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

Conduct of the Business of Company. From the date hereof until the Closing Date, except (a) as expressly permitted by this Agreement, (b) as required by Law, or (c) with the written consent of the Purchasers (such consent not to be unreasonably withheld, conditioned or delayed), the Company shall conduct its business and operations in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (i) preserve intact its present business organization; (ii) maintain good relationships with its vendors, suppliers, and others having material business relationships with it; and (iii) manage its working capital in the ordinary course of business consistent with past practice. Without limiting the generality of the foregoing, and, except as contemplated in this Agreement or as described in Schedule 5.5, during the period from the date of this Agreement through the Closing Date, without the prior written consent of the Purchasers (which consent shall not be unreasonably withheld or delayed), the Company shall not, and shall not permit any of its Subsidiaries to: (a) amend any of its Charter Documents; (b) split, combine, subdivide or reclassify any of its equity securities; (c) authorize, sell, issue or grant any equity securities or sell, issue or grant any option, warrant or right to acquire any equity securities or sell, issue or grant any security convertible into or exchangeable for equity securities, or sell, transfer or dispose of, or grant or permit any Encumbrance on, any equity interest; (d) except as required pursuant to applicable Law or the terms of any Company Benefit Plan in existence as of the date hereof, (A) make or grant any increases in the compensation or fringe benefits of any current or former employee or service provider of the Company or its Subsidiaries except in the ordinary course of business consistent with past practice (x) for current employees whose annual base salary or annual fee is less than $150,000 or (y) in respect of fringe benefits, increases in fringe benefits that do not result in a material increase in cost to the Company or its Subsidiaries; (B) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Benefit Plan or any action to fund or secure the payment of compensation or benefits under any Company Benefit Plan; (C) amend, adopt or terminate any Company Benefit Plan other than in connection with routine, immaterial or ministerial amendments to health and welfare plans that do not materially increase benefits or result in a material increase in administrative costs; or (D) enter into, modify or terminate any collective bargaining agreement or other agreement or arrangement with any labor union, works council, labor organization or other employee-representative body. (e) declare, set aside for payment or pay any dividend on, or make any other distribution in respect of its equity interests or otherwise make any payments to any holder of such interests in its capacity as such; (f) take or fail to take any action the result of which would cause the creation of an Encumbrance on any of its equity interests; (g) make any material change to its financial reporting and accounting methods other than as required by a change in GAAP; (h) make any material change in its Tax reporting or Tax accounting methods, including making or changing any material Tax elections except as required by applicable Law; (i) acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner; (j) take any action to liquidate, dissolve, or wind up its business; (k) take any action that would require the consent of the Purchasers as the holder of the Series B Preferred Stock pursuant to the Certificate of Designations if such action were to occur after the Closing; or (l) commit itself to do any of the foregoing.

Conduct of the Business of Company. From the date hereof until the Closing Date, except (a) as expressly permitted by this Agreement, (b) as required by Law, or (c) with the written consent of the Purchasers Purchaser (such consent not to be unreasonably withheld, conditioned or delayed), the Company shall conduct its business and operations in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (i) preserve intact its present business organization; (ii) maintain good relationships with its vendors, suppliers, and others having material business relationships with it; and (iii) manage its working capital in the ordinary course of business consistent with past practice. Without limiting the generality of the foregoing, and, except as contemplated in this Agreement or as described in Schedule 5.5, during the period from the date of this Agreement through the Closing Date, without the prior written consent of the Purchasers Purchaser (which consent shall not be unreasonably withheld or delayed), the Company shall not, and shall not permit any of its Subsidiaries to: (a) amend any of its Charter Documents; (b) split, combine, subdivide or reclassify any of its equity securities; (c) authorize, sell, issue or grant any equity securities or sell, issue or grant any option, warrant or right to acquire any equity securities or sell, issue or grant any security convertible into or exchangeable for equity securities, or sell, transfer or dispose of, or grant or permit any Encumbrance on, any equity interest, except (i) with respect to shares of the Company’s Series A Convertible Preferred Stock and Series B Convertible Preferred Stock or (ii) upon the exercise or conversion of any equity securities or any option, warrant or right to acquire any equity securities outstanding as of the date hereof; (d) except as required pursuant to applicable Law or the terms of any Company Benefit Plan in existence as of the date hereof, (A) make or grant any increases in the compensation or fringe benefits of any current or former employee or service provider of the Company or its Subsidiaries except in the ordinary course of business consistent with past practice (x) for current employees whose annual base salary or annual fee is less than $150,000 or (y) in respect of fringe benefits, increases in fringe benefits that do not result in a material increase in cost to the Company or its Subsidiaries; (B) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Benefit Plan or any action to fund or secure the payment of compensation or benefits under any Company Benefit Plan; (C) amend, adopt or terminate any Company Benefit Plan other than in connection with routine, immaterial or ministerial amendments to health and welfare plans that do not materially increase benefits or result in a material increase in administrative costs; or (D) enter into, modify or terminate any collective bargaining agreement or other agreement or arrangement with any labor union, works council, labor organization or other employee-representative body. (e) declare, set aside for payment or pay any dividend on, or make any other distribution in respect of its equity interests or otherwise make any payments to any holder of such interests in its capacity as such, except with respect to shares of the Company’s Series A Convertible Preferred Stock and Series B Convertible Preferred Stock; (f) take or fail to take any action the result of which would cause the creation of an Encumbrance on any of its equity interests; (g) make any material change to its financial reporting and accounting methods other than as required by a change in GAAP; (h) make any material change in its Tax reporting or Tax accounting methods, including making or changing any material Tax elections except as required by applicable Law; (i) change its entity classification for Tax purposes; (j) acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner; (jk) take any action to liquidate, dissolve, or wind up its business; (k) take any action that would require the consent of the Purchasers as the holder of the Series B Preferred Stock pursuant to the Certificate of Designations if such action were to occur after the Closing; or (l) commit itself to do any of the foregoing.

Conduct of the Business of Company. From the date hereof until the Closing Date, except (a) as expressly permitted by this Agreement, (b) as required by Law, or (c) with the written consent of the Purchasers (such consent not to be unreasonably withheld, conditioned or delayed), the Company shall conduct its business and operations in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (i) preserve intact its present business organization; (ii) maintain good relationships with its vendors, suppliers, and others having material business relationships with it; and (iii) manage its working capital in the ordinary course of business consistent with past practice. Without limiting the generality of the foregoing, and, except as contemplated in this Agreement or as described in Schedule 5.5, during the period from the date of this Agreement through the Closing Date, without the prior written consent of the Purchasers (which consent shall not be unreasonably withheld or delayed), the Company shall not, and shall not permit any of its Subsidiaries to: (a) amend any of its Charter Documents; (b) split, combine, subdivide or reclassify any of its equity securities; (c) authorize, sell, issue or grant any equity securities or sell, issue or grant any option, warrant or right to acquire any equity securities or sell, issue or grant any security convertible into or exchangeable for equity securities, or sell, transfer or dispose of, or grant or permit any Encumbrance on, any equity interest; (d) except as required pursuant to applicable Law or the terms of any Company Benefit Plan in existence as of the date hereof, (A) make or grant any increases in the compensation or fringe benefits of any current or former employee or service provider of the Company or its Subsidiaries except in the ordinary course of business consistent with past practice (x) for current employees whose annual base salary or annual fee is less than $150,000 or (y) in respect of fringe benefits, increases in fringe benefits that do not result in a material increase in cost to the Company or its Subsidiaries; (B) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Benefit Plan or any action to fund or secure the payment of compensation or benefits under any Company Benefit Plan; (C) amend, adopt or terminate any Company Benefit Plan other than in connection with routine, immaterial or ministerial amendments to health and welfare plans that do not materially increase benefits or result in a material increase in administrative costs; or (D) enter into, modify or terminate any collective bargaining agreement or other agreement or arrangement with any labor union, works council, labor organization or other employee-representative body. (e) declare, set aside for payment or pay any dividend on, or make any other distribution in respect of its equity interests or otherwise make any payments to any holder of such interests in its capacity as suchsuch except in accordance with the terms of the Certificate of Designations of Series A Convertible Preferred Stock and the Certificate of Designations of Series B Convertible Preferred Stock; (f) take or fail to take any action the result of which would cause the creation of an Encumbrance on any of its equity interests; (g) make any material change to its financial reporting and accounting methods other than as required by a change in GAAP; (h) make any material change in its Tax reporting or Tax accounting methods, including making or changing any material Tax elections except as required by applicable Law; (i) acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner; (j) take any action to liquidate, dissolve, or wind up its business; (k) take any action that would require the consent of the Purchasers as the holder of the Series B C Preferred Stock pursuant to the Certificate of Designations if such action were to occur after the Closing; or (l) commit itself to do any of the foregoing.

Conduct of the Business of Company. From the date hereof until the Closing Date, except (a) as expressly permitted by this Agreement, (b) as required by Law, or (c) with the written consent of the Purchasers Purchaser (such consent not to be unreasonably withheld, conditioned or delayed), the Company shall conduct its business and operations in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (i) preserve intact its present business organization; (ii) maintain good relationships with its vendors, suppliers, and others having material business relationships with it; and (iii) manage its working capital in the ordinary course of business consistent with past practice. Without limiting the generality of the foregoing, and, except as contemplated in this Agreement or as described in Schedule 5.5, during the period from the date of this Agreement through the Closing Date, without the prior written consent of the Purchasers Purchaser (which consent shall not be unreasonably withheld or delayed), the Company shall not, and shall not permit any of its Subsidiaries to: (a) amend any of its Charter Documents; (b) split, combine, subdivide or reclassify any of its equity securities; (c) authorize, sell, issue or grant any equity securities or sell, issue or grant any option, warrant or right to acquire any equity securities or sell, issue or grant any security convertible into or exchangeable for equity securities, or sell, transfer or dispose of, or grant or permit any Encumbrance on, any equity interest; (d) except as required pursuant to applicable Law or the terms of any Company Benefit Plan in existence as of the date hereof, (A) make or grant any increases in the compensation or fringe benefits of any current or former employee or service provider of the Company or its Subsidiaries except in the ordinary course of business consistent with past practice (x) for current employees whose annual base salary or annual fee is less than $150,000 or (y) in respect of fringe benefits, increases in fringe benefits that do not result in a material increase in cost to the Company or its Subsidiaries; (B) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Benefit Plan or any action to fund or secure the payment of compensation or benefits under any Company Benefit Plan; (C) amend, adopt or terminate any Company Benefit Plan other than in connection with routine, immaterial or ministerial amendments to health and welfare plans that do not materially increase benefits or result in a material increase in administrative costs; or (D) enter into, modify or terminate any collective bargaining agreement or other agreement or arrangement with any labor union, works council, labor organization or other employee-representative body. (e) declare, set aside for payment or pay any dividend on, or make any other distribution in respect of its equity interests or otherwise make any payments to any holder of such interests in its capacity as such; (f) take or fail to take any action the result of which would cause the creation of an Encumbrance on any of its equity interests; (g) make any material change to its financial reporting and accounting methods other than as required by a change in GAAP; (h) make any material change in its Tax reporting or Tax accounting methods, including making or changing any material Tax elections except as required by applicable Law; (i) acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner; (j) take any action to liquidate, dissolve, or wind up its business; (k) take any action that would require the consent of the Purchasers Purchaser as the holder of the Series B Preferred Stock pursuant to the Certificate of Designations if such action were to occur after the Closing; or (l) commit itself to do any of the foregoing.

Conduct of the Business of Company. From the date hereof until the Closing Date, except (a) as expressly permitted by this Agreement, (b) as required by Law, or (c) with the written consent of the Purchasers Purchaser (such consent not to be unreasonably withheld, conditioned or delayed), the Company shall conduct its business and operations in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (i) preserve intact its present business organization; (ii) maintain good relationships with its vendors, suppliers, and others having material business relationships with it; and (iii) manage its working capital in the ordinary course of business consistent with past practice. Without limiting the generality of the foregoing, and, except as contemplated in this Agreement or as described in Schedule 5.5, during the period from the date of this Agreement through the Closing Date, without the prior written consent of the Purchasers Purchaser (which consent shall not be unreasonably withheld or delayed), the Company shall not, and shall not permit any of its Subsidiaries to: (a) amend any of its Charter Documents; (b) split, combine, subdivide or reclassify any of its equity securities; (c) authorize, sell, issue or grant any equity securities or sell, issue or grant any option, warrant or right to acquire any equity securities or sell, issue or grant any security convertible into or exchangeable for equity securities, or sell, transfer or dispose of, or grant or permit any Encumbrance on, any equity interest; (d) except as required pursuant to applicable Law or the terms of any Company Benefit Plan in existence as of the date hereof, (A) make or grant any increases in the compensation or fringe benefits of any current or former employee or service provider of the Company or its Subsidiaries except in the ordinary course of business consistent with past practice (x) for current employees whose annual base salary or annual fee is less than $150,000 or (y) in respect of fringe benefits, increases in fringe benefits that do not result in a material increase in cost to the Company or its Subsidiaries; (B) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Benefit Plan or any action to fund or secure the payment of compensation or benefits under any Company Benefit Plan; (C) amend, adopt or terminate any Company Benefit Plan other than in connection with routine, immaterial or ministerial amendments to health and welfare plans that do not materially increase benefits or result in a material increase in administrative costs; or (D) enter into, modify or terminate any collective bargaining agreement or other agreement or arrangement with any labor union, works council, labor organization or other employee-representative body. (e) declare, set aside for payment or pay any dividend on, or make any other distribution in respect of its equity interests or otherwise make any payments to any holder of such interests in its capacity as suchsuch except in accordance with the terms of the Certificate of Designations of Series A Convertible Preferred Stock and the Certificate of Designations of Series B Convertible Preferred Stock; (f) take or fail to take any action the result of which would cause the creation of an Encumbrance on any of its equity interests; (g) make any material change to its financial reporting and accounting methods other than as required by a change in GAAP; (h) make any material change in its Tax reporting or Tax accounting methods, including making or changing any material Tax elections except as required by applicable Law; (i) acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner; (j) take any action to liquidate, dissolve, or wind up its business; (k) take any action that would require the consent of the Purchasers Purchaser as the holder of the Series B C Preferred Stock pursuant to the Certificate of Designations if such action were to occur after the Closing; or (l) commit itself to do any of the foregoing.

Conduct of the Business of Company. From the date hereof until the Closing Date, except (a) as expressly permitted by this Agreement, (b) as required by Law, or (c) with the written consent of the Purchasers Purchaser (such consent not to be unreasonably withheld, conditioned or delayed), the Company shall conduct its business and operations in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (i) preserve intact its present business organization; (ii) maintain good relationships with its vendors, suppliers, and others having material business relationships with it; and (iii) manage its working capital in the ordinary course of business consistent with past practice. Without limiting the generality of the foregoing, and, except as contemplated in this Agreement or as described in Schedule 5.5, during the period from the date of this Agreement through the Closing Date, without the prior written consent of the Purchasers Purchaser (which consent shall not be unreasonably withheld or delayed), the Company shall not, and shall not permit any of its Subsidiaries to: (a) amend any of its Charter Documents; (b) split, combine, subdivide or reclassify any of its equity securities; (c) authorize, sell, issue or grant any equity securities or sell, issue or grant any option, warrant or right to acquire any equity securities or sell, issue or grant any security convertible into or exchangeable for equity securities, or sell, transfer or dispose of, or grant or permit any Encumbrance on, any equity interest, except with respect to the offer and sale of (i) up to $15,000,000 in the aggregate of additional Series A Preferred Stock pursuant to the Backstop Agreements, or (ii) up to $50,000,000 in the aggregate of Series B Preferred Stock (as defined in the Certificate of Designations), in each case of the foregoing clauses (i) and (ii), as the Company deems appropriate; (d) except as required pursuant to applicable Law or the terms of any Company Benefit Plan in existence as of the date hereof, (A) make or grant any increases in the compensation or fringe benefits of any current or former employee or service provider of the Company or its Subsidiaries except in the ordinary course of business consistent with past practice (x) for current employees whose annual base salary or annual fee is less than $150,000 or (y) in respect of fringe benefits, increases in fringe benefits that do not result in a material increase in cost to the Company or its Subsidiaries; (B) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Benefit Plan or any action to fund or secure the payment of compensation or benefits under any Company Benefit Plan; (C) amend, adopt or terminate any Company Benefit Plan other than in connection with routine, immaterial or ministerial amendments to health and welfare plans that do not materially increase benefits or result in a material increase in administrative costs; or (D) enter into, modify or terminate any collective bargaining agreement or other agreement or arrangement with any labor union, works council, labor organization or other employee-representative body. (e) declare, set aside for payment or pay any dividend on, or make any other distribution in respect of its equity interests or otherwise make any payments to any holder of such interests in its capacity as such; (f) take or fail to take any action the result of which would cause the creation of an Encumbrance on any of its equity interests; (g) make any material change to its financial reporting and accounting methods other than as required by a change in GAAP; (h) make any material change in its Tax reporting or Tax accounting methods, including making or changing any material Tax elections except as required by applicable Law; (i) acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner; (j) take any action to liquidate, dissolve, or wind up its business; (k) take any action that would require the consent of the Purchasers Purchaser as the holder of the Series B A Preferred Stock pursuant to the Certificate of Designations if such action were to occur after the Closing; or (l) commit itself to do any of the foregoing.

Conduct of the Business of Company. From the date hereof until the Closing Date, except (a) as expressly permitted by this Agreement, (b) as required by Law, or (c) with the written consent of the Purchasers (such consent not to be unreasonably withheld, conditioned or delayed), the Company shall conduct its business and operations in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (i) preserve intact its present business organization; (ii) maintain good relationships with its vendors, suppliers, and others having material business relationships with it; and (iii) manage its working capital in the ordinary course of business consistent with past practice. Without limiting the generality of the foregoing, and, except as contemplated in this Agreement or as described in Schedule 5.5, during the period from the date of this Agreement through the Closing Date, without the prior written consent of the Purchasers (which consent shall not be unreasonably withheld or delayed), the Company shall not, and shall not permit any of its Subsidiaries to: (a) amend any of its Charter Documents; (b) split, combine, subdivide or reclassify any of its equity securities; (c) authorize, sell, issue or grant any equity securities or sell, issue or grant any option, warrant or right to acquire any equity securities or sell, issue or grant any security convertible into or exchangeable for equity securities, or sell, transfer or dispose of, or grant or permit any Encumbrance on, any equity interest, except with respect to the offer and sale of up to $50,000,000 in the aggregate of Series A Preferred Stock (as defined in the Certificate of Designations) as the Company deems appropriate; (d) except as required pursuant to applicable Law or the terms of any Company Benefit Plan in existence as of the date hereof, (A) make or grant any increases in the compensation or fringe benefits of any current or former employee or service provider of the Company or its Subsidiaries except in the ordinary course of business consistent with past practice (x) for current employees whose annual base salary or annual fee is less than $150,000 or (y) in respect of fringe benefits, increases in fringe benefits that do not result in a material increase in cost to the Company or its Subsidiaries; (B) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Benefit Plan or any action to fund or secure the payment of compensation or benefits under any Company Benefit Plan; (C) amend, adopt or terminate any Company Benefit Plan other than in connection with routine, immaterial or ministerial amendments to health and welfare plans that do not materially increase benefits or result in a material increase in administrative costs; or (D) enter into, modify or terminate any collective bargaining agreement or other agreement or arrangement with any labor union, works council, labor organization or other employee-representative body. (e) declare, set aside for payment or pay any dividend on, or make any other distribution in respect of its equity interests or otherwise make any payments to any holder of such interests in its capacity as such; (f) amend, modify or terminate, or waive any provision of, the Stockholder Support Agreement; (g) take or fail to take any action the result of which would cause the creation of an Encumbrance on any of its equity interests; (gh) make any material change to its financial reporting and accounting methods other than as required by a change in GAAP; (hi) make any material change in its Tax reporting or Tax accounting methods, including making or changing any material Tax elections except as required by applicable Law; (ij) acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner; (jk) take any action to liquidate, dissolve, or wind up its business; (kl) take any action that would require the consent of the Purchasers as the holder of the Series B Preferred Stock pursuant to the Certificate of Designations if such action were to occur after the Closing; or (lm) commit itself to do any of the foregoing.

Conduct of the Business of Company. From The Company agrees that, except as set forth in the Company Disclosure Schedule, or as permitted, required or specifically contemplated by, or otherwise described in, this Agreement or otherwise consented to or approved in writing by Parent (which consent or approval shall not be unreasonably withheld or delayed), during the period commencing on the date hereof until the Closing Dateearlier of (1) the termination of this Agreement in accordance with Article VII, except (2) the Effective Time or (3) the Changeover Time: (a) as expressly permitted by this Agreement, (b) as required by Law, or (c) with the written consent of the Purchasers (such consent not to be unreasonably withheld, conditioned or delayed), the Company and each of its Subsidiaries shall conduct its business and their respective operations in the all material respects only according to their ordinary and usual course of business consistent with past practice and shall use their commercially reasonable efforts to (i) preserve intact its present their respective business organization; (ii) , keep available the services of their officers, employees and consultants and maintain good satisfactory relationships with its vendorslicensors, suppliers, distributors, clients, customers, joint venture partners and others having material significant business relationships with it; them; (b) by way of illustration and not limitation, neither the Company nor any of its Subsidiaries shall: (1) make any change in or amendment to the Company's Charter Documents or increase the number of members on the Company Board of Directors beyond the number in office as of the date of this Agreement; (2) issue, sell, pledge, dispose of or encumber, or authorize to issue or sell, pledge, dispose of or encumber, any shares of its capital stock or any other securities, or issue or sell, or authorize to issue or sell, any securities convertible into, or options, warrants, convertible securities or other rights to purchase or subscribe to, or enter into any arrangement or contract with respect to the issuance or sale of, any shares of its capital stock or any other securities, or make any other changes in its capital structure, other than (A) the issuance of Shares upon the exercise of Company Options and Company Warrants, in each case, outstanding on the date hereof, in accordance with their present terms, (B) the issuance of Shares upon the conversion of other Company Derivative Securities outstanding on June 30, 2001, or (C) issuances by a wholly-owned Subsidiary of the Company of capital stock to such Subsidiary's parent, the Company or another wholly-owned Subsidiary of the Company. (3) declare, pay or set aside any dividend or other distribution (whether in cash, stock or property or any combination thereof) or payment with respect to, or split, combine, redeem or reclassify, or purchase or otherwise acquire, any shares of its capital stock or its other securities, other than dividends payable by a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary of the Company; (4) other than in connection with transactions permitted by Section 5.1(b)(5), incur any capital expenditures or any obligations or liabilities in respect thereof, except for those (A) contemplated by the capital expenditure budgets for the Company and its Subsidiaries made available to Parent prior to the date hereof, (B) incurred in the ordinary course of business of the Company and its Subsidiaries or (C) not otherwise described in clauses (A) and (iiiB) manage its working capital which, as to this clause (C), do not exceed $100,000 in the aggregate; (5) acquire (whether pursuant to merger, stock or asset purchase or otherwise) in one transaction or series of related transactions (A) any assets (including any equity interests) having a fair market value in excess of $100,000, in the aggregate, other than acquisitions of inventory. supplies, licenses, services and raw materials in the ordinary course of business consistent with past practice. Without limiting the generality , or (B) all or substantially all of the foregoingequity interests of any Person or any business or division of any Person having a fair market value in excess of $100,000, andin the aggregate; (6) (A) grant any options under the Company Stock Plans or otherwise grant any Company Option, Company Award, or other Company Derivative Security or (B) establish, adopt, enter into or amend any bonus, profit sharing or similar plan, agreement, trust, fund, policy or arrangement, or (C) except as contemplated disclosed in this Agreement Section 5.1(b)(6) of the Company Disclosure Schedule, and whether or not required under existing employee and director benefit plans, agreements or arrangements as described in Schedule 5.5, during the period from effect on the date of this Agreement through the Closing DateAgreement, without the prior written consent of the Purchasers (which consent shall not be unreasonably withheld or delayed), the Company shall not, and shall not permit any of its Subsidiaries to: (a) amend any of its Charter Documents; (b) split, combine, subdivide or reclassify any of its equity securities; (c) authorize, sell, issue or grant any equity securities or sell, issue or grant any option, warrant or right to acquire any equity securities or sell, issue or grant any security convertible into or exchangeable for equity securities, or sell, transfer or dispose of, or grant or permit any Encumbrance on, any equity interest; (d) except as required pursuant to applicable Law or the terms of any Company Benefit Plan in existence as of the date hereof, (A) make or grant any increases in increase the compensation or fringe benefits of any current of its directors, officers or employees or grant any severance or termination pay not currently required to be paid under existing severance plans or enter into any employment, consulting or severance agreement or arrangement with any present, former or prospective director, officer or other employee or service provider of the Company or any of its Subsidiaries, or establish, adopt, enter into or amend in any material respect or terminate any collective bargaining, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees, except as may be required by law; (7) transfer, lease, license, guarantee, sell, mortgage, pledge, renovate, rehabilitate, dispose of, encumber or subject to any Lien, any assets of the Company or any of its Subsidiaries except for (A) sales of assets or Liens made or granted in the ordinary course of business, and (B) sales of assets which are not, individually or in the aggregate, material to the Company and its Subsidiaries, taken as a whole); (8) except as required by applicable law or U.S. GAAP and after notice to Parent, 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); (9) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger) or any agreement relating to a Company Acquisition Proposal, except as provided for in Section 7.1(c)(4); (10) (A) incur any material indebtedness for borrowed money, issue any debt securities, or assume or guarantee any such indebtedness of another Person (other than indebtedness owing to or guarantees of indebtedness owing to the Company or any direct or indirect wholly-owned Subsidiary of the Company) or endorse or otherwise become responsible for the obligations of any Person or (B) make any loans or advances to any other Person, other than to the Company or to any direct or indirect wholly-owned Subsidiary of the Company, except, in the case of clause (A), for borrowings (i) in the ordinary course of business consistent with past practice practice, including without limitation borrowings under existing credit facilities in the ordinary course of business consistent with past practice, (xii) for current employees whose annual base salary or annual fee is less than $150,000 in connection with the Transactions, or (yiii) in respect connection with financing activities relating to activities described in Section 5.1(b) of fringe the Company Disclosure Schedule; (11) except as required by the preexisting agreements set forth on Section 5.1(b)(11) of the Company Disclosure Schedule, accelerate the payment, right to payment or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option (including any options issued pursuant to the Company Stock Plans or under any Company Award), insurance or other compensation or benefits, increases or amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any Subsidiary to amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, any of its securities or any securities of its subsidiaries, including, without limitation, Shares, or any option, warrant or right, directly or indirectly, to acquire any such securities; (12) settle, pay or discharge any claim, suit or other action brought or threatened against the Company with respect to or arising out of a stockholder's equity interest in fringe benefits the Company, or pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) over $50,000, individually or in the aggregate, other than the payment, discharge or satisfaction (A) of any such claims, liabilities or obligations in the ordinary course of business and consistent with past practice or (B) of claims, liabilities or obligations reflected on the consolidated financial statements and fully reserved against as of the date of this Agreement; provided, in each case, that do any such settlement provides for a complete release of the Company and its Subsidiaries and imposes no obligation on the Company or its Subsidiaries other than the payment of money; (13) enter into any agreement, understanding or commitment that materially restrains, limits or impedes the Company's or any of its Subsidiaries' ability to compete with or conduct any business or line of business, including, but not result limited to, geographic limitations on the Company's or any of its Subsidiaries' activities; (14) plan, announce, implement or effect any material reduction in a material increase in cost to labor force, lay-off, early retirement program, severance program or other program or effort concerning the termination of employment of employees of the Company or its Subsidiaries; , provided, however, that routine employee terminations for cause shall not be considered subject to this clause (B14); (15) take any action to accelerate including, without limitation, the vesting or payment adoption of any compensation stockholder rights plan or amendments to its Charter Documents, which would, directly or indirectly, restrict or impair the ability of Parent to vote, or otherwise to exercise the rights and receive the benefits under of a stockholder with respect to, securities of the Company that may be acquired or controlled by Parent or Acquisition Sub or, except as provided in preexisting agreements set forth on Section 5.1(b)(15) of the Company Disclosure Schedule, permit any stockholder to acquire securities of the Company Benefit Plan on a basis not available to Parent or Acquisition Sub in the event that Parent or Acquisition Sub were to acquire any action to fund or secure shares of the payment of compensation or benefits under any Company Benefit Plan; Company's capital stock; (C16) amendmaterially modify, adopt amend or terminate any Company Benefit Plan other than in connection with routine, immaterial material contract to which it is a party or ministerial amendments to health and welfare plans that do not materially increase benefits or result in a material increase in administrative costs; or (D) enter into, modify or terminate waive any collective bargaining agreement or other agreement or arrangement with any labor union, works council, labor organization or other employee-representative body. (e) declare, set aside for payment or pay any dividend on, or make any other distribution in respect of its equity interests material rights or otherwise make any payments to any holder claims except, in each case, in the ordinary course of such interests in its capacity as suchbusiness consistent with past practice; (f17) take make any tax election or fail settle or compromise any United States federal, state, local or non-United States tax liability if the effect thereof would be adverse in any material respect to take any action the result of which would cause Company; or (18) neither the creation of an Encumbrance on Company nor any of its equity interests; (g) make any material change to its financial reporting and accounting methods other than as required by a change in GAAP; (h) make any material change in its Tax reporting or Tax accounting methods, including making or changing any material Tax elections except as required by applicable Law; (i) acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assetsSubsidiaries will take, or by any other manner; (j) take any action agree to liquidatecommit to take, dissolve, or wind up its business; (k) take any action that would require the consent or is reasonably likely to result in any of the Purchasers as conditions to the holder Offer set forth in Annex I or any of the Series B Preferred Stock pursuant conditions to the Certificate Merger set forth in Article VI not being satisfied, or would make any representation or warranty of Designations if the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company, Parent, Acquisition Sub or the holders of Shares to consummate the Offer or the Merger in accordance with the terms hereof or materially delay such action were to occur after the Closingconsummation; orand (l19) commit itself neither the Company nor any of its Subsidiaries will enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing, or agree, in writing or otherwise, to take any of the foregoing actions.

Conduct of the Business of Company. From the date hereof until the Closing Date, except (ai) as expressly permitted by this Agreement, (bii) as required by LawApplicable Laws, or (ciii) with the written consent of the Purchasers Buyer (such consent not to be unreasonably withheld, conditioned or delayed), the Company shall conduct its business and operations in the ordinary course of business consistent with past practice and use and use commercially reasonable efforts to (i1) preserve intact its present business organization; (ii2) maintain good relationships with its vendors, suppliers, and others having material business relationships with it; and (iii3) manage its working capital in the ordinary course of business consistent with past practice. Without limiting the generality of the foregoing, and, except as contemplated in this Agreement or as described in Schedule 5.5Agreement, during the period from the date of this Agreement through the Closing Date, without the prior written consent of the Purchasers Buyer (which consent shall not be unreasonably withheld or delayed), the Company shall not, and shall not permit any of its Subsidiaries to: (a) i. amend any of its Charter Documents; (b) ii. split, combine, subdivide or reclassify any of its equity securities; (c) iii. authorize, sell, issue or grant any equity securities or sell, issue or grant any option, warrant or right to acquire any equity securities or sell, issue or grant any security convertible into or exchangeable for equity securities, or sell, transfer or dispose of, or grant or permit any Encumbrance Lien on, any equity interest; (d) , except as required pursuant to applicable Law upon the exercise or the terms conversion of any Company Benefit Plan in existence equity securities or any option warrant or right to acquire any equity securities outstanding as of the date hereof, (A) make or grant any increases in the compensation or fringe benefits of any current or former employee or service provider of the Company or its Subsidiaries except in the ordinary course of business consistent with past practice (x) for current employees whose annual base salary or annual fee is less than $150,000 or (y) in respect of fringe benefits, increases in fringe benefits that do not result in a material increase in cost to the Company or its Subsidiaries; (B) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Benefit Plan or any action to fund or secure the payment of compensation or benefits under any Company Benefit Plan; (C) amend, adopt or terminate any Company Benefit Plan other than in connection with routine, immaterial or ministerial amendments to health and welfare plans that do not materially increase benefits or result in a material increase in administrative costs; or (D) enter into, modify or terminate any collective bargaining agreement or other agreement or arrangement with any labor union, works council, labor organization or other employee-representative body.; (e) iv. declare, set aside for payment or pay any dividend on, or make any other distribution in respect of its equity interests or otherwise make any payments to any holder of such interests in its capacity as such; (f) v. take or fail to take any action action, the result of which would cause the creation of an Encumbrance a Lien on any of its equity interests; (g) vi. make any material change to its financial reporting and accounting methods other than as required by a change in GAAP; (h) vii. make any material change in its Tax reporting or Tax accounting methods, including making or changing any material Tax elections except as required by applicable Applicable Law; (i) viii. change its entity classification for Tax purposes; ix. acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner; (j) x. take any action to liquidate, dissolve, dissolve or wind up its business; (k) take any action that would require the consent of the Purchasers as the holder of the Series B Preferred Stock pursuant to the Certificate of Designations if such action were to occur after the Closing; or (l) xi. commit itself to do any of the foregoing.

Conduct of the Business of Company. From The Company agrees that, except as set forth in the Company Disclosure Schedule, or as permitted, required or specifically contemplated by, or otherwise described in, this Agreement or in the Divestco Disposition agreement or otherwise consented to or approved in writing by Parent (which consent or approval shall not be unreasonably withheld or delayed), during the period commencing on the date hereof until the Closing Date, except earlier of the termination of this Agreement or the Effective Time: (a) as expressly permitted by this Agreementthe Company and each of its Subsidiaries shall conduct their respective operations in all material respects only according to their ordinary and usual course of business consistent with past practice and shall use their commercially reasonable efforts to preserve intact their respective business organization, keep available the services of their officers, employees and consultants and maintain satisfactory relationships with licensors, suppliers, distributors, clients, customers, joint venture partners and others having significant business relationships with them; (b) by way of illustration and not limitation, neither the Company nor any of its Subsidiaries shall: (i) make any change in or amendment to the Company’s Charter Documents or increase the number of members on the Company Board of Directors beyond the number in office as required by Lawof the date of this Agreement; (ii) issue, sell, pledge, dispose of or encumber, or authorize to issue or sell, pledge, dispose of or encumber, any shares of its capital stock or any other securities, or issue or sell, or authorize to issue or sell, any securities convertible into, or options, warrants, convertible securities or other rights to purchase or subscribe to, or enter into any arrangement or contract with respect to the issuance or sale of, any shares of its capital stock or any other securities, or make any other changes in its capital structure, other than (A) the issuance of Shares upon the exercise of Company Options and Company Warrants, in each case, outstanding on the date hereof, in accordance with their present terms, (B) the issuance of Shares upon the conversion, exercise or vesting of other Company Derivative Securities outstanding on December 31, 2002, or (cC) with the written consent issuances by a wholly-owned Subsidiary of the Purchasers Company (other than Divestco) of capital stock to such consent not to be unreasonably withheld, conditioned or delayed)Subsidiary’s parent, the Company shall conduct or another wholly-owned Subsidiary of the Company (other than Divestco); or (D) the issuance or sale of Divestco Capital Stock pursuant to a Divestco Disposition. (iii) declare, pay or set aside any dividend or other distribution (whether in cash, stock or property or any combination thereof) or payment with respect to, or split, combine, redeem or reclassify, or purchase or otherwise acquire, any shares of its capital stock or its other securities other than intracompany transfers payable by a wholly owned Subsidiary of the Company to the Company in the ordinary course of business consistent with past practice. (iv) other than in connection with transactions permitted by Section 5.1(b)(v), incur any capital expenditures or any obligations or liabilities in respect thereof, except for those (A) contemplated by the capital expenditure budgets for the Company and operations its Subsidiaries made available to, and approved by, Parent prior to the date hereof, or (B) not otherwise described in clause (A) which, as to this clause (B), do not exceed $50,000 in the aggregate; (v) acquire (whether pursuant to merger, stock or asset purchase or otherwise) in one transaction or series of related transactions any Assets or Properties (including any equity interests) having a fair market value in excess of $25,000, in the aggregate, other than acquisitions of inventory, supplies, licenses, services and raw materials in the ordinary course of business consistent with past practice; (vi) (A) grant any options under the Company Stock Plans or otherwise grant any Company Option, Company Award, or other Company Derivative Security or (B) establish, adopt, enter into or amend any bonus, profit sharing or similar plan, agreement, trust, fund, policy or arrangement, or (C) except in the ordinary course of business consistent with past practice and use commercially reasonable efforts except to the extent (i1) preserve intact required under existing employee and director benefit plans, agreements or arrangements as in effect on the date of this Agreement or (2) as contemplated by Section 5.1(b)(vi) of the Company Disclosure Schedule with respect to severance payments, increase the compensation or fringe benefits of any of its present business organization; directors, officers or employees or grant any severance or termination pay not currently required to be paid under existing severance plans or enter into any employment, consulting or severance agreement or arrangement with any present, former or prospective director, officer or other employee of the Company or any of its Subsidiaries, or establish, adopt, enter into or amend in any material respect or terminate any collective bargaining, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees, except as may be required by law and upon prior written notice to Parent. (iivii) maintain good relationships with transfer, lease, license, guarantee, sell, mortgage, pledge, renovate, rehabilitate, dispose of, encumber or subject to any Lien, any assets of the Company or any of its vendors, suppliersSubsidiaries except for (A) sales of assets or Liens made or granted in the ordinary course of business, and others having (B) sales of assets which are not, individually or in the aggregate in excess of $25,000. (viii) except as required by applicable law or U.S. GAAP and after notice to Parent, 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); (ix) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger and the disposition of Divestco pursuant to a Divestco Disposition) or any agreement relating to a Company Acquisition Proposal, except as provided for in Section 7.1(c)(iv); (x) (A) incur any material business relationships with it; and indebtedness for borrowed money, issue any debt securities, or assume or guarantee any such indebtedness of another Person (iiiother than indebtedness owing to or guarantees of indebtedness owing to the Company or any direct or indirect wholly-owned Subsidiary of the Company(other than Divestco)) manage its working capital or endorse or otherwise become responsible for the obligations of any Person or (B) make any loans or advances to any other Person, other than to the Company or to any direct or indirect wholly-owned Subsidiary of the Company (other than Divestco), except, in the case of clause (A), for borrowings (1) in the ordinary course of business consistent with past practice. Without limiting , including without limitation borrowings under existing credit facilities in the generality ordinary course of business consistent with past practice, (2) in connection with the Transactions, or (3) in connection with financing activities relating to any activities described in Section 5.1(b)(x) of the foregoing, and, Company Disclosure Schedule; (xi) except as contemplated in this Agreement required by the preexisting agreements set forth on Section 5.1(b)(xi) of the Company Disclosure Schedule, accelerate the payment, right to payment or as described in Schedule 5.5vesting of any bonus, during severance, profit sharing, retirement, deferred compensation, stock option (including any options issued pursuant to the Company Stock Plans or under any Company Award), insurance or other compensation or benefits, or amend the terms or change the period from of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any Subsidiary to amend the date terms or change the period of this Agreement through the Closing Dateexercisability of, without the prior written consent of the Purchasers (which consent shall not be unreasonably withheld purchase, repurchase, redeem or delayed)otherwise acquire, the Company shall not, and shall not permit any of its Subsidiaries to: (a) amend securities or any securities of its Charter Documents; (b) splitsubsidiaries, combineincluding, subdivide without limitation, Shares, or reclassify any of its equity securities; (c) authorize, sell, issue or grant any equity securities or sell, issue or grant any option, warrant or right right, directly or indirectly, to acquire any equity securities or sell, issue or grant any security convertible into or exchangeable for equity such securities, or sell, transfer or dispose of, or grant or permit any Encumbrance on, any equity interest; (dxii) except as required pursuant settle, pay or discharge any claim, suit or other action brought or threatened against the Company with respect to applicable Law or arising out of a shareholder’s equity interest in the Company (other than in connection with the severance of employees or the terms termination of consulting agreements, in each case, as expressly contemplated herein), or pay, discharge or satisfy any Company Benefit Plan claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) over $10,000, individually or in existence as of the date hereofaggregate, other than the payment, discharge or satisfaction (A) make of any such claims, liabilities or grant any increases obligations in the compensation ordinary course of business and consistent with past practice or fringe benefits (B) of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company furnished to Parent prior to the date of this Agreement; provided, in each case, that any current such settlement provides for a complete release of the Company and its Subsidiaries and imposes no obligation on the Company or former employee its Subsidiaries other than the payment of money; (xiii) enter into any agreement, understanding or service provider commitment that materially restrains, limits or impedes the Company’s or any of its Subsidiaries’ ability to compete with or conduct any business or line of business, including, but not limited to, geographic limitations on the Company’s or any of its Subsidiaries’ activities, in each case other than with respect to agreements solely as to Divestco pursuant to a Divestco Disposition; (xiv) plan, announce, implement or effect any material reduction in labor force, lay-off, early retirement program, severance program or other program or effort concerning the termination of employment of employees of the Company or its Subsidiaries Subsidiaries, provided, however, that (A) routine employee terminations for cause, (B) terminating of Divestco employees pursuant to a Divestco Disposition, (C) the termination of persons identified in Section 5.1(b)(xiv) of the Company Disclosure Schedule which do not result in the payment to such persons in excess of the amount set forth therein or, if no amount is set forth therein, then not in excess of $10,000 per person without the Parent’s consent, which consent will not be unreasonably refused or delayed in each case, shall not be considered subject to this clause (xiv); (xv) knowingly take any action or fail to take any action which action or failure to act would prevent, or would be reasonably likely to prevent, the Merger from qualifying as a Section 368 Reorganization; (xvi) take any action including, without limitation, the adoption of any shareholder rights plan or amendments to its Charter Documents, which would, directly or indirectly, restrict or impair the ability of Parent to vote, or otherwise to exercise the rights and receive the benefits of a shareholder with respect to, securities of the Company that may be acquired or controlled by Parent or Merger Sub or, except as provided in preexisting agreements set forth on Section 5.1(b)(xvi) of the Company Disclosure Schedule, permit any shareholder to acquire securities of the Company on a basis not available to Parent or Merger Sub in the event that Parent or Merger Sub were to acquire any shares of the Company’s capital stock; (xvii) materially modify, amend or terminate any material Contract, including without limitation, Contracts of the type identified in Section 3.20 (a)(x), each of which shall be presumed to be material for purposes of this clause, to which it is a party, or waive any of its material rights or claims except, in each case, in the ordinary course of business consistent with past practice (x) for current employees whose annual base salary or annual fee is less than $150,000 or (y) in respect of fringe benefits, increases in fringe benefits that do not result in a material increase in cost and upon prior written notice to the Company or its Subsidiaries; (B) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Benefit Plan or any action to fund or secure the payment of compensation or benefits under any Company Benefit Plan; (C) amend, adopt or terminate any Company Benefit Plan other than in connection with routine, immaterial or ministerial amendments to health and welfare plans that do not materially increase benefits or result in a material increase in administrative costs; or (D) enter into, modify or terminate any collective bargaining agreement or other agreement or arrangement with any labor union, works council, labor organization or other employee-representative body. (e) declare, set aside for payment or pay any dividend on, or make any other distribution in respect of its equity interests or otherwise make any payments to any holder of such interests in its capacity as suchParent; (f) take or fail to take any action the result of which would cause the creation of an Encumbrance on any of its equity interests; (gxviii) make any material change to its financial reporting and accounting methods other than as required by a change Tax election or settle or compromise any United States federal, state, local or non-United States Tax liability if the effect thereof would be adverse in GAAP; (h) make any material change in its Tax reporting or Tax accounting methods, including making or changing any material Tax elections except as required by applicable Law; (i) acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner; (j) take any action to liquidate, dissolve, or wind up its business; (k) take any action that would require the consent of the Purchasers as the holder of the Series B Preferred Stock pursuant respect to the Certificate of Designations if such action were to occur after the ClosingCompany; or (lxix) commit itself agree, in writing or otherwise, to do take any of the foregoingforegoing actions. (c) The Company shall promptly implement the cost saving measures set forth in Section 5.1(c) of the Company Disclosure Schedule and such other cost savings measures as Parent may reasonably request, which request will not unreasonably refused or delayed. (d) The Company shall promptly negotiate and implement the Company debt restructuring outlined in Exhibit 5.1(d) to this Agreement (the “Company Debt Restructuring”). The Company shall use commercially reasonable efforts to inform Parent of the status of such negotiations and shall provide Parent with the opportunity to participate in all negotiations with respect to the Company Debt Restructuring from and to the extent Parent so desires.

Conduct of the Business of Company. From During the period from the date hereof until of this Agreement to the Closing DateEffective Time, and except as may be required or specifically permitted pursuant to this Agreement, Seller covenants that the Company: (a) as expressly permitted by this Agreementshall, (b) as required by Lawand shall cause each of its subsidiaries to, or (c) with the written consent of the Purchasers (such consent not to be unreasonably withheld, conditioned or delayed), the Company shall conduct its business and operations engage in transactions only in the ordinary course of business consistent with past practice practices; (b) shall use reasonable efforts, and cause each of its subsidiaries to use commercially reasonable efforts efforts, to (i) preserve intact its present business organization; (ii) organization and goodwill, keep available the services of its officers and employees as a group and maintain good satisfactory relationships with its vendorsborrowers, suppliers, other customers and others having material business relationships with it; ; (c) shall, at Buyer's request and expense, reasonably cooperate with Buyer with respect to preparation for the acquisition and integration of Company by Buyer, and Company shall cause its officers and employees to confer on a regular basis with one or more representatives of Buyer to report on operational and related matters; (d) shall not declare or pay any dividends on or make any other distributions in respect of any shares of Company Capital Stock, except for (i) dividends by Company after the date hereof and prior to the Closing Date in an aggregate amount not in excess of the sum of (A) consolidated net income of the Company and its subsidiaries for the period commencing on October 1, 1996 and ending on the Closing Date, plus (B) all litigation reserves of the Company and its subsidiaries as of the Closing Date, plus (C) all reserves for taxes (excluding deferred taxes) of the Company and its subsidiaries as of the Closing Date, and (iiiii) manage dividends by any wholly-owned subsidiary of Company to Company or any other wholly-owned subsidiary of Company; (e) shall not adopt any amendments to its working Articles of Incorporation or other charter documents or by-laws; (f) shall not issue, deliver or sell any shares (whether original issuance or from treasury shares) of its capital stock or securities convertible into or exercisable for shares of its capital stock (or permit any of its subsidiaries to issue, deliver or sell any shares of such subsidiaries' capital stock or securities convertible into or exercisable for shares of such subsidiaries' capital stock), or effect any stock split, reverse stock split, recapitalization, reclassification or similar transaction or otherwise change its equity capitalization as it exists on the date hereof; (g) shall not, and shall not permit any of its subsidiaries to, (i) implement any increase or improvement in base compensation, bonuses of any kind or benefits under Company Benefit Plans, except as contemplated by the Company/Seller Change of Control Arrangements dated December 17, 1996 (the "Change Arrangements") and except normal merit increases in accordance with present practices; or (ii) grant or award any options, warrants, conversion rights or other rights not existing on the date hereof to acquire any shares of its capital stock; (h) shall not purchase, redeem or otherwise acquire, or permit any of its subsidiaries to purchase, redeem or otherwise acquire, any shares of its capital stock or any securities convertible into or exercisable for any shares of its capital stock; (i) shall not incur, or permit any of its subsidiaries to incur, any additional debt obligation or other obligation for borrowed money, or guaranty, or permit any of its subsidiaries to guaranty, any additional debt obligation or other obligation for borrowed money, except in the ordinary course of business consistent with past practice. Without limiting the generality practices; (j) shall not, and shall not permit any of the foregoingits subsidiaries to, andchange its methods of accounting in effect at December 31, 1995, except as contemplated may be required by changes in this Agreement or GAAP as described concurred in Schedule 5.5by Seller's independent auditors, during the period from the date of this Agreement through the Closing Date, without the prior written consent of the Purchasers (which consent shall not be unreasonably withheld or delayed), the and Company shall not, and shall not permit any of its Subsidiaries subsidiaries to:, change its fiscal year; (ak) amend shall not, with respect to itself or any of its Charter Documents; (b) splitsubsidiaries, combine, subdivide or reclassify any of its equity securities; (c) authorize, sellrecommend, issue propose or grant any equity securities announce an intention to authorize, recommend or sell, issue or grant any option, warrant or right to acquire any equity securities or sell, issue or grant any security convertible into or exchangeable for equity securitiespropose, or sell, transfer or dispose of, or grant or permit any Encumbrance onenter into an agreement with respect to, any equity interest; (d) except as required pursuant to applicable Law or the terms of any Company Benefit Plan in existence as of the date hereof, (A) make or grant any increases in the compensation or fringe benefits of any current or former employee or service provider of the Company or its Subsidiaries except in the ordinary course of business consistent with past practice (x) for current employees whose annual base salary or annual fee is less than $150,000 or (y) in respect of fringe benefits, increases in fringe benefits that do not result in a material increase in cost to the Company or its Subsidiaries; (B) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Benefit Plan or any action to fund or secure the payment of compensation or benefits under any Company Benefit Plan; (C) amend, adopt or terminate any Company Benefit Plan other than in connection with routine, immaterial or ministerial amendments to health and welfare plans that do not materially increase benefits or result in a material increase in administrative costs; or (D) enter into, modify or terminate any collective bargaining agreement or other agreement or arrangement with any labor union, works council, labor organization or other employee-representative body. (e) declare, set aside for payment or pay any dividend on, or make any other distribution in respect of its equity interests or otherwise make any payments to any holder of such interests in its capacity as such; (f) take or fail to take any action the result of which would cause the creation of an Encumbrance on any of its equity interests; (g) make any material change to its financial reporting and accounting methods other than as required by a change in GAAP; (h) make any material change in its Tax reporting or Tax accounting methods, including making or changing any material Tax elections except as required by applicable Law; (i) acquire any Person or other business organization, division or business by merger, consolidation, purchase and assumption transaction or business combination (other than the Acquisition Merger), any acquisition of an equity interest a material amount of assets or assets, securities or by assumption of liabilities or any other mannerdisposition of a material amount of assets or securities; (jl) take shall not, and shall not permit any action to liquidateof its subsidiaries to, dissolve, or wind up its business; (k) take any action that is intended or would require the consent reasonably be expected to result in (i) any of the Purchasers as the holder of the Series B Preferred Stock pursuant Seller's or Company's representations or warranties contained in this Agreement being or becoming untrue in any material respect at any time prior to the Certificate of Designations if such action were to occur after the Closing; or Effective Time, (lii) commit itself to do any of the foregoingconditions to the obligations of the parties set forth in Article VI not being satisfied or (iii) any violation of any of its other agreements or commitments contained in this Agreement; and (m) shall not, and shall not permit any of its subsidiaries to, agree, in writing or otherwise, to take any of the actions that are described above in this Section 5.01 as prohibited hereunder.