Common use of Covenants of Target Clause in Contracts

Covenants of Target. TARGET covenants and agrees that, during the period from the date of this Agreement until the Closing Date, TARGET shall conduct its business as presently operated and solely in the ordinary course, and consistent with such operation, and, in connection therewith, without the written consent of SUB and PARENT: (i) shall not amend its Certificate of Incorporation or Bylaws; (ii) shall not pay or agree to pay to any employee, officer or director compensation that is in excess of the current compensation level of such employee, officer or director other than salary increases or payments made in the ordinary course of business or as otherwise provided in any contracts or agreements with any such employees; (iii) shall not merge or consolidate with any other entity or acquire or agree to acquire any other entity; (iv) shall not sell, transfer, or otherwise dispose of any assets required for the operations of TARGET’s business except in the ordinary course of business consistent with past practices; (v) shall not create, incur, assume, or guarantee any indebtedness for money borrowed except in the ordinary course of business, or create or suffer to exist any mortgage, lien or other encumbrance on any of its assets, except those in existence on the date hereof or those granted pursuant to agreements in effect on the date of this Agreement or provided by SUB and PARENT and/or any of their affiliates; (vi) shall not make any capital expenditure or series of capital expenditures except in the ordinary course of business, with the exception of the acquisition referred to in Section 4.01(iii) hereof; (vii) shall not declare or pay any dividends on or make any distribution of any kind with respect to the TARGET Common Stock; (viii) shall maintain its facilities, assets and properties in reasonable repair, order and condition, reasonable wear and tear excepted, and to notify SUB and PARENT immediately in the event of any material loss or damage to any of TARGET’s material assets; (ix) shall maintain in full force and effect all present insurance coverage of the types and in the amounts as are in effect as of the date of this Agreement; (x) shall seek to preserve the present employees, reputation and business organization of TARGET and TARGET’s relationship with its clients and others having business dealings with it; (xi) shall not issue any additional TARGET Common Stock or take any action affecting the capitalization of TARGET; (xii) shall use commercially reasonable efforts to comply with and not be in default or violation under any law, regulation, decree or order applicable to TARGET’s business, operations or assets where such violation would have a Material Adverse Effect; (xiii) shall not grant any severance or termination pay to any director, officer or any other employees of TARGET, other than pursuant to agreements in effect on the date of this Agreement or as otherwise disclosed in the documents delivered pursuant to this Agreement; (xiv) shall not change any of the accounting principles or practices used by it, except as may be required as a result of a change in law or in GAAP, whether in respect of Taxes or otherwise; (xv) shall not terminate or waive any right of substantial value other than in the ordinary course of business; and (xvi) shall not enter into any material contract or commitment other than in the ordinary course of business.

Covenants of Target. TARGET covenants and agrees that, during During the period from the date of this ------------------- Agreement and continuing until the Closing Dateearlier of the termination of this Agreement or the Effective Time, TARGET Target agrees as to itself and its Subsidiaries, except to the extent that Acquirer shall conduct otherwise consent in writing (which consent will not be unreasonably withheld or delayed), to carry on its business as presently operated and solely in the usual, regular and ordinary coursecourse in substantially the same manner as previously conducted, to pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, to pay or perform its other obligations when due, and, to the extent consistent with such operationbusiness, and, in connection therewith, without the written consent of SUB to use all reasonable efforts consistent with past practices and PARENT: policies to (i) shall not amend preserve intact its Certificate of Incorporation or Bylaws; present business organization, (ii) keep available the services of its present officers and key employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it. Target shall promptly notify Acquirer of any event or occurrence not pay or agree to pay to any employee, officer or director compensation that is in excess of the current compensation level of such employee, officer or director other than salary increases or payments made in the ordinary course of business of Target of which Target has knowledge where such event or occurrence would result in a breach of any covenant of Target set forth in this Agreement or cause any representation or warranty of Target set forth in this Agreement to be inaccurate in any material respect as of the date made or (except in the case of representations and warranties that speak specifically as of the date hereof or as otherwise provided of another specific date) as of the Effective Time. Except as expressly contemplated by this Agreement, subject to Section 6.1, Target shall not (and shall not permit any of its Subsidiaries to), without the prior written consent of Acquirer ( which consent will not be unreasonably withheld or delayed): (a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock granted under any employee stock plan of Target or authorize cash payments in exchange for any contracts options granted under any of such plans except as required by the terms of such plans or any related agreements with any such employeesin effect as of the date of this Agreement; (iiib) shall not merge Transfer or consolidate with license to any other person or entity or acquire otherwise extend, amend or agree modify any rights to acquire any the Target Intellectual Property Rights other entity; than (ivi) shall not sell, transfer, or otherwise dispose the grant of any assets required for non-exclusive licenses in the operations ordinary course of TARGET’s business except consistent with past practices and (ii) the grant of exclusive licenses in connection with [describe type of transaction] transactions entered into in the ordinary course of business consistent with past practices; (vc) shall not createDeclare, incur, assume, or guarantee any indebtedness for money borrowed except in the ordinary course of business, or create or suffer to exist any mortgage, lien or other encumbrance on any of its assets, except those in existence on the date hereof or those granted pursuant to agreements in effect on the date of this Agreement or provided by SUB and PARENT and/or any of their affiliates; (vi) shall not make any capital expenditure or series of capital expenditures except in the ordinary course of business, with the exception of the acquisition referred to in Section 4.01(iii) hereof; (vii) shall not declare set aside or pay any dividends on or make any distribution other distributions (whether in cash, stock, equity securities or property) in respect of any kind with of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect to the TARGET Common Stockof, in lieu of or in substitution for shares of its capital stock; (viiid) shall maintain Purchase, redeem or otherwise acquire, directly or indirectly, any shares of its facilitiescapital stock except from former employees, assets directors and properties consultants in reasonable repair, order and condition, reasonable wear and tear excepted, and to notify SUB and PARENT immediately accordance with agreements providing for the repurchase of shares in the event connection with any termination of any material loss or damage to any of TARGET’s material assetsservice by such party; (ixe) shall maintain Issue, deliver or sell or authorize or propose the issuance, delivery or sale of, any shares of its capital stock or securities convertible into shares of its capital stock, or subscriptions, rights, warrants or options to acquire, or other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than the issuance, delivery and/or sale of (i) rights to purchase shares of Target Common Stock under the Target Purchase Plan, (ii) options to purchase up to an aggregate of 150,000 shares of Target Common Stock in full force connection with the hiring, retention and/or promotion of employees of or consultants to the Target or its Subsidiaries (other than officers and effect all present insurance coverage directors of the types and Target) in the amounts as are in effect as ordinary course of business consistent with Target's past policies, or (iii) shares of Target Common Stock issuable upon the date exercise of this Agreementoptions granted under the Target Employee Option Plan or the Target Director Option Plan or the Target Individual Options or pursuant to rights under the Target Purchase Plan or pursuant to the Target Incentive Plan; (xf) shall seek Acquire or agree to preserve acquire by merging or consolidating with, or by purchasing a substantial equity interest in or substantial portion of the present employeesassets of, reputation and or by any other manner, any business or any corporation or other business organization of TARGET and TARGET’s relationship with its clients and others having business dealings with itor division; (xig) shall not issue Sell, lease, license, encumber or otherwise dispose of (by merger, consolidation, sale of assets or otherwise) any additional TARGET Common Stock of its properties or take any action affecting assets which are material, individually or in the capitalization aggregate, to the business of TARGETTarget and its Subsidiaries, taken as a whole, except for licenses and sales in the ordinary course of business consistent with past practices; (xiih) shall use commercially reasonable efforts Take any action to: (i) increase the compensation payable or to comply become payable to its officers or employees, except for increases in salary or wages of employees in accordance with and not be in default or violation under any lawpast practices, regulation, decree or order applicable to TARGET’s business, operations or assets where such violation would have a Material Adverse Effect; (xiiiii) shall not grant any additional severance or termination pay to to, or enter into any directoremployment or severance agreements with, officer officers, (iii) grant any additional severance or termination pay to, or enter into any employment or severance agreement, with any employee, except in accordance with past practices, (iv) enter into any collective bargaining agreement, or (v) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other employees plan, trust, fund, policy or arrangement for the benefit of TARGETany directors, other than pursuant to agreements in effect on the date of this Agreement officers or as otherwise disclosed in the documents delivered pursuant to this Agreementemployees; (xivi) shall not change Revalue any material amount of its assets, including writing down the accounting principles value of inventory or practices used by it, except as may be required as a result of a change in law writing off notes or in GAAP, whether in respect of Taxes or otherwise; (xv) shall not terminate or waive any right of substantial value accounts receivable other than in the ordinary course of business; andbusiness consistent with past practices; (xvij) shall not enter into Incur any material contract indebtedness for borrowed money or commitment guarantee any such indebtedness or issue or sell any debt securities or warrants or rights to acquire any debt securities or guarantee any debt securities of others, other than indebtedness incurred under outstanding lines of credit; (k) Amend or propose to amend its Certificate of Incorporation or Bylaws, except as contemplated by this Agreement; (l) Incur or commit to incur capital expenditures in excess of $200,000 during any calendar month; (m) Enter into or amend any agreement pursuant to which any third party is granted exclusive marketing, distribution or manufacturing rights with respect to any Target product or any agreement pursuant to which any third party is granted any right to source code or to use source code to make or create derivative works other than pursuant to (i) agreements relating to the porting of Target's software with specific products of third parties, (ii) customary source code escrow agreements with customers, (iii) agreements for the development of ancillary products, and (iv) agreements relating to the localization or translation of software, in each case entered into in the ordinary course of business consistent with past practice; (n) Amend or terminate any material contract, agreement or license to which it is a party except in the ordinary course of business; (o) Waive or release any material right or claim, except in the ordinary course of business; (p) Initiate any litigation or arbitration proceeding, other than a proceeding relating to the enforcement or interpretation of its rights under this Agreement or relating to the transactions contemplated hereby; (q) Agree in writing or otherwise to take any of the actions described in Sections (a) through (p) above; or (r) Take any other action which is reasonably likely to make any of Target's representations or warranties contained in this Agreement inaccurate in any material respect as of the date made or (except in the case of representations or warranties that speak specifically as of the date hereof or as of another specific date) as of the Effective Time.

Covenants of Target. TARGET covenants During the period from the date of this Agreement and continuing until the Effective Time, Target agrees thatas to itself and its Subsidiaries (except as expressly contemplated or permitted by this Agreement or to the extent that Parent shall otherwise consent in writing) to conduct its operations in the ordinary course, consistent with past practice, and to use all reasonable efforts to maintain and preserve its business organization and its material rights and franchises and to retain the services of its officers and key employees and maintain relationships with customers, suppliers, lessees, licensees and other third parties, to the end that their goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoing, during the period from the date of this Agreement and continuing until the Closing DateEffective Time, TARGET Target shall conduct not (except as expressly contemplated or permitted by this Agreement and the transactions contemplated hereby or to the extent that Parent shall otherwise consent in writing): (a) do or effect any of the following actions with respect to its business as presently operated and solely in the ordinary course, and consistent with such operation, and, in connection therewith, without the written consent of SUB and PARENT: securities: (i) shall not amend adjust, split, combine or reclassify its Certificate of Incorporation or Bylaws; capital stock, (ii) shall not make, declare or pay any dividend or agree to pay to distribution on, or directly or indirectly redeem, purchase or otherwise acquire, any employeeshares of its capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock, officer or director compensation that is in excess of the current compensation level of such employee, officer or director other than salary increases dividends, distributions, redemptions, purchases or payments made in the ordinary course other acquisitions of business or as otherwise provided in any contracts or agreements with any such employees; (iii) shall not merge or consolidate with any other entity or acquire or agree to acquire any other entity; (iv) shall not sell, transfer, or otherwise dispose shares between Target and a wholly owned Subsidiary of any assets required for the operations Target and dividends by majority-owned Subsidiaries of TARGET’s business except Target in the ordinary course of business consistent with past practicespractice (including increases in such amounts consistent with past practice), (iii) grant any person any right or option to acquire any shares of its capital stock; provided that Target may grant options under the Target's 1997 Stock Option Plan with a fair market value exercise price to purchase shares of Target Common Stock consistent with the terms of the preestablished formula under Target's 1997 Stock Option Plan with respect to Target's fiscal 1998 performance to employees of Target in the ordinary course of business consistent with past practice, (iv) issue, deliver or sell or agree to issue, deliver or sell any additional shares of its capital stock, Target Voting Debt or any securities or obligations convertible into or exchangeable or exercisable for any shares of its capital stock or such securities (except (A) pursuant to the exercise of options which are outstanding as of the date of this Agreement in accordance with their existing terms or (B) as and to the extent provided for in clause (iii) of this sentence), or (v) enter into any agreement, understanding or arrangement with respect to the sale, purchase or voting of its capital stock (except as and to the extent provided for in clause (iii) of this sentence); (vb) shall not directly or indirectly sell, transfer, lease, pledge, mortgage, encumber or otherwise dispose of any of its material property or assets, other than the sale of inventory and the disposition of obsolete or worn-out equipment in the ordinary course of business consistent with past practice; (c) make or propose any changes in Target's Certificate of Incorporation or By-laws; (d) merge or consolidate with any other person or acquire a material amount of assets or capital stock of any other person, create any subsidiary outside the ordinary course of business or enter into any confidentiality agreement with any person outside the ordinary course of business; (e) incur, create, incur, assume, assume or guarantee otherwise become liable for any indebtedness for borrowed money borrowed except or assume, guarantee, endorse or otherwise as an accommodation become responsible or liable for the obligations of any other individual, corporation or other entity, other than in the ordinary course of business, or create or suffer to exist any mortgage, lien or other encumbrance on any of its assets, except those in existence on the date hereof or those granted pursuant to agreements in effect on the date of this Agreement or provided by SUB and PARENT and/or any of their affiliatesconsistent with past practice; (vif) shall not make except as disclosed in a schedule previously provided by Target to Parent, enter into or modify any capital expenditure employment, severance, termination or series of capital expenditures except similar agreements or arrangements with, or grant any bonuses, salary increases, severance or termination pay to, any officer, director, consultant or employee other than salary increases granted in the ordinary course of businessbusiness consistent with past practice, with other than, without the exception consent of Parent, to employees who are officers or directors of Target, or otherwise increase the acquisition referred to in Section 4.01(iii) hereof; (vii) shall not declare compensation or pay any dividends on or make any distribution of any kind with respect to the TARGET Common Stock; (viii) shall maintain its facilities, assets and properties in reasonable repair, order and condition, reasonable wear and tear excepted, and to notify SUB and PARENT immediately in the event of any material loss or damage benefits provided to any of TARGET’s material assets; (ix) shall maintain in full force and effect all present insurance coverage of the types and in the amounts officer, director, consultant or employee except as are may be required by Applicable Law or a binding written contract in effect as of on the date of this Agreement; (xg) shall seek to preserve the present employeesenter into, reputation and business organization of TARGET and TARGET’s relationship with its clients and others having business dealings with itadopt or amend any employee benefit or similar plan; (xih) shall not issue change any additional TARGET Common Stock method or principle of accounting in a manner that is inconsistent with past practice, except to the extent required by U.S. GAAP as advised by Target's regular independent accountants; (i) settle any Actions, whether now pending or hereafter made or brought involving an amount in excess of $500,000; (j) write up, write down or write off the book value of any assets, individually or in the aggregate, in excess of $500,000, except for depreciation and amortization in accordance with U.S. GAAP consistently applied; (k) incur or commit to any capital expenditures, other than capital expenditures provided for in Target's Profit Plan for fiscal 1999 previously provided to Parent; (l) take any action, or permit any of its Subsidiaries to take any action, that would prevent the Merger from qualifying as a reorganization under Section 368 of the Code; (m) take any action affecting that would reasonably be expected to result in any of the capitalization of TARGETrepresentations and warranties set forth in Section 3.1 becoming false or inaccurate in any material respect; (xiin) shall use commercially reasonable efforts permit or cause any Subsidiary to comply with and not be in default or violation under any law, regulation, decree or order applicable to TARGET’s business, operations or assets where such violation would have a Material Adverse Effect; (xiii) shall not grant any severance or termination pay to any director, officer or any other employees of TARGET, other than pursuant to agreements in effect on the date of this Agreement or as otherwise disclosed in the documents delivered pursuant to this Agreement; (xiv) shall not change do any of the accounting principles foregoing or practices used by it, except as may be required as a result agree or commit to do any of a change in law or in GAAP, whether in respect of Taxes or otherwise;the foregoing; or (xvo) shall not terminate agree in writing or waive otherwise to take any right of substantial value other than in the ordinary course of business; and (xvi) shall not enter into any material contract or commitment other than in the ordinary course of businessforegoing actions.

Covenants of Target. TARGET covenants and agrees that, during During the period from the date of this ------------------- Agreement and continuing until the Closing Dateearlier of the termination of this Agreement or the Effective Time, TARGET shall conduct agrees as to itself and its business as presently operated and solely in Subsidiaries (except to the ordinary course, and consistent extent that noncompliance with such operation, and, in connection therewith, without the written consent of SUB and PARENT: (i) shall not amend its Certificate of Incorporation these covenants occurs because BUYER has declined to advance funds to TARGET or Bylaws; (ii) shall not pay or agree because Wexford has declined to pay advance funds to any employee, officer or director compensation that is TARGET in excess of the current compensation level of Interim Funding Cap and only to the extent that such employee, officer or director other than salary increases or payments made actions are in the ordinary course control of TARGET), to carry on its business in the Ordinary Course of Business, to pay its debts and taxes when due, subject to good faith disputes over such debts or as otherwise provided in any contracts taxes, to pay or agreements perform its other obligations when due, and, to the extent consistent with any such business, to use all reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and key employees; , (iii) shall not merge or consolidate with any other entity or acquire or agree to acquire any other entity; maintain its properties, (iv) shall not sellkeep its insurance in force, transfer, or otherwise dispose of any assets required for the operations of TARGET’s business except in the ordinary course of business consistent with past practices; (v) shall not createpreserve its relationships with clients, incursuppliers, assumedistributors, or guarantee any indebtedness for money borrowed except licensors, licensees, and others having business dealings with it, and (vi) pay its accounts payable in the ordinary course Ordinary Course of businessBusiness without material increase in average days outstanding. TARGET shall promptly notify BUYER of any event or occurrence not in the Ordinary Course of Business of TARGET or its Subsidiaries, where such event or create occurrence would result in a breach of any covenant of TARGET or suffer to exist any mortgageits Subsidiaries, lien or other encumbrance on any of its assets, except those set forth in existence on the date hereof or those granted pursuant to agreements in effect on the date of this Agreement or provided cause any representation or warranty of TARGET, set forth in this Agreement to be untrue as of the date of, or giving effect to, such event or occurrence. Except as expressly contemplated by SUB and PARENT and/or any this Agreement, TARGET shall not, without the prior written consent of their affiliates;BUYER which shall not be unreasonably withheld: (via) shall not make any capital expenditure or series of capital expenditures except in the ordinary course of business, with the exception of the acquisition referred to in Section 4.01(iii) hereof; (vii) shall not declare Declare or pay any dividends on or make any distribution other distributions (whether in cash, stock or property) in respect of any kind with of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect to the TARGET Common Stockof, in lieu of or in substitution for shares of its capital stock, or purchase or otherwise acquire, directly or indirectly, any shares of its capital stock; (viiib) shall maintain its facilitiesAcquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or assets and properties in reasonable repairof, order and conditionor by any other manner, reasonable wear and tear exceptedany business or any corporation, and partnership or other business organization or division, or otherwise acquire or agree to notify SUB and PARENT immediately in the event of acquire any material loss or damage to any of TARGET’s material assets; (ixc) shall maintain in full force and effect all present insurance coverage Sell, lease, license or otherwise dispose of the types and any of its properties or assets which are material, individually or in the amounts aggregate, to its business and that of its Subsidiaries, taken as are a whole, except for transactions entered into in effect as the Ordinary Course of the date of this AgreementBusiness; (xd) shall seek Transfer or license to preserve any Person or otherwise extend, amend or modify any material rights to the present employeesTARGET Intellectual Property Rights, reputation and business organization other than the grant of non-exclusive licenses in the Ordinary Course of Business substantially consistent with past practices; issue any shares of TARGET and TARGET’s relationship with its clients and others having business dealings with itcapital stock or capital stock of any Subsidiary, or any securities which may be exchanged or exercised for or converted into TARGET capital stock or the capital stock of any Subsidiary (including, without limitation, any options or warrants) other than shares of TARGET Common Stock issuable upon exercise of existing options; (xie) shall not issue (i) Increase or agree to increase the compensation payable or to become payable to its officers or employees, except for increases in salary or wages of employees in the Ordinary Course of Business, (ii) grant any additional TARGET Common Stock severance or take termination pay to, or enter into any action affecting the capitalization of TARGET; employment or severance agreements with, officers, (xiiiii) shall use commercially reasonable efforts to comply with and not be in default or violation under any law, regulation, decree or order applicable to TARGET’s business, operations or assets where such violation would have a Material Adverse Effect; (xiii) shall not grant any severance or termination pay to to, or enter into any directoremployment or severance agreement with, officer any employee, except in settlement of dispute with terminated employees, (iv) enter into any collective bargaining agreement, or (v) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other employees plan, trust, fund, policy or arrangement for the benefit of TARGETany directors, other than pursuant to agreements in effect on the date of this Agreement officers or as otherwise disclosed in the documents delivered pursuant to this Agreementemployees; (xivf) shall not change Revalue any material amount of its assets, including writing down the accounting principles value of inventory or practices used by itdiscounting or writing off notes or accounts receivable other than the Mannesmann Receivable, except as may be required as a result of a change in law or in GAAPthe LIM Funds, whether in respect of Taxes or otherwise; (xv) shall not terminate or waive any right of substantial value and other than in the ordinary course Ordinary Course of business; andBusiness; (xvig) shall not enter into Except with the approval of the Executive Committee, incur any material contract Indebtedness for borrowed money or commitment guarantee any such Indebtedness or issue or sell any debt securities or warrants or rights to acquire any debt securities or guarantee any debt securities of others, other than Indebtedness incurred under outstanding lines of credit in the Ordinary Course of Business; (h) Change any policy or take any action with respect to the payment of accounts payable, and other than in the ordinary course Ordinary Course of businessBusiness; (i) Incur or commit to incur capital expenditures other than in the Ordinary Course of Business; (j) Make any material change or take any material action with respect to the amortization, capitalization or other accounting policies or procedures, other than actions in the Ordinary Course of Business; (k) Other than with respect to the Designated Amounts and the Puerto Rico Tax Liability, waive, release, assign, settle or compromise any material claims or litigation; (l) Except as described on the TARGET Disclosure Schedule, make any tax election or settle or compromise any material federal, state, local or foreign tax liability; or (m) Take, or agree in writing or otherwise to take, any of the actions described in Sections (a) through (l) above, or any action that individually or in the aggregate could reasonably be expected to (x) have a TARGET Material Adverse Effect, (y) materially impair the ability of TARGET to perform its obligations under this Agreement or (z) prevent or materially delay the consummation of the transactions contemplated by this Agreement.

Covenants of Target. TARGET covenants and (a) Target agrees that, during the period as follows from the date of this Agreement until the Closing Date, TARGET shall conduct its business as presently operated earlier of the Effective Time and solely the date on which this Agreement is terminated in the ordinary course, and consistent accordance with such operation, andArticle 7, in connection therewith, without each case except with the written consent of SUB and PARENTCrosshair to any deviation therefrom, or as expressly contemplated in this Agreement or the Plan of Arrangement: (i) Each of Target and its Subsidiaries shall (A) carry on its businesses in the usual and ordinary course consistent with past practices, (B) use commercially reasonable efforts to preserve intact its present business organizations and material rights and franchises, to keep available the services of its current officers and employees, and to preserve its relationships with those having business dealings with it, and (C) maintain and keep its material properties and assets in as good repair and condition as at the date of this Agreement, subject to ordinary wear and tear, all to the end that its goodwill and ongoing businesses shall not amend its Certificate of Incorporation or Bylaws;be impaired in any material respect at the Effective Time. (ii) Target shall not, and it shall not permit any of its Subsidiaries to: (A) declare, set aside or pay any dividends on, make other distributions or return capital in respect of any of its capital stock or any other equity interests, in cash, stock property or otherwise; (B) split, combine, subdivide or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, shares of its capital stock; (C) issue, sell, pledge, reserve, set aside, dispose of, grant or encumber, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities or obligations convertible into, exercisable or exchangeable for, or any rights, warrants, calls, subscriptions or options to acquire, shares of its capital stock (including any phantom interest or other right linked to the price of the Target Common Shares), or authorize any of the foregoing, except as required by the terms of any Target Securities outstanding on the date of this Agreement; or (D) enter into or announce any agreement or arrangement with respect to the sale, voting, registration or repurchase of any shares of its capital stock or any security convertible into or exchangeable for such shares. (iii) Target shall not, nor shall it permit any of its Subsidiaries to authorize, make or commit to make any expenditures (including capital expenditures and capital lease obligations) in excess of $5,000 individually or in the aggregate except for (A) reoccurring expenditures such as office rental, salaries, office expenses, (B) payment of outstanding obligations existing on the date of this Agreement, (C) payments made to legal advisors, financial advisors and other third parties in connection with the Arrangement and (D) expenditures in accordance with the operating plan and budget as disclosed to Crosshair. (iv) Target shall not, nor shall it permit any of its Subsidiaries to, reorganize, recapitalize, consolidate, dissolve, liquidate, amalgamate or merge with any other person, nor acquire or agree to pay acquire, by amalgamating, merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other manner, any business or person or otherwise acquire or agree to acquire any assets of any other person. (v) Target shall not, nor shall it permit any of its Subsidiaries to sell, pledge, encumber, lease (whether such lease is an operating or capital lease) or otherwise dispose of any assets (other than relating to transactions between two or more wholly-owned Target Subsidiaries or between a wholly-owned Subsidiary and Target) except in the ordinary course of business. (vi) Target shall not, nor shall it permit any of its Subsidiaries to, (A) incur any indebtedness for borrowed money or purchase money indebtedness or assume, guarantee, endorse or enter into a “keepwell” or similar arrangement with respect to, any indebtedness, other than (1) indebtedness between Target and any of its Subsidiaries, and (2) indebtedness incurred to Crosshair, (B) enter into any material operating lease or create any Liens on the property of Target or any of its Subsidiaries in connection with any indebtedness or (C) refinance any debt. (vii) Except as required by applicable Law or any agreement to which Target or any of its Subsidiaries is a party on the date of this Agreement, Target shall not, nor shall it permit any of its Subsidiaries to: (A) without the consent of Crosshair, such consent not to be unreasonably withheld, increase the amount of or accelerate the payment or vesting of, any benefit or amount payable under, any employee benefit plan or any other contract, agreement, commitment, arrangement, plan or policy providing for compensation or benefits to any employeeformer, present or future director, officer or director compensation employee of Target or any of its Subsidiaries, except for such increases that is in excess of the current compensation level of such employee, officer or director other than salary increases or payments made are in the ordinary course of business or for non- management employees and pursuant to management agreements to be entered into, as otherwise provided in any contracts or agreements with any such employeesdisclosed to Crosshair; (iiiB) without the consent of Crosshair, such consent not to be unreasonably withheld, increase or enter into any commitment or arrangement to increase the compensation or benefits, or otherwise to extend, expand or enhance the engagement, employment or any related rights, of any former, present or future director, officer, employee or consultant of Target or any of its Subsidiaries, except for such increases that are in the ordinary course of business for non-management employees and pursuant to management agreements to be entered into, as disclosed to Crosshair; (C) amend, vary or modify the Target Stock Option Plan or any options outstanding thereunder; or (D) except as otherwise disclosed to Crosshair, adopt, establish, enter into or implement any employee benefit plan, policy, severance or termination agreement providing for any form of benefits or other compensation to any former, present or future director, officer or employee of Target or any of its Subsidiaries or amend any employee benefit plan, policy, severance or termination agreement, except for such adoption, establishment, entering into or implementation as are in the ordinary course of business for non- management employees and pursuant to management agreements to be entered into, as disclosed to Crosshair. (viii) Target shall not, nor shall it permit any of its Subsidiaries to, without the consent of Crosshair, such consent not merge to be unreasonably withheld, hire or consolidate with retain any other entity new officers, employees or acquire consultants. (ix) Target shall not, nor shall it permit any of its Subsidiaries to, amend or propose to amend its constating documents. (x) Target shall not, nor shall it permit any of its Subsidiaries to, pay, discharge, satisfy, compromise or settle any claims, obligations or liabilities prior to the same being due which, individually or in the aggregate, are in excess of $5,000. (xi) Except in the ordinary course of business, Target shall not, nor shall it permit any of its Subsidiaries to, (A) enter into, terminate or waive any provision of, exercise any option or relinquish any contractual rights under, or modify in any material respect any contract, agreement, guarantee, lease commitment or arrangement material to it or any contract which involves payments or receipts by Target or any of its Subsidiaries of more than $5,000 over the term of such contract, or (B) waive, transfer, grant or release any claims or potential claims of material value or (C) waive any benefits of, or agree to acquire modify in any other entity;respect, or terminate, release or fail to enforce, or consent to any material matter with respect to which consent is required, under, any confidentiality, standstill or similar agreement to which Target or any of its Subsidiaries is a party or which Target or any of its Subsidiaries is a beneficiary. (ivxii) Target shall not, nor shall it permit any of its Subsidiaries to, make any changes to the existing accounting practices, methods and principles relating to Target or any Subsidiary of Target except as required by Law or by Canadian generally accepted accounting principles as advised by Target's or such Subsidiary's regular independent accountants, as the case may be. (xiii) Target shall not, nor shall it permit any of its Subsidiaries to, (A) make, change or rescind any material tax election, (B) take any action, or omit to take any action, in either case inconsistent with past practice, relating to the filing of any Tax Return or the payment of any Tax (except as otherwise required by Law), (C) settle any material Tax claim or assessment, (D) surrender any right or claim to a Tax refund, or (E) amend any of its transfer pricing policies. (xiv) Target shall not selltake any action to exempt from, transferwaive or make not subject to (including redemption of outstanding rights) any take-over Law or other Law that purports to limit or restrict business combinations or the ability to acquire or vote shares, any person (other than Crosshair and its Subsidiaries) or any action taken thereby including any take-over bid, which person or action would have otherwise dispose been subject to the restrictive provisions thereof and not exempt therefrom. Target shall not nor shall it permit any Subsidiary to, enter into any confidentiality or standstill agreement except as permitted by Section 5.5, amend, release any third party from its obligations or grant any consent under any confidentiality or standstill provision or fail to fully enforce any such provision. (xv) Target shall not, nor shall it permit any of its Subsidiaries to, take or fail to take any action which would cause any of Target's representations or warranties hereunder to be untrue in any respect or would be reasonably expected to prevent or materially impede, interfere with or delay the Arrangement or which would cause the conditions set forth in Section 6.2(b) not to be satisfied. (xvi) Target shall not, nor shall it permit any of its Subsidiaries to, amend, modify or terminate any insurance policy in effect on the date of this Agreement, except for scheduled renewals of any assets required for insurance policy in effect on the operations of TARGET’s business except date hereof in the ordinary course of business consistent with past practices; (v) shall not create, incur, assume, practice or guarantee any indebtedness for money borrowed except in the ordinary course of business, or create or suffer to exist any mortgage, lien or other encumbrance on any of its assets, except those in existence on the date hereof or those granted pursuant to agreements in effect on the date of this Agreement or provided by SUB and PARENT and/or any of their affiliates; (vi) shall not make any capital expenditure or series of capital expenditures except in the ordinary course of business, with the exception of the acquisition referred to in Section 4.01(iii) hereof; (vii) shall not declare or pay any dividends on or make any distribution of any kind with respect to the TARGET Common Stock; (viii) shall maintain its facilities, assets and properties in reasonable repair, order and condition, reasonable wear and tear excepted, and to notify SUB and PARENT immediately in the event of any material loss or damage to any of TARGET’s material assets; (ix) shall maintain in full force and effect all present insurance coverage of the types and in the amounts as are in effect as of the date of this Agreement; (x) shall seek to preserve the present employees, reputation and business organization of TARGET and TARGET’s relationship with its clients and others having business dealings with it; (xi) shall not issue any additional TARGET Common Stock or take any action affecting the capitalization of TARGET; (xii) shall use commercially reasonable efforts to comply with and not be in default or violation under any law, regulation, decree or order applicable to TARGET’s business, operations or assets where such violation would have a Material Adverse Effect; (xiii) shall not grant any severance or termination pay to any director, officer or any other employees of TARGET, other than pursuant to agreements in effect on the date of this Agreement or as otherwise disclosed in the documents delivered pursuant to this Agreement; (xiv) shall not change any of the accounting principles or practices used by it, except as may be required as a result of a change in law or in GAAP, whether in respect of Taxes any acquisition or otherwise; (xv) shall not terminate or waive disposition of any right of substantial value other than in the ordinary course of business; and (xvi) shall not enter into any non- material contract or commitment other than property, plant and/or equipment in the ordinary course of business. (xvii) Target shall not, nor shall it permit any of its Subsidiaries to, (A) cancel any material indebtedness, or (B) waive, transfer, grant or release any claims or potential claims of material value. (xviii) Target shall not, nor shall it permit any of its Subsidiaries to, enter into any recognition agreement, collective agreement, works council agreement or similar agreement with any trade union or representative body other than with the prior approval of Crosshair, acting reasonably. (b) Target shall promptly advise Crosshair in writing: (i) of any event, condition or circumstance that might be reasonably expected to cause any representation or warranty of Target contained in this Agreement to be untrue or inaccurate on the Effective Date (or, in the case of any representation or warranty made as of a specified date, as of such specified date) in any material respect; (ii) of any Material Adverse Effect on Target or any event, occurrence or development which would be reasonably expected to have a Material Adverse Effect on Target; and (iii) of any material breach by Target of any covenant, obligation or agreement contained in this Agreement. (c) Target shall use its commercially reasonable efforts to, and shall use its commercially reasonable efforts to cause its Subsidiaries to, perform all obligations required to be performed by Target or any of its Subsidiaries under this Agreement, cooperate with Crosshair in connection therewith, and do all such other acts and things as may be necessary or desirable in order to consummate and make effective, as soon as reasonably practicable, the transactions contemplated in this Agreement and, without limiting the generality of the foregoing, Target shall: (i) subject to Sections 5.5 and 5.6 solicit from the Target Shareholders proxies in favour of approval of the Arrangement Resolution (in a commercially reasonable manner) and use commercially reasonable efforts to obtain the approval by Target Shareholders of the Arrangement Resolution; (ii) subject to the last sentence of Section 5.6(a), not adjourn, postpone or cancel (or propose adjournment, postponement or cancellation of) the Target Meeting without Crosshair's prior written consent except as required by Law or, in the case of adjournment, as may be required by Target Shareholders as expressed by majority resolution; (iii) use commercially reasonable efforts to satisfy or cause to be satisfied as soon as reasonably practicable all the conditions precedent that are set forth in Article 6 hereof; (iv) as soon as practicable apply for and use commercially reasonable efforts to obtain all Appropriate Regulatory Approvals required to be obtained by Target or any of its Subsidiaries in order for Target to consummate the transactions contemplated hereby and, in doing so, to keep Crosshair reasonably informed as to the status of the proceedings and any material discussions or correspondence related to obtaining such Appropriate Regulatory Approvals, including, but not limited to, providing Crosshair the opportunity to be present for all communications with any Governmental Entity and providing Crosshair with copies of all related applications and notifications, in draft and final form, in order for Crosshair to provide its reasonable comments and all such applications and notifications shall be subject to the prior approval of Crosshair, acting reasonably; (v) apply for and use commercially reasonable efforts to obtain the Interim Order and the Final Order, which Final Order shall be applied for on the basis that it shall be effective only upon Target notifying the Court that the Appropriate Regulatory Approvals have been obtained; (vi) carry out the terms of the Interim Order and the Final Order applicable to it and use commercially reasonable efforts to comply promptly with all requirements which applicable Laws may impose on Target or its Subsidiaries with respect to the transactions contemplated hereby and by the Arrangement; (vii) diligently defend all lawsuits or other legal, regulatory or other proceedings to which it is a party challenging or affecting this Agreement or the consummation of the transactions contemplated hereby; (viii) use commercially reasonable efforts to have lifted or rescinded any injunction or restraining order or other order which may adversely affect the ability of the parties to consummate the transactions contemplated hereby; (ix) effect all necessary registrations, filings and submissions of information required by Governmental Entities from Target or any of its Subsidiaries in connection with the transactions contemplated hereby; (x) consult with Crosshair prior to making publicly available its financial results for any period after the date of this Agreement and prior to filing any Target SRA Reports; and (xi) use commercially reasonable efforts to obtain all waivers, consents and approvals from other parties to loan agreements, leases or other contracts required to be obtained by Target or a Subsidiary of Target to consummate the transactions contemplated hereby which the failure to obtain would materially and adversely affect the ability of Target or its Subsidiaries to consummate the transactions contemplated hereby. (d) The board of directors of Target shall recommend to the Target Shareholders the approval of the Arrangement Resolution, provided that, notwithstanding any other provision of this Agreement, the board of directors of Target may withdraw, modify or change its recommendation if such withdrawal, modification or change is permitted by, and made in accordance with, the provisions of Section 5.5 and prior to the approval of the Arrangement Resolution by the Target Shareholders. (e) Target shall have delivered Target Support Agreements from the Locked-up Shareholders prior to, or contemporaneously with, the execution of this Agreement.