Common use of Conduct of the Company and the Subsidiaries Clause in Contracts

Conduct of the Company and the Subsidiaries. The Company covenants and agrees that, between the date of this Agreement and the Effective Time or the date, if any, on which this Agreement is terminated pursuant to Section 10.1, except (i) as may be required by Law, (ii) as may be agreed in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) as may be expressly permitted pursuant to this Agreement, (iv) as set forth in Section 7.1 of the Company Disclosure Letter, (v) for the payment of the Reimbursement to Merger Sub or (vi) for the payment of the Company Termination Fee to Merger Sub, the business of the Company and its Subsidiaries shall be conducted only, and such entities shall not take any action except, in the ordinary course of business and in a manner consistent with past practice in all material respects; and the Company and its Subsidiaries shall use their reasonable best efforts to (x) preserve substantially intact the Company’s and its Subsidiaries’ business organization, (y) maintain existing relations with customers, suppliers, creditors and business partners that are integral to the operation of their business as presently conducted and (z) keep available the services of those of their present officers, employees and consultants who are integral to the operation of their businesses as presently conducted; provided, however, that any action taken or not taken by the Company or its Subsidiaries in express compliance with a matter specifically addressed by a specific provision of Sections 7.1(a) through 7.1(s) shall not be deemed a breach of this sentence unless such action would constitute a breach of such specific provision of Sections 7.1(a) through 7.1(s) below. Furthermore, other than (i) as set forth in Section 7.1 of the Company Disclosure Letter, (ii) the payment of the Reimbursement to Merger Sub and (iii) the payment of the Company Termination Fee to Merger Sub, without the prior written consent of Parent, the Company shall not, and shall cause its Subsidiaries not to: (a) amend or otherwise change the Articles of Incorporation, the Bylaws or any Subsidiary Document; (b) except for transactions among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries, or as otherwise contemplated in Section 7.1(f), issue, sell, pledge, dispose, encumber or grant any shares or equity interests of its or its Subsidiaries’ capital stock, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of its or its Subsidiaries’ capital stock; provided, however, that the Company may issue Shares (i) upon the exercise of any Company Stock Option outstanding as of the date of this Agreement, (ii) issuable under the Company ESPP after the date of this Agreement pursuant to Section 3.8(e), (iii) in connection with the vesting or redemption of any Company Restricted Stock Unit and Company Performance Stock Unit outstanding as of the date of this Agreement in accordance with their terms or (iv) in connection with the redemption of any notional interests deemed invested in Shares under the Company Deferred Compensation Plan, as amended and restated effective as of January 31, 2014; (c) redeem, purchase or otherwise acquire, or propose or offer to redeem, purchase or otherwise acquire, any outstanding shares of capital stock or any other equity interests of the Company or any of its Subsidiaries, except as required pursuant to any Company Benefit Plans in effect as of the date of this Agreement; (d) declare, authorize, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to the Company’s or any of its Subsidiaries’ capital stock, other than dividends paid by any Subsidiary of the Company to the Company or any wholly-owned Subsidiary of the Company; (e) except as required pursuant to existing written agreements (true and complete copies of which have been provided to Parent) or Company Benefit Plans in effect as of the date of this Agreement, as otherwise required by Law or this Agreement, or provided on Section 7.1(e) of the Company Disclosure Schedule, (i) increase the compensation or other benefits payable or to become payable to directors, employees, consultants, independent contractors or executive officers of the Company or any of its Subsidiaries, except for (A) from and after March 1, 2016, increases in compensation or other benefits made in the ordinary course of business consistent with past practice of up to 10% for any individual and 2% in the aggregate with respect to all employees (including executive officers) of the Company and any of its Subsidiaries and (B) cash bonuses to employees (other than executive officers) of less than $300,000 in the aggregate, (ii) grant or increase any severance or termination pay to, or enter into or amend any severance agreement with any director, employee, consultant or independent contractor of the Company or any of its Subsidiaries, (iii) enter into or amend any employment agreement with any employee of the Company or any of its Subsidiaries, (iv) establish, adopt, enter into or amend any Company Benefit Plan, collective bargaining agreement, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees of the Company or any of its Subsidiaries, or any of their beneficiaries, or (v) enter into, amend, alter, adopt, implement or otherwise make any commitment to do any of the foregoing; (A) hire any executive officer or promote any person to an executive officer position or (B) other than in the ordinary course of business consistent with past practice, hire or promote any employee, consultant or independent contractor of the Company or any of its Subsidiaries; (g) grant, confer or award any options, convertible security, restricted stock units or other rights to acquire any of its or its Subsidiaries’ capital stock or take any action to cause to be exercisable or otherwise vest any otherwise unexercisable option or other award under any existing equity compensation arrangement or other Company Stock Plan, or enter into, amend, alter, adopt, implement or otherwise make any commitment to do any of the foregoing; (h) acquire, except in respect of any mergers, consolidations, business combinations among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries (including by merger, consolidation, acquisition of stock or assets or otherwise), any corporation, partnership, limited liability company, other business organization or any division thereof, or all or substantially all of the assets of any Person in connection with acquisitions or investments, or enter into any Contract with respect to any such acquisition, including any confidentiality, exclusivity, standstill or similar agreements, other than in connection with the acquisition or opening of new locations that do not involve the payment by the Company or any of its Subsidiaries in excess of $10 million in the aggregate; (i) sell, pledge, dispose of, transfer, abandon, exchange, swap, allow to lapse or expire, lease, license, mortgage or otherwise encumber or subject to any Lien (including pursuant to a sale-leaseback transaction or an asset securitization transaction) (other than Permitted Liens) any (i) Owned Real Property (or portion thereof) or (ii) other properties, rights or assets with a fair market value in excess of $2.5 million individually or $7.5 million in the aggregate, except, in the case of clause (ii) for (A) sales of inventory in the ordinary course of business consistent with past practices, (B) transfers among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries and (C) dispositions of obsolete or other assets not used in or not material to the Company or its Subsidiaries with a net book value of not more than $5 million in the aggregate; (j) incur any (i) indebtedness for borrowed money, except for indebtedness of not more than $10 million in the aggregate incurred under the Company’s existing credit facilities or any replacement credit facility entered into in accordance with the terms of this Agreement, (ii) capitalized lease obligations other than in the ordinary course of business consistent with past practice, (iii) guarantees and other arrangements having the economic effect of a guarantee of any indebtedness of any other Person or (iv) obligations or undertakings to maintain or cause to be maintained the financial position or covenants of others or to purchase the obligations of others, except, in each case, for (A) indebtedness for borrowed money in connection with any renewal or replacement of an existing credit facility of the Company, provided that (1) the prepayment terms of any such renewal or replacement credit facility are no less favorable to the Company or its Subsidiaries than the Company’s existing credit facilities and (2) no such renewal or replacement facility shall be entered into prior to April 1, 2016, or (B) with respect to trade payables incurred in the ordinary course of business; (k) modify, amend or terminate any Lease with annual rental payments greater than $1 million, other than any termination pursuant to an expiration of the Lease in accordance with its terms, or waive, release or assign any rights or claims under any Lease; (l) except as permitted by Section 7.1(j), (i) modify or amend any Company Material Contract which cannot be terminated by the Company or any of its Subsidiaries without material penalty upon notice of 60 days or less, (ii) terminate (other than in accordance with its terms) any Company Material Contract, (iii) waive, release or assign any rights or claims under any Company Material Contract or (iv) enter into any Contract that if entered into prior to the date hereof would have been a Company Material Contract; (m) make any material change to its methods of accounting in effect as of August 1, 2015, except (i) as required by GAAP (or any interpretation thereof), Regulation S-X of the Exchange Act or as required by a Governmental Entity or quasi-Governmental Entity (including the Financial Accounting Standards Board or any similar organization), (ii) to permit the audit of the Company’s financial statements in compliance with GAAP, (iii) as required by a change in applicable Law or (iv) as disclosed in the Company SEC Reports filed prior to the date of this Agreement; (n) (i) change or revoke any material income Tax election, (ii) file any material amended income Tax Return, (iii) settle or compromise any material liability for income Taxes or surrender any claim for a refund of a material amount of income Taxes or (iv) change any material method of Tax accounting, other than in the case of clauses (ii) and (iii) hereof in respect of any income Taxes that have been identified in the reserves for income Taxes in Company’s GAAP financial statements; (o) settle, compromise, discharge or agree to settle any litigation, investigation, arbitration or proceeding other than those that do not involve the payment by the Company or any of its Subsidiaries of monetary damages in excess of $2.5 million in the aggregate, after taking into account any applicable reserves and any applicable insurance coverage, and do not involve any material injunctive or other material non-monetary relief or impose material restrictions on the business or operations of the Company or its Subsidiaries; (p) other than in accordance with Section 7.1(h), make any capital expenditures, except (i) capital expenditures made in accordance with the Company’s annual budget and capital expenditure plan, copies of which have been previously provided to Parent, or (ii) other capital expenditures in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $5 million; (q) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries or alter through merger, liquidation, reorganization or restructuring the corporate structure of the Company or any of its Subsidiaries (other than the Merger); (r) increase the Company’s aggregate inventory beyond $650 million; or (s) authorize or enter into any Contract or otherwise make any commitment to do any of the foregoing.

Conduct of the Company and the Subsidiaries. The Company covenants and agrees that, between During the period from the date of this Agreement and continuing until the Effective Time or Closing, the date, if any, on which this Agreement is terminated pursuant Company agrees as to Section 10.1itself and the Subsidiaries that, except (i) as may be required expressly contemplated or permitted by Lawthis Agreement, (ii) as may be agreed required by applicable Law, or (iii) to the extent that the Buyer shall otherwise consent in writing by Parent (writing, which consent shall not be unreasonably withheld, delayed conditioned or conditioned), delayed: (iiia) as may be expressly permitted pursuant to this Agreement, (iv) as set forth in Section 7.1 of the Company Disclosure Letter, (v) for the payment of the Reimbursement to Merger Sub or (vi) for the payment of the Company Termination Fee to Merger Sub, the business of the Company and its the Subsidiaries shall be conducted only, and such entities shall not take any action except, use reasonable efforts to carry on their respective businesses in the usual, regular and ordinary course of business and in a manner consistent with past practice in all material respects; , in substantially the same manner as heretofore conducted, and the Company and its Subsidiaries shall use their reasonable best efforts to preserve intact their present lines of business, maintain their rights and franchises and preserve their relationships (xcontractual or otherwise) preserve substantially intact the Company’s and its Subsidiaries’ business organization, (y) maintain existing relations with customers, supplierssuppliers and others having business dealings with them (including, creditors without limitation, through ordinary course renewals, negotiations with and business partners that are integral amendments to such relationships) to the operation of end that their business as presently conducted and (z) keep available ongoing businesses shall not be impaired in any material respect at the services of those of their present officers, employees and consultants who are integral to the operation of their businesses as presently conductedClosing; provided, however, that any no action taken or not taken by the Company or its Subsidiaries in express compliance any Subsidiary with a matter respect to matters specifically addressed by a specific any other provision of Sections 7.1(a) through 7.1(s) this Section 6.01 shall not be deemed a breach of this sentence Section 6.01(a), unless such action would constitute a breach of one or more of such specific provision of Sections 7.1(a) through 7.1(s) below. Furthermore, other than (i) as set forth in Section 7.1 of the Company Disclosure Letter, (ii) the payment of the Reimbursement to Merger Sub and (iii) the payment of the Company Termination Fee to Merger Sub, without the prior written consent of Parent, the Company shall not, and shall cause its Subsidiaries not to: (a) amend or otherwise change the Articles of Incorporation, the Bylaws or any Subsidiary Documentprovisions; (b) except for transactions among neither the Company and its wholly-owned Subsidiaries nor any Subsidiary shall incur or among the Company’s wholly-owned Subsidiaries, or as otherwise contemplated in Section 7.1(f), issue, sell, pledge, dispose, encumber or grant commit to any shares or equity interests of its or its Subsidiaries’ capital stock, expenditures or any options, warrants, convertible securities obligations or other rights of any kind to acquire any shares of its or its Subsidiaries’ capital stock; provided, however, that the Company may issue Shares (i) upon the exercise of any Company Stock Option outstanding as of the date of this Agreement, (ii) issuable under the Company ESPP after the date of this Agreement pursuant to Section 3.8(e), (iii) liabilities in connection with the vesting or redemption of any Company Restricted Stock Unit and Company Performance Stock Unit outstanding as of the date of this Agreement in accordance with their terms or (iv) in connection with the redemption of any notional interests deemed invested in Shares under the Company Deferred Compensation Plan, as amended and restated effective as of January 31, 2014; (c) redeem, purchase or otherwise acquire, or propose or offer to redeem, purchase or otherwise acquire, any outstanding shares of capital stock or any other equity interests of the Company or any of its Subsidiaries, except as required pursuant to any Company Benefit Plans in effect as of the date of this Agreement; (d) declare, authorize, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to the Company’s or any of its Subsidiaries’ capital stock, other than dividends paid by any Subsidiary of the Company to the Company or any wholly-owned Subsidiary of the Company; (e) except as required pursuant to existing written agreements (true and complete copies of which have been provided to Parent) or Company Benefit Plans in effect as of the date of this Agreement, as otherwise required by Law or this Agreement, or provided on Section 7.1(e) of the Company Disclosure Schedule, (i) increase the compensation or other benefits payable or to become payable to directors, employees, consultants, independent contractors or executive officers of the Company or any of its Subsidiariesexpenditures, except for (Ai) from capital expenditures and after March 1, 2016, increases obligations or liabilities in compensation connection therewith incurred or other benefits made committed to in the ordinary course of business consistent with past practice of up or (ii) other capital expenditures and obligations or liabilities in connection therewith in an amount not to 10% for any individual and 2% exceed $150,000 in the aggregate with respect to all employees aggregate; (including executive officersc) the Company shall not, and shall not permit any of the Company and Subsidiaries to, (i) declare or pay any dividends on or make other distributions in respect of any of its Subsidiaries capital stock or other equity interests (except for dividends in Cash and (B) cash bonuses dividends by a Subsidiary to employees (other than executive officers) of less than $300,000 in another Subsidiary or the aggregateCompany), (ii) grant split, combine or increase reclassify any severance of its capital stock or termination pay other equity interests or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests (except for any such transaction by a direct or indirect Subsidiary that remains a direct or indirect Subsidiary after consummation of such transaction), or (iii) repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible into or exercisable for any shares of its capital stock or other equity interests (except for repurchases and redemptions paid in Cash and upon the exercise of Options); (d) the Company shall not, and shall not permit any Subsidiary to, issue, deliver or sell, or authorize or propose the issuance, delivery or sale of, any shares of its capital stock of any class, or any securities convertible into or exercisable for, or any rights, warrants or options to acquire, any such shares of their respective capital stock, or enter into or amend any severance agreement with respect to any directorof the foregoing, employeeother than the issuance of shares upon the exercise of Options or other securities convertible into or exercisable for shares of capital stock issued and outstanding as of the date hereof, consultant issuances of capital stock by a direct or independent contractor indirect Subsidiary to such Subsidiary’s parent or another direct or indirect Subsidiary, the transactions contemplated herein or the Stock Incentive Plan; (e) other than to the extent required to comply with its obligations hereunder or required by Law, the Company shall not, and shall not permit any Subsidiary to, amend or propose to amend its certificate of incorporation or bylaws or equivalent formation documents; (f) the Company shall not, and shall not permit any Subsidiary to, acquire or agree to acquire by merging or consolidating with, or by purchasing an equity interest in or any portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire or agree to acquire or in-license any assets or rights (other than the acquisition or in-license of assets used in the operations of the business of the Company or any Subsidiary in the ordinary course consistent with past practice); provided, however, that the foregoing shall not prohibit (i) the creation of new direct or indirect Subsidiaries organized to conduct or continue activities otherwise permitted by this Agreement or (ii) internal reorganizations or consolidations involving existing direct or indirect Subsidiaries that remain direct or indirect Subsidiaries; (g) other than (i) internal reorganizations or consolidations involving existing direct or indirect Subsidiaries that remain direct or indirect Subsidiaries or (ii) as may be required by or in conformance with applicable Law in order to permit or facilitate the consummation of the transactions contemplated hereby, the Company shall not, and shall not permit any Subsidiary to, sell, encumber (other than Permitted Liens) or otherwise dispose of, or agree to sell, encumber (other than Permitted Liens) or otherwise dispose of, any of its Subsidiariesassets other than in the ordinary course of business consistent with past practice; (h) the Company shall not, and shall not permit any Subsidiary to, (iiii) enter into make any loans, advances or amend capital contributions to, or investments in, any employment agreement with other Person, other than (A) by the Company or a direct or indirect Subsidiary to or in the Company or any employee other direct or indirect Subsidiary, (B) pursuant to any contract or other legal obligation of the Company or in any Subsidiary as in effect as of its Subsidiariesthe date hereof or (C) in the ordinary course of business consistent with past practice or (ii) create, (iv) establishincur, adoptassume or suffer to exist any indebtedness, enter into issuances of debt securities, guarantees, loans or amend any Company Benefit Plan, collective bargaining agreement, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees of advances to the Company or any Subsidiary not in existence as of its Subsidiariesthe date of this Agreement except (A) pursuant to the credit facilities, indentures (but not in excess of amounts authorized for issuance thereunder as of the date of this Agreement) and other arrangements in existence on the date of this Agreement, (B) by the Company or a direct or indirect Subsidiary to or in the Company or any of their beneficiariesother direct or indirect Subsidiary, or (vC) enter intotrade debt and commercial finance in the ordinary course of business consistent with past practice, amendin each case as such credit facilities, alterindentures and other arrangements and other existing indebtedness may be amended, adoptextended, implement modified, refunded, renewed or otherwise make any commitment to do any refinanced after the date of the foregoingthis Agreement; (Ai) hire any executive officer other than as required by an existing contract or promote any person to agreement, an executive officer position Employee Benefit Plan or (B) applicable Law and other than in the ordinary course of business consistent with past practice, hire or promote any employee, consultant or independent contractor of neither the Company nor any Subsidiary shall (A) increase the amount of cash compensation or severance pay of any of its Subsidiaries; director or executive officer, (gB) grant, confer or award make any options, convertible security, restricted stock units or other rights to acquire any of its or its Subsidiaries’ capital stock or take any action to cause to be exercisable or otherwise vest any otherwise unexercisable option or other award under any existing equity compensation arrangement or other Company Stock Planmaterial increase in, or enter intocommitment to increase materially, amendany employee benefits, alter, adopt, implement (C) adopt or otherwise make any commitment to do adopt any of the foregoing; (h) acquire, except in respect of material new Employee Benefit Plan or make any mergers, consolidations, business combinations among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries (including by merger, consolidation, acquisition of stock or assets or otherwise), any corporation, partnership, limited liability companymaterial contribution, other business organization than regularly scheduled contributions, to any Employee Benefit Plan; or any division thereof, or all or substantially all of the assets of any Person in connection with acquisitions or investments, or (D) enter into any Contract employment, severance or similar contract or collective bargaining agreement with respect to any such acquisition, including any confidentiality, exclusivity, standstill or similar agreements, other than in connection with the acquisition or opening of new locations that do not involve the payment by employees. (j) neither the Company or nor any of its Subsidiaries in excess of $10 million in the aggregate; (i) sell, pledge, dispose of, transfer, abandon, exchange, swap, allow to lapse or expire, lease, license, mortgage or otherwise encumber or subject to any Lien (including pursuant to a sale-leaseback transaction or an asset securitization transaction) (other than Permitted Liens) any (i) Owned Real Property (or portion thereof) or (ii) other properties, rights or assets with a fair market value in excess of $2.5 million individually or $7.5 million in the aggregate, except, in the case of clause (ii) for Subsidiary shall (A) sales of inventory in the ordinary course of business consistent with past practiceschange its fiscal year, (B) transfers among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries and (C) dispositions of obsolete or other assets not used in or not material to the Company or its Subsidiaries with a net book value of not more than $5 million in the aggregate; (j) incur any (i) indebtedness for borrowed moneymake, except for indebtedness of not more than $10 million in the aggregate incurred under the Company’s existing credit facilities or any replacement credit facility entered into in accordance with the terms of this Agreement, (ii) capitalized lease obligations other than in the ordinary course of business consistent with past practice, (iii) guarantees and other arrangements having the economic effect of a guarantee of any indebtedness of any other Person or (iv) obligations or undertakings to maintain or cause to be maintained the financial position or covenants of others or to purchase the obligations of others, except, in each case, for (A) indebtedness for borrowed money in connection with any renewal or replacement of an existing credit facility of the Company, provided that (1) the prepayment terms of any such renewal or replacement credit facility are no less favorable to the Company or its Subsidiaries than the Company’s existing credit facilities and (2) no such renewal or replacement facility shall be entered into prior to April 1, 2016, or (B) with respect to trade payables incurred in the ordinary course of business; (k) modify, amend or terminate any Lease with annual rental payments greater than $1 million, other than any termination pursuant to an expiration of the Lease in accordance with its terms, or waive, release or assign any rights or claims under any Lease; (l) except as permitted by Section 7.1(j), (i) modify or amend any Company Material Contract which cannot be terminated by the Company or any of its Subsidiaries without material penalty upon notice of 60 days or less, (ii) terminate (other than in accordance with its terms) any Company Material Contract, (iii) waive, release or assign any rights or claims under any Company Material Contract or (iv) enter into any Contract that if entered into prior to the date hereof would have been a Company Material Contract; (m) make any material change to its methods of accounting in effect as of August 1, 2015, except (i) as required by GAAP (or any interpretation thereof), Regulation S-X of the Exchange Act or as required by a Governmental Entity or quasi-Governmental Entity (including the Financial Accounting Standards Board or any similar organization), (ii) to permit the audit of the Company’s financial statements in compliance with GAAP, (iii) as required by a change in applicable Law or (iv) as disclosed in the Company SEC Reports filed prior to the date of this Agreement; (n) (i) change or revoke any material income Tax election, election (ii) file any material amended income Tax Return, (iii) settle or compromise any material liability for income Taxes or surrender any claim for a refund of a material amount of income Taxes or (iv) change any material method of Tax accounting, other than in the case of clauses (ii) and (iii) hereof in respect of any income Taxes that have been identified in the reserves for income Taxes in Company’s GAAP financial statements; (o) settle, compromise, discharge or agree to settle any litigation, investigation, arbitration or proceeding other than those that do not involve the payment by the Company or any of its Subsidiaries of monetary damages in excess of $2.5 million in the aggregate, after taking into account any applicable reserves and any applicable insurance coverage, and do not involve any material injunctive or other material non-monetary relief or impose material restrictions on the business or operations of the Company or its Subsidiaries; (p) other than in accordance with Section 7.1(h), make any capital expenditures, except (i) capital expenditures made in accordance with the Company’s annual budget and capital expenditure plan, copies of which have been previously provided to Parent, or (ii) other capital expenditures in the ordinary course of business consistent with past practice or as otherwise required by applicable Law) or (C) except as required by changes in an aggregate amount not to exceed $5 million;GAAP or as required by applicable Law, materially change its methods of accounting in effect as of the date hereof; and (qk) adopt a plan other than in connection with any action expressly permitted by any other subsection of complete this Section 6.01 and except for any new contract awards, and any contract renewals, negotiations and amendments entered into in the ordinary course of business and consistent with past practice, neither the Company nor any Subsidiary shall (A) enter into or partial liquidationbecome bound by, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization permit any of the Company assets owned or used by it to become bound by, any of its Subsidiaries or alter through merger, liquidation, reorganization or restructuring the corporate structure contract of the Company or any type required to be disclosed pursuant to Section 3.16 of its Subsidiaries this Agreement (other than in the Mergerordinary course of business); , or (rB) increase prematurely terminate (other than in the Company’s aggregate inventory beyond $650 million; or (s) authorize ordinary course of business), or enter into waive any Contract material right or otherwise make remedy under, any commitment to do any of the foregoingsuch contract.

Conduct of the Company and the Subsidiaries. The Company covenants and agrees that, between the date of this Agreement and the Effective Time or the date, if any, on which this Agreement is terminated pursuant to Section 10.1, except (i) as may be required by Law, (ii) as may be agreed in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) as may be expressly permitted pursuant to this Agreement, Agreement or (iv) as set forth in Section 7.1 of the Company Disclosure Letter, (v) for the payment of the Reimbursement to Merger Sub or (vi) for the payment of the Company Termination Fee to Merger Sub, the business of the Company and its Subsidiaries shall be conducted only, and such entities shall not take any action except, in the ordinary course of business and in a manner consistent with past practice in all material respects; and the Company and its Subsidiaries shall use their reasonable best efforts to (x) preserve substantially intact the Company’s 's and its Subsidiaries’ ' business organization, (y) maintain existing relations with customers, suppliers, creditors and business partners that are integral to the operation of their business as presently conducted and (z) keep available the services of those of their present officers, employees and consultants who are integral to the operation of their businesses as presently conducted; provided, however, that any action taken or not taken by the Company or its Subsidiaries in express compliance with a matter specifically addressed by a specific provision of Sections 7.1(a7.1 (a) through 7.1(s) shall not be deemed a breach of this sentence unless such action would constitute a breach of such specific provision of Sections 7.1(a) through 7.1(s) below. Furthermore, other than (i) as set forth in Section 7.1 of the Company Disclosure Letter, (ii) the payment of the Reimbursement to Merger Sub and (iii) the payment of the Company Termination Fee to Merger Sub, without the prior written consent of Parent, the Company shall not, and shall cause its Subsidiaries not to: (a) amend or otherwise change the Articles of Incorporation, the Bylaws or any Subsidiary Document; (b) except for transactions among the Company and its wholly-owned Subsidiaries or among the Company’s 's wholly-owned Subsidiaries, or as otherwise contemplated in Section 7.1(f), issue, sell, pledge, dispose, encumber or grant any shares or equity interests of its or its Subsidiaries’ ' capital stock, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of its or its Subsidiaries’ ' capital stock; provided, however, that the Company may issue Shares (i) upon the exercise of any Company Stock Option outstanding as of the date of this Agreement, (ii) issuable under the Company ESPP after the date of this Agreement pursuant to Section 3.8(e), (iii) in connection with the vesting or redemption of any Company Restricted Stock Unit and Company Performance Stock Unit outstanding as of the date of this Agreement in accordance with their terms or (iv) in connection with the redemption of any notional interests deemed invested in Shares under the Company Deferred Compensation Plan, as amended and restated effective as of January 31, 2014; (c) redeem, purchase or otherwise acquire, or propose or offer to redeem, purchase or otherwise acquire, any outstanding shares of capital stock or any other equity interests of the Company or any of its Subsidiaries, except as required pursuant to any Company Benefit Plans in effect as of the date of this Agreement; (d) declare, authorize, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to the Company’s 's or any of its Subsidiaries’ ' capital stock, other than dividends paid by any Subsidiary of the Company to the Company or any wholly-owned Subsidiary of the Company; (e) except as required pursuant to existing written agreements (true and complete copies of which have been provided to Parent) or Company Benefit Plans in effect as of the date of this Agreement, as otherwise required by Law or this Agreement, or provided on Section 7.1(e) of the Company Disclosure Schedule, (i) increase the compensation or other benefits payable or to become payable to directors, employees, consultants, independent contractors or executive officers of the Company or any of its Subsidiaries, except for (A) from and after March 1, 2016, increases in compensation or other benefits made in the ordinary course of business consistent with past practice of up to 10% for any individual and 2% in the aggregate with respect to all employees (including executive officers) of the Company and any of its Subsidiaries and (B) cash bonuses to employees (other than executive officers) of less than $300,000 in the aggregate, (ii) grant or increase any severance or termination pay to, or enter into or amend any severance agreement with any director, employee, consultant or independent contractor of the Company or any of its Subsidiaries, (iii) enter into or amend any employment agreement with any employee of the Company or any of its Subsidiaries, (iv) establish, adopt, enter into or amend any Company Benefit Plan, collective bargaining agreement, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees of the Company or any of its Subsidiaries, or any of their beneficiaries, or (v) enter into, amend, alter, adopt, implement or otherwise make any commitment to do any of the foregoing; (A) hire any executive officer or promote any person to an executive officer position or (B) other than in the ordinary course of business consistent with past practice, hire or promote any employee, consultant or independent contractor of the Company or any of its Subsidiaries; (g) grant, confer or award any options, convertible security, restricted stock units or other rights to acquire any of its or its Subsidiaries’ ' capital stock or take any action to cause to be exercisable or otherwise vest any otherwise unexercisable option or other award under any existing equity compensation arrangement or other Company Stock Plan, or enter into, amend, alter, adopt, implement or otherwise make any commitment to do any of the foregoing; (h) acquire, except in respect of any mergers, consolidations, business combinations among the Company and its wholly-owned Subsidiaries or among the Company’s 's wholly-owned Subsidiaries (including by merger, consolidation, acquisition of stock or assets or otherwise), any corporation, partnership, limited liability company, other business organization or any division thereof, or all or substantially all of the assets of any Person in connection with acquisitions or investments, or enter into any Contract with respect to any such acquisition, including any confidentiality, exclusivity, standstill or similar agreements, other than in connection with the acquisition or opening of new locations that do not involve the payment by the Company or any of its Subsidiaries in excess of $10 million in the aggregate; (i) sell, pledge, dispose of, transfer, abandon, exchange, swap, allow to lapse or expire, lease, license, mortgage or otherwise encumber or subject to any Lien (including pursuant to a sale-leaseback transaction or an asset securitization transaction) (other than Permitted Liens) any (i) Owned Real Property (or portion thereof) or (ii) other properties, rights or assets with a fair market value in excess of $2.5 million individually or $7.5 million in the aggregate, except, in the case of clause (ii) for (A) sales of inventory in the ordinary course of business consistent with past practices, (B) transfers among the Company and its wholly-owned Subsidiaries or among the Company’s 's wholly-owned Subsidiaries and (C) dispositions of obsolete or other assets not used in or not material to the Company or its Subsidiaries with a net book value of not more than $5 million in the aggregate; (j) incur any (i) indebtedness for borrowed money, except for indebtedness of not more than $10 million in the aggregate incurred under the Company’s 's existing credit facilities or any replacement credit facility entered into in accordance with the terms of this Agreement, (ii) capitalized lease obligations other than in the ordinary course of business consistent with past practice, (iii) guarantees and other arrangements having the economic effect of a guarantee of any indebtedness of any other Person or (iv) obligations or undertakings to maintain or cause to be maintained the financial position or covenants of others or to purchase the obligations of others, except, in each case, for (A) indebtedness for borrowed money in connection with any renewal or replacement of an existing credit facility of the Company, provided that (1) the prepayment terms of any such renewal or replacement credit facility are no less favorable to the Company or its Subsidiaries than the Company’s 's existing credit facilities and (2) no such renewal or replacement facility shall be entered into prior to April 1, 2016, or (B) with respect to trade payables incurred in the ordinary course of business; (k) modify, amend or terminate any Lease with annual rental payments greater than $1 million, other than any termination pursuant to an expiration of the Lease in accordance with its terms, or waive, release or assign any rights or claims under any Lease; (l) except as permitted by Section 7.1(j), (i) modify or amend any Company Material Contract which cannot be terminated by the Company or any of its Subsidiaries without material penalty upon notice of 60 days or less, (ii) terminate (other than in accordance with its terms) any Company Material Contract, (iii) waive, release or assign any rights or claims under any Company Material Contract or (iv) enter into any Contract that if entered into prior to the date hereof would have been a Company Material Contract; (m) make any material change to its methods of accounting in effect as of August 1, 2015, except (i) as required by GAAP (or any interpretation thereof), Regulation S-X of the Exchange Act or as required by a Governmental Entity or quasi-Governmental Entity (including the Financial Accounting Standards Board or any similar organization), (ii) to permit the audit of the Company’s 's financial statements in compliance with GAAP, (iii) as required by a change in applicable Law or (iv) as disclosed in the Company SEC Reports filed prior to the date of this Agreement; (n) (i) change or revoke any material income Tax election, (ii) file any material amended income Tax Return, (iii) settle or compromise any material liability for income Taxes or surrender any claim for a refund of a material amount of income Taxes or (iv) change any material method of Tax accounting, other than in the case of clauses (ii) and (iii) hereof in respect of any income Taxes that have been identified in the reserves for income Taxes in Company’s 's GAAP financial statements; (o) settle, compromise, discharge or agree to settle any litigation, investigation, arbitration or proceeding other than those that do not involve the payment by the Company or any of its Subsidiaries of monetary damages in excess of $2.5 million in the aggregate, after taking into account any applicable reserves and any applicable insurance coverage, and do not involve any material injunctive or other material non-monetary relief or impose material restrictions on the business or operations of the Company or its Subsidiaries; (p) other than in accordance with Section 7.1(h), make any capital expenditures, except (i) capital expenditures made in accordance with the Company’s 's annual budget and capital expenditure plan, copies of which have been previously provided to Parent, or (ii) other capital expenditures in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $5 million; (q) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries or alter through merger, liquidation, reorganization or restructuring the corporate structure of the Company or any of its Subsidiaries (other than the Merger); (r) increase the Company’s 's aggregate inventory beyond $650 million; or (s) authorize or enter into any Contract or otherwise make any commitment to do any of the foregoing.

Conduct of the Company and the Subsidiaries. The Company covenants and agrees that, between (a) From the date of hereof through the Closing, except as expressly provided in this Agreement and the Effective Time or the date, if any, on which this Agreement is terminated pursuant as otherwise consented to Section 10.1, except (i) as may be required by Law, (ii) as may be agreed in writing in advance by Parent (which such consent shall not to be unreasonably withheld, delayed or conditioned), (iii) as may be expressly permitted pursuant to this Agreement, (iv) as set forth in Section 7.1 of the Company Disclosure Letter, (v) for the payment of the Reimbursement to Merger Sub or (vi) for the payment of the Company Termination Fee to Merger Sub, the business of Sellers shall cause the Company and its the Subsidiaries shall be conducted only, and such entities shall not take any action except, to conduct their businesses only in the ordinary course of business and in a manner consistent with past practice and Sellers shall cause the Company and the Subsidiaries to use all commercially reasonable efforts to (i) preserve intact their respective material Assets, current business organizations and material relationships with third parties, (ii) make all filings, pay all fees and take all other actions necessary to operate the Business, (iii) preserve, in all material respects; , the goodwill and the Company and its Subsidiaries shall use their reasonable best efforts to (x) preserve substantially intact the Company’s and its Subsidiaries’ business organization, (y) maintain existing relations relationships with customers, supplierssuppliers and others having significant business dealings with such businesses, creditors and business partners that are integral to the operation of their business as presently conducted and (z) keep available the services of those of their present officers, employees and consultants who are integral to the operation of their businesses as presently conducted; provided, however, that any action taken or not taken by the Company or its Subsidiaries in express compliance with a matter specifically addressed by a specific provision of Sections 7.1(a) through 7.1(s) shall not be deemed a breach of this sentence unless such action would constitute a breach of such specific provision of Sections 7.1(a) through 7.1(s) below. Furthermore, other than (i) as set forth in Section 7.1 of the Company Disclosure Letter, (ii) the payment of the Reimbursement to Merger Sub and (iii) the payment of the Company Termination Fee to Merger Sub, without the prior written consent of Parent, the Company shall not, and shall cause its Subsidiaries not to: (a) amend or otherwise change the Articles of Incorporation, the Bylaws or any Subsidiary Document; (b) except for transactions among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries, or as otherwise contemplated in Section 7.1(f), issue, sell, pledge, dispose, encumber or grant any shares or equity interests of its or its Subsidiaries’ capital stock, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of its or its Subsidiaries’ capital stock; provided, however, that the Company may issue Shares (i) upon the exercise of any Company Stock Option outstanding as of the date of this Agreement, (ii) issuable under the Company ESPP after the date of this Agreement pursuant to Section 3.8(e), (iii) in connection with the vesting or redemption of any Company Restricted Stock Unit and Company Performance Stock Unit outstanding as of the date of this Agreement in accordance with their terms or (iv) maintain in connection with full force and effect until the redemption Closing substantially the same levels of any notional interests deemed invested in Shares under the Company Deferred Compensation Plan, as amended and restated effective as coverage of January 31, 2014; (c) redeem, purchase or otherwise acquire, or propose or offer to redeem, purchase or otherwise acquire, any outstanding shares of capital stock or any other equity interests of the Company or any of its Subsidiaries, except as required pursuant to any Company Benefit Plans in effect as of the date of this Agreement; (d) declare, authorize, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, insurance with respect to the Company’s or any of its Subsidiaries’ capital stockAssets, other than dividends paid by any Subsidiary operations and activities of the Company to and the Company or any wholly-owned Subsidiary of the Company; (e) except Subsidiaries as required pursuant to existing written agreements (true and complete copies of which have been provided to Parent) or Company Benefit Plans are in effect as of the date of this Agreement, (v) comply in all material respects with all Laws applicable to any of the Company and the Subsidiaries, (vi) maintain in full force and effect, and comply with, all of the material Permits, (vii) maintain their respective books and records in accordance with past practice, (vii) upon the reasonable request of Parent, confer with Parent concerning operational matters and (ix) otherwise report periodically to Parent, upon the reasonable request of Parent, concerning the status of the business, operations and finances of the Company and the Subsidiaries. (b) From the date hereof through the Closing, except as otherwise required by Law or expressly provided in this Agreement, or provided on Section 7.1(edescribed in Schedule 5.2(b) of the Disclosure Letter or consented to in writing in advance by Parent (such consent not to be unreasonably withheld), Sellers shall cause the Company Disclosure Schedule, and the Subsidiaries to not: (i) increase amend or modify their Organizational Documents or corporate structure, or the compensation terms of any Equity Securities; (ii) (A) issue or other benefits payable or to become payable to directors, employees, consultants, independent contractors or executive officers otherwise encumber any Equity Securities of the Company or any Subsidiary, (B) declare or pay any dividends or distributions on, or make any other distributions in respect of, any Equity Securities of its Subsidiariesthe Company or any Subsidiary, except for or (AC) from and after March 1purchase, 2016redeem or otherwise acquire or dispose of any Equity Securities of the Company or any Subsidiary; (iii) incur any Indebtedness, increases in compensation make any investment in, or other benefits made make any loan, advance or capital contribution to, any Person or make any capital expenditure otherwise than in the ordinary course of business consistent with past practice or in an aggregate amount in excess of up $25,000; (iv) (A) sell, lease or otherwise dispose of, or extend or exercise any option to 10% for sell, lease or otherwise dispose of, any individual and 2% in the aggregate with respect to all employees (including executive officers) of the Company and any of its Subsidiaries and material Assets or (B) cash bonuses to employees (other than executive officers) of less than $300,000 in the aggregate, (ii) grant mortgage or increase pledge any severance or termination pay to, or enter into or amend any severance agreement with any director, employee, consultant or independent contractor Assets of the Company or any of its Subsidiaries, (iii) enter into or amend any employment agreement with any employee of the Company or any of its Subsidiaries, (iv) establish, adopt, enter into or amend any Company Benefit Plan, collective bargaining agreement, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees of the Company or any of its SubsidiariesSubsidiary, or create or suffer to exist any of their beneficiariesLien (other than a Permitted Lien) thereupon, or (v) enter into, amend, alter, adopt, implement or otherwise make any commitment to do any of the foregoing; (A) hire any executive officer or promote any person to an executive officer position or (B) in each case other than in the ordinary course of business consistent with past practice; (v) fail to maintain its books and records in accordance with GAAP or make any material change in any method of accounting or Tax, hire pension or promote accounting practice, policy, principle or procedure, except as required by any employeechanges in GAAP or applicable Law; (vi) amend any Tax Return, consultant file any claim for a refund, change any method of Tax accounting, make or independent contractor change any election or settle or compromise any liability with respect to Taxes that could reasonably be expected to result in an increase in Tax liability of Parent or the Company or any of its SubsidiariesSubsidiary after the Closing Date; (gvii) grantpay, confer discharge, cancel or award satisfy (a) Taxes or (b) any options, convertible security, restricted stock units claims or other rights to acquire any of its or its Subsidiaries’ capital stock or take any action to cause to be exercisable or otherwise vest any otherwise unexercisable option or other award under any existing equity compensation arrangement or other Company Stock Plan, or enter into, amend, alter, adopt, implement or otherwise make any commitment to do any of the foregoing; (h) acquire, except in respect of any mergers, consolidations, business combinations among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries (including by merger, consolidation, acquisition of stock or assets or otherwise), any corporation, partnership, limited liability company, other business organization or any division thereof, or all or substantially all of the assets of any Person in connection with acquisitions or investments, or enter into any Contract with respect to any such acquisition, including any confidentiality, exclusivity, standstill or similar agreementsLiabilities, other than in connection with the acquisition payment, discharge or opening of new locations that do not involve the payment by the Company or any of its Subsidiaries in excess of $10 million in the aggregate; (i) sell, pledge, dispose of, transfer, abandon, exchange, swap, allow to lapse or expire, lease, license, mortgage satisfaction when due or otherwise encumber or subject to any Lien (including pursuant to a sale-leaseback transaction or an asset securitization transaction) (other than Permitted Liens) any (i) Owned Real Property (or portion thereof) or (ii) other properties, rights or assets with a fair market value in excess of $2.5 million individually or $7.5 million in the aggregate, except, in the case of clause (ii) for (A) sales of inventory in the ordinary course of business consistent with past practicespractice; (viii) cancel, amend or waive any claims or rights of substantial value; (Bix) transfers among commence, compromise or settle, or take any material action with respect to, any Legal Proceedings; (x) except as may be required under the Company and its wholly-owned Subsidiaries terms of the Benefit Plans or among by Law (1) adopt, amend or terminate any Benefit Plan (other than any termination of a Benefit Plan in connection with the Company’s wholly-owned Subsidiaries and Merger); (C2) dispositions take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of obsolete compensation or other assets benefits under a Benefit Plan, to the extent not used already provided in such Benefit Plan; (3) change the manner in which contributions to any Benefit Plan are made or not material the basis on which such contributions are determined, except as may be required by GAAP; (4) forgive any loans to directors, officers or Employees of the Company or its Subsidiaries with a net book value of not more than $5 million in the aggregate; (j) incur any (i) indebtedness for borrowed money, except for indebtedness of not more than $10 million in the aggregate incurred under the Company’s existing credit facilities Subsidiary or any replacement credit facility entered into in accordance with the terms of this Agreement, Seller; or (ii5) capitalized lease obligations forgive any loans to any registered representatives other than in the ordinary course of business consistent with past practice, (iii) guarantees and other arrangements having the economic effect of a guarantee of any indebtedness of any other Person or (iv) obligations or undertakings to maintain or cause to be maintained the financial position or covenants of others or to purchase the obligations of others, except, in each case, for (A) indebtedness for borrowed money in connection with any renewal or replacement of an existing credit facility of the Company, provided that (1) the prepayment terms of any such renewal or replacement credit facility are no less favorable to the Company or its Subsidiaries than the Company’s existing credit facilities and (2) no such renewal or replacement facility shall be entered into prior to April 1, 2016, or (B) with respect to trade payables incurred in the ordinary course of business; (kxi) modifygrant, amend pay or terminate provide to any Lease with annual rental payments greater than $1 milliondirector, other than any termination pursuant to an expiration of the Lease in accordance with its termsofficer, registered representative or waive, release or assign any rights or claims under any Lease; (l) except as permitted by Section 7.1(j), (i) modify or amend any Company Material Contract which cannot be terminated by the Company or any of its Subsidiaries without material penalty upon notice of 60 days or less, (ii) terminate (other than in accordance with its terms) any Company Material Contract, (iii) waive, release or assign any rights or claims under any Company Material Contract or (iv) enter into any Contract that if entered into prior to the date hereof would have been a Company Material Contract; (m) make any material change to its methods of accounting in effect as of August 1, 2015, except (i) as required by GAAP (or any interpretation thereof), Regulation S-X of the Exchange Act or as required by a Governmental Entity or quasi-Governmental Entity (including the Financial Accounting Standards Board or any similar organization), (ii) to permit the audit of the Company’s financial statements in compliance with GAAP, (iii) as required by a change in applicable Law or (iv) as disclosed in the Company SEC Reports filed prior to the date of this Agreement; (n) (i) change or revoke any material income Tax election, (ii) file any material amended income Tax Return, (iii) settle or compromise any material liability for income Taxes or surrender any claim for a refund of a material amount of income Taxes or (iv) change any material method of Tax accounting, other than in the case of clauses (ii) and (iii) hereof in respect of any income Taxes that have been identified in the reserves for income Taxes in Company’s GAAP financial statements; (o) settle, compromise, discharge or agree to settle any litigation, investigation, arbitration or proceeding other than those that do not involve the payment by the Company or any of its Subsidiaries of monetary damages in excess of $2.5 million in the aggregate, after taking into account any applicable reserves and any applicable insurance coverage, and do not involve any material injunctive or other material non-monetary relief or impose material restrictions on the business or operations Employee of the Company or its Subsidiaries; (p) other than and Subsidiary any severance or termination payments or benefits or any increase in accordance with Section 7.1(h)or enhancement to wages, make any capital expenditurescommissions, except (i) capital expenditures made in accordance with the Company’s annual budget and capital expenditure planbonus, copies of which have been previously provided to Parentseverance, or (ii) other capital expenditures in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $5 million; (q) adopt a plan of complete or partial liquidationprofit sharing, dissolutionretirement, mergerdeferred compensation, consolidation, restructuring, recapitalization insurance or other reorganization of the Company compensation or any of its Subsidiaries or alter through merger, liquidation, reorganization or restructuring the corporate structure of the Company or any of its Subsidiaries (other than the Merger); (r) increase the Company’s aggregate inventory beyond $650 millionbenefits; or (sxii) take, offer, propose or authorize any of, or enter into commit or agree to take any Contract or otherwise make any commitment to do any of of, the foregoing.

Conduct of the Company and the Subsidiaries. The Company covenants and agrees that, between (a) From the date of hereof through the Closing, except as expressly provided in this Agreement or as otherwise consented to in writing in advance by Parent (such consent not to be unreasonably withheld), Sellers shall cause the Company and the Effective Time or Subsidiaries to conduct their businesses only in the date, if any, on which this Agreement is terminated pursuant ordinary course of business consistent with past practice and Sellers shall cause the Company and the Subsidiaries to Section 10.1, except use all commercially reasonable efforts to (i) as may be required by Lawpreserve intact their respective material Assets, current business organizations and material relationships with employees, registered representatives, investment adviser representatives, agents, independent contractors, product sponsors, clearing firms, customers, suppliers and other third parties, (ii) make all filings, pay all fees and take all other actions necessary to operate the business of the Company as may be agreed in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned)currently operated, (iii) as may be expressly permitted pursuant to this Agreementpreserve, in all material respects, the goodwill and relationships with employees, registered representatives, investment adviser representatives, agents, independent contractors, product sponsors, clearing firms, customers, suppliers and other third parties, (iv) as set forth maintain in Section 7.1 full force and effect until the Closing substantially the same levels of coverage of errors and omissions and other insurance with respect to the Company Disclosure LetterAssets, (v) for the payment of the Reimbursement to Merger Sub or (vi) for the payment of the Company Termination Fee to Merger Sub, the business operations and activities of the Company and its Subsidiaries shall be conducted only, and such entities shall not take any action except, in the ordinary course of business and in a manner consistent with past practice in all material respects; and the Company and its Subsidiaries shall use their reasonable best efforts to (x) preserve substantially intact the Company’s and its Subsidiaries’ business organization, (y) maintain existing relations with customers, suppliers, creditors and business partners that as are integral to the operation of their business as presently conducted and (z) keep available the services of those of their present officers, employees and consultants who are integral to the operation of their businesses as presently conducted; provided, however, that any action taken or not taken by the Company or its Subsidiaries in express compliance with a matter specifically addressed by a specific provision of Sections 7.1(a) through 7.1(s) shall not be deemed a breach of this sentence unless such action would constitute a breach of such specific provision of Sections 7.1(a) through 7.1(s) below. Furthermore, other than (i) as set forth in Section 7.1 of the Company Disclosure Letter, (ii) the payment of the Reimbursement to Merger Sub and (iii) the payment of the Company Termination Fee to Merger Sub, without the prior written consent of Parent, the Company shall not, and shall cause its Subsidiaries not to: (a) amend or otherwise change the Articles of Incorporation, the Bylaws or any Subsidiary Document; (b) except for transactions among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries, or as otherwise contemplated in Section 7.1(f), issue, sell, pledge, dispose, encumber or grant any shares or equity interests of its or its Subsidiaries’ capital stock, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of its or its Subsidiaries’ capital stock; provided, however, that the Company may issue Shares (i) upon the exercise of any Company Stock Option outstanding as of the date of this Agreement, (ii) issuable under the Company ESPP after the date of this Agreement pursuant to Section 3.8(e), (iii) in connection with the vesting or redemption of any Company Restricted Stock Unit and Company Performance Stock Unit outstanding as of the date of this Agreement in accordance with their terms or (iv) in connection with the redemption of any notional interests deemed invested in Shares under the Company Deferred Compensation Plan, as amended and restated effective as of January 31, 2014; (c) redeem, purchase or otherwise acquire, or propose or offer to redeem, purchase or otherwise acquire, any outstanding shares of capital stock or any other equity interests of the Company or any of its Subsidiaries, except as required pursuant to any Company Benefit Plans in effect as of the date of this Agreement; (d) declare, authorize, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to the Company’s or any of its Subsidiaries’ capital stock, other than dividends paid by any Subsidiary of the Company to the Company or any wholly-owned Subsidiary of the Company; (e) except as required pursuant to existing written agreements (true and complete copies of which have been provided to Parent) or Company Benefit Plans in effect as of the date of this Agreement, (v) comply in all material respects with all Laws applicable to any of the Company and the Subsidiaries, (vi) maintain in full force and effect, and comply with, all of the material Permits, (vii) maintain their respective books and records in accordance with past practice, (vii) upon the reasonable request of Parent, confer with Parent concerning operational matters, and (ix) otherwise report periodically to Parent, upon the reasonable request of Parent, concerning the status of the business, operations and finances of the Company and the Subsidiaries. (b) From the date hereof through the Closing, except as otherwise required by Law or expressly provided in this Agreement, or provided on Section 7.1(edescribed in Schedule 6.1(b) of the Disclosure Letter or consented to in writing in advance by Parent (such consent not to be unreasonably withheld), Sellers shall cause the Company Disclosure Schedule, and the Subsidiaries to not: (i) increase amend or modify their Organizational Documents or corporate structure, or the compensation terms of any Equity Securities, (ii) (A) issue or other benefits payable or to become payable to directors, employees, consultants, independent contractors or executive officers otherwise encumber any Equity Securities of the Company or any Subsidiary, (B) declare or pay any dividends or distributions on, or make any other distributions in respect of, any Equity Securities of its Subsidiariesthe Company or any Subsidiary, except for or (AC) from and after March 1purchase, 2016redeem or otherwise acquire or dispose of any Equity Securities of the Company or any Subsidiary, (iii) incur any Indebtedness, increases in compensation make any investment in, or other benefits made make any loan, advance or capital contribution to, any Person or make any capital expenditure otherwise than in the ordinary course of business consistent with past practice or in an aggregate amount in excess of up $50,000, (iv) (A) sell, lease or otherwise dispose of, or extend or exercise any option to 10% for sell, lease or otherwise dispose of, any individual and 2% in the aggregate with respect to all employees (including executive officers) of the Company and any of its Subsidiaries and material Assets or (B) cash bonuses to employees (other than executive officers) of less than $300,000 in the aggregate, (ii) grant mortgage or increase pledge any severance or termination pay to, or enter into or amend any severance agreement with any director, employee, consultant or independent contractor Assets of the Company or any of its Subsidiaries, (iii) enter into or amend any employment agreement with any employee of the Company or any of its Subsidiaries, (iv) establish, adopt, enter into or amend any Company Benefit Plan, collective bargaining agreement, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees of the Company or any of its SubsidiariesSubsidiary, or create or suffer to exist any of their beneficiariesLien (other than a Permitted Lien) thereupon, or (v) enter into, amend, alter, adopt, implement or otherwise make any commitment to do any of the foregoing; (A) hire any executive officer or promote any person to an executive officer position or (B) in each case other than in the ordinary course of business consistent with past practice, (v) fail to maintain its books and records in material accordance with GAAP or make any material change in any method of accounting or Tax, hire pension or promote accounting practice, policy, principle or procedure, except as required by any employeechanges in GAAP or applicable Law, (vi) amend any Tax Return, consultant file any claim for a refund, change any method of Tax accounting, make or independent contractor change any election or settle or compromise any liability with respect to Taxes that could reasonably be expected to result in a material increase in Tax liability of Parent or the Company or any of its Subsidiaries;Subsidiary after the Closing Date, (gvii) grantpay, confer discharge, cancel or award satisfy (A) Taxes or (B) any options, convertible security, restricted stock units claims or other rights to acquire any of its or its Subsidiaries’ capital stock or take any action to cause to be exercisable or otherwise vest any otherwise unexercisable option or other award under any existing equity compensation arrangement or other Company Stock Plan, or enter into, amend, alter, adopt, implement or otherwise make any commitment to do any of the foregoing; (h) acquire, except in respect of any mergers, consolidations, business combinations among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries (including by merger, consolidation, acquisition of stock or assets or otherwise), any corporation, partnership, limited liability company, other business organization or any division thereof, or all or substantially all of the assets of any Person in connection with acquisitions or investments, or enter into any Contract with respect to any such acquisition, including any confidentiality, exclusivity, standstill or similar agreementsLiabilities, other than in connection with the acquisition payment, discharge or opening of new locations that do not involve the payment by the Company or any of its Subsidiaries in excess of $10 million in the aggregate; (i) sell, pledge, dispose of, transfer, abandon, exchange, swap, allow to lapse or expire, lease, license, mortgage satisfaction when due or otherwise encumber or subject to any Lien (including pursuant to a sale-leaseback transaction or an asset securitization transaction) (other than Permitted Liens) any (i) Owned Real Property (or portion thereof) or (ii) other properties, rights or assets with a fair market value in excess of $2.5 million individually or $7.5 million in the aggregate, except, in the case of clause (ii) for (A) sales of inventory in the ordinary course of business consistent with past practicespractice, (viii) cancel, amend or waive any claims or rights of substantial value, (ix) commence, compromise or settle, or take any material action with respect to, any Legal Proceedings, (x) except as may be required under the terms of the Benefit Plans or by Law (A) adopt, amend or terminate any Benefit Plan (other than any termination of a Benefit Plan in connection with the Transaction), (B) transfers among take any action to accelerate the Company and its wholly-owned Subsidiaries vesting or among payment, or fund or in any other way secure the Company’s wholly-owned Subsidiaries and payment, of compensation or benefits under a Benefit Plan, to the extent not already provided in such Benefit Plan, (C) dispositions change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined, except as may be required by GAAP, (D) forgive any loans to directors, officers or Employees of obsolete or other assets not used in or not material to the Company or its Subsidiaries with a net book value of not more than $5 million in the aggregate; (j) incur any (i) indebtedness for borrowed money, except for indebtedness of not more than $10 million in the aggregate incurred under the Company’s existing credit facilities Subsidiary or any replacement credit facility entered into in accordance with the terms of this AgreementSeller, or (iiE) capitalized lease obligations forgive any loans to any registered representatives other than in the ordinary course of business consistent with past practice, (iii) guarantees and other arrangements having the economic effect of a guarantee of any indebtedness of any other Person or (iv) obligations or undertakings to maintain or cause to be maintained the financial position or covenants of others or to purchase the obligations of others, except, in each case, for (A) indebtedness for borrowed money in connection with any renewal or replacement of an existing credit facility of the Company, provided that (1) the prepayment terms of any such renewal or replacement credit facility are no less favorable to the Company or its Subsidiaries than the Company’s existing credit facilities and (2) no such renewal or replacement facility shall be entered into prior to April 1, 2016, or (B) with respect to trade payables incurred in the ordinary course of business;, (kxi) modifygrant, amend pay or terminate provide to any Lease with annual rental payments greater than $1 milliondirector, other than any termination pursuant to an expiration of the Lease in accordance with its termsofficer, registered representative or waive, release or assign any rights or claims under any Lease; (l) except as permitted by Section 7.1(j), (i) modify or amend any Company Material Contract which cannot be terminated by the Company or any of its Subsidiaries without material penalty upon notice of 60 days or less, (ii) terminate (other than in accordance with its terms) any Company Material Contract, (iii) waive, release or assign any rights or claims under any Company Material Contract or (iv) enter into any Contract that if entered into prior to the date hereof would have been a Company Material Contract; (m) make any material change to its methods of accounting in effect as of August 1, 2015, except (i) as required by GAAP (or any interpretation thereof), Regulation S-X of the Exchange Act or as required by a Governmental Entity or quasi-Governmental Entity (including the Financial Accounting Standards Board or any similar organization), (ii) to permit the audit of the Company’s financial statements in compliance with GAAP, (iii) as required by a change in applicable Law or (iv) as disclosed in the Company SEC Reports filed prior to the date of this Agreement; (n) (i) change or revoke any material income Tax election, (ii) file any material amended income Tax Return, (iii) settle or compromise any material liability for income Taxes or surrender any claim for a refund of a material amount of income Taxes or (iv) change any material method of Tax accounting, other than in the case of clauses (ii) and (iii) hereof in respect of any income Taxes that have been identified in the reserves for income Taxes in Company’s GAAP financial statements; (o) settle, compromise, discharge or agree to settle any litigation, investigation, arbitration or proceeding other than those that do not involve the payment by the Company or any of its Subsidiaries of monetary damages in excess of $2.5 million in the aggregate, after taking into account any applicable reserves and any applicable insurance coverage, and do not involve any material injunctive or other material non-monetary relief or impose material restrictions on the business or operations Employee of the Company or its Subsidiaries; (p) other than and Subsidiary any severance or termination payments or benefits or any increase in accordance with Section 7.1(h)or enhancement to wages, make any capital expenditurescommissions, except (i) capital expenditures made in accordance with the Company’s annual budget and capital expenditure planbonus, copies of which have been previously provided to Parentseverance, or (ii) other capital expenditures in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $5 million; (q) adopt a plan of complete or partial liquidationprofit sharing, dissolutionretirement, mergerdeferred compensation, consolidation, restructuring, recapitalization insurance or other reorganization of the Company compensation or any of its Subsidiaries or alter through mergerbenefits, liquidation, reorganization or restructuring the corporate structure of the Company or any of its Subsidiaries (other than the Merger); (r) increase the Company’s aggregate inventory beyond $650 million; or (sxii) take, offer, propose or authorize any of, or enter into commit or agree to take any Contract or otherwise make any commitment to do any of of, the foregoing.

Conduct of the Company and the Subsidiaries. The Company covenants and agrees that, between (a) From the date of hereof through the Closing, except as expressly provided in this Agreement and the Effective Time or the date, if any, on which this Agreement is terminated pursuant as otherwise consented to Section 10.1, except (i) as may be required by Law, (ii) as may be agreed in writing in advance by Parent FROZ (which such consent shall not to be unreasonably withheld, delayed or conditioned), (iii) as may be expressly permitted pursuant to this Agreement, (iv) as set forth in Section 7.1 of Sellers shall cause the Company Disclosure Letter, (v) for the payment of the Reimbursement to Merger Sub or (vi) for the payment of the Company Termination Fee to Merger Sub, the business of the Company and its Subsidiaries shall be conducted only, and such entities shall not take any action except, conduct their businesses only in the ordinary course of business and in a manner consistent with past practice and Sellers shall cause the Company to use all commercially reasonable efforts to (i) preserve intact their respective material Assets, current business organizations and material relationships with third parties, (ii) make all filings, pay all fees and take all other actions necessary to operate the Business, (iii) preserve, in all material respects; , the goodwill and the Company and its Subsidiaries shall use their reasonable best efforts to (x) preserve substantially intact the Company’s and its Subsidiaries’ business organization, (y) maintain existing relations relationships with customers, supplierssuppliers and others having significant business dealings with such businesses, creditors and business partners that are integral to the operation of their business as presently conducted and (z) keep available the services of those of their present officers, employees and consultants who are integral to the operation of their businesses as presently conducted; provided, however, that any action taken or not taken by the Company or its Subsidiaries in express compliance with a matter specifically addressed by a specific provision of Sections 7.1(a) through 7.1(s) shall not be deemed a breach of this sentence unless such action would constitute a breach of such specific provision of Sections 7.1(a) through 7.1(s) below. Furthermore, other than (i) as set forth in Section 7.1 of the Company Disclosure Letter, (ii) the payment of the Reimbursement to Merger Sub and (iii) the payment of the Company Termination Fee to Merger Sub, without the prior written consent of Parent, the Company shall not, and shall cause its Subsidiaries not to: (a) amend or otherwise change the Articles of Incorporation, the Bylaws or any Subsidiary Document; (b) except for transactions among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries, or as otherwise contemplated in Section 7.1(f), issue, sell, pledge, dispose, encumber or grant any shares or equity interests of its or its Subsidiaries’ capital stock, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of its or its Subsidiaries’ capital stock; provided, however, that the Company may issue Shares (i) upon the exercise of any Company Stock Option outstanding as of the date of this Agreement, (ii) issuable under the Company ESPP after the date of this Agreement pursuant to Section 3.8(e), (iii) in connection with the vesting or redemption of any Company Restricted Stock Unit and Company Performance Stock Unit outstanding as of the date of this Agreement in accordance with their terms or (iv) maintain in connection with full force and effect until the redemption Closing substantially the same levels of any notional interests deemed invested in Shares under the Company Deferred Compensation Plan, as amended and restated effective as coverage of January 31, 2014; (c) redeem, purchase or otherwise acquire, or propose or offer to redeem, purchase or otherwise acquire, any outstanding shares of capital stock or any other equity interests of the Company or any of its Subsidiaries, except as required pursuant to any Company Benefit Plans in effect as of the date of this Agreement; (d) declare, authorize, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, insurance with respect to the Company’s or any of its Subsidiaries’ capital stockAssets, other than dividends paid by any Subsidiary operations and activities of the Company to the Company or any wholly-owned Subsidiary of the Company; (e) except as required pursuant to existing written agreements (true and complete copies of which have been provided to Parent) or Company Benefit Plans are in effect as of the date of this Agreement, (v) comply in all material respects with all Laws applicable to the Company, (vi) maintain in full force and effect, and comply with, all of the material Permits, (vii) maintain its respective books and records in accordance with past practice, (vii) upon the reasonable request of FROZ, confer with FROZ concerning operational matters and (ix) otherwise report periodically to FROZ, upon the reasonable request of FROZ, concerning the status of the business, operations and finances of the Company. (b) From the date hereof through the Closing, except as otherwise required by Law or expressly provided in this Agreement, or provided on Section 7.1(edescribed in Schedule 5.2(b) of the Agreement or consented to in writing in advance by FROZ (such consent not to be unreasonably withheld), Sellers shall cause the Company Disclosure Schedule, to not: (i) increase the compensation amend or other benefits payable or to become payable to directors, employees, consultants, independent contractors or executive officers of the Company or modify any of its Subsidiariestheir Organizational Documents or corporate structure, except for or the terms of any Equity Securities; (ii) (A) from and after March 1, 2016, increases in compensation issue or other benefits made in the ordinary course of business consistent with past practice of up to 10% for otherwise encumber any individual and 2% in the aggregate with respect to all employees (including executive officers) Equity Securities of the Company and any of its Subsidiaries and Company, (B) cash bonuses to employees (other than executive officers) of less than $300,000 in the aggregate, (ii) grant declare or increase pay any severance dividends or termination pay todistributions on, or enter into or amend make any severance agreement with other distributions in respect of, any director, employee, consultant or independent contractor Equity Securities of the Company Company, or (C) purchase, redeem or otherwise acquire or dispose of any Equity Securities of its Subsidiaries, the Company; (iii) enter into incur any Indebtedness, make any investment in, or amend make any employment agreement with loan, advance or capital contribution to, any employee of the Company Person or make any of its Subsidiaries, capital expenditure without express written consent by FROZ; (iv) establish, adopt, enter into or amend any Company Benefit Plan, collective bargaining agreement, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees of the Company or any of its Subsidiaries, or any of their beneficiaries, or (v) enter into, amend, alter, adopt, implement or otherwise make any commitment to do any of the foregoing; (A) hire sell, lease or otherwise dispose of, or extend or exercise any executive officer option to sell, lease or promote otherwise dispose of, any person to an executive officer position material Assets or (B) mortgage or pledge any Assets of the Company, or create or suffer to exist any Lien (other than a Permitted Lien) thereupon, in each case other than in the ordinary course of business consistent with past practice, hire or promote any employee, consultant or independent contractor of the Company or any of its Subsidiaries; (gv) grant, confer fail to maintain its books and records in accordance with GAAP or award any options, convertible security, restricted stock units or other rights to acquire any of its or its Subsidiaries’ capital stock or take any action to cause to be exercisable or otherwise vest any otherwise unexercisable option or other award under any existing equity compensation arrangement or other Company Stock Plan, or enter into, amend, alter, adopt, implement or otherwise make any commitment to do material change in any method of the foregoingaccounting or Tax, pension or accounting practice, policy, principle or procedure, except as required by any changes in GAAP or applicable Law; (hvi) acquireamend any Tax Return, except in respect file any claim for a refund, change any method of Tax accounting, make or change any mergers, consolidations, business combinations among the Company and its wholly-owned Subsidiaries election or among the Company’s wholly-owned Subsidiaries (including by merger, consolidation, acquisition of stock settle or assets or otherwise), compromise any corporation, partnership, limited liability company, other business organization or any division thereof, or all or substantially all of the assets of any Person in connection with acquisitions or investments, or enter into any Contract with respect to Taxes that could reasonably be expected to result in an increase in Tax liability of FROZ or the Company after the Closing Date; (vii) pay, discharge, cancel or satisfy (a) Taxes or (b) any such acquisition, including any confidentiality, exclusivity, standstill claims or similar agreementsLiabilities, other than in connection with the acquisition payment, discharge or opening of new locations that do not involve the payment by the Company or any of its Subsidiaries in excess of $10 million in the aggregate; (i) sell, pledge, dispose of, transfer, abandon, exchange, swap, allow to lapse or expire, lease, license, mortgage satisfaction when due or otherwise encumber or subject to any Lien (including pursuant to a sale-leaseback transaction or an asset securitization transaction) (other than Permitted Liens) any (i) Owned Real Property (or portion thereof) or (ii) other properties, rights or assets with a fair market value in excess of $2.5 million individually or $7.5 million in the aggregate, except, in the case of clause (ii) for (A) sales of inventory in the ordinary course of business consistent with past practices, (B) transfers among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries and (C) dispositions of obsolete or other assets not used in or not material to the Company or its Subsidiaries with a net book value of not more than $5 million in the aggregate; (j) incur any (i) indebtedness for borrowed money, except for indebtedness of not more than $10 million in the aggregate incurred under the Company’s existing credit facilities or any replacement credit facility entered into in accordance with the terms of this Agreement, (ii) capitalized lease obligations other than in the ordinary course of business consistent with past practice; (viii) cancel, amend or waive any claims or rights of substantial value; (iiiix) guarantees and other arrangements having commence, compromise or settle, or take any material action with respect to, any Legal Proceedings; (x) except as may be required under the economic effect of a guarantee of any indebtedness of any other Person or (iv) obligations or undertakings to maintain or cause to be maintained the financial position or covenants of others or to purchase the obligations of others, except, in each case, for (A) indebtedness for borrowed money in connection with any renewal or replacement of an existing credit facility terms of the Company, provided that Benefit Plans or by Law (1) the prepayment terms of any such renewal or replacement credit facility are no less favorable to the Company or its Subsidiaries than the Company’s existing credit facilities and (2) no such renewal or replacement facility shall be entered into prior to April 1, 2016, or (B) with respect to trade payables incurred in the ordinary course of business; (k) modifyadopt, amend or terminate any Lease with annual rental payments greater than $1 million, other than Benefit Plan; (2) take any termination pursuant action to an expiration of accelerate the Lease in accordance with its termsvesting or payment, or waivefund or in any other way secure the payment, release of compensation or assign benefits under a Benefit Plan, to the extent not already provided in such Benefit Plan; (3) change the manner in which contributions to any rights Benefit Plan are made or claims under any Lease; (l) the basis on which such contributions are determined, except as permitted may be required by Section 7.1(j), (i) modify or amend any Company Material Contract which cannot be terminated by the Company or any of its Subsidiaries without material penalty upon notice of 60 days or less, (ii) terminate (other than in accordance with its terms) any Company Material Contract, (iii) waive, release or assign any rights or claims under any Company Material Contract GAAP; or (iv4) enter into forgive any Contract that if entered into prior loans to the date hereof would have been a Company Material Contract; (m) make any material change to its methods of accounting in effect as of August 1directors, 2015, except (i) as required by GAAP (officers or any interpretation thereof), Regulation S-X of the Exchange Act or as required by a Governmental Entity or quasi-Governmental Entity (including the Financial Accounting Standards Board or any similar organization), (ii) to permit the audit of the Company’s financial statements in compliance with GAAP, (iii) as required by a change in applicable Law or (iv) as disclosed in the Company SEC Reports filed prior to the date of this Agreement; (n) (i) change or revoke any material income Tax election, (ii) file any material amended income Tax Return, (iii) settle or compromise any material liability for income Taxes or surrender any claim for a refund of a material amount of income Taxes or (iv) change any material method of Tax accounting, other than in the case of clauses (ii) and (iii) hereof in respect of any income Taxes that have been identified in the reserves for income Taxes in Company’s GAAP financial statements; (o) settle, compromise, discharge or agree to settle any litigation, investigation, arbitration or proceeding other than those that do not involve the payment by the Company or any of its Subsidiaries of monetary damages in excess of $2.5 million in the aggregate, after taking into account any applicable reserves and any applicable insurance coverage, and do not involve any material injunctive or other material non-monetary relief or impose material restrictions on the business or operations of the Company or its Subsidiaries; (p) other than in accordance with Section 7.1(h), make any capital expenditures, except (i) capital expenditures made in accordance with the Company’s annual budget and capital expenditure plan, copies of which have been previously provided to Parent, or (ii) other capital expenditures in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $5 million; (q) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization Employees of the Company or any of its Subsidiaries Seller; (xi) grant, pay or alter through mergerprovide to any director, liquidation, reorganization officer or restructuring the corporate structure Employee of the Company any severance or termination payments or benefits or any of its Subsidiaries (increase in or enhancement to wages, commissions, bonus, severance, profit sharing, retirement, deferred compensation, insurance or other than the Merger); (r) increase the Company’s aggregate inventory beyond $650 millioncompensation or benefits; or (sxii) take, offer, propose or authorize any of, or enter into commit or agree to take any Contract or otherwise make any commitment to do any of of, the foregoing.

Conduct of the Company and the Subsidiaries. The Company covenants and agrees that, between the date of this Agreement and the Effective Time or the date, if any, on which this Agreement is terminated pursuant to Section 10.19.1, except (i) as may be required by Law, (ii) as may be agreed in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) as may be expressly permitted pursuant to this Agreement, Agreement or (iv) as set forth in Section 7.1 6.1 of the Company Disclosure Letter, (v) for the payment of the Reimbursement to Merger Sub or (vi) for the payment of the Company Termination Fee to Merger Sub, the business of the Company and its Subsidiaries shall be conducted onlyonly in, and such entities shall not take any action exceptexcept in, in the ordinary course of business and in a manner consistent with past practice in all material respects; and the Company and its Subsidiaries shall use their commercially reasonable best efforts to (x) preserve substantially intact the Company’s and business organization (except that any of its wholly-owned Subsidiaries may be merged with or into, or be consolidated with any of its other wholly-owned Subsidiaries or may be liquidated into the Company or any of its Subsidiaries’ business organization), (y) maintain existing relations with customers, suppliers, creditors and business partners that are integral to the operation of their business as presently conducted and (z) keep available the services of those of their present officers, employees and consultants who are integral to the operation of their businesses as presently conducted; provided, however, that any no action taken or not taken by the Company or its Subsidiaries in express compliance with a matter respect to matters specifically addressed by a specific any provision of Sections 7.1(a) through 7.1(s) this Section 6.1 shall not be deemed a breach of this sentence unless such action would constitute a breach of such specific provision of Sections 7.1(a) through 7.1(s) belowprovision. Furthermore, other than (i) as set forth in Section 7.1 6.1 of the Company Disclosure Letter, (ii) the payment of the Reimbursement to Merger Sub and (iii) the payment of the Company Termination Fee to Merger Sub, without the prior written consent of Parent, the Company shall not, and shall cause its Subsidiaries not to: (a) amend or otherwise change the Articles of Incorporationchange, in any material respect, the Bylaws articles of incorporation or bylaws of the Company or such equivalent organizational documents of any Subsidiary Documentof its Subsidiaries; (b) except for transactions among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries, or as otherwise contemplated in Section 7.1(f)6.1(e) of this Agreement with respect to options of the Company, issue, sell, pledge, dispose, encumber or grant any shares or equity interests of its or its Subsidiaries’ capital stock, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of its or its Subsidiaries’ capital stock; provided, however, however that the Company may issue Shares (i) shares upon the exercise of any Company Stock Option outstanding as of the date of hereof under this Agreement, (ii) issuable under the Company ESPP after the date of this Agreement pursuant to Section 3.8(e), (iii) in connection with the vesting or redemption of any Company Restricted Stock Unit and Company Performance Stock Unit outstanding as of the date of this Agreement in accordance with their terms or (iv) in connection with the redemption of any notional interests deemed invested in Shares under the Company Deferred Compensation Plan, as amended and restated effective as of January 31, 20146.1; (c) redeem, purchase or otherwise acquire, or propose or offer to redeem, purchase or otherwise acquire, any outstanding shares of capital stock or any other equity interests of except for the dividend declared by the Company or any of its Subsidiarieson July 2, except as required pursuant to any 2007 on the Company Benefit Plans Common Stock and Company Preferred Stock that is payable on August 21, 2007 (which dividend on the Company Preferred Stock shall not exceed $13,800 in effect as of the date of this Agreement; (d) aggregate), declare, authorize, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to the Company’s or any of its Subsidiaries’ capital stock, other than dividends paid by any wholly-owned Subsidiary of the Company to the Company or any wholly-owned Subsidiary of the Company; or repurchase, redeem or otherwise acquire any outstanding shares of the capital stock or other securities of, or other ownership interests in, the Company or any of the Subsidiaries; (ed) except as required pursuant to existing written agreements (true and complete copies of which have been provided to Parent) or Company Benefit Plans in effect as of the date of this Agreementhereof and provided or made available to Parent, or as otherwise required by Law or this Agreement, or provided on Section 7.1(e) of the Company Disclosure ScheduleLaw, (i) increase the compensation or other benefits payable or to become payable to directors, employees, consultants, independent contractors directors or executive officers officers, of the Company or any of its Subsidiaries, Subsidiaries except for (A) from and after March 1, 2016, increases in compensation or other benefits made in the ordinary course of business consistent with past practice of up to 10% practices (including, for any individual this purpose, the normal salary, bonus and 2% in the aggregate with respect to all employees (including executive officers) of the Company and any of its Subsidiaries and (B) cash bonuses to employees (other than executive officers) of less than $300,000 in the aggregateequity compensation review process conducted each year), (ii) grant or increase any severance or termination pay to, or enter into or amend any severance agreement with any director, employee, consultant director or independent contractor executive officer of the Company or any of its Subsidiaries, other than in the ordinary course of business consistent with past practice, (iii) enter into or amend any employment agreement with any employee executive officer of the Company or any its Subsidiaries (except to the extent necessary to replace a departing employee, except for employment agreements terminable on less than 30 days’ notice without penalty to the Company and except for extension of its Subsidiariesemployment agreements in the ordinary course of business consistent with past practice), or (iv) establish, adopt, enter into or amend any Company Benefit Plan, collective bargaining agreement, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees of the Company or any of its Subsidiaries, or any of their beneficiaries, or (v) enter into, amend, alter, adopt, implement or otherwise make any commitment to do any of the foregoing; (A) hire any executive officer or promote any person to an executive officer position or (B) other than in the ordinary course of business consistent with past practice, hire or promote any employee, consultant or independent contractor of the Company or any of its Subsidiaries; (ge) grant, confer or award any award, except as may be required under employment agreements executed prior to the date hereof and provided or made available to Parent, options, convertible security, restricted stock units or other rights to acquire any of its the Company’s or its Subsidiaries’ capital stock or take any action to cause to be exercisable or otherwise vest any otherwise unexercisable option or other award under any existing equity compensation arrangement or other Company Stock Plan, or enter into, amend, alter, adopt, implement or stock option plan (except as otherwise make provided by the terms of any commitment to do any of unexercisable options outstanding on the foregoingdate hereof); (hf) acquire, except in respect of any mergers, consolidations, business combinations among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries Subsidiaries, (including by merger, consolidation, or acquisition of stock or assets or otherwise), assets) any corporation, partnership, limited liability company, other business organization or any division thereof, or all or substantially all of the any assets of any Person in connection with acquisitions or investments, or enter into any Contract with respect to any such acquisition, including any confidentiality, exclusivity, standstill or similar agreements, other than in connection with the acquisition or opening of new locations that do not involve the payment by the Company or any of its Subsidiaries in excess of $10 million in the aggregate; (i) sell, pledge, dispose of, transfer, abandon, exchange, swap, allow to lapse or expire, lease, license, mortgage or otherwise encumber or subject to any Lien (including pursuant to a sale-leaseback transaction or an asset securitization transaction) (other than Permitted Liens) any (i) Owned Real Property (or portion thereof) or (ii) other properties, rights or assets with a fair market value in excess of $2.5 million individually or $7.5 million in the aggregate, except, in the case of clause (ii) for (A) sales of inventory in the ordinary course of business consistent with past practices, (B) transfers among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries and (C) dispositions of obsolete or other assets not used in or not material to the Company or its Subsidiaries with a net book value of not more than $5 million in the aggregate; (j) incur any (i) indebtedness for borrowed money, except for indebtedness of not more than $10 million in the aggregate incurred under the Company’s existing credit facilities or any replacement credit facility entered into in accordance with the terms of this Agreement, (ii) capitalized lease obligations other than in the ordinary course of business consistent with past practice, practice but which in no event is in excess of $250,000 individually or $1,000,000 in the aggregate; (iiig) guarantees and other arrangements having the economic effect of a guarantee of incur any indebtedness of any other Person or (iv) obligations or undertakings to maintain or cause to be maintained the financial position or covenants of others or to purchase the obligations of others, except, in each case, for (A) indebtedness for borrowed money in connection with any renewal or replacement of an existing credit facility of the Companymoney, provided that (1) the prepayment terms of guarantee any such renewal indebtedness for any Person (other than a Company Subsidiary), or replacement credit facility are no less favorable cancel any third party indebtedness owed to the Company or its Subsidiaries than except for indebtedness (i) incurred under the Company’s existing credit facilities and facilities, (2ii) no such renewal or replacement facility shall be entered into for borrowed money incurred pursuant to agreements in effect prior to April 1the execution of this Agreement, 2016, (iii) as otherwise required in the ordinary course of business consistent with past practice or (Biv) with respect other than as permitted pursuant to trade payables incurred this Section 6.1(g), in an aggregate principal amount not to exceed $5.0 million; (h) terminate, cancel, modify or amend any Company Material Contract other than in the ordinary course of business; (k) modify, amend or terminate any Lease with annual rental payments greater than $1 million, other than any termination pursuant to an expiration of the Lease in accordance with its terms, or waive, release or assign any rights or claims under any Lease; (l) except as permitted by Section 7.1(j), (i) modify or amend any Company Material Contract which cannot be terminated by the Company or any of its Subsidiaries without material penalty upon notice of 60 days or less, (ii) terminate (other than in accordance with its terms) any Company Material Contract, (iii) waive, release or assign any rights or claims under any Company Material Contract or (iv) enter into any Contract that if entered into prior to the date hereof would have been a Company Material Contract; (m) make any material change to its methods of accounting in effect as of August 1January 31, 20152007, except (i) as required by GAAP (or any interpretation thereof), Regulation S-X of the Exchange Act or as required by a Governmental Entity or quasi-Governmental Entity (including the Financial Accounting Standards Board or any similar organization), (ii) to permit the audit of the Company’s financial statements in compliance with GAAP, (iii) as required by a change in applicable Law or (iv) as disclosed in the Company SEC Reports Documents filed prior to the date of this Agreementhereof; (nj) except for transactions among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries, sell, lease, license, transfer, exchange or swap, mortgage or otherwise encumber (iincluding securitizations), or subject to any Lien (other than Permitted Liens) change or revoke otherwise dispose of any material income Tax election, (ii) file any material amended income Tax Return, (iii) settle portion of its properties or compromise any material liability for income Taxes or surrender any claim for a refund of a material amount of income Taxes or (iv) change any material method of Tax accountingassets, other than in the case of clauses (ii) and (iii) hereof in respect of any income Taxes that have been identified in the reserves for income Taxes in Company’s GAAP financial statements; (o) settle, compromise, discharge or agree to settle any litigation, investigation, arbitration or proceeding other than those that do not involve the payment by the Company or any of its Subsidiaries of monetary damages in excess of $2.5 million in the aggregate, after taking into account any applicable reserves and any applicable insurance coverage, and do not involve any material injunctive or other material non-monetary relief or impose material restrictions on the business or operations of the Company or its Subsidiaries; (p) other than in accordance with Section 7.1(h), make any capital expenditures, except (i) capital expenditures made in accordance with the Company’s annual budget and capital expenditure plan, copies of which have been previously provided to Parent, or (ii) other capital expenditures in the ordinary course of business consistent with past practice and except (A) pursuant to existing agreements in an aggregate amount not effect prior to exceed $5 millionthe execution of this Agreement provided or made available to Parent or (B) as may be required by applicable Law; (qk) adopt pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), except for (i) the payment, discharge or satisfaction of liabilities or obligations in the ordinary course of business or in accordance with their terms or (ii) settlements or compromises of any litigation (whether or not commenced prior to the date of this Agreement) where the amount paid (after giving effect to insurance proceeds actually received) in such settlement or compromise does not exceed $250,000 individually or $500,000 in the aggregate for all such settlements or compromises; (l) take any action (other than filing bona fide claims) that would make a plan Policy void or voidable or result in an increase in the premium payable under a Policy or prejudice the ability to effect equivalent insurance in the future, and shall continue each Policy or suitable replacements; (i) make, change or rescind any material Tax election; (ii) settle or compromise any material Tax liability, audit claim or assessment; (iii) file any amended Tax Return involving a material amount of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization Taxes; (iv) prepare any Tax Returns in a manner which is not consistent in all material respects with the past practice of the Company or any of and its Subsidiaries with respect to the treatment of items on such Tax Returns; or alter through merger, liquidation, reorganization or restructuring the corporate structure of the Company or (v) incur any of its Subsidiaries (material liability for Taxes other than in the Merger)ordinary course of business; (rn) increase the Company’s aggregate inventory beyond $650 millionclose more than ten (10) retail stores; or (so) authorize or enter into any Contract written agreement or otherwise make any commitment to do any of the foregoing.

Conduct of the Company and the Subsidiaries. The Company covenants and agrees that, between the date of this Agreement and the Effective Time or the date, if any, on which this Agreement is terminated pursuant to Section 10.19.1, except (i) as may be required by Law, (ii) as may be agreed in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) as may be expressly permitted pursuant to this Agreement, Agreement or (iv) as set forth in Section 7.1 6.1 of the Company Disclosure Letter, (v) for the payment of the Reimbursement to Merger Sub or (vi) for the payment of the Company Termination Fee to Merger Sub, the business of the Company and its Subsidiaries shall be conducted onlyonly in, and such entities shall not take any action exceptexcept in, in the ordinary course of business and in a manner consistent with past practice in all material respects; , and the Company and its Subsidiaries shall use their commercially reasonable best efforts to (xA) preserve substantially intact the Company’s 's and its Subsidiaries’ ' business organizationorganization in all material respects, (yB) maintain existing relations with customers, suppliers, creditors and business partners that are integral to the operation of their business businesses as presently conducted and (zC) keep available the services of those of their present officers, employees and consultants who are integral to the operation of their businesses as presently conducted; provided, however, that any action taken or not taken by the Company or its Subsidiaries in express compliance with a matter specifically addressed by a specific provision of Sections 7.1(a) through 7.1(s) this Section 6.1 shall not be deemed a breach of this sentence unless such action would constitute a breach of such specific provision of Sections 7.1(a6.1(a) through 7.1(s6.1(q) below. Furthermore, other than (i) as set forth in Section 7.1 6.1 of the Company Disclosure Letter, (ii) the payment of the Reimbursement to Merger Sub and (iii) the payment of the Company Termination Fee to Merger Sub, without the prior written consent of ParentParent (which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall not, and the Company shall cause its Subsidiaries not to: (a) amend or otherwise change the Amended and Restated Articles of Incorporation, Incorporation or By-Laws of the Bylaws Company or such equivalent organizational documents of any Subsidiary Documentof its Subsidiaries; (b) except for transactions among the Company and its wholly-owned Subsidiaries or among the Company’s 's wholly-owned Subsidiaries, or as otherwise contemplated in Section 7.1(f)6.1(f) of this Agreement, issue, sell, pledge, dispose, encumber or grant any shares or equity interests of its or its Subsidiaries’ ' capital stock, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of its or its Subsidiaries’ ' capital stock; provided, however, that the Company may issue Shares (i) shares upon the exercise of any Company Stock Option outstanding as of the date of this Agreement, (ii) issuable under the Company ESPP after the date of this Agreement pursuant to Section 3.8(e), (iii) in connection with hereof or the vesting or redemption of any Company Restricted Stock Unit and or Company Performance Deferred Stock Unit outstanding as of the date of this Agreement in accordance with their terms or (iv) in connection with the redemption of any notional interests deemed invested in Shares under the Company Deferred Compensation Plan, as amended and restated effective as of January 31, 2014terms; (c) redeem, purchase or otherwise acquire, or propose or offer to redeem, purchase or otherwise acquire, any outstanding shares of capital stock or any other equity interests of the Company or any of its Subsidiaries, except as required pursuant to any Company Benefit Plans in effect as of the date of this Agreementhereof; (d) declare, authorize, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to the Company’s 's or any of its Subsidiaries’ ' capital stock, other than dividends paid by any Subsidiary of the Company to the Company or any wholly-owned Subsidiary of the Company; (e) except as required pursuant to existing written agreements (true and complete copies of which have been provided to Parent) or Company Benefit Plans in effect as of the date of this Agreementhereof, or as otherwise required by Law or this Agreement, or provided on Section 7.1(e) of the Company Disclosure Schedule, (i) increase the compensation or other benefits payable or to become payable to directors, employees, consultants, independent contractors directors or executive officers of the Company or any of its Subsidiaries, except for (A) from and after March 1, 2016, increases in compensation or other benefits made in the ordinary course of business consistent with past practice of up to 10% for any individual and 2% in the aggregate with respect to all employees (including executive officers) of the Company and any of its Subsidiaries and (B) cash bonuses to employees (other than executive officers) of less than $300,000 in the aggregate, (ii) grant or materially increase any severance or termination pay to, or enter into or materially amend any severance agreement or termination agreement with any director, employee, consultant director or independent contractor executive officer of the Company or any of its Subsidiaries, (iii) enter into or materially amend any employment agreement with any employee executive officer of the Company (except for employment agreements terminable on less than 30 calendar days' notice without penalty or any to the extent to replace a departing employee, in which case only in the ordinary course of its Subsidiariesbusiness consistent with past practice), or (iv) establish, adopt, enter into or amend any Company Benefit Plan, collective bargaining agreement, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees of the Company or any of its Subsidiaries, or any of their beneficiaries, or (v) enter into, amend, alter, adopt, implement or otherwise make any commitment to do any of the foregoing; (A) hire any executive officer or promote any person to an executive officer position or (B) other than in the ordinary course of business consistent with past practice, hire or promote any employee, consultant or independent contractor of the Company or any of its Subsidiaries; (gf) grant, confer or award any award, options, convertible security, restricted stock units or other rights to acquire any of its or its Subsidiaries’ ' capital stock or take any action to cause to be exercisable or otherwise vest any otherwise unexercisable option or other award under any existing equity compensation arrangement or stock option plan, other than grants of Company Restricted Stock Units pursuant to deferral elections made prior to the date hereof under the Company Deferred Compensation Plan, or enter into, amend, alter, adopt, implement or otherwise make any commitment to do any of the foregoing; (hg) acquire, except in respect of any mergers, consolidations, business combinations among the Company and its wholly-owned Subsidiaries or among the Company’s 's wholly-owned Subsidiaries Subsidiaries, (including by merger, consolidation, acquisition of stock or assets or otherwise), ) any corporation, partnership, limited liability company, other business organization or any division thereof, or all or of substantially all of the assets of any Person in connection with acquisitions or investments, or enter into any Contract agreement, arrangement or understanding with respect to any such acquisition, including any confidentiality, exclusivity, standstill or similar agreements, other than in connection with the acquisition or opening of new locations that do not involve the payment by the Company or any of its Subsidiaries in excess of $10 million in the aggregate; (i) sell, pledge, dispose of, transfer, abandon, exchange, swap, allow to lapse or expire, lease, license, mortgage or otherwise encumber or subject to any Lien (including pursuant to a sale-leaseback transaction or an asset securitization transaction) (other than Permitted Liens) any (i) Owned Real Property (or portion thereof) or (ii) other properties, rights or assets with a fair market value in excess of $2.5 million individually or $7.5 million in the aggregate, except, in the case of clause (ii) for (A) sales of inventory in the ordinary course of business consistent with past practices, (B) transfers among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries and (C) dispositions of obsolete or other assets not used in or not material to the Company or its Subsidiaries with a net book value of not more than $5 million in the aggregate; (jh) incur any (i) indebtedness for borrowed money, except for indebtedness of not more than $10 million in the aggregate incurred under the Company’s existing credit facilities or any replacement credit facility entered into in accordance with the terms of this Agreement, money (ii) capitalized lease obligations other than in the ordinary course of business consistent with past practice, (iii) guarantees and other arrangements having the economic effect of a guarantee of any indebtedness of any other Person or (iv) obligations or undertakings to maintain or cause to be maintained the financial position or covenants of others or to purchase the obligations of others, except, in each case, except for (A) indebtedness for borrowed money in connection with any renewal or replacement of an existing credit facility of the Company, provided that (1) the prepayment terms of any such renewal or replacement credit facility are no less favorable aggregate principal amount not to the Company or its Subsidiaries than the Company’s existing credit facilities and (2) no such renewal or replacement facility shall be entered into prior to April 1, 2016, exceed $5 million or (B) with respect to trade payables incurred in the ordinary course of businesspayables; (ki) modify, amend or terminate any Lease with annual rental payments greater than $1 million, other than any termination pursuant to an expiration of the Lease in accordance with its terms, or waive, release or assign any rights or claims under any Lease; (l) except as permitted by Section 7.1(j), (i) modify or amend any Company Material Contract with a term longer than one (1) year which cannot be terminated by the Company or any of its Subsidiaries without material penalty upon notice of 60 sixty (60) calendar days or less, (ii) terminate (other than in accordance with its terms) any Company Material Contract, (iii) waive, release or assign any rights or claims under any Company Material Contract or (iviii) enter into any Contract that if entered into prior to the date hereof would have been a Company Material Contract; (mj) make any material change to its methods of accounting in effect as of August 1October 29, 20152011, except (i) as required by GAAP (or any interpretation thereof), Regulation S-X of the Exchange Act or as required by a Governmental Entity or quasi-Governmental Entity (including the Financial Accounting Standards Board or any similar organization), (ii) to permit the audit of the Company’s 's financial statements in compliance with GAAP, (iii) as required by a change in applicable Law or (iv) as disclosed in the Company SEC Reports Documents filed prior to the date of this Agreementhereof; (nk) except for transactions among the Company and its wholly-owned Subsidiaries or among the Company's wholly-owned Subsidiaries, sell, lease, license, transfer, exchange or swap, mortgage or otherwise encumber (iincluding securitizations), or subject to any Lien (other than Permitted Liens) change or revoke otherwise dispose of any material income Tax election, portion of its properties or assets (iiother than Inventory in the ordinary course of business consistent with past practice); (l) file any material amended income amendment to any Tax ReturnReturn or make any election relating to Taxes, (iii) change any election relating to Taxes already made, adopt or change any accounting method relating to Taxes, enter into any closing agreement relating to Taxes, settle any claim or compromise any material liability for income assessment relating to Taxes or surrender consent to any claim for a refund of a material amount of income or assessment relating to Taxes or (iv) change any material method waiver of the statute of limitations for any such claim or assessment if any of the foregoing would reasonably be expected to materially increase the Tax accounting, other than in liability of the case Company and its Subsidiaries or materially reduce a Tax attribute of clauses (ii) the Company and (iii) hereof in respect of any income Taxes that have been identified in the reserves for income Taxes in Company’s GAAP financial statementsits Subsidiaries; (om) settle, compromise, discharge or agree to settle any litigation, investigation, arbitration or proceeding other than those that do not involve the payment by the Company or any of its Subsidiaries of monetary damages in excess of $2.5 2 million in the aggregate, after taking into account any applicable reserves and any applicable insurance coverage, and do not involve any material injunctive or other material non-monetary relief or impose material restrictions on the business or operations of the Company or its Subsidiaries; (pn) other than in accordance with Section 7.1(h), make any capital expenditures, except (i) capital expenditures made in accordance with the Company’s 's annual budget and capital expenditure plan, copies of which have been previously provided to Parent, or (ii) other capital expenditures in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $5 million; (qo) sell, lease, mortgage, sell and leaseback or otherwise dispose of any Real Property or any interests therein, other than in the ordinary course of business with respect to property designated as "surplus" in Section 4.17 of the Company Disclosure Letter; (p) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries or alter through merger, liquidation, reorganization or restructuring the corporate structure of the Company or any of its Subsidiaries (other than the Merger); (r) increase the Company’s aggregate inventory beyond $650 million; or (sq) authorize or enter into any Contract written agreement or otherwise make any commitment to do any of the foregoing.

Conduct of the Company and the Subsidiaries. The Company covenants and agrees that, between During the period from the date of this Agreement and continuing until the Effective Time or Closing, the date, if any, on which this Agreement is terminated pursuant Company agrees as to Section 10.1itself and the Subsidiaries that, except (i) as may be required expressly contemplated or permitted by Lawthis Agreement or the Schedules, (ii) as may be agreed required by applicable Law, or (iii) to the extent that the Buyer shall otherwise consent in writing by Parent (writing, which consent shall not be unreasonably withheld, delayed conditioned or conditioned), delayed: (iiia) as may be expressly permitted pursuant to this Agreement, (iv) as set forth in Section 7.1 of the Company Disclosure Letter, (v) for the payment of the Reimbursement to Merger Sub or (vi) for the payment of the Company Termination Fee to Merger Sub, the business of the Company and its the Subsidiaries shall be conducted only, and such entities shall not take any action except, use reasonable efforts to carry on their respective businesses in the usual, regular and ordinary course of business and in a manner consistent with past practice in all material respects; , in substantially the same manner as heretofore conducted, and the Company and its Subsidiaries shall use their reasonable best efforts to preserve intact their present lines of business and preserve their relationships (xcontractual or otherwise) preserve substantially intact the Company’s and its Subsidiaries’ business organization, (y) maintain existing relations with customers, supplierssuppliers and others having business dealings with them (including, creditors without limitation, through ordinary course renewals, negotiations with and business partners that are integral amendments to such relationships) to the operation of end that their business as presently conducted and (z) keep available ongoing businesses shall not be impaired in any material respect at the services of those of their present officers, employees and consultants who are integral to the operation of their businesses as presently conductedClosing; provided, however, that any no action taken or not taken by the Company or its the Subsidiaries in express compliance with a matter respect to matters specifically addressed by a specific any other provision of Sections 7.1(a) through 7.1(s) this Section 6.01 shall not be deemed a breach of this sentence Section 6.01(a), unless such action would constitute a breach of one or more of such specific provision other provisions; (b) the Company shall not, and shall not permit any of Sections 7.1(athe Subsidiaries to (A) through 7.1(sdeclare or pay any dividends on or make other distributions in respect of any of its or their capital stock (except for (x) below. Furthermoredividends in Cash or as otherwise contemplated by the Certificate of Incorporation and (y) dividends by the Subsidiaries to other Subsidiaries or to the Company), (B) split, combine or reclassify any of its or their capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, shares of its or their capital stock (except for any such transaction by a direct or indirect Subsidiary which remains a direct or indirect Subsidiary after consummation of such transaction), or (C) repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible into or exercisable for any shares of its capital stock (except for repurchases and redemptions paid in Cash); (c) the Company shall not, and shall not permit any of the Subsidiaries to, incur any Indebtedness (other than (i) as set forth in Section 7.1 of borrowings under the Company Disclosure Letter, Company’s existing credit facilities and (ii) other performance bonds or letters of credit, in each case entered into in the payment ordinary course of business consistent with past practice); provided, however, that the foregoing shall not prohibit the Company or any of the Reimbursement Subsidiaries from repaying any Indebtedness to Merger Sub and an ACAS Holder or any of their respective Affiliates; (iiid) the payment Company shall not, and shall not permit any of the Company Termination Fee Subsidiaries to, issue, deliver or sell, or authorize or propose the issuance, delivery or sale of, any shares of its capital stock of any class, or any securities convertible into or exercisable for, or any rights, warrants, or options to Merger Subacquire, without any such shares of its capital stock, or enter into any agreement with respect to any of the prior written consent foregoing, other than issuances of Parentcapital stock by a direct or indirect Subsidiary to such Subsidiary’s parent or another direct or indirect Subsidiary; (e) other than to the extent required to comply with its obligations hereunder or required by Law, the Company shall not, and shall cause not permit any of the Subsidiaries to, amend its Subsidiaries not to: (a) amend or otherwise change the Articles their certificate of Incorporationincorporation, the Bylaws by-laws or any Subsidiary Documentother equivalent governing documents; (bf) except for transactions among the Company shall not, and shall not permit any of the Subsidiaries to, acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire or agree to acquire or in-license any assets or rights (other than the acquisition or in-license of assets used in the operations of the business of the Company and its wholly-owned the Subsidiaries in the ordinary course consistent with past practice); (g) other than as may be required by or among in conformance with Law in order to permit or facilitate the Company’s wholly-owned Subsidiariesconsummation of the Transactions contemplated hereby or the transactions disclosed in the Schedules, or as otherwise contemplated in Section 7.1(f)the Company shall not, issueand shall not permit any of the Subsidiaries to, sell, pledgeencumber or otherwise dispose of, disposeor agree to sell, encumber or grant any shares or equity interests otherwise dispose of its or its Subsidiaries’ capital stock, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of its or its Subsidiaries’ capital stock; provided, however, that the Company may issue Shares (i) upon any property or assets (other than the exercise disposition of any Company Stock Option outstanding as Inventory or equipment in the ordinary course of the date of this Agreementbusiness consistent with past practice), (ii) issuable under the Company ESPP after the date of this Agreement pursuant mortgage or encumber or otherwise subject to Section 3.8(eany Lien any properties or assets (other than by Permitted Liens), or (iii) in connection with the vesting cancel or redemption of waive any Company Restricted Stock Unit and Company Performance Stock Unit outstanding as of the date of this Agreement in accordance with their terms debts owed to or (iv) in connection with the redemption of any notional interests deemed invested in Shares under claims or rights held by the Company Deferred Compensation Plan, as amended and restated effective as or any Subsidiary (except in the ordinary course of January 31, 2014business consistent with past practice); (ch) redeemthe Company shall not, purchase and shall not permit any of the Subsidiaries to, (x) make any loans, advances or otherwise acquirecapital contributions to, or propose or offer to redeem, purchase or otherwise acquireinvestments in, any outstanding shares of capital stock other Person, other than (A) by the Company or a direct or indirect Subsidiary to or in the Company or any other equity interests direct or indirect Subsidiary, (B) pursuant to any contract or other legal obligation of the Company or any of its Subsidiaries, except Subsidiary as required pursuant to any Company Benefit Plans in effect as of the date of this Agreement; hereof or (dC) declare, authorize, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to the Company’s or any of its Subsidiaries’ capital stock, other than dividends paid by any Subsidiary of the Company to the Company or any wholly-owned Subsidiary of the Company; (e) except as required pursuant to existing written agreements (true and complete copies of which have been provided to Parent) or Company Benefit Plans in effect as of the date of this Agreement, as otherwise required by Law or this Agreement, or provided on Section 7.1(e) of the Company Disclosure Schedule, (i) increase the compensation or other benefits payable or to become payable to directors, employees, consultants, independent contractors or executive officers of the Company or any of its Subsidiaries, except for (A) from and after March 1, 2016, increases in compensation or other benefits made in the ordinary course of business consistent with past practice or (y) create, incur, assume or suffer to exist any indebtedness, issuances of up debt securities, guarantees, loans or advances to 10% for any individual and 2% in the aggregate with respect to all employees (including executive officers) of the Company and any of its Subsidiaries and (B) cash bonuses to employees (other than executive officers) of less than $300,000 in the aggregate, (ii) grant or increase any severance or termination pay to, or enter into or amend any severance agreement with any director, employee, consultant or independent contractor of the Company or any Subsidiary not in existence as of its Subsidiariesthe date of this Agreement except (1) pursuant to the credit facilities, indentures (but not in excess of amounts authorized for issuance there under as of the date of this Agreement) and other arrangements in existence on the date of this Agreement, (iii2) by the Company or a direct or indirect Subsidiary to the Company or any other direct or indirect Subsidiary, (3) arising from the sale, factoring or discounting of receivables in the ordinary course of business consistent with past practice or (4) trade debt and commercial finance in the ordinary course of business consistent with past practice, in each case as such credit facilities, indentures and other arrangements and other existing indebtedness may be amended, extended, modified, refunded, renewed or refinanced after the date of this Agreement; (i) other than as may be required by an existing Contract or other arrangement disclosed to Buyer, neither the Company nor any Subsidiary shall (A) increase the amount of cash compensation or severance pay of any director or executive officer, (B) make any material increase in, or commitment to increase materially, any employee benefits or (C) adopt or make any commitment to adopt any material new Employee Benefit Plan or make any material contribution, other than regularly scheduled contributions, to any Employee Benefit Plan or (D) make or grant any bonus or any wage or salary increase to any employee or group of employees, or make or grant any increase in any Employee Benefit Plan, or amend or terminate any existing Employee Benefit Plan or adopt any new Employee Benefit Plan, except for such salary increases and bonus or incentive compensation payments for fiscal year ending December 31, 2012 as contemplated by the Company’s 2013 annual budget furnished to Buyer; (j) the Company shall not, and shall not permit any of the Subsidiaries to, (A) change its fiscal year, (B) change any Tax elections, amend any Tax Returns, change the past practice or reporting position in filing any Tax Returns, or settle any Tax controversies or audits (except in the ordinary course of business consistent with past practice or as otherwise required by applicable Law), or (C) make any change to its methods of accounting in effect as of the date hereof; (k) other than in connection with any action expressly permitted by any other subsection of this Section 6.01 and except for any new contract awards, and any contract renewals, negotiations and amendments entered into in the ordinary course of business consistent with past practice, neither the Company nor any Subsidiary shall (i) enter into or amend any employment agreement with any employee of the Company or any of its Subsidiaries, (iv) establish, adopt, enter into or amend any Company Benefit Plan, collective bargaining agreement, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees of the Company or any of its Subsidiariesbecome bound by, or any of their beneficiaries, or (v) enter into, amend, alter, adopt, implement or otherwise make any commitment to do permit any of the foregoing; assets owned or used by it to become bound by, any Material Contract or Contract of the type required to be disclosed pursuant to Section 4.16 of this Agreement (A) hire any executive officer or promote any person to an executive officer position or (B) other than in the ordinary course of business consistent with past practice, hire or promote any employee, consultant or independent contractor of the Company or any of its Subsidiaries; (g) grant, confer or award any options, convertible security, restricted stock units or other rights to acquire any of its or its Subsidiaries’ capital stock or take any action to cause to be exercisable or otherwise vest any otherwise unexercisable option or other award under any existing equity compensation arrangement or other Company Stock Plan, or enter into, amend, alter, adopt, implement or otherwise make any commitment to do any of the foregoing; (h) acquire, except in respect of any mergers, consolidations, business combinations among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries (including by merger, consolidation, acquisition of stock or assets or otherwise), any corporation, partnership, limited liability company, other business organization or any division thereof, or all or substantially all of the assets of any Person in connection with acquisitions or investments, or enter into any Contract with respect to any such acquisition, including any confidentiality, exclusivity, standstill or similar agreements, other than in connection with the acquisition or opening of new locations that do not involve the payment by the Company or any of its Subsidiaries in excess of $10 million in the aggregate; (i) sell, pledge, dispose of, transfer, abandon, exchange, swap, allow to lapse or expire, lease, license, mortgage or otherwise encumber or subject to any Lien (including pursuant to a sale-leaseback transaction or an asset securitization transaction) (other than Permitted Liens) any (i) Owned Real Property (or portion thereof) or (ii) other properties, rights or assets with a fair market value in excess of $2.5 million individually or $7.5 million in the aggregate, except, in the case of clause (ii) for (A) sales of inventory in the ordinary course of business consistent with past practices, (B) transfers among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries and (C) dispositions of obsolete or other assets not used in or not material to the Company or its Subsidiaries with a net book value of not more than $5 million in the aggregate; (j) incur any (i) indebtedness for borrowed money, except for indebtedness of not more than $10 million in the aggregate incurred under the Company’s existing credit facilities or any replacement credit facility entered into in accordance with the terms of this Agreement, (ii) capitalized lease obligations modify, amend, prematurely terminate (other than in the ordinary course of business consistent with past practice) or waive any material right or remedy under, any such Contract, or (iii) guarantees and other arrangements having default in the economic effect of a guarantee performance of any indebtedness of any other Person or (iv) obligations or undertakings to maintain or cause to be maintained the financial position or covenants of others or to purchase the obligations of others, except, in each case, for (A) indebtedness for borrowed money in connection with any renewal or replacement of an existing credit facility of the Company, provided that (1) the prepayment terms of material covenant under any such renewal or replacement credit facility are no less favorable to the Company or its Subsidiaries than the Company’s existing credit facilities and (2) no such renewal or replacement facility shall be entered into prior to April 1Contract, 2016, or (B) with respect to trade payables incurred in the ordinary course of business; (k) modify, amend or terminate which default is not cured within any Lease with annual rental payments greater than $1 million, other than any termination pursuant to an expiration of the Lease in accordance with its terms, or waive, release or assign any rights or claims under any Leaseapplicable grace period; (l) neither the Company nor any Subsidiary shall effectuate a “plant closing” or “mass layoff” (as those terms are defined under the WARN Act) affecting in whole or in part any site of employment, facility, operating unit or employees of the Company or any Subsidiary; (m) neither the Company nor any Subsidiary shall make capital expenditures in excess of $100,000, except as permitted by Section 7.1(j), (i) modify or amend any Company Material Contract which cannot be terminated for progress payments for capital equipment previously ordered by the Company or any of its Subsidiaries without material penalty upon notice of 60 days Subsidiary and set forth on Schedule 6.01(m) or lessin the Company’s 2013 annual budget furnished to Buyer; (n) neither the Company nor any Subsidiary shall take any action that would reasonably be expected to, (ii) terminate (other than in accordance with its terms) or fail to take any Company Material Contract, (iii) waive, release or assign any rights or claims under any Company Material Contract or (iv) enter into any Contract action that if entered into not taken would reasonably be expected to, result in the occurrence of any event that, if such event had occurred subsequent to the Latest Balance Sheet date and prior to the date hereof or the Closing Date, would have been a Company Material Contract; (m) make any material change required to its methods of accounting in effect as of August 1, 2015, except (i) as required by GAAP (or any interpretation thereof), Regulation S-X of the Exchange Act or as required by a Governmental Entity or quasi-Governmental Entity (including the Financial Accounting Standards Board or any similar organization), (ii) to permit the audit of the Company’s financial statements in compliance with GAAP, (iii) as required by a change in applicable Law or (iv) as disclosed in the Company SEC Reports filed prior to the date of this Agreement; (n) (i) change or revoke any material income Tax election, (ii) file any material amended income Tax Return, (iii) settle or compromise any material liability for income Taxes or surrender any claim for a refund of a material amount of income Taxes or (iv) change any material method of Tax accounting, other than in the case of clauses (ii) and (iii) hereof in respect of any income Taxes that have been identified in the reserves for income Taxes in Company’s GAAP financial statementsdisclosed on Schedule 4.13; (o) settle, compromise, discharge or agree to settle any litigation, investigation, arbitration or proceeding other than those that do not involve the payment by neither the Company nor any Subsidiary shall take any action that is intended or would reasonably be expected to result in any of its Subsidiaries of monetary damages the representations and warranties set forth in excess of $2.5 million ARTICLE 4 being or becoming untrue in the aggregate, after taking into account any applicable reserves and any applicable insurance coverage, and do not involve any material injunctive or other material non-monetary relief or impose material restrictions on the business or operations of the Company or its Subsidiaries;respect; and (p) other than in accordance with Section 7.1(h), make any capital expenditures, except (i) capital expenditures made in accordance with the Company’s annual budget and capital expenditure plan, copies of which have been previously provided to Parent, or (ii) other capital expenditures in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $5 million; (q) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of neither the Company or nor any of its Subsidiaries or alter through merger, liquidation, reorganization or restructuring the corporate structure of the Company or any of its Subsidiaries (other than the Merger); (r) increase the Company’s aggregate inventory beyond $650 million; or (s) authorize or enter into any Contract or otherwise make any commitment Subsidiary shall agree to do take any of the foregoingactions described in this Section 6.01.

Conduct of the Company and the Subsidiaries. The Company covenants and agrees that, between from and after the date of this Agreement and hereof until the Effective Time or the date, if any, on which this Agreement is terminated pursuant to Section 10.1Time, except (i) as may be required by Law, (ii) as may be expressly permitted pursuant to this Agreement, as set forth in Section 6.1 of the Company Disclosure Letter, or as agreed in writing by Parent (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), (iii) as may be expressly permitted pursuant to this Agreement, (iv) as set forth in Section 7.1 of the Company Disclosure Letter, (v) for the payment of the Reimbursement to Merger Sub or (vi) for the payment of the Company Termination Fee to Merger Sub, the business of the Company and its Subsidiaries shall be conducted only, and such entities shall not take any action except, in the ordinary course of business and in a manner consistent with past practice in all material respects; , and the Company and its Subsidiaries shall use their reasonable best efforts to (x) preserve substantially intact the Company’s and its Subsidiaries’ business organization, (y) maintain existing relations with customers, suppliers, creditors Clients and other Persons with whom the Company or any of its Subsidiaries has business partners that are integral to the operation of their business as presently conducted relations and (z) keep available the services of those of their present officers, employees and consultants who are integral to the operation of their businesses as presently conducted; provided, however, that any action taken or not taken by . Without limiting the Company or its Subsidiaries in express compliance with a matter specifically addressed by a specific provision generality of Sections 7.1(a) through 7.1(s) shall not be deemed a breach of this sentence unless such action would constitute a breach of such specific provision of Sections 7.1(a) through 7.1(s) below. Furthermorethe foregoing, other than (i) as set forth in Section 7.1 6.1 of the Company Disclosure Letter, (ii) the payment of the Reimbursement to Merger Sub and (iii) the payment of the Company Termination Fee to Merger Sub, without the prior written consent of ParentParent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company shall not, and the Company shall cause its Subsidiaries not to: (a) amend or otherwise change the Articles of Incorporation, the Bylaws or any Subsidiary DocumentOrganizational Documents; (b) except for transactions among the Company and its wholly-wholly owned Subsidiaries or among the Company’s wholly-wholly owned Subsidiaries, or Subsidiaries as otherwise contemplated in by Section 7.1(f)6.1(h) of this Agreement, issue, sell, pledge, dispose, encumber or grant any shares or equity interests of its or its Subsidiaries’ capital stock, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of its or its Subsidiaries’ capital stock; provided, however, that the Company may issue Shares (i) except as required upon the exercise of any Company Stock Option outstanding as of the date of this Agreement, (ii) issuable under the Company ESPP after the date of this Agreement pursuant to Section 3.8(e), (iii) in connection with hereof or the vesting or redemption of any Company Restricted Stock Unit and or Company Performance Stock Unit Award, in each case, outstanding as of the date of this Agreement hereof, in accordance with their terms or (iv) in connection with the redemption of any notional interests deemed invested in Shares and for granting Company Restricted Stock Units as permitted under the Company Deferred Compensation Plan, as amended and restated effective as of January 31, 2014Section 6.1(g); (c) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire, or propose or offer to redeem, purchase or otherwise acquire, directly or indirectly, any outstanding shares of capital stock or any other equity interests of the Company or any of its Subsidiaries, except as required pursuant to any Company Benefit Plans in effect as of the date of hereof or this Agreement; (d) declare, authorize, make make, set aside or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to the Company’s or any of its Subsidiaries’ capital stock, other than (i) cash dividends paid by any wholly owned Subsidiary of the Company to the Company or any wholly-other wholly owned Subsidiary of the Company, (ii) regular quarterly cash dividends on the Company Capital Stock not in excess of $0.05 per quarter, (iii) the cash distribution by EFC LLC described in Section 6.1(d)(iii) of the Company Disclosure Letter and (iv) cash distributions by any Subsidiary of the Company other than EFC LLC to such Subsidiary’s members other than the Company or another Subsidiary thereof in the ordinary course of business consistent with past practice and that are required pursuant to the terms of the agreements governing such Subsidiaries as in effect as of the date hereof; (e) except as required pursuant to existing written agreements (true and complete copies of which have been provided to Parent) or Company Benefit Plans in effect as of the date of this Agreementhereof, or as otherwise required by Law or this Agreement, or provided on Section 7.1(e) of the Company Disclosure Schedule, (i) increase the compensation or other benefits payable or to become payable to directors, employees, consultants, independent contractors directors or executive officers of the Company or any of its Subsidiaries, except for (A) from and after March 1, 2016, annual increases in compensation or other benefits made in the ordinary course of business that are consistent with past practice of up to 10% for any individual and 2% in the aggregate with respect to all employees (including executive officers) of the Company and any of its Subsidiaries and (B) cash bonuses to employees (other than executive officers) of less than $300,000 in the aggregateprior periods, (ii) grant or increase any severance or termination pay to, or enter into or materially amend any severance agreement or termination agreement with any director, employee, consultant director or independent contractor executive officer of the Company or any of its Subsidiaries, (iii) enter into or amend any employment agreement with any employee executive officer of the Company Company, or any of its Subsidiaries, (iv) establish, adopt, enter into or amend any Company Benefit Plan, collective bargaining agreement, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees of the Company or any of its Subsidiaries, or any of their beneficiaries; provided that any actions described in (i), (ii) or (viii) enter into, amend, alter, adopt, implement or otherwise make with respect to any commitment officer who is not an executive officer shall be subject to do any the prior approval of the foregoingExecutive; (Af) hire any new key executive officer or promote terminate the employment of any person to an current key executive officer position or (B) other than in the ordinary course of business consistent with past practice, hire or promote any employee, consultant or independent contractor of the Company or any of its Subsidiariesofficer; (g) grant, confer or award any options, convertible security, restricted stock, restricted stock units or other rights to acquire any of its or its Subsidiaries’ capital stock or take any action (other than as expressly permitted pursuant to this Agreement) to cause to be exercisable or otherwise vest any otherwise unexercisable option or other award under any existing equity compensation arrangement or other stock option plan, provided that the Company may award up to 37,500 Company Restricted Stock Units under the Company Stock PlanPlan in connection with new hires, or enter intopromotions and annual performance reviews and awards in the ordinary course of business consistent with past practice, amend, alter, adopt, implement or otherwise make in any commitment to do any of such case that have been previously approved by the foregoingExecutive; (h) acquire, except in respect of any mergersmerger, consolidations, consolidation or business combinations among the Company and its wholly-wholly owned Subsidiaries or among the Company’s wholly-wholly owned Subsidiaries (including by merger, consolidation, acquisition of stock or assets or otherwise), any corporation, partnership, limited liability company, other business organization or any division thereof, or all or of substantially all of the assets of any Person in connection with acquisitions or investments, or enter into any Contract agreement, arrangement or understanding with respect to any such acquisition, including any confidentiality, exclusivity, standstill or similar agreements, other than in connection with the acquisition or opening of new locations that do not involve the payment by the Company or any of its Subsidiaries in excess of $10 million in the aggregate; (i) sell, pledge, dispose of, transfer, abandon, exchange, swap, allow to lapse or expire, lease, license, mortgage or otherwise encumber or subject to any Lien (including pursuant to a sale-leaseback transaction or an asset securitization transaction) (other than Permitted Liens) any (i) Owned Real Property (or portion thereof) or (ii) other properties, rights or assets with a fair market value in excess of $2.5 million individually or $7.5 million in the aggregate, except, in the case of clause (ii) for (A) sales of inventory in the ordinary course of business consistent with past practices, (B) transfers among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries and (C) dispositions of obsolete or other assets not used in or not material to the Company or its Subsidiaries with a net book value of not more than $5 million in the aggregate; (j) incur any (i) indebtedness Indebtedness for borrowed money, except for indebtedness of not more than $10 million in the aggregate incurred under the Company’s existing credit facilities or any replacement credit facility entered into in accordance with the terms of this Agreement, money (ii) capitalized lease obligations other than in the ordinary course of business consistent with past practice, (iii) guarantees and other arrangements having the economic effect of a guarantee of any indebtedness Indebtedness of any other Person or (iv) obligations or undertakings to maintain or cause to be maintained the financial position or covenants of others or to purchase the obligations of others, except, in each case, except for (A) indebtedness Indebtedness for borrowed money in connection with any renewal or replacement of an existing credit facility of the Companyaggregate principal amount not to exceed $250,000, provided that (1) the prepayment terms of any such renewal or replacement credit facility are no less favorable to the Company or its Subsidiaries than the Company’s existing credit facilities and (2) no such renewal or replacement facility which Indebtedness shall be entered into prior to April 1, 2016, prepayable in full without premium or (B) with respect to trade payables incurred in the ordinary course of businesspenalty; (k) modify, amend or terminate any Lease with annual rental payments greater than $1 million, other than any termination pursuant to an expiration of the Lease in accordance with its terms, or waive, release or assign any rights or claims under any Lease; (l) except as permitted by Section 7.1(j), (i) modify or amend in any Company Material Contract which cannot be terminated by the Company or any of its Subsidiaries without material penalty upon notice of 60 days or less, (ii) terminate (other than in accordance with its terms) respect any Company Material Contract, (iiiii) waive, release or assign any material rights or material claims under any Company Material Contract or (iviii) except in the ordinary course of business consistent with past practice enter into any Contract that if entered into prior to the date hereof would have been a Company Material Contract; (mk) make any material change to its methods of accounting in effect as of August 1December 31, 20152011, except (i) as required by GAAP (or any interpretation thereof), Regulation S-X of the Exchange Act or as required by a Governmental Entity or quasi-Governmental Entity (including the Financial Accounting Standards Board or any similar organization), (ii) to permit the audit of the Company’s financial statements in compliance with GAAP, (iii) as required by a change in applicable Law or (iv) as disclosed in the Company SEC Reports filed prior to the date hereof; (l) except for transactions among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, sell, lease, license, transfer, exchange or swap, mortgage or otherwise encumber (including securitizations), or subject to any Lien (other than Permitted Liens) or otherwise dispose of this Agreementany material portion of its properties or assets, other than in the ordinary course of business consistent with past practice; (m) file any amendment to any material Tax Return or make, change or revoke any material election relating to Taxes, adopt or change any accounting method relating to Taxes, enter into any ruling request, material closing agreement or similar agreement relating to Taxes, surrender any right to claim a material refund of Taxes, settle any material claim or assessment relating to Taxes or consent to any material claim or assessment relating to Taxes or any waiver of the statute of limitations for any such claim or assessment; (n) (iexcept as set forth on Section 6.1(n) change or revoke any material income Tax electionof the Company Disclosure Letter, (ii) file any material amended income Tax Return, (iii) settle or compromise any material liability for income Taxes or surrender any claim for a refund of a material amount of income Taxes or (iv) change any material method of Tax accounting, other than in the case of clauses (ii) and (iii) hereof in respect of any income Taxes that have been identified in the reserves for income Taxes in Company’s GAAP financial statements; (o) settle, compromise, discharge or agree to settle any litigation, investigation, arbitration or proceeding other than those that do not involve the payment by the Company or any of its Subsidiaries of monetary damages in excess of $2.5 million 250,000 in the aggregate, after taking into account any applicable reserves and any applicable insurance coverage, and do not involve any material injunctive or other material non-monetary relief or impose material restrictions on the business or operations of the Company or its Subsidiaries; (po) other than in accordance with Section 7.1(h), make any capital expenditures, except (i) capital expenditures made in accordance with the Company’s annual budget and capital expenditure plan, copies of which have been previously provided to Parent, or (ii) other capital expenditures in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $5 million200,000; (p) sell, lease, mortgage, sell and leaseback or otherwise dispose of any Leased Real Property or any interests therein, other than in the ordinary course of business; (q) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries or alter through merger, liquidation, reorganization or restructuring the corporate structure of the Company or any of its Subsidiaries (other than the Merger); (r) increase the Company’s aggregate inventory beyond $650 million; or (sr) authorize or enter into any Contract written agreement or otherwise make any commitment to do any of the foregoing.

Conduct of the Company and the Subsidiaries. The Company covenants and agrees that, between During the period from the date of this Agreement and continuing until the Effective Time or Closing, the date, if any, on which this Agreement is terminated pursuant Company agrees as to Section 10.1itself and the Subsidiaries that, except (i) as may be required expressly contemplated or permitted by Lawthis Agreement or the Schedules, (ii) as may be agreed required by applicable law or regulation, (iii) as set forth on Schedule 6.01 hereto, or (iv) to the extent that the Buyer shall otherwise consent in writing by Parent (writing, which consent shall not be unreasonably withheld, delayed conditioned or conditioned), delayed: (iiia) as may be expressly permitted pursuant to this Agreement, (iv) as set forth in Section 7.1 of the Company Disclosure Letter, (v) for the payment of the Reimbursement to Merger Sub or (vi) for the payment of the Company Termination Fee to Merger Sub, the business of the Company and its the Subsidiaries shall be conducted only, and such entities shall not take any action except, carry on their respective businesses in the usual, regular and ordinary course of business and in a manner consistent with past practice in all material respects; , in substantially the same manner as heretofore conducted, and the Company and its Subsidiaries shall use their reasonable best efforts to preserve intact their present lines of business, maintain their rights, franchises, facilities and assets (xincluding application of insurance proceeds and repair and replacement thereof consistent with historical practice), and preserve their relationships (contractual or otherwise) preserve substantially intact the Company’s and its Subsidiaries’ business organization, (y) maintain existing relations with customers, supplierssuppliers and others having business dealings with them (including, creditors without limitation, through ordinary course renewals, negotiations with and business partners that are integral amendments to such relationships) to the operation of end that their business as presently conducted and (z) keep available ongoing businesses shall not be impaired in any material respect at the services of those of their present officers, employees and consultants who are integral to the operation of their businesses as presently conductedClosing; provided, however, provided that any no action taken or not taken by the Company or its the Subsidiaries in express compliance with a matter respect to matters specifically addressed by a specific any other provision of Sections 7.1(a) through 7.1(s) this Section 6.01 shall not be deemed a breach of this sentence Section 6.01(a), unless such action would constitute a breach of one or more of such specific provision other provisions; (b) the Company shall not, and shall not permit any of Sections 7.1(athe Subsidiaries to (A) through 7.1(sdeclare or pay any dividends on or make other distributions in respect of any of its or their capital stock (except for (x) below. Furthermoredividends in Cash and (y) dividends by the Subsidiaries to other Subsidiaries or to the Company), (B) split, combine or reclassify any of its or their capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, shares of its or their capital stock (except for any such transaction by a direct or indirect Subsidiary which remains a direct or indirect Subsidiary after consummation of such transaction), or (C) repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible into or exercisable for any shares of its capital stock (except for repurchases and redemptions paid in Cash and repurchases from employees of the Company or its Subsidiaries); (c) the Company shall not, and shall not permit any of the Subsidiaries to, issue, deliver, repurchase, acquire or sell, or authorize or propose the issuance, delivery, repurchase, acquisition or sale of, any shares of its capital stock of any class, or any securities convertible into or exercisable for, or any rights, warrants or options to acquire, any such shares of its capital stock, or enter into any agreement with respect to any of the foregoing, other than (i) as set forth in Section 7.1 issuances of capital stock by a direct or indirect Subsidiary to such Subsidiary's parent or another direct or indirect Subsidiary and other than issuances of Common Stock by the Company Disclosure Letter, upon exercise of Options issued and outstanding on the date hereof; (iid) other than to the payment of the Reimbursement extent required to Merger Sub and (iii) the payment of the Company Termination Fee to Merger Sub, without the prior written consent of Parentcomply with its obligations hereunder or required by law, the Company shall not, and shall cause not permit any of the Subsidiaries to, amend its Subsidiaries not to: (a) amend or otherwise change the Articles their certificate of Incorporationincorporation, the Bylaws by-laws or any Subsidiary Documentother equivalent governing documents; (be) except for transactions among the Company shall not, and shall not permit any of the Subsidiaries to, acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or sell or otherwise acquire or agree to sell or acquire or in-license any assets or rights (other than the acquisition or sale or in-license of assets used in the operations of the business of the Company and its wholly-owned the Subsidiaries in the ordinary course consistent with past practice); (f) other than as may be required by or among in conformance with applicable law or regulation in order to permit or facilitate the Company’s wholly-owned Subsidiariesconsummation of the transactions contemplated hereby or the transactions disclosed in the Schedules, or as otherwise contemplated in Section 7.1(f)the Company shall not, issueand shall not permit any of the Subsidiaries to, sell, pledgeencumber, disposelease, encumber sublease, license, or grant otherwise dispose of, or agree to sell, encumber, lease, sublease, license, or otherwise dispose of, any shares or equity interests of its or its Subsidiaries’ capital stock, or any options, warrants, convertible securities or material assets other rights than in the ordinary course of any kind to acquire any shares of its or its Subsidiaries’ capital stock; provided, however, that the Company may issue Shares (i) upon the exercise of any Company Stock Option outstanding as of the date of this Agreement, (ii) issuable under the Company ESPP after the date of this Agreement pursuant to Section 3.8(e), (iii) in connection business consistent with the vesting or redemption of any Company Restricted Stock Unit and Company Performance Stock Unit outstanding as of the date of this Agreement in accordance with their terms or (iv) in connection with the redemption of any notional interests deemed invested in Shares under the Company Deferred Compensation Plan, as amended and restated effective as of January 31, 2014past practice; (cg) redeemthe Company shall not, purchase and shall not permit any of the Subsidiaries to (x) make any loans, advances or otherwise acquirecapital contributions to, or propose or offer to redeem, purchase or otherwise acquireinvestments in, any outstanding shares of capital stock other Person, other than (A) by the Company or a direct or indirect Subsidiary to or in the Company or any other equity interests direct or indirect Subsidiary, (B) pursuant to any contract or other legal obligation of the Company or any of its Subsidiaries, except Subsidiary as required pursuant to any Company Benefit Plans in effect as of the date of this Agreement; hereof or (dC) declare, authorize, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to the Company’s or any of its Subsidiaries’ capital stock, other than dividends paid by any Subsidiary of the Company to the Company or any wholly-owned Subsidiary of the Company; (e) except as required pursuant to existing written agreements (true and complete copies of which have been provided to Parent) or Company Benefit Plans in effect as of the date of this Agreement, as otherwise required by Law or this Agreement, or provided on Section 7.1(e) of the Company Disclosure Schedule, (i) increase the compensation or other benefits payable or to become payable to directors, employees, consultants, independent contractors or executive officers of the Company or any of its Subsidiaries, except for (A) from and after March 1, 2016, increases in compensation or other benefits made in the ordinary course of business consistent with past practice or (y) create, incur, assume or suffer to exist any indebtedness, issuances of up debt securities, guarantees, loans or advances to 10% for any individual and 2% in the aggregate with respect to all employees (including executive officers) of the Company and any of its Subsidiaries and (B) cash bonuses to employees (other than executive officers) of less than $300,000 in the aggregate, (ii) grant or increase any severance or termination pay to, or enter into or amend any severance agreement with any director, employee, consultant or independent contractor of the Company or any Subsidiary not in existence as of its Subsidiariesthe date of this Agreement except (1) pursuant to the credit facilities (but not in excess of amounts authorized for issuance thereunder as of the date of this Agreement) and other arrangements in existence on the date of this Agreement, (iii2) enter into by the Company or amend any employment agreement with any employee of a direct or indirect Subsidiary to the Company or any of its Subsidiariesother direct or indirect Subsidiary, (iv3) establisharising from the sale, adopt, enter into factoring or amend any Company Benefit Plan, collective bargaining agreement, plan, trust, fund, policy or arrangement for discounting of receivables in the benefit ordinary course of any current or former directors, officers or employees of the Company or any of its Subsidiaries, or any of their beneficiaries, business consistent with past practice or (v4) enter intotrade debt and commercial finance in the ordinary course of business consistent with past practice, amendin each case as such credit facilities, alterindentures and other arrangements and other existing indebtedness may be amended, adoptextended, implement modified, refunded, renewed or otherwise make any commitment to do any refinanced after the date of the foregoingthis Agreement; (Ah) hire any executive officer other than as required by an existing written contract or promote any person to an executive officer position or (B) agreement as in effect on the date hereof and other than in the ordinary course of business consistent with past practice, neither the Company nor any Subsidiary shall (A) increase the amount of compensation or severance pay of, or enter into any new bonus or incentive agreement or arrangement with, or amend or accelerate any existing agreement with, any director or employee (other than the acceleration of vesting of any of the Shares), (B) make any material increase in, or commitment to increase materially, any employee benefits, (C) amend, adopt or make any commitment to amend or adopt any Employee Benefit Plan or make any contribution, other than regularly scheduled contributions, to any Employee Benefit Plan, or (D) enter into or amend any retention, bonus, incentive, employment, severance, consulting, or other similar agreement with any of its existing employees, officers or directors or hire any new management employee; (i) neither the Company nor any Subsidiary shall change its fiscal year, make or promote change any employeeelection with respect to any material Taxes (except as required by applicable Law or regulation), consultant change any Tax accounting period, adopt or independent contractor change any material method of Tax accounting (except as required by changes in GAAP or as required by applicable law or regulation), file any amended Tax return, enter into a closing agreement with any Tax Authority, consent to an extension of the statute of limitations applicable to any non-income Tax claim or assessment or take any other similar action (or omit to take any action), if such election, change, amendment, agreement, action or omission would have the effect of increasing the Tax liability of the Company or any of its Subsidiaries;Subsidiary after the Closing Date. (gj) grant, confer or award any options, convertible security, restricted stock units or other rights to acquire any of its or its Subsidiaries’ capital stock or take any action to cause to be exercisable or otherwise vest any otherwise unexercisable option or other award under any existing equity compensation arrangement or other Company Stock Plan, or enter into, amend, alter, adopt, implement or otherwise make any commitment to do any of the foregoing; (h) acquire, except in respect of any mergers, consolidations, business combinations among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries (including by merger, consolidation, acquisition of stock or assets or otherwise), any corporation, partnership, limited liability company, other business organization or any division thereof, or all or substantially all of the assets of any Person in connection with acquisitions or investments, or enter into any Contract with respect to any such acquisition, including any confidentiality, exclusivity, standstill or similar agreements, other than in connection with the acquisition or opening any action expressly permitted by any other subsection of this Section 6.01 and except for any new locations that do not involve the payment by the Company or contract awards, and any of its Subsidiaries in excess of $10 million in the aggregate; (i) sellcontract renewals, pledge, dispose of, transfer, abandon, exchange, swap, allow to lapse or expire, lease, license, mortgage or otherwise encumber or subject to any Lien (including pursuant to a sale-leaseback transaction or an asset securitization transaction) (other than Permitted Liens) any (i) Owned Real Property (or portion thereof) or (ii) other properties, rights or assets with a fair market value in excess of $2.5 million individually or $7.5 million in the aggregate, except, in the case of clause (ii) for (A) sales of inventory negotiations and amendments entered into in the ordinary course of business and consistent with past practicespractice, (B) transfers among neither the Company nor any Subsidiary shall (i) enter into or become bound by, or permit any of the assets owned or used by it to become bound by, any contract of the type required to be disclosed pursuant to Section 3.16 of this Agreement (other than in the ordinary course of business), or (ii) prematurely terminate (other than in the ordinary course of business), or waive any material right or remedy under, any such contract; (k) except as set forth on Schedule 6.01(k), the Company shall not, and its whollyshall not permit any of the Subsidiaries to, make or commit to make any capital expenditures related to an individual project or program in excess of $250,000; (l) the Company shall not, and shall not permit any of the Subsidiaries to, cancel, compromise or settle any claim or any material debts owed by a third-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries and (C) dispositions of obsolete or other assets not used in or not material party to the Company or its Subsidiaries with a net book value of not more than $5 million in the aggregate; (j) incur any (i) indebtedness for borrowed moneySubsidiaries, except for indebtedness of not more than $10 million in the aggregate incurred under the Company’s existing credit facilities or any replacement credit facility entered into in accordance with the terms of this Agreement, (ii) capitalized lease obligations other than in the ordinary course of business consistent with past practice, (iii) guarantees and other arrangements having the economic effect of a guarantee of any indebtedness of any other Person or (iv) obligations or undertakings to maintain or cause to be maintained the financial position or covenants of others or to purchase the obligations of others, except, in each case, for (A) indebtedness for borrowed money in connection with any renewal or replacement of an existing credit facility of the Company, provided that (1) the prepayment terms of any such renewal or replacement credit facility are no less favorable to the Company or its Subsidiaries than the Company’s existing credit facilities and (2) no such renewal or replacement facility shall be entered into prior to April 1, 2016, or (B) with respect to trade payables incurred in the ordinary course of business; (k) modify, amend or terminate any Lease with annual rental payments greater than $1 million, other than any termination pursuant to an expiration of the Lease in accordance with its terms, or waive, release or assign any rights or claims under any Lease; (l) except as permitted by Section 7.1(j), (i) modify or amend any Company Material Contract which cannot be terminated by the Company or any of its Subsidiaries without material penalty upon notice of 60 days or less, (ii) terminate (other than in accordance with its terms) any Company Material Contract, (iii) waive, release or assign any rights or claims under any Company Material Contract or (iv) enter into any Contract that if entered into prior to the date hereof would have been a Company Material Contract; (m) make any material change prior to its methods the Closing Date, and consistent with the requirements of accounting in effect Section 280G(b)(5)(A)(ii) of the Code and the regulations, the Company and each Subsidiary, as of August 1required, 2015, except shall (i) as required by GAAP use commercially reasonable efforts to take all actions necessary (or any interpretation thereof), Regulation S-X including obtaining appropriate waivers) such that a vote of the Exchange Act requisite number of shareholders in accordance with Section 280G(b)(5)(A)(ii) of the Code, if affirmative, will establish the "disqualified individual's" right to the payment, benefit, or as required by a Governmental Entity or quasi-Governmental Entity (including compensation in accordance with Section 280G(b)(5)(A)(ii) and the Financial Accounting Standards Board or any similar organization), regulations promulgated thereunder and (ii) provide adequate disclosure of all material facts to permit the audit all persons required to vote concerning all payments which would be parachute payments in accordance with Section 280G(b)(5)(B)(ii) of the Company’s financial statements in compliance with GAAPCode and the regulations promulgated thereunder. Following the receipt of such waivers and the completion of such actions, (iii) as required by a change in applicable Law or (iv) as disclosed in the Company SEC Reports filed prior and each Subsidiary, as required, shall submit for a separate stockholder vote the right of any "disqualified individual" (as defined in Section 280G(c) of the Code) to receive any and all payments (or other benefits or compensation) that could be deemed "parachute payments" under Section 280G(b) of the date Code (the "Section 280G Payments") in a manner that satisfies that stockholder approval requirements of this Agreement;Section 280G(b)(5) of the Code and the regulations promulgated thereunder; and (n) (i) change or revoke any material income Tax election, (ii) file any material amended income Tax Return, (iii) settle or compromise any material liability for income Taxes or surrender any claim for a refund of a material amount of income Taxes or (iv) change any material method of Tax accounting, other than in the case of clauses (ii) and (iii) hereof in respect of any income Taxes that have been identified in the reserves for income Taxes in Company’s GAAP financial statements; (o) settle, compromise, discharge or agree to settle any litigation, investigation, arbitration or proceeding other than those that do not involve the payment by the Company or shall not terminate any of its Subsidiaries of monetary damages in excess of $2.5 million in the aggregate, after taking into account any applicable reserves and any applicable insurance coverage, and do not involve any material injunctive or other material non-monetary relief or impose material restrictions on the business or operations officer of the Company or its Subsidiaries; (pwhose name is set forth on Schedule 6.01(n) other than in accordance with Section 7.1(h), make any capital expenditures, except (i) capital expenditures made in accordance with the Company’s annual budget and capital expenditure plan, copies of which have been previously provided to Parent, or (ii) other capital expenditures in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $5 million; (q) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries or alter through merger, liquidation, reorganization or restructuring the corporate structure of the Company or any of its Subsidiaries (other than the Merger); (r) increase the Company’s aggregate inventory beyond $650 million; or (s) authorize or enter into any Contract or otherwise make any commitment to do any of the foregoingfor cause.

Conduct of the Company and the Subsidiaries. The Company covenants and agrees that, between (a) From the date of hereof until the Closing Date, except as expressly provided in this Agreement and the Effective Time or the date, if any, on which this Agreement is terminated pursuant otherwise consented to Section 10.1, except (i) as may be required by Law, (ii) as may be agreed in writing by Parent Purchaser (which such consent not to be unreasonably withheld, conditioned or delayed; it being understood that in determining to withhold, condition or delay its consent, it would be reasonable for Purchaser to consider any related effects on the Company or the Subsidiaries in light of Purchaser’s plans and expectations regarding the future operation of their businesses), the Sellers shall cause the Company and Subsidiaries to conduct their businesses in the ordinary course of business (including by procuring and replacing inventory, collecting accounts receivable, paying accounts payable and otherwise dealing with their non-cash current assets and their current liabilities in the ordinary course of business in a manner consistent with past practices), to use commercially reasonable efforts to keep available the services of their respective current officers, employees, independent contractors and consultants and preserve their relationships with those Persons, and to use commercially reasonable efforts to preserve intact their businesses and endeavor to preserve the goodwill and relationships with customers, suppliers and others having business dealings with such businesses. (b) From the date hereof until the Closing Date, subject to applicable Law and except as expressly provided in this Agreement or otherwise consented to in writing by Purchaser (such consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed; it being understood that in determining to withhold, condition or delay its consent, it would be reasonable for Purchaser to consider any related effects on the Company or the Subsidiaries in light of Purchaser’s plans and expectations regarding the future operation of their businesses), (iii) as may be expressly permitted pursuant to this Agreement, (iv) as set forth in Section 7.1 of the Company Disclosure Letter, (v) for the payment of the Reimbursement to Merger Sub or (vi) for the payment of the Company Termination Fee to Merger Sub, the business of Sellers shall cause the Company and its Subsidiaries shall be conducted only, and such entities shall not take any action except, in the ordinary course of business and in a manner consistent with past practice in all material respects; and the Company and its Subsidiaries shall use their reasonable best efforts to (x) preserve substantially intact the Company’s and its Subsidiaries’ business organization, (y) maintain existing relations with customers, suppliers, creditors and business partners that are integral to the operation of their business as presently conducted and (z) keep available the services of those of their present officers, employees and consultants who are integral to the operation of their businesses as presently conducted; provided, however, that any action taken or not taken by the Company or its Subsidiaries in express compliance with a matter specifically addressed by a specific provision of Sections 7.1(a) through 7.1(s) shall not be deemed a breach of this sentence unless such action would constitute a breach of such specific provision of Sections 7.1(a) through 7.1(s) below. Furthermore, other than (i) as set forth in Section 7.1 of the Company Disclosure Letter, (ii) the payment of the Reimbursement to Merger Sub and (iii) the payment of the Company Termination Fee to Merger Sub, without the prior written consent of Parent, the Company shall not, and shall cause its Subsidiaries not to: (ai) amend create, incur, assume or otherwise change the Articles modify any amount of Incorporationindebtedness for borrowed money, the Bylaws or any Subsidiary Documentexcept for advances from Sellers consistent with past practices; (bii) except for transactions among in the ordinary course of business, acquire, or dispose of, any property or assets; (iii) except in the ordinary course of business, (A) modify or amend in any material respect or terminate, release, assign or waive any material rights or claims under, any Contract, or (B) enter into any Contract that, if the Company and its wholly-owned Subsidiaries or among Subsidiary had entered into such Contract immediately prior to the Company’s wholly-owned Subsidiariesdate hereof, or as otherwise contemplated in Section 7.1(f), would be a Material Contract; (iv) issue, selldeliver, pledge, disposeencumber, encumber dispose of or grant otherwise distribute or cause to be granted to any shares Person other than Sellers, the Company or equity interests of its or its Subsidiaries’ capital stockthe Subsidiaries any Securities, as applicable, or any options, warrants, convertible securities other commitments or other rights of any kind to acquire any shares of its or its Subsidiaries’ capital stock; provided, however, that the Company may issue Shares (i) upon the exercise of any Company Stock Option outstanding as of the date of this Agreement, (ii) issuable under the Company ESPP after the date of this Agreement pursuant to Section 3.8(e), (iii) in connection with the vesting or redemption of any Company Restricted Stock Unit and Company Performance Stock Unit outstanding as of the date of this Agreement in accordance with their terms or (iv) in connection with the redemption of any notional interests deemed invested in Shares under the Company Deferred Compensation PlanSecurities, as amended and restated effective as of January 31, 2014applicable; (cv) redeemexcept as may be required pursuant to any Contract in effect on the date hereof: (1) enter into, purchase adopt, renew, amend in any material respect or otherwise acquireterminate any employment, consulting, severance, change in control, separation contracts or agreements, or propose any similar material benefit plan, policy or offer to redeem, purchase or otherwise acquire, any outstanding shares of capital stock or any other equity interests of agreement involving the Company or any of its Subsidiaries, except as required pursuant to any Company Benefit Plans in effect as the Subsidiaries and one or more of the date of this Agreement; (d) declare, authorize, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to the Company’s or any of its Subsidiaries’ capital stock, other than dividends paid by any Subsidiary of the Company to the Company or any wholly-owned Subsidiary of the Company; (e) except as required pursuant to existing written agreements (true and complete copies of which have been provided to Parent) or Company Benefit Plans in effect as of the date of this Agreement, as otherwise required by Law or this Agreement, or provided on Section 7.1(e) of the Company Disclosure Schedule, (i) increase the compensation or other benefits payable or to become payable to their respective directors, employeesofficers, consultantskey employees or agents; (2) terminate or amend, independent contractors modify or executive officers change in any material respect the terms and conditions of the Company or any of its Subsidiaries, except for (A) from and after March 1, 2016, increases in compensation or other benefits made in the ordinary course of business consistent with past practice of up to 10% for any individual and 2% in the aggregate with respect to all employees (including executive officers) of the Company and any of its Subsidiaries and (B) cash bonuses to employees (other than executive officers) of less than $300,000 in the aggregate, (ii) grant or increase any severance or termination pay to, or enter into or amend any severance agreement with any director, employee, consultant or independent contractor of the Company or any of its Subsidiaries, (iii) enter into or amend any employment agreement with of any key employee of the Company or any of its the Subsidiaries; (3) increase the compensation of any director, officer, employee or agent of or consultant to the Company or any of the Subsidiaries, except regularly scheduled annual merit increases for employees of the Company and the Subsidiaries, or pay any benefit or amount not required by a plan or arrangement as in effect on the date of this Agreement to any such Person; (iv4) establish, adopt, enter into, amend in any material respect, terminate or increase benefits or obligations under, any Seller Benefit Plans with respect to Company Employees; or (5) enter into any agreement with any director, officer, key employee or amend any Company Benefit Plan, collective bargaining agreement, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees stockholder of the Company or any of its Subsidiaries, or any of their beneficiaries, or (v) enter into, the Subsidiaries to amend, alter, adopt, implement modify or otherwise make change the terms and conditions of any commitment to do any of the foregoingsuch agreement; (Avi) hire make any executive officer material change to the accounting (including Tax accounting) methods, principles or promote practices applicable to the Company or the Subsidiaries, except as may be required by GAAP; (vii) settle or compromise or agree to settle or compromise any person claim related to an executive officer position Taxes or other matter affecting the Tax liability of the Company or the Subsidiaries; (Bviii) make any Tax election other than in the ordinary course of business and consistent with past practice, hire or promote practices; (ix) make any employee, consultant or independent contractor amendment to the Organizational Documents of the Company or any of its SubsidiariesSubsidiary; (g) grant, confer or award any options, convertible security, restricted stock units or other rights to acquire any of its or its Subsidiaries’ capital stock or take any action to cause to be exercisable or otherwise vest any otherwise unexercisable option or other award under any existing equity compensation arrangement or other Company Stock Plan, or enter into, amend, alter, adopt, implement or otherwise make any commitment to do any of the foregoing; (h) acquire, except in respect of any mergers, consolidations, business combinations among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries (including by merger, consolidation, acquisition of stock or assets or otherwise), any corporation, partnership, limited liability company, other business organization or any division thereof, or all or substantially all of the assets of any Person in connection with acquisitions or investments, or enter into any Contract with respect to any such acquisition, including any confidentiality, exclusivity, standstill or similar agreements, other than in connection with the acquisition or opening of new locations that do not involve the payment by the Company or any of its Subsidiaries in excess of $10 million in the aggregate; (i) sell, pledge, dispose of, transfer, abandon, exchange, swap, allow to lapse or expire, lease, license, mortgage or otherwise encumber or subject to any Lien (including pursuant to a sale-leaseback transaction or an asset securitization transaction) (other than Permitted Liens) any (i) Owned Real Property (or portion thereof) or (ii) other properties, rights or assets with a fair market value in excess of $2.5 million individually or $7.5 million in the aggregate, except, in the case of clause (ii) for (A) sales of inventory in the ordinary course of business consistent with past practices, (B) transfers among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries and (C) dispositions of obsolete or other assets not used in or not material to the Company or its Subsidiaries with a net book value of not more than $5 million in the aggregate; (j) incur any (i) indebtedness for borrowed money, except for indebtedness of not more than $10 million in the aggregate incurred under the Company’s existing credit facilities or any replacement credit facility entered into in accordance with the terms of this Agreement, (ii) capitalized lease obligations other than in the ordinary course of business consistent with past practice, (iii) guarantees and other arrangements having the economic effect of a guarantee of any indebtedness of any other Person or (iv) obligations or undertakings to maintain or cause to be maintained the financial position or covenants of others or to purchase the obligations of others, except, in each case, for (A) indebtedness for borrowed money in connection with any renewal or replacement of an existing credit facility of the Company, provided that (1) the prepayment terms of any such renewal or replacement credit facility are no less favorable to the Company or its Subsidiaries than the Company’s existing credit facilities and (2) no such renewal or replacement facility shall be entered into prior to April 1, 2016, or (B) with respect to trade payables incurred in the ordinary course of business; (k) modify, amend or terminate any Lease with annual rental payments greater than $1 million, other than any termination pursuant to an expiration of the Lease in accordance with its terms, or waive, release or assign any rights or claims under any Lease; (l) except as permitted by Section 7.1(j), (i) modify or amend any Company Material Contract which cannot be terminated by the Company or any of its Subsidiaries without material penalty upon notice of 60 days or less, (ii) terminate (other than in accordance with its terms) any Company Material Contract, (iii) waive, release or assign any rights or claims under any Company Material Contract or (ivx) enter into any Contract that if entered into prior to would result in a Conflicting Obligation (as defined in the date hereof Marketing Agreement) that would have been a Company Material Contract; (m) make any material change to its methods of accounting remain in effect as of August 1, 2015, except (i) as required by GAAP (or any interpretation thereof), Regulation S-X of following the Exchange Act or as required by a Governmental Entity or quasi-Governmental Entity (including the Financial Accounting Standards Board or any similar organization), (ii) to permit the audit of the Company’s financial statements in compliance with GAAP, (iii) as required by a change in applicable Law or (iv) as disclosed in the Company SEC Reports filed prior to the date of this Agreement; (n) (i) change or revoke any material income Tax election, (ii) file any material amended income Tax Return, (iii) settle or compromise any material liability for income Taxes or surrender any claim for a refund of a material amount of income Taxes or (iv) change any material method of Tax accounting, other than in the case of clauses (ii) and (iii) hereof in respect of any income Taxes that have been identified in the reserves for income Taxes in Company’s GAAP financial statements; (o) settle, compromise, discharge or agree to settle any litigation, investigation, arbitration or proceeding other than those that do not involve the payment by the Company or any of its Subsidiaries of monetary damages in excess of $2.5 million in the aggregate, after taking into account any applicable reserves and any applicable insurance coverage, and do not involve any material injunctive or other material non-monetary relief or impose material restrictions on the business or operations of the Company or its Subsidiaries; (p) other than in accordance with Section 7.1(h), make any capital expenditures, except (i) capital expenditures made in accordance with the Company’s annual budget and capital expenditure plan, copies of which have been previously provided to Parent, or (ii) other capital expenditures in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $5 million; (q) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries or alter through merger, liquidation, reorganization or restructuring the corporate structure of the Company or any of its Subsidiaries (other than the Merger); (r) increase the Company’s aggregate inventory beyond $650 millionClosing; or (sxi) authorize agree or enter into any Contract or otherwise make any commitment commit to do any of the foregoing.