deductions (including any change to its methods or basis of write-offs of accounts receivable) for federal income Tax purposes from those employed in the preparation of its federal income Tax Return for the taxable year ending December 31, 2008; (i) fail to maintain its existing material insurance coverage of all types in effect or, in the event any such coverage shall be terminated or lapse, to the extent available at reasonable cost, procure substantially similar substitute insurance policies which in all material respects are in at least such amounts and against such risks as are currently covered by such policies; (j) make any material change to its methods of accounting as in effect on October 31, 2009 except as required by GAAP or the SEC or applicable law, or take any action, other than contracts or agreements (including intellectual property contracts) entered into usual actions in the ordinary course of business and consistent with past practice; (v) authorize, or make any commitment with respect toto accounting policies, any capital expenditure in any manner not reflected in unless required by GAAP or the capital budget of the Company attached as Section 6.01(e)(v) of the Disclosure Schedule; SEC or applicable law; (vik) enter into or amend materially amend, terminate or extend any contractMaterial Contract, agreementor waive, commitment release, assign or binding arrangement fail to enforce any material rights or claims under any Material Contract, if such Material Contract or any such action or failure to act with respect to a Material Contract would reasonably be expected to impair the ability of the Company or Merger Sub to perform their respective obligations under this Agreement or any matter of the Ancillary Agreements or prevent or delay the consummation of the Merger or any of the other transactions contemplated by this Agreement or any of the Ancillary Agreements; (l) take, or agree to commit to take, any action that is intended to result in any of the conditions set forth in this Section 6.01(e)7.1 or Section 7.3 not being satisfied; (fm) take except as expressly contemplated by the Ancillary Agreements, engage in any action that would have the effecttransaction with, or enter into any agreement, arrangement, or understanding with, directly or indirectly, of paying or discharging any Affiliate of the Company Expenses for an amount which involves the transfer of material consideration or has a material financial impact on the Company, other than pursuant to such agreements, arrangements, or understandings as in excess effect on the date of $2,340,000 in the aggregate; (g) except as specifically contemplated this Agreement or provided for in this Agreement, increase the compensation payable or with respect to become payable or the benefits provided to its directors, officers or employees, except for increases inter-company loans and/or transfers in the ordinary course of business and consistent with past practice in salaries, wages, bonuses or incentives of employees of the Company or between any Subsidiary of the Company who are not directors or officers of the Company, or grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or other employee of and the Company or of any another Subsidiary of the Company; (n) pay or commit to pay any expenses or make or commit to make any capital expenditures in excess of $2,500,000 individually, or establish, adopt, enter into or amend any collective bargaining, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for $12,500,000 in the benefit of any director, officer or employee; aggregate (h) change any of the accounting methods used by it unless required by GAAP; (i) make any tax election other than immaterial tax elections in capital expenditures for the ordinary course consistent with past practice repair or settle or compromise any United States federal, state, local or non-United States material income tax liabilitymaintenance of capital Assets); (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 any such liabilities in the ordinary course of business and consistent with past practice; (k) amend, modify or consent to the termination of any Material Contract, or amend, waive, modify or consent to the termination of the Company's or its Subsidiary's material rights thereunder, other than in the ordinary course of business and consistent with past practice; (l) commence or settle any Action; (m) fail to pay, discharge or satisfy any claim, liability or obligation in accordance with the ordinary course of business of the Company, consistent with past practice; or (n) announce an intention, enter into any formal or informal agreement or otherwise make a commitment, to do any of the foregoing.

Conduct of Business Pending the Merger. SECTION 6.014.01. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGERConduct of Business by the Company Pending the Merger. The Company agrees that, between During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, the Company covenants and agrees that, unless Parent shall otherwise agree in writingwriting or as required or permitted under this Agreement, or except as expressly contemplated by this Agreement or described in Section 6.01 of the Disclosure Schedule, the businesses of the Company and the Subsidiaries of the Company shall conduct its business and shall cause the business of its subsidiaries to be conducted only in, and the Company and the Subsidiaries of the Company its subsidiaries shall not take any action except in, in the ordinary course of business and in a manner consistent with past practice; and the Company shall use its commercially reasonable best commercial efforts consistent with its obligations under this Agreement to preserve substantially intact the business organization of the Company and the Subsidiaries of the Companyits subsidiaries, to keep available the services of the current present officers, employees and consultants of the Company and the Subsidiaries of the Company its subsidiaries and to preserve the current present relationships of the Company and the Subsidiaries of the Company its subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary of the Company subsidiary has significant business relations; PROVIDED THAT nothing in this Section 6.01 shall require the Company or the Subsidiaries of the Company to make any payments to any officer, employee, consultant or other person who is not otherwise entitled to receive such payments solely in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be in the ordinary course of business consistent with past practice. By way of amplification and not limitation, except as expressly contemplated by this Agreement and except as disclosed in Section 6.01 4.01 of the Company Disclosure Schedule, neither the Company nor any Subsidiary of the Company subsidiary shall, between 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, indirectly do, or propose to do, any of the following without the prior written consent of Parent: (a) amend or otherwise change its Restated Certificate the Company's certificate of Incorporation incorporation or By-laws or equivalent organizational documentsbylaws; (b) issue, sell, pledge, dispose of, grant of or encumber, or authorize the issuance, sale, pledge, disposition, grant disposition or encumbrance of, (i) any shares of any class of Company capital stock of the Company or any Subsidiary of the Companyclass, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such Company capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary of the Company (except for the securities issuable pursuant to the Warrants or Company Stock Options, in each case as set forth on Section 4.03 of the Disclosure Schedule) or (ii) any assets of the Company or any Subsidiary of the Company, exceptany subsidiary or any of its affiliates, except for the issuance of (i) options under the Company Stock Option Plans to purchase up to 2,000,000 shares of Company Common Stock granted to Company employees in the case ordinary course of business, which options shall have exercise prices no less than the fair market value at the time of grant and (ii) shares of Company Common Stock issuable to participants in the Company's employee stock purchase plan in the ordinary course of business and in a manner consistent with past practiceupon issuance of outstanding Stock Options granted under the Company Stock Option Plans; (c) declaresell, set asidepledge, make dispose of or pay encumber any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except for dividends by any direct or indirect wholly owned Subsidiary of the Company to the Company or any other Subsidiary of the Company; (d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock; (e) (i) acquire (including, without limitation, 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; (ii) 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 or advances, or grant any security interest in any of its assets; (iii) enter into any contract or agreement that would be a Material Contract, (iv) enter into any distribution or manufacturing contract or agreement, other than contracts or agreements (including intellectual property contracts) entered into in the ordinary course of business and consistent with past practice; (v) authorize, or make any commitment with respect to, any capital expenditure in any manner not reflected in the capital budget of the Company attached as Section 6.01(e)(v) of the Disclosure Schedule; or (vi) enter into or amend any contract, agreement, commitment or binding arrangement with respect to any matter set forth in this Section 6.01(e); (f) take any action that would have the effect, directly or indirectly, of paying or discharging any of the Company Expenses for an amount in excess of $2,340,000 in the aggregate; (g) except as specifically contemplated or provided for in this Agreement, 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, wages, bonuses or incentives of employees of the Company or any Subsidiary of the Company who are not directors or officers of the Company, or grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or other employee inventory of the Company or of any Subsidiary of the Company, or establish, adopt, enter into or amend any collective bargaining, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement subsidiary (except for the benefit of any director, officer or employee; (h) change any of the accounting methods used by it unless required by GAAP; (i) make any tax election other than immaterial tax elections in the ordinary course consistent with past practice sales of assets or settle or compromise any United States federal, state, local or non-United States material income tax liability; (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 any such liabilities inventory in the ordinary course of business business, (ii) dispositions of obsolete or worthless assets, and consistent (iii) pledges of assets pursuant to existing agreements, or agreements the Company is permitted to enter into in connection with past practice; (k) amendthe purchase of assets), modify or consent take any action that would reasonably be expected to the termination result in any damage to, destruction or loss of any Material Contract, or amend, waive, modify or consent to the termination material asset of the Company's Company (whether or its Subsidiary's material rights thereunder, other than in the ordinary course of business and consistent with past practicenot covered by insurance); (l) commence or settle any Action; (m) fail to pay, discharge or satisfy any claim, liability or obligation in accordance with the ordinary course of business of the Company, consistent with past practice; or (n) announce an intention, enter into any formal or informal agreement or otherwise make a commitment, to do any of the foregoing.

Conduct of Business Pending the Merger. SECTION 6.01Section 6.1. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGERConduct of Business by the Company Pending the Merger. The Company agrees that, between the date of this Agreement and Prior to the Effective Time, unless Parent shall otherwise agree in writing, or except as set forth on Schedule 6.1 or as otherwise expressly contemplated by this Agreement or described in Section 6.01 of the Disclosure Schedule, the businesses of Agreement: (a) the Company and the Subsidiaries of the Company shall be conducted only inshall, and the Company and the shall cause its Subsidiaries of the Company shall not take any action except into, conduct their respective businesses only in the ordinary and usual course of business and in a manner consistent with past practice; , and the Company shall use its commercially their reasonable best efforts consistent with its obligations under this Agreement to preserve substantially intact the their present business organization of the Company and the Subsidiaries of the Companyorganization, to keep available the services of their present officers and key employees, and preserve the current officers, employees and consultants goodwill of those having business relationships with them; the Company shall not, and the Subsidiaries of the Company and shall not permit any Subsidiary to, hire any person to preserve the current relationships of the Company and the Subsidiaries of the Company with customers, suppliers and other persons with which any position as an employee or as a consultant to the Company or any a Subsidiary of the Company has significant business relations; PROVIDED THAT nothing where the total annual compensation payable to such person, whether in this Section 6.01 shall require cash or otherwise, would exceed $100,000; (b) the Company shall not, and shall not permit any Subsidiary to, (i) amend their respective charters, By-laws or the Subsidiaries other organizational documents, (ii) split, combine or reclassify any shares of their 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 their capital stock; (c) the Company shall not, and shall not permit any Subsidiary to, (i) authorize for issuance, issue or sell or agree to make issue or sell any payments to any officer, employee, consultant or other person who is not otherwise entitled to receive such payments solely in order to keep available the services shares of, or preserve rights or securities of any current relationship withkind to acquire, rights or securities convertible into any such personshares of, unless such payments would be their respective capital stock (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, (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 or otherwise acquire any material 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. By way of amplification and not limitation, except as expressly contemplated by this Agreement and Section 6.01 of the Disclosure Schedule, neither the Company nor any Subsidiary of the Company 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) amend or otherwise change its Restated Certificate of Incorporation or By-laws or equivalent organizational documents; (b) issue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of any class of capital stock of the Company or any Subsidiary 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, without limitation, any phantom interest), of the Company or any Subsidiary of the Company (except for the securities issuable pursuant to the Warrants or Company Stock Options, in each case as set forth on Section 4.03 of the Disclosure Schedule) or (ii) any assets of the Company or any Subsidiary of the Company, except, in the case of (ii) 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 by any direct or indirect wholly owned Subsidiary of the Company to the Company or any other Subsidiary of the Company; (d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock; (e) (i) acquire (including, without limitation, 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; (ii) 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 or advances, or grant any security interest in any of its assets; (iii) enter into any contract or agreement that would be a Material Contract, (iv) enter into except as noted on Schedule 6.1(c)(iv), sell, lease, license, waive, release, transfer, encumber or otherwise dispose of any distribution or manufacturing contract or agreement, other than contracts or agreements (including intellectual property contracts) entered into in of its material assets outside the ordinary and usual course of business and consistent with past practice; , including any shares the Company holds of HealxxXxxx.xxx, Xxc., (v) authorizeincur, assume or make prepay any commitment with respect to, any capital expenditure in any manner not reflected in the capital budget of the Company attached as Section 6.01(e)(v) of the Disclosure Schedule; or (vi) enter into or amend any contract, agreement, commitment or binding arrangement with respect to any matter set forth in this Section 6.01(e); (f) take any action that would have the effect, directly or indirectly, of paying or discharging any of the Company Expenses for an amount in excess of $2,340,000 in the aggregate; (g) except as specifically contemplated or provided for in this Agreement, 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, wages, bonuses or incentives of employees of the Company material indebtedness or any Subsidiary of the Company who are not directors or officers of the Company, or grant 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 of any Subsidiary of the Company, or establish, adopt, enter into or amend any collective bargaining, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee; (h) change any of the accounting methods used by it unless required by GAAP; (i) make any tax election other than immaterial tax elections in the ordinary course consistent with past practice or settle or compromise any United States federal, state, local or non-United States material income tax liability; (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 any such liabilities in the ordinary course of business and consistent with past practice; (k) amend, modify or consent to the termination of any Material Contract, or amend, waive, modify or consent to the termination of the Company's or its Subsidiary's material rights thereunder, other than in the ordinary course of business and consistent with past practice; , (lvi) commence assume, guarantee, endorse or settle otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of a material nature any Action; (m) fail to pay, discharge or satisfy any claim, liability or obligation other person other than in accordance with the ordinary course of business of the Company, and consistent with past practice; or , (nvii) announce an intentionmake any loans, advances or capital contributions to, or investments in, any other person, (viii) authorize or make capital expenditures in excess of the amounts currently budgeted therefor, (ix) permit any insurance policy naming the Company as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business, or (x) enter into any formal contract, agreement, commitment or informal agreement or otherwise make a commitment, arrangement with respect to do any of the foregoing; (d) the Company shall not, and shall not permit any Subsidiary 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 base compensation in the ordinary course of business consistent with past practice), or (iii) 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 Plan (including the Company Stock Options); (e) the Company shall not, and shall not permit any Subsidiary to, take any action with respect to, or make any material change in, their respective accounting policies or procedures; (f) from the date hereof through the Effective Time, the Company shall not, and shall not permit any Subsidiary to, make any Tax election or settle or compromise any income Tax liability prior to the last day (including extensions) prescribed by law, in the case of any of the foregoing, material to the business, financial condition or results of operations of the Company; and (g) the Company shall not, and shall not permit any Subsidiary to, propose, adopt, approve or implement any Stockholder Rights Plan which could have the effect of restricting, prohibiting, impeding or otherwise affecting the consummation of the transactions contemplated by this Agreement or the Voting Agreement, in each case by the respective parties thereto.

Conduct of Business Pending the Merger. SECTION 6.01. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGERSection 6.01 Conduct of Business by the Company Pending the Merger. The Company agrees that, between the date of this Agreement and the Effective Time, unless Parent shall otherwise agree in writing, or except as expressly required, permitted or otherwise contemplated by this Agreement or described as set forth in Section 6.01 of the Disclosure ScheduleSchedule and except with the prior written consent of Parent, which consent shall not be unreasonably withheld, conditioned or delayed, the businesses of the Company Company, the Operating Partnership and the Company's other Subsidiaries of the Company shall be conducted only inconducted, and the Company Company, the Operating Partnership and the Company's other Subsidiaries of the Company shall not take any action except inexcept, in the ordinary course of business and in a manner consistent with past practice; and the Company shall use its commercially reasonable best efforts consistent with its obligations under this Agreement to preserve (i) substantially intact the business organization of the Company Company, the Operating Partnership and the Subsidiaries of the Company's other Subsidiaries, to keep available the services of the current its present officers, managers and employees and consultants of the Company and the Subsidiaries of the Company and to preserve the current relationships of the Company Company, the Operating Partnership and the Company's other Subsidiaries of the Company with customers, suppliers lessees and other persons Persons with which the Company Company, the Operating Partnership or any other Subsidiary of the Company has significant business relations; PROVIDED THAT nothing in this Section 6.01 shall require relations and (ii) the Company or Company's status as a REIT within the Subsidiaries meaning of the Company to make any payments to any officerCode. Except as required, employee, consultant permitted or other person who is not otherwise entitled to receive such payments solely in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be in the ordinary course of business consistent with past practice. By way of amplification and not limitation, except as expressly contemplated by this Agreement and or as set forth on Section 6.01 of the Disclosure Schedule, neither the Company nor any Subsidiary none of the Company Company, the Operating Partnership and the Company's other Subsidiaries shall, between the date of this Agreement and the Effective Time, directly or indirectly, do, or propose to do, do any of the following without the prior written consent of Parent: (a) amend , which consent shall not be unreasonably withheld, conditioned or otherwise change its Restated Certificate of Incorporation or By-laws or equivalent organizational documents; (b) issuedelayed; provided, sellhowever, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of any class of capital stock of the Company or any Subsidiary 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, without limitation, any phantom interest), of the Company or any Subsidiary of the Company (except for the securities issuable pursuant to the Warrants or Company Stock Options, in each case as set forth on Section 4.03 of the Disclosure Schedule) or (ii) any assets of the Company or any Subsidiary of the Company, except, in the case of (ii) 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 otherwisethat, with respect to any of its capital stock, except for dividends consents required by any direct or indirect wholly owned Subsidiary of the Company under this Section 6.01, the Company shall send to the Company or any other Subsidiary Parent Consent Addressees identified in Section 10.03 a written request for such consent and if Parent does not object in writing within two (2) Business Days after delivery of the Company; (d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock; (e) (i) acquire (including, without limitation, 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; (ii) incur any indebtedness such initial request for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible forconsent, the obligations of any person, or make any loans or advances, or grant any security interest in any of its assets; (iii) enter into any contract or agreement that would be a Material Contract, (iv) enter into any distribution or manufacturing contract or agreement, other than contracts or agreements (including intellectual property contracts) entered into in the ordinary course of business and consistent with past practice; (v) authorize, or make any commitment with respect to, any capital expenditure in any manner not reflected in the capital budget of the Company attached as Section 6.01(e)(v) of the Disclosure Schedule; or (vi) enter into or amend any contract, agreement, commitment or binding arrangement with respect to any matter set forth in this Section 6.01(e); (f) take any action that would have the effect, directly or indirectly, of paying or discharging any of the Company Expenses for an amount in excess of $2,340,000 in the aggregate; (g) except as specifically contemplated or provided for in this Agreement, 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, wages, bonuses or incentives of employees of the Company or any Subsidiary of the Company who are not directors or officers of the Company, or grant 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 of any Subsidiary of the Company, or establish, adopt, enter into or amend any collective bargaining, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee; (h) change any of the accounting methods used by it unless required by GAAP; (i) make any tax election other than immaterial tax elections in the ordinary course consistent with past practice or settle or compromise any United States federal, state, local or non-United States material income tax liability; (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 any such liabilities in the ordinary course of business and consistent with past practice; (k) amend, modify or consent shall send to the termination of any Material Contract, or amend, waive, modify or consent to the termination of the Company's or its Subsidiary's material rights thereunder, other than Parent Consent Addressees identified in the ordinary course of business and consistent with past practice; (l) commence or settle any Action; (m) fail to pay, discharge or satisfy any claim, liability or obligation in accordance with the ordinary course of business of the Company, consistent with past practice; or (n) announce an intention, enter into any formal or informal agreement or otherwise make a commitment, to do any of the foregoing.Section

Conduct of Business Pending the Merger. SECTION 6.01. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER5.1 Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, between during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, unless Parent Parent, shall otherwise agree in writing, or except as expressly contemplated by this Agreement or described in Section 6.01 of the Disclosure Schedule, the businesses of the Company and the Subsidiaries of the Company shall be conducted conduct its business only in, and the Company and the Subsidiaries of the Company shall not take any action except in, the ordinary course of business and in a manner consistent with past practicepractice other than actions taken by the Company in contemplation of the Merger; and the Company shall use its commercially all reasonable best commercial efforts consistent with its obligations under this Agreement to preserve substantially intact the business organization of the Company and the Subsidiaries of the Company, to keep available the services of the current present officers, employees and consultants of the Company and the Subsidiaries of the Company and to preserve the current present relationships of the Company and the Subsidiaries of the Company with customers, suppliers and other persons with which the Company or any Subsidiary of the Company its subsidiaries has significant business relations; PROVIDED THAT nothing in this Section 6.01 shall require the Company or the Subsidiaries of the Company to make any payments to any officer, employee, consultant or other person who is not otherwise entitled to receive such payments solely in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be in the ordinary course of business consistent with past practice. By way of amplification and not limitation, except as expressly contemplated by this Agreement and Section 6.01 of the Disclosure ScheduleAgreement, neither the Company nor any Subsidiary of shall not, during the Company shall, between 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, indirectly do, or propose to do, any of the following without the prior written consent of Parent: (a) amend or otherwise change its Restated Certificate the Articles of Incorporation or By-laws or equivalent organizational documentsLaws of the Company; (b) issue, sell, pledge, dispose of, grant of or encumber, or authorize the issuance, sale, pledge, disposition, grant disposition or encumbrance of, (i) any shares of any class of capital stock of the Company or any Subsidiary of the Companyclass, 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)) in the Company, or its affiliates (except for the issuance of shares of Company Common Stock issuable pursuant to Stock Options which were granted under the Company Stock Option Plan and are outstanding on the date hereof). (c) sell, pledge, dispose of or encumber any Subsidiary assets of the Company (except for the securities issuable pursuant to the Warrants or Company Stock Options, in each case as set forth on Section 4.03 (i) sales of the Disclosure Schedule) or (ii) any assets of the Company or any Subsidiary of the Company, except, in the case of (ii) in the ordinary course of business and in a manner consistent with past practice, (ii) dispositions of obsolete or worthless assets, and (iii) sales of immaterial assets not in excess of $10,000 in the aggregate); (ci) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock, stock or property or otherwise, with any combination thereof) in respect to of any of its capital stock, (ii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock (except for dividends by any direct or indirect wholly owned Subsidiary the issuance of shares of Company Common Stock issuable pursuant to Stock Options which were granted under the Company to Stock Option Plan and are outstanding on the Company date hereof) or any other Subsidiary (iii) amend the terms or change the period of the Company; (d) reclassifyexercisability of, combinepurchase, splitrepurchase, subdivide or redeem, or purchase redeem or otherwise acquire, any of its securities, including, without limitation, shares of Company Stock or any option, warrant or right, directly or indirectly, to acquire shares of the Company's capital stock or propose to do any of its capital stockthe foregoing; (e) (i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets or any other business combinationassets) any corporation, partnership, partnership or other business organization or any division thereof or any significant amount of assetsthereof; (ii) incur any indebtedness for borrowed money calling for aggregate payments in excess of $10,000 or issue any debt securities or assume, guarantee or endorse, endorse or otherwise as an accommodation become responsible for, the obligations of any personperson or, or except in the ordinary course of business consistent with past practice, make any loans or advances, or grant any security interest in any of its assets; (iii) enter into or amend any material contract or agreement that would be a Material Contract, agreement; (iv) enter into authorize any distribution capital expenditures or manufacturing contract or agreementpurchase of fixed assets which are, other than contracts or agreements (including intellectual property contracts) entered into in the ordinary course aggregate, in excess of business and consistent with past practice; (v) authorize, or make any commitment with respect to, any capital expenditure in any manner not reflected in the capital budget of $10,000 for the Company attached and its subsidiaries taken as Section 6.01(e)(v) of the Disclosure Schedulea whole; or (viv) enter into or amend any contract, agreement, commitment or binding arrangement with respect to effect any matter set forth in of the matters prohibited by this Section 6.01(e5.1(e); (f) take any action that would have the effect, directly or indirectly, of paying or discharging any of the Company Expenses for an amount in excess of $2,340,000 in the aggregate; (g) except as specifically contemplated or provided for in this Agreement, 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, wages, bonuses or incentives of employees of the Company or any Subsidiary of the Company who are not directors or officers of the Company, or grant any severance or termination pay to, or enter into any employment or severance agreement with, with any director, officer or other employee of the Company or of any Subsidiary of the Company, or establish, adopt, enter into or amend any collective bargaining, bonus, profit-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 directorcurrent or former directors, officer officers or employees, except, in each case, as may be required by law provided the Company may increase wages in the ordinary course of business consistent with the Company's past practice but not more than 5% for any individual employee; (g) take any action to change accounting policies or procedures (including, without limitation, procedures with respect to revenue recognition, payments of accounts payable and collection of accounts receivable); (h) change any of the accounting methods used by it unless required by GAAP; (i) make any material tax election other than immaterial tax elections in the ordinary course consistent inconsistent with past practice or settle or compromise any United States material federal, state, local or non-United States material income foreign tax liabilityliability or agree to an extension of a statute of limitations; (ji) pay, discharge or satisfy any material claimclaims, liability liabilities or obligation obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of any such business and consistent with past practice of liabilities reflected or reserved against in the Financial Statements or incurred in the ordinary course of business and consistent with past practice; (k) amend, modify or consent to the termination of any Material Contract, or amend, waive, modify or consent to the termination of the Company's or its Subsidiary's material rights thereunder, other than in the ordinary course of business and consistent with past practice; (l) commence or settle any Action; (m) fail to pay, discharge or satisfy any claim, liability or obligation in accordance with the ordinary course of business of the Company, consistent with past practice; or (nj) announce an intentiontake, enter into any formal or informal agreement agree in writing or otherwise make a commitmentto take, to do any of the foregoingactions described in Sections 5.1 (a) through (i) above, or any action which would make any of the representations or warranties of the Company contained in this Agreement untrue or incorrect or prevent the Company from performing or cause the Company not to perform its covenants hereunder.

Conduct of Business Pending the Merger. SECTION 6.01. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER4.1 Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, between during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, unless Parent shall otherwise agree in writing, or except as expressly contemplated by this Agreement or described in Section 6.01 of the Disclosure Schedulewhich agreement shall not be unreasonably withheld, the businesses of the Company and the Subsidiaries of the Company shall be conducted conduct its business only in, and the Company and the Subsidiaries of the Company shall not take any action except in, the ordinary course of business and in a manner consistent with past practicepractice other than actions taken by the Company in contemplation of the Merger; and the Company shall use its commercially all reasonable best commercial efforts consistent with its obligations under this Agreement to preserve substantially intact the business organization of the Company and the Subsidiaries of the Company, to keep available the services of the current present officers, employees and consultants of the Company and the Subsidiaries of the Company and to preserve the current present relationships of the Company and the Subsidiaries of the Company with customers, suppliers and other persons with which the Company or any Subsidiary of the Company has significant business relations; PROVIDED THAT nothing in this Section 6.01 shall require the Company or the Subsidiaries of the Company to make any payments to any officer, employee, consultant or other person who is not otherwise entitled to receive such payments solely in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be in the ordinary course of business consistent with past practice. By way of amplification and not limitation, except as expressly contemplated by this Agreement and Section 6.01 of the Disclosure ScheduleAgreement, neither the Company nor any Subsidiary of shall not, during the Company shall, between 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, indirectly do, or propose to do, any of the following without the prior written consent of Parent: (a) amend or otherwise change its Restated Certificate the Articles of Incorporation or By-laws or equivalent organizational documentsLaws of the Company except pursuant to the Merger Agreement; (b) issue, sell, pledge, dispose of, grant of or encumber, or authorize the issuance, sale, pledge, disposition, grant disposition or encumbrance of, (i) any shares of any class of capital stock of the Company or any Subsidiary of the Companyclass, 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 of the Company (except for the securities issuable pursuant to the Warrants or Company Stock Options, ) in each case as set forth on Section 4.03 of the Disclosure Schedule) or (ii) any assets of the Company or any Subsidiary of the Company, except, in the case of ; (iic) except in the ordinary course of business business, sell, pledge, dispose of or encumber any assets (tangible or intangible) of the Company except for (i) dispositions of obsolete or worthless assets and (ii) sales of assets not in a manner consistent with past practiceexcess of $50,000 in the aggregate; (ci) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock, stock or property or otherwise, with any combination thereof) in respect to of any of its capital stock, except for dividends by (ii) split, combine or reclassify any direct of its capital stock or indirect wholly owned Subsidiary issue or authorize or propose the issuance of the Company to the Company or any other Subsidiary securities in respect of, in lieu of or in substitution for shares of its capital stock or (iii) amend the Company; (d) reclassifyterms or change the period of exercisability of, combinepurchase, splitrepurchase, subdivide or redeem, or purchase redeem or otherwise acquire, any of its securities including without limitation, shares of Company Common Stock or any option, warrant or right, directly or indirectly, to acquire shares of Company Common Stock, or propose to do any of its capital stockthe foregoing; (e) (i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets or any other business combinationassets) any corporation, partnership, partnership or other business organization or any division thereof or any significant amount of assetsthereof; (ii) except in the ordinary course of business and only under the Company's revolving line of credit, incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, endorse or otherwise as an accommodation become responsible for, the obligations of any personperson or, or except in the ordinary course of business consistent with past practice, make any loans or advances, or grant any security interest in any of its assets; (iii) enter into or amend any material contract or agreement that would be a Material Contract, agreement; (iv) enter into authorize any distribution capital expenditures or manufacturing contract or agreementpurchases of fixed assets which are, other than contracts or agreements (including intellectual property contracts) entered into in the ordinary course aggregate, in excess of business and consistent with past practice; (v) authorize, or make any commitment with respect to, any capital expenditure in any manner not reflected in the capital budget of the Company attached as Section 6.01(e)(v) of the Disclosure Schedule$100,000; or (viv) enter into or amend any contract, agreement, commitment or binding arrangement with respect to effect any matter set forth in of the matters prohibited by this Section 6.01(e4.1(e); (f) take any action that would have the effect, directly or indirectly, of paying or discharging any of the Company Expenses for an amount in excess of $2,340,000 in the aggregate; (g) except as specifically contemplated or provided for in this Agreement, increase the compensation payable or to become payable or the benefits provided to its directorsofficers, officers increase compensation payable or employees, except for increases to become payable to its employees other in the ordinary course of business and consistent with past practice in salaries, wages, bonuses or incentives of employees of the Company or any Subsidiary of the Company who are not directors or officers of the Companybusiness, or grant any severance or termination pay to, or enter into any employment or severance agreement with, with any director, officer or other employee of the Company or of any Subsidiary of the Company, or establish, adopt, enter into or amend any collective bargaining, bonus, profit-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 directorcurrent or former directors, officer officers or employeeemployees, except, in each case, as may be required by law; (g) take any action to change accounting policies or procedures (including, without limitation, procedures with respect to revenue recognition, payments of accounts payable and collection of accounts receivable); (h) change any of the accounting methods used by it unless required by GAAP; (i) make any material tax election other than immaterial tax elections in the ordinary course consistent inconsistent with past practice or settle or compromise any United States material federal, state, local or non-United States material income foreign tax liabilityliability or agree to an extension of a statute of limitations; (ji) pay, discharge or satisfy any material claimclaims, liability liabilities or obligation obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of any such business and consistent with past practice of liabilities reflected or reserved against in the Financial Statements or incurred in the ordinary course of business and consistent with past practice; (k) amend, modify or consent to the termination of any Material Contract, or amend, waive, modify or consent to the termination of the Company's or its Subsidiary's material rights thereunder, other than in the ordinary course of business and consistent with past practice; (l) commence or settle any Action; (m) fail to pay, discharge or satisfy any claim, liability or obligation in accordance with the ordinary course of business of the Company, consistent with past practice; or (nj) announce an intentiontake, enter into any formal or informal agreement agree in writing or otherwise make a commitmentto take, to do any of the foregoingactions described in Sections 4.1 (a) through (i) above, or any action which would make any of the representations or warranties of the Company contained in this Agreement untrue or incorrect or prevent the Company from performing or cause the Company not to perform its covenants hereunder.

Conduct of Business Pending the Merger. SECTION 6.015.01 Conduct of Business by the Company Pending the Merger. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. The Company agrees that, between During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, unless Parent shall otherwise agree in writing, or except as expressly contemplated by this Agreement or described in Section 6.01 of (a) the Disclosure Schedule, the businesses of the Company and the Subsidiaries business of the Company shall be conducted only in, and the Company and the Subsidiaries of the Company shall not take any action except in, the ordinary course of business business, and in a manner accordance in all material respects with all applicable laws, rules and regulations, and (b) the Company agrees (except to the extent that Parent shall otherwise consent in writing), to use all reasonable efforts consistent with past practice; practices and the Company shall use its commercially reasonable best efforts consistent with its obligations under this Agreement to preserve substantially intact the business organization of the Company and the Subsidiaries of the Company, policies to keep available the services of the current officers, its present officers and key employees and consultants of the Company and the Subsidiaries of the Company and to preserve the current its relationships of the Company and the Subsidiaries of the Company with customers, suppliers suppliers, distributors, licensors, licensees, and other persons others having business dealings with which it, to the Company or any Subsidiary of the Company has significant business relations; PROVIDED THAT nothing in this Section 6.01 shall require the Company or the Subsidiaries of the Company to make any payments to any officer, employee, consultant or other person who is not otherwise entitled to receive such payments solely in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments end that its goodwill and ongoing businesses would be unimpaired, in any material respect, at the Effective Time. The Company shall promptly notify Parent of any event or occurrence not in the ordinary course of business consistent with past practiceof the Company and shall notify Parent of any change in the operation of the Company’s business activities and of any governmental or third party complaints, investigations or proceedings if such complaint, change, investigation, or hearing would have, or would reasonably be expected to have, a Company Material Adverse Effect or would be material to any party’s ability to consummate the transactions contemplated by the Transaction Documents. By way of amplification and not limitation, except as expressly contemplated by this Agreement and or as set forth in Section 6.01 5.01 of the Company Disclosure Schedule, neither the Company nor any Subsidiary of the Company shallshall not, between the date of this Agreement and the Effective Time, directly or indirectly, do, or propose to do, do any of the following without the prior written consent of Parent: (a) amend or otherwise change its Restated Certificate of Incorporation or By-laws or equivalent organizational documentsBylaws; (b) issue, sell, pledge, dispose of, grant or grant, encumber, authorize or authorize propose the issuance, sale, pledge, disposition, grant or encumbrance of, (i) of any shares of any class of its capital stock of the Company or any Subsidiary of the Companyclass, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, stock or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary of the Company (Company, except for the securities issuable pursuant to the Warrants terms of options, warrants or preferred stock outstanding on the date of this Agreement and except for grants of options to purchase up to 100,000 shares of Company Stock Optionspursuant to the Stock Plan, each in each case as set forth on Section 4.03 accordance with past practices; (c) sell, lease, license, pledge, grant, encumber or otherwise dispose of the Disclosure Schedule) any of its properties or (ii) any assets of the Company which are material, individually or any Subsidiary of the Company, except, in the case of (ii) aggregate, to its business, except in the ordinary course of business and in a manner business, consistent with past practice; (cd) 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 by any direct or indirect wholly owned Subsidiary of the Company to the Company or any other Subsidiary of the Company; (de) reclassifysplit, combine, splitsubdivide, subdivide redeem or redeemreclassify 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, or purchase or otherwise acquire, directly or indirectly, any shares of its capital stockstock except from former employees, directors and consultants in accordance with agreements existing as of the date hereof providing for the repurchase of shares in connection with any termination of service by such party; (e) (if) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets assets) any interest or any other business combination) assets in any corporation, partnership, other business organization or any division thereof thereof; (g) incur, other than to Parent or any significant amount of assets; (ii) incur Company Stockholders, any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances, or grant any security interest in any of its assets; ; (iiih) enter into any contract or agreement that would be a Material Contract, (iv) enter into any distribution or manufacturing contract or agreement, other than contracts or agreements (including intellectual property contracts) entered into in the ordinary course of business and consistent with past practice; (v) authorize, or make any commitment with respect to, authorize any capital expenditure in any manner not reflected in the capital budget of the Company attached as Section 6.01(e)(v) of the Disclosure Schedule; or (vi) enter into or amend any contract, agreement, commitment or binding arrangement with respect to any matter set forth in this Section 6.01(e); (f) take any action that would have the effect, directly or indirectly, of paying or discharging any of the Company Expenses for an amount in excess of $2,340,000 100,000, in the aggregate; (gi) enter into any lease or contract for the purchase or sale of any property, real or personal, except as specifically contemplated in the ordinary course of business, consistent with past practice; (j) increase, or provided for in this Agreementagree to increase, increase the compensation payable payable, or to become payable or the benefits provided payable, to its directors, officers or employees or grant any bonuses to its officers, directors or employees, except for increases or grants in the ordinary course of business and consistent accordance with past practice in salaries, wages, bonuses salaries or incentives wages of its employees of the Company or any Subsidiary of the Company who are not directors or officers of the Companyits officers, or grant any severance or termination pay to, or enter into or modify any employment or severance agreement with, any directorof its directors, officer officers or other employee of the Company or of any Subsidiary of the Companyemployees, or establish, adopt, enter into or amend any collective bargaining, bonus, profit-profit sharing, thrift, compensation, stock optionoption (other than as expressly contemplated in Section 2.05 above), restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other planPlan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee; (h; provided, however, that the foregoing provisions of this subsection shall not apply to any amendments to employee benefit plans described in Section 3(3) change any of the accounting methods used by it unless ERISA that may be required by GAAP; (i) make any tax election other than immaterial tax elections in the ordinary course consistent with past practice or settle or compromise any United States federal, state, local or non-United States material income tax liability; (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 any such liabilities in the ordinary course of business and consistent with past practiceLaw; (k) amendaccelerate, amend or change the period of exercisability or the vesting schedule of restricted stock or Outstanding Company Options granted under any option plan, employee stock plan or other agreement or authorize cash payments in exchange for any Outstanding Company Options granted under any of such plans except as specifically required by the terms of such plans or any such agreement or any related agreement in effect as of the date of this Agreement and disclosed in the Company Disclosure Schedule; (l) extend any offers of employment to potential employees who would receive cash compensation at a rate of $100,000 per year or more or extend any consulting or independent contracting offers that are not cancelable on prior notice of 30 days or less; or (m) amend or modify or consent to the termination of any Material Contract, or amend, waive, modify or consent to the termination of the Company's or its Subsidiary's material rights thereunder, Contract other than in the ordinary course of business and consistent with past practice; practice (l) commence except the Company shall not amend or settle modify any Action; (m) fail to pay, discharge Material Contract with MOVA or satisfy any claim, liability or obligation in accordance with the ordinary course of business of the Company, consistent with past practice; or (n) announce an intention, enter into any formal or informal agreement or otherwise make a commitment, to do any of the foregoingAbt Associates Clinical Trials/AACT).

Conduct of Business Pending the Merger. SECTION 6.01Section 6.1. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGERConduct of Business by the Company Pending the Merger. The Company agrees that, between From the date of this Agreement and hereof until the Effective Time, unless Parent Sponsor shall otherwise agree consent in writing, or except as set forth in the Company Disclosure Letter or as otherwise expressly contemplated permitted by or provided for in this Agreement or described in Section 6.01 Agreement, the Conversion Term Sheet, the Post-Merger Integration Plan, or, if approved by the Department and approved and adopted by the requisite vote of the Disclosure ScheduleMembers, the businesses Plan of Conversion, the Company and the Company Subsidiaries of the Company shall be conducted only in, and the Company and the Subsidiaries of the Company shall not take any action except in, conduct their respective businesses in the ordinary course of business and in a manner consistent with past practice; practice and the Company shall use its commercially all reasonable best efforts consistent with its obligations under this Agreement to preserve substantially intact the their business organization of the Company organizations and the Subsidiaries of the Companygoodwill and relationships with third parties (including their respective relationships with policyholders, insureds, agents, underwriters, brokers and investment customers) and to keep available the services of the their current officers, key employees and consultants maintain their current rights and franchises, subject to the terms of this Agreement. Except as set forth in the Company and Disclosure Letter or as otherwise expressly permitted by or provided for in this Agreement, from the Subsidiaries date hereof until the Effective Time, without the prior written consent of Sponsor: (a) the Company shall not adopt or propose, and shall not permit any Company Subsidiary to preserve adopt or propose, any change in its Constituent Documents (other than the current relationships of Articles Amendments adopted in connection with the Conversion); (b) the Company shall not and the Subsidiaries of the shall not permit any Company with customersSubsidiary that is not wholly-owned to declare, suppliers and other persons with which the Company set aside or pay any Subsidiary of the Company has significant business relations; PROVIDED THAT nothing in this Section 6.01 shall require the Company or the Subsidiaries of the Company to make any payments to any officer, employee, consultant dividend or other person who is not otherwise entitled distribution except to receive such payments solely in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be policyholders in the ordinary course of business consistent with past practice. By way of amplification and not limitation, except as expressly contemplated by this Agreement and Section 6.01 of the Disclosure Schedule, neither the Company nor any Subsidiary of the Company 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) amend or otherwise change its Restated Certificate of Incorporation or By-laws or equivalent organizational documents; (bc) issuesubject to Section 7.2, sellthe Company shall not, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance ofand shall not permit any Company Subsidiary to, (i) merge or consolidate with any shares other Person other than another subsidiary of the Company, (ii) acquire a material amount of the assets or equity of any class other Person, or (iii) other than in the ordinary course of business, make or commit to make any capital stock expenditure; (d) the Company shall not, and shall not permit any Company Subsidiary to, sell, lease, license, subject to an Encumbrance other than a Permitted Encumbrance, or otherwise surrender, relinquish or dispose of (i) any facility owned or leased by the Company or any Company Subsidiary 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, without limitation, any phantom interest), of the Company or any Subsidiary of the Company (except for the securities issuable pursuant to the Warrants or Company Stock Options, in each case as set forth on Section 4.03 of the Disclosure Schedule) or (ii) any assets of the Company or any Subsidiary of the Company, property except, in the case of (x) with respect to clause (ii), pursuant to existing written contracts or commitments (the terms of which have been disclosed to Sponsor prior to the date hereof), or (y) with respect to clauses (i) and (ii), in the ordinary course of business and in a manner consistent with past practice; (ce) declarethe Company shall not, set asideand shall not permit any Company Insurance Subsidiary to, make conduct transactions in Company Investments except in compliance with the Consolidated Investment Policy of the Company and the Company Insurance Subsidiaries, in effect on the date hereof, a copy of which has previously been delivered to Sponsor; (f) the Company shall not and shall not permit any Company Subsidiary (i) to issue, sell, grant, pledge or pay otherwise encumber any dividend shares of its capital stock or other distributionsecurities, payable in cashor split, stock, property combine or otherwise, with respect to reclassify any of its capital stock, except for dividends by stock or issue securities in respect of its capital stock or enter into any direct or indirect wholly owned Subsidiary amendment of the Company to the Company or any other Subsidiary material term of the Company; (d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock; (e) (i) acquire (includingoutstanding securities, without limitation, 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; (ii) incur or assume 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; (iii) enter into any contract or agreement that would be a Material Contract, (iv) enter into any distribution or manufacturing contract or agreement, other than contracts or agreements (including intellectual property contracts) entered into liabilities except in the ordinary course of business and consistent with past practice or pursuant to existing credit facilities, or (iii) amend or otherwise increase, accelerate the payment or vesting of the amounts payable or to become payable under or fail to make any required contribution to, any Plan or materially increase any non-salary benefits payable to any employee or former employee, except in the ordinary course of business consistent with past practice; (v) authorize, or make any commitment with respect to, any capital expenditure in any manner not reflected in the capital budget of the Company attached as Section 6.01(e)(v) of the Disclosure Schedule; or (vi) enter into or amend any contract, agreement, commitment or binding arrangement with respect to any matter set forth in this Section 6.01(e); (f) take any action that would have the effect, directly or indirectly, of paying or discharging any of the Company Expenses for an amount in excess of $2,340,000 in the aggregate; (g) except as specifically contemplated or provided for the Company shall not, and shall not permit any Company Subsidiary to, grant any increase in this Agreement, increase the compensation payable or to become payable or the benefits provided to its of directors, officers or officers, employees, except for consultants or agents of the Company or any Company Subsidiary other than increases in the ordinary course of business and consistent with past practice practice; (h) other than in salariesthe ordinary course of business consistent with past practices with respect to field management and support personnel, wages, bonuses or incentives of employees of the Company or shall not, and shall not permit any Company Subsidiary of the Company who are not directors or officers of the Company, or grant 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 of any Subsidiary of the Company, or establish, adopt, enter into or amend any collective bargaining, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance employment agreement or other plan, agreement, trust, fund, policy or arrangement for the benefit of employment arrangements with any director, officer or employee; (h) change any employee of the accounting methods used by it unless required by GAAPCompany or any Company Subsidiary; (i) make the Company shall not change any tax election other than immaterial tax elections method of accounting or accounting practice by the Company or any Company Subsidiary, except for any such required change in U.S. GAAP or the ordinary course consistent with past practice or settle or compromise any United States federalapplicable State Statutory Accounting Practices as agreed by PricewaterhouseCoopers LLP, state, local or non-United States material income tax liabilitythe Company's independent auditors; (j) the Company shall not, and shall not permit any Company Subsidiary to, take any action that would reasonably be expected to cause the Merger to fail to qualify as a reorganization within the meaning of Section 368(a) of the Code; (k) the Company shall not permit any Company Subsidiary to purchase or redeem any shares of its capital stock, or any other equity interests or any rights, warrants or options to acquire any such shares or interests, except for any such purchases or redemptions by a wholly-owned subsidiary of the Company; (l) the Company shall not, and shall not permit any Company Subsidiary to pay, discharge discharge, settle or satisfy any material claimclaims, liability liabilities or obligation obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), in each case, other than the payment(i) settlement of policy claims or other payments, discharge discharges, settlements or satisfaction of any such liabilities satisfactions in the ordinary course of business and consistent with past practice, (ii) settlements of litigation that individually do not exceed $1,000,000 or, in the aggregate, $5,000,000, or (iii) payment of indebtedness, debt securities, guarantees, loans, advances and capital contributions made in the ordinary course of business consistent with past practices but not individually in excess of $1,000,000 or in the aggregate in excess of $5,000,000; (km) amendthe Company shall not, modify or consent to the termination of and shall not permit any Material Contract, or amend, waive, modify or consent to the termination of the Company's or its Subsidiary's material rights thereunderCompany Subsidiary to, other than in the ordinary course of business and consistent with past practicepractices, (i) make or rescind any material express or deemed election relating to Taxes, (ii) settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, which, individually or in the aggregate, exceeds $500,000, (iii) make a request for a written ruling of a taxing authority relating to Taxes, other than any request for a determination concerning qualified status of any Plan intended to be qualified under Code Section 401(a), (iv) enter into a written and legally binding agreement with a taxing authority relating to Taxes, or (v) change in any material respect any of its methods of reporting income or deductions for federal income tax purposes from those employed in the preparation of its federal income tax returns for the taxable year ending December 31, 2000; (ln) commence or settle the Company shall not, and shall not permit any Action; (m) fail to payCompany Subsidiary to, discharge or satisfy any claim, liability or obligation other than in accordance with the ordinary course of business of the Company, consistent with past practice; or (n) announce an intention, modify or amend in any material respect or terminate any Company Contract or enter into any formal new agreement which would have been considered a Company Contract if it were entered into at or informal prior to the date hereof; (o) The Company shall not, and shall not permit any Company Subsidiary to, terminate, amend, modify or waive any provision of any standstill agreement or any standstill provisions of other agreements to which it is a party, and the Company shall, and shall cause each Company Subsidiary to, enforce the provisions of any such agreements; (p) the Company shall not permit any Company Insurance Subsidiary to forfeit, abandon, modify, waive, terminate or otherwise change any of its insurance licenses, except (i) as may be required in order to comply with Applicable Law or (ii) such modifications or waivers of insurance licenses as would not, individually or in the aggregate, restrict the business or operations of such Company Insurance Subsidiary in any material respect; (q) the Company shall not, and shall not permit or cause any Company Subsidiary to, take any actions or omit to take any actions that would cause any of its representations and warranties herein to become untrue in any material respect or that would cause or reasonably be expected to cause a Company Material Adverse Effect; (r) the Company shall not terminate, cancel or amend any insurance coverage maintained by it or any Company Subsidiary with respect to any material assets which is not replaced by a comparable amount of insurance coverage; (s) the Company shall not, and shall not permit any Company Subsidiary to, take any action that is not expressly permitted by or provided for in this Agreement that would reasonably be expected to result in a reduction of the insurer financial strength ratings of the Company and the Company Insurance Subsidiaries; (t) the Company will not amend the Company Privacy Policy, except as may be required by Applicable Law or except as would not have or be reasonably likely to result in a Company Material Adverse Effect; (u) the Company shall not, and shall not permit any of the Company Insurance Subsidiaries to, make a commitmentany material change in its underwriting, claims management, pricing or reserving practices; and (v) the Company shall not, and shall not permit any Company Subsidiary to, agree or commit to do any of the foregoing.