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

Conduct of Business Pending the Mergers. SECTION 6.01. Conduct of Business by the Company Pending the Mergers. 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 writing or as required or permitted under this Agreement, the Company shall conduct its business and shall cause the business of its subsidiaries to be conducted only in, and the Company and its subsidiaries shall not take any action, except in the ordinary course of business and in a manner consistent with past practice; and the Company shall use all commercially reasonable efforts to preserve substantially intact the business organization of the Company and its subsidiaries, to keep available the services of the present officers, employees and consultants of the Company and its subsidiaries and to preserve the present relationships of the Company and its subsidiaries with customers, suppliers and other persons with which the Company or any subsidiary has significant business relations. By way of amplification and not limitation, except as contemplated by this Agreement and except for transfers of cash among the Company and its wholly-owned subsidiaries pursuant to the Company's ordinary cash management policies as disclosed in Section 6.01 of the Company Disclosure Schedule, neither the Company nor any subsidiary shall, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, directly or indirectly do, or propose to do, any of the following without the prior written consent of Parent: (a) amend or otherwise change the Company's certificate of incorporation or bylaws; (b) issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of Company capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of Company capital stock, or any other ownership interest (including, without limitation, any phantom interest) of the Company, any subsidiary or any of its affiliates, except for the issuance of shares of Company Common Stock issuable to participants in the Company's Employee Stock Purchase Plan or upon the exercise of outstanding Company Stock Options or Company Stock Warrants; or (c) sell, pledge, lease or otherwise dispose of or encumber any assets or inventory of the Company or of any subsidiary (except for (i) sales of assets or inventory in the ordinary course of business and in a manner consistent with past practice, (ii) dispositions of obsolete or worthless assets, and (iii) pledges of assets pursuant to existing agreements), or take any action that would reasonably be expected to result in any damage to, destruction or loss of any material asset of the Company (whether or not covered by insurance); (d) except as is contemplated by this Agreement, or the applicable award agreement or Employee Plan, accelerate, amend or change the period (or permit any acceleration, amendment or change) of exercisability of options or restricted stock granted under the Employee Plans (including the Company Stock Option Plans) or authorize cash payments in exchange for any options granted under any of such plans; (i) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of any of its common stock, except that a subsidiary may declare and pay a dividend to the Company, (ii) split, combine or reclassify any of its common 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 common stock, (iii) amend the terms of, repurchase (including without limitation through its currently existing stock buy-back programs), redeem or otherwise acquire, or permit any subsidiary to repurchase, redeem or otherwise acquire, any of its securities or any securities of a subsidiary, or propose to do any of the foregoing; (i) acquire (by merger, consolidation, or acquisition of stock or assets) any company, corporation, partnership or other business organization or division thereof, or enter into or amend any contract, agreement, commitment or arrangement to effect any such acquisition, except with respect to those transactions as set forth in Section 6.01(f) of the Company Disclosure Schedule, (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of a subsidiary entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances, except in each case in the ordinary course of business consistent with past practice (including pursuant to existing credit lines and lease facilities); (iii) except in the ordinary course of business or otherwise provided or permitted by this Agreement, to enter into or amend any material agreement or contract that provides for the sale, license, or purchase by the Company or any of its subsidiaries of assets, including without limitation any licensing or technology transfer agreement; (iv) have or make any capital expenditures or commitment for the purchase of fixed assets in excess of $410,000 in the aggregate in the third quarter of 2003 and amounts to purchase assets under capital leases under existing contracts on the date hereof, in accordance with their terms, in the fourth quarter of 2004, without the consent of Parent, which consent shall not be unreasonably withheld; or (v) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 6.01(f); (g) except as set forth in Section 6.01(g) of the Company Disclosure Schedule or as required by Law, increase the compensation payable or to become payable to its officers or employees, except for increases in salary or wages of employees of the Company or of any subsidiary who are not vice-president level or higher level employees of the Company in the ordinary course of business and in accordance with past practices, or grant any bonus, severance or termination pay to, or enter into any employment or severance agreement with any director, officer (except for officers who are terminated on an involuntary basis and payments relating thereto made pursuant to written agreements outstanding on the date hereof as set forth on the Company Disclosure Schedule) or other employee of the Company or of any subsidiary, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees, except, in each case, as may be required by Law or as contemplated by this Agreement; (h) 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), except as required by concurrent changes in GAAP or Federal Securities Law applicable to companies generally; (i) make any material Tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign Tax liability or agree to an extension of a statute of limitations; (j) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements of the Company or incurred since the date of such financial statements; (k) waive the benefits of, agree to modify in any manner, terminate, release any person from or fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary; (l) engage in any action or enter into any transaction or authorize any action to be taken or transaction to be entered into that could reasonably be expected to delay the consummation of, or otherwise adversely affect, any of the transactions contemplated by this Agreement, including the taking of any action that would prevent the Mergers, taken together from qualifying as an exchange described under Section 351 of the Code; (m) undertake any revaluation of any of the Company's or any subsidiary's assets, including, without limitation, writing down the value of inventory or writing off notes or accounts receivable other than in the ordinary course of business and consistent with past practice, or in accordance with GAAP consistently applied; (n) adopt a plan of complete or partial liquidation or dissolution of Parent or any of its material subsidiaries; (o) except for the existing Company Rights Agreement, adopt any similar antitakeover plan or device, or enter into any other arrangement that has an antitakeover effect, or that otherwise would limit the ability of Holdco to consummate the Company Merger, or any of the other transactions contemplated hereby; (p) amend the Company Rights Agreement in any manner that would permit any person other than Parent or its affiliates, including Holdco to acquire more than 15% of the Company Commons, or redeem the Company Rights; (q) except as reflected on the balance sheet dated June 30, 2003 and covered by an adequate reserve therefor, make any sale or acceleration of accounts receivable or any accrual of liabilities not in the ordinary course or write off any notes or accounts receivable or portions thereof as uncollectible other than in the ordinary course or as required by GAAP; (r) discharge any lien or pay any obligation or liability (whether absolute, accrued, contingent or otherwise) other than current liabilities shown on the balance sheet dated June 30, 2003, and current liabilities incurred thereafter or liabilities incurred in the ordinary course and not required under GAAP to be reflected on such balance sheet; (s) make any gifts or sell, transfer or exchange any property for less than the fair value thereof; (t) make any cash expenditure other than (i) in the ordinary course of business, (ii) in connection with the implementation of the transactions contemplated by this Agreement, including payment of transaction expenses, (iii) in connection with payments for director and officer insurance policies or (iv) in connection with the settlement of claims in the ordinary course of business as permitted in Section 6.01(j); or (u) take, or agree in writing or otherwise to take, any of the actions described in Sections 6.01(a) through (t) above, or any action that 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 Mergers. SECTION 6.01. 7.1 Conduct of Business by of the Company Pending the Mergers. 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 The Company covenants and agrees that, during the period from the date hereof to the Effective Time of the Acquisition Merger, unless Parent shall otherwise agree in writing or as required or permitted under this AgreementAcquisition gives its prior written consent, the businesses of the Company shall conduct its business and shall cause the business of its subsidiaries to shall be conducted only in, and the Company and its subsidiaries shall not take any actionaction except in, except in the ordinary course of business and in a manner consistent compliance with past practiceapplicable laws; and the Company and its subsidiaries shall each use all commercially its reasonable best efforts to preserve substantially intact the business organization of the Company and its subsidiaries, to keep available the services of the present officers, employees and consultants of the Company and its subsidiaries and to preserve the present relationships of the Company and its subsidiaries with customers, suppliers and other persons with which the Company or any subsidiary of its subsidiaries has significant business relations. By Except as expressly contemplated by this Agreement or as set forth in the Disclosure Schedule, by way of amplification and not limitation, except as contemplated by this Agreement and except for transfers of cash among the Company and its wholly-owned subsidiaries pursuant to the Company's ordinary cash management policies as disclosed in Section 6.01 of the Company Disclosure Schedule, neither the Company nor any subsidiary of its subsidiaries shall, during the period from between the date of this Agreement and continuing until the earlier Effective Time of the termination of this Agreement or the Effective TimeAcquisition Merger, directly or indirectly do, do or propose commit to do, do any of the following without the prior written consent of ParentAcquisition: (a) amend or otherwise change the Company's certificate articles of incorporation or bylawsby-laws or equivalent organizational documents of the Company or any of its subsidiaries; (b) issue, deliver, sell, lease, sell and leaseback, pledge, dispose of or encumber, or authorize or commit to the issuance, delivery, sale, lease, sale/leaseback, pledge, disposition or encumbrance of, (i) any shares of Company capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of Company capital stock, or any other ownership interest (includingincluding but not limited to stock appreciation rights or phantom stock), without limitation, any phantom interest) of the Company, any subsidiary Company or any of its affiliates, subsidiaries (except for the issuance and delivery of shares of Company Common Stock issuable to participants in accordance with the Company's Employee Stock Purchase Plan or upon the exercise terms of outstanding Company Stock Options outstanding as of January 1, 1999) or Company Stock Warrants; or (cii) sell, pledge, lease or otherwise dispose of or encumber any material assets or inventory of the Company or any of any subsidiary (except for (i) sales its subsidiaries, other than assets sold, leased, pledged, disposed of assets or inventory encumbered in the ordinary course of business and in a manner consistent with past practice, (ii) dispositions of obsolete or worthless assets, and (iii) pledges of assets pursuant to existing agreements), or take any action that would reasonably be expected to result in any damage to, destruction or loss of any material asset of the Company (whether or not covered by insurance); (d) except as is contemplated by this Agreement, or the applicable award agreement or Employee Plan, accelerate, amend or change the period (or permit any acceleration, amendment or change) of exercisability of options or restricted stock granted under the Employee Plans (including the Company Stock Option Plans) or authorize cash payments in exchange for any options granted under any of such plans; (ic) declare, set aside, make or pay any dividend or other distribution (whether distribution, payable in cash, stock or stock, property or any combination thereof) in otherwise, with respect of to any of its common capital stock, except that a subsidiary may declare and pay a dividend to for the Company's regular quarterly dividend in an amount not in excess of $.025 per share per quarter; (d) reclassify, (ii) combine, split, combine subdivide or reclassify any of its common stock or issue or authorize or propose the issuance of any other securities in respect ofredeem, in lieu of or in substitution for shares of its common stock, (iii) amend the terms of, repurchase (including without limitation through its currently existing stock buy-back programs), redeem purchase or otherwise acquire, directly or permit any subsidiary to repurchase, redeem or otherwise acquireindirectly, any of its securities the capital stock of the Company or any securities of a subsidiary, or propose to do any of the foregoingits subsidiaries; (e) (i) acquire (by mergerrepurchase, consolidation, repay or acquisition of stock or assets) any company, corporation, partnership or other business organization or division thereof, or enter into or amend any contract, agreement, commitment or arrangement to effect any such acquisition, except with respect to those transactions as set forth in Section 6.01(f) of the Company Disclosure Schedule, (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of a subsidiary entered into in the ordinary course of business) or endorse endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans loans, advances or advancescapital contributions to, except or investments in, any other person; (ii) enter into any material contract or agreement or any Leases; or (iii) enter into or amend any material contract, lease, agreement, commitment or arrangement with respect to any of the matters set forth in each case this Section 7.1(e), other than in the ordinary course of business consistent with past practice practice; (including pursuant to existing credit lines and lease facilities); (iiif) except to the extent required under existing employee and director benefit plans, agreements or arrangements as in effect on the ordinary course date of business or otherwise provided or permitted by this Agreement, to enter into (i) increase the compensation or amend any material agreement or contract that provides for the sale, license, or purchase by the Company or fringe benefits of any of its subsidiaries of assetsdirectors, including without limitation any licensing or technology transfer agreement; (iv) have or make any capital expenditures or commitment for the purchase of fixed assets in excess of $410,000 in the aggregate in the third quarter of 2003 and amounts to purchase assets under capital leases under existing contracts on the date hereof, in accordance with their terms, in the fourth quarter of 2004, without the consent of Parent, which consent shall not be unreasonably withheld; or (v) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 6.01(f); (g) except as set forth in Section 6.01(g) of the Company Disclosure Schedule or as required by Law, increase the compensation payable or to become payable to its officers or employees, except for increases in salary or wages of employees of the Company or of any subsidiary its subsidiaries, who are not vice-president level directors or higher level employees officers of the Company Company, in the ordinary course of business and in accordance consistent with the Company's past practicespractice, or (ii) grant any bonus, severance or termination pay not currently required to be paid under existing severance plans to, or enter into any employment employment, consulting or severance agreement with or arrangement with, any present or former director, officer (except for officers who are terminated on an involuntary basis and payments relating thereto made pursuant to written agreements outstanding on the date hereof as set forth on the Company Disclosure Schedule) or other employee of the Company or any of any subsidiary, its subsidiaries or (iii) establish, adopt, enter into or amend or terminate any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any current present or former directors, officers or employees, except, in each case, employees or the Company or any of its subsidiaries; (g) except as may be required as a result of a change in law or in generally accepted accounting principles, change any of the accounting practices or principles used by Law or as contemplated by this Agreementit; (h) take make any action to material tax election, make or change any material method of accounting policies or procedures (including, without limitation, procedures with respect to revenue recognitionany Tax, payments of accounts payable and collection of accounts receivable), except as required by concurrent changes in GAAP or Federal Securities Law applicable file any amended Tax Return with respect to companies generally; (i) make any material Tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign Tax liability tax liability; (i) adopt a plan of complete or agree to an extension partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of a statute the Company or any of limitationsits subsidiaries (other than the Mergers); (j) acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial portion of the stock or assets of, or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof; (k) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than except for the payment, discharge or satisfaction of liabilities or obligations in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements of the Company or incurred since the date of such financial statements; (k) waive the benefits of, agree to modify in any manner, terminate, release any person from or fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary; (l) engage in any action or enter into any transaction or authorize any action to be taken or transaction to be entered into that could reasonably be expected to delay the consummation of, or otherwise adversely affect, any of the transactions contemplated by this Agreement, including the taking of any action that would prevent the Mergers, taken together from qualifying as an exchange described under Section 351 of the Code; (m) undertake any revaluation of any of the Company's or any subsidiary's assets, including, without limitation, writing down the value of inventory or writing off notes or accounts receivable other than in the ordinary course of business and consistent with past practice, or waive, release, grant, or transfer any rights of value; (l) settle or compromise any litigation (whether or not commenced prior to the date of this Agreement), other than settlements not in accordance with GAAP consistently appliedexcess of amounts specifically reserved for in respect of the subject litigation in the most recent consolidated financial statements of the Company included in the SEC Documents (provided such settlement documents do not involve any material non-monetary obligations on the part of the Company); (m) close, shut down or otherwise eliminate any of its facilities; (n) adopt a plan change the composition, fill any vacancies or increase the size of complete or partial liquidation or dissolution the Company's Board of Parent or any of its material subsidiariesDirectors; (o) except for amend, modify or waive any provision of the existing Company Rights Agreement, adopt or take any similar antitakeover plan action to redeem the Rights or device, or enter into render the Rights inapplicable to any transaction other arrangement that has an antitakeover effect, or that otherwise would limit than the ability of Holdco to consummate Mergers and the Company Merger, or any of the other transactions contemplated herebyby the Voting Agreement other than in accordance with Section 8.14(b); (p) amend the Company Rights Agreement or modify in any manner that would permit material respect or terminate any person existing IP License, execute any new IP License, sell, license or otherwise dispose of, in whole or in part, any Company IP, and/or subject any Company IP to any lien or other than Parent or its affiliates, including Holdco to acquire more than 15% of the Company Commons, or redeem the Company Rights;encumbrance; or (q) except as reflected on the balance sheet dated June 30, 2003 and covered by an adequate reserve therefor, make any sale or acceleration of accounts receivable or any accrual of liabilities not in the ordinary course or write off any notes or accounts receivable or portions thereof as uncollectible other than in the ordinary course or as required by GAAP; (r) discharge any lien or pay any obligation or liability (whether absolute, accrued, contingent or otherwise) other than current liabilities shown on the balance sheet dated June 30, 2003, and current liabilities incurred thereafter or liabilities incurred in the ordinary course and not required under GAAP to be reflected on such balance sheet; (s) make any gifts or sell, transfer or exchange any property for less than the fair value thereof; (t) make any cash expenditure other than (i) in the ordinary course of business, (ii) in connection with the implementation of the transactions contemplated by this Agreement, including payment of transaction expenses, (iii) in connection with payments for director and officer insurance policies or (iv) in connection with the settlement of claims in the ordinary course of business as permitted in Section 6.01(j); or (u) take, take or agree to take in writing or otherwise to takeotherwise, any of the actions described in Sections 6.01(a7.1(a) through (t) above, or any action that 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 hereunder7.1(p).

Conduct of Business Pending the Mergers. SECTION 6.01. Conduct of Business by the (a) The Company Pending the Mergers. During the period from agrees that, between the date of this Agreement and continuing until the Effective Time or the earlier termination of the termination this Agreement, except as (1) expressly contemplated by any other provision of this Agreement or the Effective Timeany Ancillary Agreement, (2) as set forth in Section 8.01(a) of the Company covenants and agrees thatDisclosure Schedule, or (3) as required by applicable Law (including as may be requested or compelled by any Governmental Authority), unless Parent Pace shall otherwise agree consent in writing (which consent shall not be unreasonably conditioned, withheld or as required or permitted under this Agreement, delayed): (i) the Company shall conduct its business shall, and shall cause the Company Subsidiaries to, conduct their business of its subsidiaries to be conducted only in, and the Company and its subsidiaries shall not take any action, except in the ordinary course of business and in a manner consistent with past practicepractice in all material respects; and and (ii) the Company shall, and shall cause each Company Subsidiary to, use all their commercially reasonable efforts to maintain and preserve substantially intact in all material respects the business organization organization, assets, properties and material business relations of the Company and its subsidiaries, to keep available the services of the present officers, employees and consultants of the Company and its subsidiaries and to preserve Subsidiaries taken as a whole. For the present relationships avoidance of the Company and its subsidiaries with customersdoubt, suppliers and other persons with which any inaction by the Company or any subsidiary has significant Company Subsidiary with respect to any of the actions prohibited by Section 8.01(c) shall not be a breach of Section 8.01(a). (b) Each Blocker agrees that, between the date of this Agreement and the Effective Time or the earlier termination of this Agreement, except as (1) expressly contemplated by any other provision of this Agreement or any Ancillary Agreement, (2) set forth in Section 8.01(b) of the Company Disclosure Schedule, (3) required by applicable Law (including as may be requested or compelled by any Governmental Authority) or (4) required to effect the Blocker Restructuring, unless Pace shall otherwise consent in writing (which consent shall not be unreasonably conditioned, withheld or delayed), such Blocker shall conduct its business relations. in the ordinary course of business and in a manner consistent with past practice in all material respects. (c) By way of amplification and not limitation, except as (1) expressly contemplated by any other provision of this Agreement and except for transfers of cash among the Company and its wholly-owned subsidiaries pursuant to the Company's ordinary cash management policies as disclosed or any Ancillary Agreement, (2) set forth in Section 6.01 8.01(c) of the Company Disclosure Schedule, neither or (3) required by applicable Law (including as may be requested or compelled by any Governmental Authority), the Company nor any subsidiary shallshall not, during the period from and shall cause each Company Subsidiary not to, between the date of this Agreement and continuing until the Effective Time or the earlier of the termination of this Agreement or the Effective TimeAgreement, directly or indirectly doindirectly, or propose to do, do any of the following without the prior written consent of Parent:Pace (which consent shall not be unreasonably conditioned, withheld or delayed): (ai) amend or otherwise change the Company's its certificate of incorporation or bylawsbylaws or equivalent organizational documents (including limited liability company agreements); (bii) (A) issue, sell, pledge, dispose of of, grant or encumber, or authorize the issuance, sale, pledge, disposition disposition, grant or encumbrance of, any shares Equity Interests of the Company capital stock of or any classCompany Subsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of Company capital stock, or any other ownership interest Equity Interests (including, without limitation, any phantom interest) of the Company), any subsidiary or any of its affiliates, except for the issuance of shares of Company Common Stock issuable to participants in the Company's Employee Stock Purchase Plan or upon the exercise of outstanding Company Stock Options or Company Stock Warrants; or (c) sell, pledge, lease or otherwise dispose of or encumber any assets or inventory of the Company or any Company Subsidiary other than sales to a Company Subsidiary, other than the grant of equity awards to employees and service providers of the Company or any subsidiary (except for (i) sales of assets or inventory Company Subsidiary in the ordinary course of business and in a manner consistent with past practice, ; or (iiB) dispositions sell any assets of obsolete the Company or worthless assets, and (iii) pledges of assets pursuant to existing agreements), or take any action Company Subsidiary that would reasonably be expected to result have a Company Material Adverse Effect; (iii) form any subsidiary or acquire any Equity Interest or other interest in any damage to, destruction other entity or loss enter into a joint venture with any other entity in an amount in excess of $40,000,000 individually or $100,000,000 in the aggregate (excluding any material asset of the transactions set forth in Section 8.01(c)(iii) of the Company (whether or not covered by insuranceDisclosure Schedule); (d) except as is contemplated by this Agreement, or the applicable award agreement or Employee Plan, accelerate, amend or change the period (or permit any acceleration, amendment or change) of exercisability of options or restricted stock granted under the Employee Plans (including the Company Stock Option Plans) or authorize cash payments in exchange for any options granted under any of such plans; (iiv) declare, set aside, make or pay any dividend or other distribution (whether distribution, payable in cash, stock or stock, property or any combination thereof) in otherwise, with respect of to any of its common stockEquity Interests, except that a subsidiary may declare and pay a dividend including Series D Notes (other than any such distributions made by the Company Subsidiaries to the Company or to any wholly-owned subsidiary of the Company); (v) reclassify, (ii) combine, split, combine subdivide or reclassify any of its common stock redeem, 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 common stock, (iii) amend the terms of, repurchase (including without limitation through its currently existing stock buy-back programs), redeem purchase or otherwise acquire, directly or permit any subsidiary to repurchase, redeem or otherwise acquireindirectly, any of its securities or any securities of a subsidiary, or propose to do any of the foregoingEquity Interests; (ivi) enter into any Contract that would need to be disclosed in Section 5.20 of the Company Disclosure Schedule, other than (1) Contracts entered into in the ordinary course of business consistent with past practice, (2) Contracts entered into on arms-length terms, or (3) Contracts requiring payments by the Company or any Company Subsidiary in an amount not to exceed $250,000; (vii) (A) acquire (including by merger, consolidation, or acquisition of stock or assetssubstantially all of the assets or any other business combination) any company, material assets or any corporation, partnership or partnership, other business organization or any division thereof, thereof in an amount in excess of $40,000,000 individually or enter into or amend $100,000,000 in the aggregate (excluding any contract, agreement, commitment or arrangement to effect any such acquisition, except with respect to those of the transactions as set forth in Section 6.01(f8.01(c)(vi)(A) of the Company Disclosure Schedule); (B) incur, (ii) incur create, assume, refinance, guarantee or forgive any indebtedness for borrowed money indebtedness, or issue any debt securities (including Series D Notes) or assume, guarantee (other than guarantees of bank debt of a subsidiary entered into in the ordinary course of business) or endorse endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances, except or intentionally grant any security interest in any of its assets, in each case other than in respect of (1) loans or advances to vacation rental owners in the ordinary course of business consistent with past practice practice, (including pursuant 2) indebtedness between the Company and any Company Subsidiary or between any Company Subsidiaries, (3) indebtedness refinanced in the same or lesser amount as of the date hereof or (4) indebtedness incurred following the date hereof that results in a total amount of indebtedness that is less than or equal to existing credit lines and lease facilitiesthe sum of the aggregate amount of indebtedness as of the date hereof plus $60,000,000; provided, that the Company shall provide reasonable notice to Pace prior to incurring any amount of indebtedness in excess of $20,000,000; or (C) merge, consolidate, combine or amalgamate with any person; (viii) (A) grant any increase in the compensation, incentives or benefits payable or to become payable to any current or former executive officer, (B) enter into any new (except as permitted under clause (E); ), or materially amend any existing, employment, retention, bonus, change in control, severance, redundancy or termination agreement with any current or former executive officer whose base salary is in excess of $250,000, (iiiC) except accelerate or commit to accelerate the funding, payment, or vesting of any compensation or benefits to any current or former executive officer whose base salary is in excess of $250,000, (D) establish or become obligated under any collective bargaining agreement, collective agreement, or other contract or agreement with a labor union, trade union, works council, or other representative of executive officers, or (E) hire any new executive officers whose base salary is in excess of $250,000 (other than hiring persons to replace former executive officers in the ordinary course of business or otherwise provided or permitted by this Agreementconsistent with past practice); provided, to enter into or amend any material agreement or contract however, that provides for the saleactions described in subsections (A), license, or purchase by the Company or any of its subsidiaries of assets, including without limitation any licensing or technology transfer agreement; (ivB) have or make any capital expenditures or commitment for the purchase of fixed assets in excess of $410,000 in the aggregate in the third quarter of 2003 and amounts to purchase assets under capital leases under existing contracts on the date hereof, in accordance with their terms, in the fourth quarter of 2004, without the consent of Parent, which consent shall not be unreasonably withheld; or (vC) enter into or amend any contract, agreement, commitment or arrangement shall be permissible to effect any of the matters prohibited by this Section 6.01(f); (g) except as set forth in Section 6.01(g) of the Company Disclosure Schedule or as required by Law, increase the compensation payable or to become payable to its officers or employees, except for increases in salary or wages of employees of the Company or of any subsidiary who are not vice-president level or higher level employees of the Company extent made in the ordinary course of business and in accordance consistent with past practices, or grant any bonus, severance or termination pay to, or enter into any employment or severance agreement with any director, officer practice; (except for officers who are terminated on an involuntary basis and payments relating thereto made pursuant to written agreements outstanding on the date hereof as set forth on the Company Disclosure Scheduleix) or other employee of the Company or of any subsidiary, or establish, adopt, enter into or amend and/or terminate any collective bargainingmaterial Plan except (A) as permitted under Section 8.01(c)(viii), bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees, except, in each case, (B) as may be required by Law applicable Law, (C) as is necessary in order to consummate the Transactions, or as contemplated by this Agreement; (hD) take any action to change accounting policies or procedures (including, without limitation, procedures with respect to revenue recognition, payments of accounts payable for health and collection of accounts receivable), except as required by concurrent changes in GAAP or Federal Securities Law applicable to companies generally; (i) make any material Tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign Tax liability or agree to an extension of a statute of limitations; (j) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction welfare plan renewals in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements of the Company or incurred since the date of such financial statementsbusiness; (kx) waive the benefits of, agree to modify in any manner, terminate, release any person from or fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary; materially amend (l) engage in any action or enter into any transaction or authorize any action to be taken or transaction to be entered into that could reasonably be expected to delay the consummation of, or otherwise adversely affect, any of the transactions contemplated by this Agreement, including the taking of any action that would prevent the Mergers, taken together from qualifying as an exchange described under Section 351 of the Code; (m) undertake any revaluation of any of the Company's or any subsidiary's assets, including, without limitation, writing down the value of inventory or writing off notes or accounts receivable other than reasonable and usual amendments in the ordinary course of business and consistent with past practice, business) the accounting policies or in accordance with GAAP consistently applied; (n) adopt a plan of complete or partial liquidation or dissolution of Parent or any of its material subsidiaries; (o) except for the existing Company Rights Agreement, adopt any similar antitakeover plan or device, or enter into any other arrangement that has an antitakeover effect, or that otherwise would limit the ability of Holdco to consummate the Company Merger, or any of the other transactions contemplated hereby; (p) amend the Company Rights Agreement in any manner that would permit any person other than Parent or its affiliates, including Holdco to acquire more than 15% procedures of the Company Commonsand any Company Subsidiary, or redeem the Company Rights; (q) except as reflected on the balance sheet dated June 30, 2003 and covered by an adequate reserve therefor, make any sale or acceleration of accounts receivable or any accrual of liabilities not in the ordinary course or write off any notes or accounts receivable or portions thereof as uncollectible other than in the ordinary course or as required by GAAP; (rxi) discharge (A) amend any lien material Tax Return, (B) change any material method of Tax accounting, (C) make, change or pay rescind any obligation material election relating to Taxes (including, for the avoidance of doubt, any election that results in the Company or liability (whether absolute, accrued, contingent or otherwise) any Company Subsidiary being treated as other than current liabilities shown on the balance sheet dated June 30a partnership or a disregarded entity for U.S. federal income tax purposes) in a manner inconsistent with past practice, 2003or (D) settle or compromise any material U.S. federal, and current liabilities incurred thereafter state, local or liabilities incurred in the ordinary course and not required under GAAP non-U.S. Tax audit, assessment, Tax claim or other controversy relating to be reflected on such balance sheetTaxes); (sxii) make amend in a manner that is material and adverse to the Company or any gifts or sell, transfer or exchange Company Subsidiary any property for less than the fair value thereofMaterial Contract; (txiii) make any cash expenditure other than (i) in fail to maintain the ordinary course of businessLeased Real Property, (ii) including the improvements located thereon or used in connection with therewith, in substantially the implementation same condition as of the transactions contemplated by date of this Agreement, including payment to the extent such failure to maintain such Leased Real Property would reasonably be expected to have a Company Material Adverse Effect; (xiv) fail to maintain the existence of, or use reasonable efforts to protect, Company-Owned IP to the extent that such action or inaction would reasonably be expected to have a Company Material Adverse Effect; (xv) permit any material item of transaction expensesCompany-Owned IP to lapse or to be abandoned, invalidated, dedicated to the public, or disclaimed, or otherwise become unenforceable or fail to perform or make any applicable filings, recordings or other similar actions or filings, or fail to pay all required fees and Taxes required or advisable to maintain and protect its interest in each and every material item of Company-Owned IP to the extent that such action or inaction would reasonably be expected to have a Company Material Adverse Effect; (iiixvi) waive, release, assign, settle or compromise any Action, other than waivers, releases, assignments, settlements or compromises that are solely monetary in connection with payments for director nature and officer insurance policies do not exceed $1,000,000 individually or $2,000,000 in the aggregate; or (ivxvii) enter into any Contract or otherwise make a binding commitment to do any of the foregoing. Nothing herein shall require the Company to obtain consent from Pace to do any of the foregoing if obtaining such consent might reasonably be expected to violate applicable Law, and nothing contained in connection with this Section 8.01 shall give to Pace, directly or indirectly, the settlement of claims in right to control or direct the ordinary course of business as permitted in Section 6.01(j); or (u) take, operations of the Company or agree in writing or otherwise to take, any of the actions described in Sections 6.01(a) through (t) aboveCompany Subsidiaries prior to the Closing Date. In addition, any action taken, or any action that would make omitted to be taken, by the Company or any of the representations Company Subsidiaries to the extent that the Company or warranties any of the Company contained Subsidiaries reasonably determine to implement any COVID-19 Measure or determine that such action or omission is necessary in this Agreement untrue or incorrect or prevent response to new restrictions imposed by any Governmental Authority related to COVID-19 to maintain and preserve in all material respects the business organization, assets, properties and material business relations of the Company from performing or cause and the Company Subsidiaries, taken as a whole, shall not be deemed to perform constitute a breach of this Section 8.01. Prior to the Closing Date, each of Pace and the Company shall exercise, consistent with the terms and conditions hereof, complete control and supervision of its covenants hereunderrespective operations, as required by Law.

Conduct of Business Pending the Mergers. SECTION 6.01. 7.1 Conduct of Business by of the Company Pending the Mergers. 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 ------------------------------------------------------ The Company covenants and agrees that, during the period from the date hereof to the Effective Time of the Acquisition Merger, unless Parent shall otherwise agree in writing or as required or permitted under this AgreementAcquisition gives its prior written consent, the businesses of the Company shall conduct its business and shall cause the business of its subsidiaries to shall be conducted only in, and the Company and its subsidiaries shall not take any actionaction except in, except in the ordinary course of business and in a manner consistent compliance with past practiceapplicable laws; and the Company and its subsidiaries shall each use all commercially its reasonable best efforts to preserve substantially intact the business organization of the Company and its subsidiaries, to keep available the services of the present officers, employees and consultants of the Company and its subsidiaries and to preserve the present relationships of the Company and its subsidiaries with customers, suppliers and other persons with which the Company or any subsidiary of its subsidiaries has significant business relations. By Except as expressly contemplated by this Agreement or as set forth in the Disclosure Schedule, by way of amplification and not limitation, except as contemplated by this Agreement and except for transfers of cash among the Company and its wholly-owned subsidiaries pursuant to the Company's ordinary cash management policies as disclosed in Section 6.01 of the Company Disclosure Schedule, neither the Company nor any subsidiary of its subsidiaries shall, during the period from between the date of this Agreement and continuing until the earlier Effective Time of the termination of this Agreement or the Effective TimeAcquisition Merger, directly or indirectly do, do or propose commit to do, do any of the following without the prior written consent of ParentAcquisition: (a) amend or otherwise change the Company's certificate articles of incorporation or bylawsby- laws or equivalent organizational documents of the Company or any of its subsidiaries; (b) issue, deliver, sell, lease, sell and leaseback, pledge, dispose of or encumber, or authorize or commit to the issuance, delivery, sale, lease, sale/leaseback, pledge, disposition or encumbrance of, (i) any shares of Company capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of Company capital stock, or any other ownership interest (includingincluding but not limited to stock appreciation rights or phantom stock), without limitation, any phantom interest) of the Company, any subsidiary Company or any of its affiliates, subsidiaries (except for the issuance and delivery of shares of Company Common Stock issuable to participants in accordance with the Company's Employee Stock Purchase Plan or upon the exercise terms of outstanding Company Stock Options outstanding as of January 1, 1999) or Company Stock Warrants; or (cii) sell, pledge, lease or otherwise dispose of or encumber any material assets or inventory of the Company or any of any subsidiary (except for (i) sales its subsidiaries, other than assets sold, leased, pledged, disposed of assets or inventory encumbered in the ordinary course of business and in a manner consistent with past practice, (ii) dispositions of obsolete or worthless assets, and (iii) pledges of assets pursuant to existing agreements), or take any action that would reasonably be expected to result in any damage to, destruction or loss of any material asset of the Company (whether or not covered by insurance); (d) except as is contemplated by this Agreement, or the applicable award agreement or Employee Plan, accelerate, amend or change the period (or permit any acceleration, amendment or change) of exercisability of options or restricted stock granted under the Employee Plans (including the Company Stock Option Plans) or authorize cash payments in exchange for any options granted under any of such plans; (ic) declare, set aside, make or pay any dividend or other distribution (whether distribution, payable in cash, stock or stock, property or any combination thereof) in otherwise, with respect of to any of its common capital stock, except that a subsidiary may declare and pay a for the 31 Company's regular quarterly dividend to the Companyin an amount not in excess of $.025 per share per quarter; (d) reclassify, (ii) combine, split, combine subdivide or reclassify any of its common stock or issue or authorize or propose the issuance of any other securities in respect ofredeem, in lieu of or in substitution for shares of its common stock, (iii) amend the terms of, repurchase (including without limitation through its currently existing stock buy-back programs), redeem purchase or otherwise acquire, directly or permit any subsidiary to repurchase, redeem or otherwise acquireindirectly, any of its securities the capital stock of the Company or any securities of a subsidiary, or propose to do any of the foregoingits subsidiaries; (e) (i) acquire (by mergerrepurchase, consolidation, repay or acquisition of stock or assets) any company, corporation, partnership or other business organization or division thereof, or enter into or amend any contract, agreement, commitment or arrangement to effect any such acquisition, except with respect to those transactions as set forth in Section 6.01(f) of the Company Disclosure Schedule, (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of a subsidiary entered into in the ordinary course of business) or endorse endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans loans, advances or advancescapital contributions to, except or investments in, any other person; (ii) enter into any material contract or agreement or any Leases; or (iii) enter into or amend any material contract, lease, agreement, commitment or arrangement with respect to any of the matters set forth in each case this Section 7.1(e), other than in the ordinary course of business consistent with past practice practice; (including pursuant to existing credit lines and lease facilities); (iiif) except to the extent required under existing employee and director benefit plans, agreements or arrangements as in effect on the ordinary course date of business or otherwise provided or permitted by this Agreement, to enter into (i) increase the compensation or amend any material agreement or contract that provides for the sale, license, or purchase by the Company or fringe benefits of any of its subsidiaries of assetsdirectors, including without limitation any licensing or technology transfer agreement; (iv) have or make any capital expenditures or commitment for the purchase of fixed assets in excess of $410,000 in the aggregate in the third quarter of 2003 and amounts to purchase assets under capital leases under existing contracts on the date hereof, in accordance with their terms, in the fourth quarter of 2004, without the consent of Parent, which consent shall not be unreasonably withheld; or (v) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 6.01(f); (g) except as set forth in Section 6.01(g) of the Company Disclosure Schedule or as required by Law, increase the compensation payable or to become payable to its officers or employees, except for increases in salary or wages of employees of the Company or of any subsidiary its subsidiaries, who are not vice-president level directors or higher level employees officers of the Company Company, in the ordinary course of business and in accordance consistent with the Company's past practicespractice, or (ii) grant any bonus, severance or termination pay not currently required to be paid under existing severance plans to, or enter into any employment employment, consulting or severance agreement with or arrangement with, any present or former director, officer (except for officers who are terminated on an involuntary basis and payments relating thereto made pursuant to written agreements outstanding on the date hereof as set forth on the Company Disclosure Schedule) or other employee of the Company or any of any subsidiary, its subsidiaries or (iii) establish, adopt, enter into or amend or terminate any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any current present or former directors, officers or employees, except, in each case, employees or the Company or any of its subsidiaries; (g) except as may be required as a result of a change in law or in generally accepted accounting principles, change any of the accounting practices or principles used by Law or as contemplated by this Agreementit; (h) take make any action to material tax election, make or change any material method of accounting policies or procedures (including, without limitation, procedures with respect to revenue recognitionany Tax, payments of accounts payable and collection of accounts receivable), except as required by concurrent changes in GAAP or Federal Securities Law applicable file any amended Tax Return with respect to companies generally; (i) make any material Tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign Tax liability tax liability; (i) adopt a plan of complete or agree to an extension partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of a statute the Company or any of limitationsits subsidiaries (other than the Mergers); (j) acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial portion of the stock or assets of, or by any other manner, any business or any (k) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than except for the payment, discharge or satisfaction of liabilities or obligations in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements of the Company or incurred since the date of such financial statements; (k) waive the benefits of, agree to modify in any manner, terminate, release any person from or fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary; (l) engage in any action or enter into any transaction or authorize any action to be taken or transaction to be entered into that could reasonably be expected to delay the consummation of, or otherwise adversely affect, any of the transactions contemplated by this Agreement, including the taking of any action that would prevent the Mergers, taken together from qualifying as an exchange described under Section 351 of the Code; (m) undertake any revaluation of any of the Company's or any subsidiary's assets, including, without limitation, writing down the value of inventory or writing off notes or accounts receivable other than in the ordinary course of business and consistent with past practice, or waive, release, grant, or transfer any rights of value; (l) settle or compromise any litigation (whether or not commenced prior to the date of this Agreement), other than settlements not in accordance with GAAP consistently appliedexcess of amounts specifically reserved for in respect of the subject litigation in the most recent consolidated financial statements of the Company included in the SEC Documents (provided such settlement documents do not involve any material non-monetary obligations on the part of the Company); (m) close, shut down or otherwise eliminate any of its facilities; (n) adopt a plan change the composition, fill any vacancies or increase the size of complete or partial liquidation or dissolution the Company's Board of Parent or any of its material subsidiariesDirectors; (o) except for amend, modify or waive any provision of the existing Company Rights Agreement, adopt or take any similar antitakeover plan action to redeem the Rights or device, or enter into render the Rights inapplicable to any transaction other arrangement that has an antitakeover effect, or that otherwise would limit than the ability of Holdco to consummate Mergers and the Company Merger, or any of the other transactions contemplated herebyby the Voting Agreement other than in accordance with Section 8.14(b); (p) amend the Company Rights Agreement or modify in any manner that would permit material respect or terminate any person existing IP License, execute any new IP License, sell, license or otherwise dispose of, in whole or in part, any Company IP, and/or subject any Company IP to any lien or other than Parent or its affiliates, including Holdco to acquire more than 15% of the Company Commons, or redeem the Company Rights;encumbrance; or (q) except as reflected on the balance sheet dated June 30, 2003 and covered by an adequate reserve therefor, make any sale or acceleration of accounts receivable or any accrual of liabilities not in the ordinary course or write off any notes or accounts receivable or portions thereof as uncollectible other than in the ordinary course or as required by GAAP; (r) discharge any lien or pay any obligation or liability (whether absolute, accrued, contingent or otherwise) other than current liabilities shown on the balance sheet dated June 30, 2003, and current liabilities incurred thereafter or liabilities incurred in the ordinary course and not required under GAAP to be reflected on such balance sheet; (s) make any gifts or sell, transfer or exchange any property for less than the fair value thereof; (t) make any cash expenditure other than (i) in the ordinary course of business, (ii) in connection with the implementation of the transactions contemplated by this Agreement, including payment of transaction expenses, (iii) in connection with payments for director and officer insurance policies or (iv) in connection with the settlement of claims in the ordinary course of business as permitted in Section 6.01(j); or (u) take, take or agree to take in writing or otherwise to takeotherwise, any of the actions described in Sections 6.01(a7.1(a) through (t) above, or any action that 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 hereunder7.1(p).