Common use of Prohibited Actions Pending Closing Clause in Contracts

Prohibited Actions Pending Closing. Unless otherwise expressly permitted herein or approved by Parent in writing, from the date hereof until the Closing, the Company shall not: (a) declare, set aside or pay any dividend or other distribution in respect of any shares of capital stock of the Company or repurchase, redeem or acquire any outstanding shares of capital stock or other securities of, or other ownership interest in, the Company; (b) merge, consolidate or adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization involving the Company, other than the Merger; (c) split, combine or reclassify any shares of capital stock of the Company or other securities of the Company or amend the terms of any such stock or securities; (d) change accounting or tax reporting principles, methods or policies of the Company; (e) make, change or rescind any material election concerning taxes or tax returns, file any amended tax return, enter into any closing agreement with respect to taxes, settle or compromise any material tax claim or assessment or surrender any right to claim a refund of taxes or obtain any tax ruling; (f) enter into any transaction other than in the Ordinary Course of Business; (g) make any loans, advances or capital contributions to, or investments in, any Person or pay any fees to any director, officer, partner or Affiliate thereof or to any Company Stockholder (who is not a director, officer or partner) or Affiliate of any Company Stockholder (other than business expenses incurred in the Ordinary Course of Business); (i) mortgage, pledge or subject to any lien any of its assets, or (ii) acquire any assets or sell, assign, transfer, convey, lease or otherwise dispose of any assets of the Company, except, in the case of clause (ii), in the Ordinary Course of Business; (i) cancel or compromise any Indebtedness or amend, cancel, terminate, relinquish, waive or release any contract or right, in each case, except in the Ordinary Course of Business, and which, in the aggregate, would not be material to the Company taken as a whole; (j) make or commit to make any capital expenditures or capital additions or betterments in excess of $30,000 individually or $75,000 in the aggregate; (k) issue, create, incur, assume, guarantee, endorse or otherwise become liable or responsible with respect to (whether directly, contingently, or otherwise) any Indebtedness where such Indebtedness of the Company exceeds, in the aggregate, $100,000 other than legal fees and expenses in connection with the Merger and the Private Placement; (l) institute or settle any legal proceeding; and (m) agree, commit, arrange or enter into any understanding to do anything set forth in this Section 5.02.

Prohibited Actions Pending Closing. Unless otherwise expressly permitted herein or approved by Parent the Purchaser in writing, from the date hereof until the Closing, the Company shall not: (a) declare, set aside or pay any dividend or other distribution in respect of any shares of capital stock of the Company or repurchase, redeem or acquire any outstanding shares of capital stock or other securities of, or other ownership interest in, the Company; (b) merge, consolidate or adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization involving the Company, other than the MergerTransactions; (c) split, combine or reclassify any shares of capital stock of the Company or other securities of the Company or amend the terms of any such stock or securities; (d) change accounting or tax reporting principles, methods or policies of the Company; (e) make, change or rescind any material election concerning taxes or tax returns, file any amended tax return, enter into any closing agreement with respect to taxes, settle or compromise any material tax claim or assessment or surrender any right to claim a refund of taxes or obtain any tax ruling; (f) enter into any transaction other than in the Ordinary Course of Business; (g) make any loans, advances or capital contributions to, or investments in, any Person or pay any fees to any director, officer, partner or Affiliate thereof or to any Company Stockholder (who is not a director, officer or partner) or Affiliate of any Company Stockholder (other than business expenses incurred in the Ordinary Course of Business); (i) mortgage, pledge or subject to any lien any of its assets, or (ii) acquire any assets or sell, assign, transfer, convey, lease or otherwise dispose of any assets of the Company, except, in the case of clause (ii), in the Ordinary Course of Business; (i) cancel or compromise any Indebtedness or amend, cancel, terminate, relinquish, waive or release any contract or right, in each case, except in the Ordinary Course of Business, and which, in the aggregate, would not be material to the Company taken as a whole; (j) make or commit to make any capital expenditures or capital additions or betterments in excess of $30,000 50,000 individually or $75,000 100,000 in the aggregate; (k) issue, create, incur, assume, guarantee, endorse or otherwise become liable or responsible with respect to (whether directly, contingently, or otherwise) any Indebtedness where such Indebtedness of the Company exceeds, in the aggregate, $100,000 other than legal fees and expenses in connection with the Merger Transactions and the Private Placement; (l) institute or settle any legal proceeding; and (m) agree, commit, arrange or enter into any understanding to do anything set forth in this Section 5.02.

Prohibited Actions Pending Closing. Unless Except as otherwise expressly permitted herein provided for in this Agreement or approved by Parent the disclosure schedules of the respective parties, or with the other party's approval in writing, from the date hereof until the ClosingClosing Date, neither the Company nor the Parent shall, and the Parent shall notcause Merger Sub not to: (a) amend or otherwise change its Articles of Incorporation, By-laws or other governing documents; (b) issue or sell or authorize for issuance or sale, or grant any options or make other agreements with respect to, any shares of their capital stock or any other of their securities; (c) authorize or incur any additional debt for money borrowed other than in the ordinary course of business, or incur any additional long-term debt maturing in whole or in part, more than one year after the date of creation thereof; (d) mortgage, pledge or subject to lien or other encumbrance any of its material properties or agree to do so; (e) enter into or agree to enter into any material agreement, contract or commitment other than in the ordinary course of business; (f) declare, set aside aside, make or pay any dividend or other distribution in respect of any shares of capital stock of to its shareholders or its stockholders (as the Company or repurchase, redeem or acquire any outstanding shares of capital stock or other securities ofcase may be), or other ownership interest inredeem, the Company; (b) mergepurchase or otherwise acquire, consolidate directly or adopt a plan indirectly, any of complete its capital stock, or partial liquidation, dissolution, restructuring, authorize or effect any split-up or any recapitalization or other reorganization involving the Company, other than the Merger; (c) split, combine make any changes in its authorized or reclassify any shares of issued capital stock of the Company or other securities of the Company or amend the terms of any such stock or securities; (d) change accounting or tax reporting principles, methods or policies of the Company; (e) make, change or rescind any material election concerning taxes or tax returns, file any amended tax return, enter into any closing agreement with respect to taxes, settle or compromise any material tax claim or assessment or surrender any right to claim a refund of taxes or obtain any tax ruling; (f) enter into any transaction other than in the Ordinary Course of Businessstock; (g) make increase or agree to increase, the compensation of any loansof its officers, advances directors or capital contributions toemployees by means of salary increase, bonus or otherwise other than in the ordinary course of business consistent with past practice; (h) sell or otherwise dispose of, or investments inagree to sell or dispose of, any Person of the Company's material assets or pay any fees to any director, officer, partner or Affiliate thereof or to any Company Stockholder (who is not a director, officer or partner) or Affiliate of any Company Stockholder (other than business expenses incurred in the Ordinary Course of Business)properties; (i) mortgageamend or terminate any material lease, pledge contract, undertaking or subject other commitment to any lien any of its assetswhich it is a party, or to take action or fail to take any action, constituting any event of default thereunder; (iij) acquire any assets or sellassume, assign, transfer, convey, lease guarantee or otherwise dispose become responsible for the obligations of any other party or agree to so do; (k) invest any assets of the Company, except, except the reinvestment of cash or cash equivalents in the case U.S. Treasury Bills and/or Certificates of clause (ii), in the Ordinary Course of Business; (i) cancel or compromise any Indebtedness or amend, cancel, terminate, relinquish, waive or release any contract or right, in each case, except in the Ordinary Course of Business, and which, in the aggregate, would not be material to the Company taken as a whole; (j) make or commit to make any capital expenditures or capital additions or betterments in excess of $30,000 individually or $75,000 in the aggregate; (k) issue, create, incur, assume, guarantee, endorse or otherwise become liable or responsible with respect to (whether directly, contingently, or otherwise) any Indebtedness where such Indebtedness of the Company exceeds, in the aggregate, $100,000 other than legal fees and expenses in connection with the Merger and the Private PlacementDeposit; (l) institute pay any finders or settle any legal proceedinginvestment bankers' fees in connection with the transactions contemplated by this Agreement; and (m) agree, commit, arrange or enter into any understanding to do anything set forth in this Section 5.02.or

Prohibited Actions Pending Closing. Unless otherwise expressly permitted provided for herein or approved by Parent Lucent in writingwriting (which Lucent approval in the case of any matters covered under subsection (j) below cannot be unreasonably withheld), from the date hereof until the Closing, the Company shall not, and shall not permit any of its Subsidiaries to: (a) amend or otherwise change its Certificate of Incorporation or By-laws; (b) issue or sell or authorize for issuance or sale (other than (i) any issuance of Company Common Stock upon the exercise of any outstanding option or warrant to purchase Company Common Stock which option or warrant was issued prior to the date hereof in accordance with the terms of the relevant stock option or warrant agreement, or (ii) the issuance of Company Common Stock pursuant to the Option Agreement), or grant any options or make other agreements with respect to, any shares of its capital stock or any other of its securities, except for the issuance of stock options to new employee hires consistent with past practice and for those provisions of the agreement with the Exchange Agent which provisions are in furtherance of this Agreement; (c) declare, set aside aside, make or pay any dividend or other distribution distribution, payable in cash, stock, property or otherwise with respect to any of any shares of its capital stock of the Company or repurchase, redeem or acquire any outstanding shares of capital stock or other securities of, or other ownership interest in, the Company; (b) merge, consolidate or adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization involving the Company, other than the Merger; (c) split, combine or reclassify any shares of capital stock of the Company or other securities of the Company or amend the terms of any such stock or securitiesstock; (d) change accounting reclassify, combine, split, subdivide or tax reporting principlesredeem, methods purchase or policies otherwise acquire, directly or indirectly, any of the Companyits capital stock; (e) makeincur any indebtedness for borrowed money or issue any debt securities or assume, change guarantee or rescind endorse, or otherwise as an accommodation become responsible for, the obligations of any material election concerning taxes Person, or tax returnsmake any loans or advances, file except (i) short-term borrowings incurred in the ordinary course of business (or to refinance existing or maturing indebtedness) and (ii) intercompany indebtedness between the Company and any amended tax return, enter into any closing agreement with respect to taxes, settle of its Subsidiaries or compromise any material tax claim or assessment or surrender any right to claim a refund of taxes or obtain any tax rulingbetween Subsidiaries; (f) (i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any corporation, partnership, other business organization or any division thereof or any material amount of assets, (ii) enter into any transaction contract or agreement other than in the Ordinary Course ordinary course of Businessbusiness consistent with past practice, (iii) authorize any capital commitment which is in excess of $500,000 or capital expenditures which are, in the aggregate, in excess of $2,000,000, or (iv) enter into or amend any contract, agreement, commitment or arrangement with respect to any matter set forth in Section 4.2(e) or this Section 4.2(f); (g) make any loans, advances or capital contributions to, or investments in, any Person or pay any fees to any director, officer, partner or Affiliate thereof or to any Company Stockholder (who is not a director, officer or partner) or Affiliate of any Company Stockholder (other than business expenses incurred in the Ordinary Course of Business); (i) mortgage, pledge or subject to any lien Lien, any of its assets, or (ii) acquire any assets or properties or agree to do so except for Permitted Liens; (h) sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of any of its properties or assets (including securitizations), other than sales or licenses of finished goods in the ordinary course of business consistent with past practice; (i) assume, guarantee or otherwise become responsible for the obligations of any other Person or agree to so do; (j) enter into or agree to enter into any employment agreement; (k) take any action, other than in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivables); (l) make any material Tax election or settle or compromise any material federal, state, local or foreign income Tax liability; (m) settle or compromise any pending or threatened suit, action or claim which is material or which relates to any of the transactions contemplated by this Agreement; (n) pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business or in accordance with their terms, of liabilities reflected or reserved against in the most recently audited balance sheet (and the notes thereto) included in the Company SEC Documents or subsequently incurred in the ordinary course of business and consistent with past practice; (o) except in connection with the sale of the Company's products in the ordinary course of business and consistent with past practice, sell, assign, transfer, conveylicense, lease sublicense, pledge or otherwise dispose of encumber any assets of the Company, except, in Intellectual Property Rights of the case of clause (ii), in the Ordinary Course of BusinessCompany or its Subsidiaries; (ip) cancel except as required by law or compromise any Indebtedness or amend, cancel, terminate, relinquish, waive or release any contract or right, in each case, contemplated hereby and except for labor agreements negotiated in the Ordinary Course of Businessordinary course, enter into, adopt or amend in any material respect or terminate any Company Benefit Plan or any other agreement, plan or policy involving the Company or its Subsidiaries, and whichone or more of its directors, officers or employees, or materially change any actuarial or other assumption used to calculate funding obligations with respect to any pension plan, or change the manner in which contributions to any pension plan are made or the basis on which such contributions are determined; (q) except for normal increases in the ordinary course of business consistent with past practice that, in the aggregate, would do not be material to the Company taken as a whole; (j) make materially increase benefits or commit to make any capital expenditures or capital additions or betterments in excess of $30,000 individually or $75,000 in the aggregate; (k) issue, create, incur, assume, guarantee, endorse or otherwise become liable or responsible with respect to (whether directly, contingently, or otherwise) any Indebtedness where such Indebtedness compensation expenses of the Company exceedsor its Subsidiaries, or as contemplated hereby or by the terms of any employment agreement in existence on the aggregatedate hereof, $100,000 increase the cash compensation of any director, executive officer or other than legal fees and expenses key employee or pay any benefit or amount not required by a plan or arrangement as in connection effect on the date of this Agreement to any such Person; provided that nothing contained herein shall prohibit the Company from paying 1999 bonuses that have been earned under its incentive bonus plans in accordance with the Merger and terms of such plans as in effect on the Private Placement;date hereof consistent with past practice; or (lr) institute announce an intention, commit or settle any legal proceeding; and (m) agree, commit, arrange or enter into any understanding agree to do anything set forth in this Section 5.02any of the foregoing.

Prohibited Actions Pending Closing. Unless Except as provided in or otherwise expressly permitted herein contemplated by this Agreement or approved by as set forth in the Schedule of Exceptions or to the extent Parent and Sorrento shall otherwise consent in writing, during the period from the date hereof until of this Agreement to the ClosingEffective Time, none of Parent, Merger Sub or Sorrento shall, other than in the Company shall notordinary course of business: (a) create any Lien on any of its properties or assets, whether tangible or intangible, other than (i) Permitted Liens and (ii) Liens that will be released at or prior to, or in connection with the Closing; (b) sell, assign, transfer, lease or otherwise dispose of or agree to sell, assign, transfer, lease or otherwise dispose of any its material assets or except as otherwise provided for in this Agreement, cancel any Indebtedness owed to it; (c) change any method of accounting or accounting practice used by it, other than such changes required by GAAP; (d) issue or sell any shares of the capital stock of, or other equity interests in it, or securities convertible into or exchangeable for such shares or equity interests, or issue or grant any options, warrants, calls, subscription rights or other rights of any kind to acquire additional shares of such capital stock, such other equity interests or such securities; (e) amend or otherwise change its Articles, Certificate, By-Laws or other charter documents, as the case may be, or other governing documents; (f) declare, set aside or pay any dividend or other distribution in with respect to any share of any shares of capital stock of the Company or repurchase, redeem or acquire any outstanding shares of its capital stock or other securities ofdeclare or effectuate a stock dividend, stock split or other ownership interest in, the Company; (b) merge, consolidate or adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization involving the Companysimilar event, other than the Merger; (c) split, combine or reclassify any shares of capital stock of the Company or other securities of the Company or amend the terms of any such stock or securities; (d) change accounting or tax reporting principles, methods or policies of the Company; (e) make, change or rescind any material election concerning taxes or tax returns, file any amended tax return, enter into any closing agreement with respect to taxes, settle or compromise any material tax claim or assessment or surrender any right to claim a refund of taxes or obtain any tax ruling; (f) enter into any transaction other than in the Ordinary Course of BusinessTax distributions; (g) make issue any loansnote, advances or capital contributions tobond, or investments in, any Person other debt security or pay any fees to any director, officer, partner or Affiliate thereof or to any Company Stockholder (who is not a director, officer or partner) or Affiliate of any Company Stockholder (other than business expenses incurred in the Ordinary Course of Business); (i) mortgage, pledge or subject to any lien any of its assets, or (ii) acquire any assets or sell, assign, transfer, convey, lease or otherwise dispose of any assets of the Company, except, in the case of clause (ii), in the Ordinary Course of Business; (i) cancel or compromise any Indebtedness or amend, cancel, terminate, relinquish, waive or release any contract or right, in each case, except in the Ordinary Course of Business, and which, in the aggregate, would not be material to the Company taken as a whole; (j) make or commit to make any capital expenditures or capital additions or betterments in excess of $30,000 individually or $75,000 in the aggregate; (k) issue, create, incur, assume, guaranteeor guarantee any Indebtedness for borrowed money or capitalized lease obligation; (h) make any equity investment in, endorse make any loan to, or acquire the securities or assets of any other person or entity; (i) enter into any new or additional agreements or materially modify any existing agreements relating to the employment of any officer or director or any written agreements of any of its employees, except as to indemnification of officers and directors and otherwise become liable in the ordinary course of business; (j) other than as specifically provided for in this Agreement, make any payments out of the ordinary course of business to any of its officers, directors, employees or responsible with respect to stockholders; (whether directlyk) other than as specifically provided for in this Agreement, contingentlypay, discharge, satisfy or settle any liability (absolute, accrued, asserted or unasserted, contingent or otherwise) any Indebtedness where such Indebtedness of the Company exceeds, other than in the aggregate, $100,000 other than legal fees and expenses in connection with the Merger and the Private Placementordinary course of business; (l) institute sell, transfer, license, abandon, let lapse, encumber or settle otherwise dispose of any legal proceeding; andIntellectual Property; (m) agreeagree in writing or otherwise take any action that would, commitor would reasonably be expected to, arrange prevent, impair or enter into materially delay the ability of Parent or Sorrento as the case may be, to consummate the transactions contemplated by this Agreement; (n) form or acquire any understanding additional Subsidiaries; or (o) agree to do anything set forth take any of the actions specified in this Section 5.026.15.

Prohibited Actions Pending Closing. Unless otherwise expressly permitted herein or approved by Parent the Purchaser or the Company in writing, as applicable, from the date hereof until the Closing, neither the Company shall notnor the Purchaser shall: (a) allow any Material Change to its business; (b) enter into or amend a material contracts or transactions or agreements; (c) make or commit to any significant liaberilities or other commitments, not in the ordinary course of business; (d) acquire, sell, assign, encumber or otherwise dispose any material assets; (e) alter or agree to alter its incorporation documents; (f) declare, set aside or pay any dividend or other distribution in respect of any shares of capital stock of the Company or repurchase, redeem or acquire any outstanding shares of capital stock or other securities of, or other ownership interest in, the Company; (b) merge, consolidate or adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization involving the Company, other than the Merger; (c) split, combine or reclassify any shares of capital stock of the Company or other securities of the Company or amend the terms of any such stock or securities; (dg) change accounting or tax reporting principles, methods or policies of the Companypolicies; (eh) make, change or rescind any material election concerning taxes Taxes or tax returns, file any amended tax return, enter into any closing agreement with respect to taxesTaxes, settle or compromise any material tax Tax claim or assessment or surrender any right to claim a refund of taxes Taxes or obtain any tax ruling; (fi) enter into cause to occur, by act or omission, an event or series of event, whether related or not, which may have, from the perspective of the other party, a Material Adverse Effect on the business, assets or financial condition of the other party or on the transactions contemplated by this Agreement; (j) make or commit to make any transaction other than capital expenditures or capital additions or betterments in excess of $10,000 individually or $40,000 in the aggregate except that the Purchaser shall not be subject to such limitation with respect to ordinary course expenditures; (i) mortgage, pledge or subject to any lien any of its assets, or (ii) acquire any assets or sell, assign, transfer, convey, lease or otherwise dispose of any assets of the Company, except in the case of clause (ii), in the Ordinary Course of Business; (gl) make any loans, advances loans or capital contributions to, or investments in, any Person or pay any fees to any director, officer, partner or Affiliate thereof or to any Company Stockholder (who is not a director, officer or partner) or Affiliate of any Company Stockholder (other than business expenses incurred in the Ordinary Course of Business); (i) mortgage, pledge or subject to any lien any of its assets, or (ii) acquire any assets or sell, assign, transfer, convey, lease or otherwise dispose of any assets of the Company, except, in the case of clause (ii), in the Ordinary Course of Business; (i) cancel or compromise any Indebtedness or amend, cancel, terminate, relinquish, waive or release any contract or right, in each case, except in the Ordinary Course of Business, and which, in the aggregate, would not be material to the Company taken as a whole; (j) make or commit to make any capital expenditures or capital additions or betterments in excess of $30,000 individually or $75,000 in the aggregate; (k) issue, create, incur, assume, guarantee, endorse or otherwise become liable or responsible with respect to (whether directly, contingently, or otherwise) any Indebtedness where such Indebtedness of the Company exceeds, in the aggregate, $100,000 other than legal fees and expenses in connection with the Merger and the Private Placement; (lm) institute or settle any legal proceeding; and (mn) agree, commit, arrange or enter into any understanding to do anything set forth in this Section 5.024.2. (o) Without derogating from the above, (i) the Purchaser shall not be precluded from completing the following transactions which are currently contemplated: financing transaction through equity/debt/convertible loan not to exceed USD $2,000,000, purchase additional printers and establish of new joint venture in China. Purchaser may also continue to raise equity investments in the framework of the Private Placement Offering as described in the F-20 submitted by Purchaser to the SEC. (ii) the Purchaser, the Company and the Stockholders shall not be precluded from any action or activity that is required or advisable for the fulfillment or the performance of the Purchaser, the Stockholders’ and/or Company’s obligations under this Agreement.

Prohibited Actions Pending Closing. Unless otherwise expressly permitted provided for herein or approved by Parent Silverline in writing, which approval shall not be unreasonably withheld from the date hereof until the Closing, the Company SeraNova shall not: (a) amend or otherwise change its certificate of incorporation or by-laws; (b) issue or sell, or authorize for issuance or sale, or grant any options or make other agreements with respect to, any shares of its capital stock or any other of its securities, except in connection with the exercise of outstanding SeraNova Stock Options or Warrants; (c) declare, set aside aside, make or pay any dividend or other distribution distribution, payable in cash, stock, property or otherwise with respect to any of any shares of its capital stock of the Company or repurchase, redeem or acquire any outstanding shares of capital stock or other securities of, or other ownership interest in, the Company; (b) merge, consolidate or adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization involving the Company, other than the Merger; (c) split, combine or reclassify any shares of capital stock of the Company or other securities of the Company or amend the terms of any such stock or securitiesstock; (d) change accounting reclassify, combine, split, subdivide or tax reporting principlesredeem, methods purchase or policies otherwise acquire, directly or indirectly, any of the Companyits capital stock except redemption of SeraNova Preferred Stock; (ei) makeacquire (including, change without limitation, by merger, consolidation, or rescind acquisition of stock or assets) any material election concerning taxes corporation, partnership, other business organization or tax returnsany division thereof, file (ii) acquire assets with an aggregate purchase price of in excess of $100,000; (iii) incur any amended tax returnindebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any Person, or make any loans or advances, except for (A) interest and fees on indebtedness set forth on Schedule 3.5 of the SeraNova Disclosure Schedule, (B) incurred in the ordinary course of business and consistent with past practice or (C) for indebtedness in aggregate principal amount not in excess of $100,000; (iv) enter into any closing contract or agreement other than in the ordinary course of business, consistent with past practice; (v) authorize any capital commitment which is in excess of $200,000 or capital expenditures which are, in the aggregate, in excess of $100,000; or (vi) enter into or amend any contract, agreement, commitment or arrangement with respect to taxes, settle or compromise any material tax claim or assessment or surrender any right to claim a refund of taxes or obtain any tax rulingmatter set forth in this Section 5.2(e); (f) enter into any transaction other than in the Ordinary Course of Business; (g) make any loans, advances or capital contributions to, or investments in, any Person or pay any fees to any director, officer, partner or Affiliate thereof or to any Company Stockholder (who is not a director, officer or partner) or Affiliate of any Company Stockholder (other than business expenses incurred in the Ordinary Course of Business); (i) mortgage, pledge or subject to any lien Lien, any of its assetsassets or properties or agree to do so except for Permitted Liens; (g) assume, guarantee or otherwise become responsible for the obligations of any other Person, or agree to so do; (h) enter into or agree to enter into, or terminate prior to the expiration date thereof, any employment agreement with respect to any employee whose annual salary exceeds $75,000; (i) increase the compensation or benefits payable, or to become payable, to its officers or employees, except for increases in accordance with past practices in salaries or wages of employees of SeraNova who are not officers of SeraNova, or grant any severance or termination pay to, or enter into any severance agreement with any current director, officer or other employee of SeraNova, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any such director, officer or employee except as required under applicable law; (j) take any action, other than in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivables); (k) make any material Tax election, or settle or compromise any material federal, state, local or foreign income Tax liability; (l) settle or compromise any pending or threatened suit, action or claim which is material, or which relates to any of the transactions contemplated by this Agreement; (m) pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than (i) the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of liabilities reflected or reserved against in the balance sheet or subsequently incurred in the ordinary course of business and consistent with past practice and (ii) acquire any assets other claims, liabilities or obligations (qualified as aforesaid) that in the aggregate do not exceed $100,000; (n) except in connection with the sale or licensing of SeraNova's products in the ordinary course of business and consistent with past practice, sell, assign, transfer, conveylicense, lease sublicense, pledge or otherwise dispose of encumber any assets of the Company, except, in the case of clause (ii), in the Ordinary Course of Business;Intellectual Property Rights; or (io) cancel announce an intention, commit or compromise agree to do any Indebtedness or amend, cancel, terminate, relinquish, waive or release any contract or right, in each case, except in the Ordinary Course of Business, and which, in the aggregate, would not be material to the Company taken as a whole; (j) make or commit to make any capital expenditures or capital additions or betterments in excess of $30,000 individually or $75,000 in the aggregate; (k) issue, create, incur, assume, guarantee, endorse or otherwise become liable or responsible with respect to (whether directly, contingently, or otherwise) any Indebtedness where such Indebtedness of the Company exceeds, in the aggregate, $100,000 other than legal fees and expenses in connection with the Merger and the Private Placement; (l) institute or settle any legal proceeding; and (m) agree, commit, arrange or enter into any understanding to do anything set forth in this Section 5.02foregoing.

Prohibited Actions Pending Closing. Unless otherwise expressly permitted provided for herein or approved by Parent in writing, or unless otherwise set forth in Item 4.2 of the Company Disclosure Schedule, from the date hereof until the Closing, the Company shall not:not (and shall not permit any of the Company Subs to): (a) amend or otherwise change any of its Organizational Documents; (b) except as contemplated by Section 3.1(c)(v), amend the Rights Agreement or take any action with respect to, or make any determination under, the Rights Agreement, including a redemption of the Rights to facilitate an Alternative Transaction (as defined below); (c) except as contemplated by Section 4.2(o), issue or sell or authorize for issuance or sale (other than any issuance of Company Common Stock upon the exercise of any outstanding option to purchase Company Common Stock which option was issued prior to the date hereof in accordance with the terms of the relevant stock option agreement), or grant any options or make other agreements with respect to, any shares of its capital stock or any other of its securities; (d) declare, set aside aside, make or pay any dividend or other distribution distribution, payable in cash, stock, property or otherwise with respect to any of any shares of its capital stock of the Company or repurchase, redeem or acquire any outstanding shares of capital stock or other securities of, or other ownership interest in, the Company; (b) merge, consolidate or adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization involving the Company, other than the Merger; (c) split, combine or reclassify any shares of capital stock of the Company or other securities of the Company or amend the terms of any such stock or securities; (d) change accounting or tax reporting principles, methods or policies of the Companystock; (e) makereclassify, change combine, split, subdivide or rescind redeem, purchase or otherwise acquire, directly or indirectly, any material election concerning taxes or tax returns, file any amended tax return, enter into any closing agreement with respect to taxes, settle or compromise any material tax claim or assessment or surrender any right to claim a refund of taxes or obtain any tax rulingits capital stock; (f) enter into incur any transaction other than indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any Person, or make any loans or advances, except (i) short-term borrowings incurred in the Ordinary Course ordinary course of Businessbusiness consistent with past practice and (ii) intercompany indebtedness between the Company and any of the Company Subs or between the Company Subs; (g) make (i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any loanscorporation, advances partnership, other business organization or any division thereof or any material amount of assets; (ii) except as contemplated by Section 4.2(o), enter into any contract or agreement other than in the ordinary course of business consistent with past practice; (iii) authorize any capital commitment which is in excess of $100,000 or capital contributions toexpenditures which are, in the aggregate, in excess of $250,000; or investments in(iv) enter into or amend any contract, any Person agreement, commitment or pay any fees arrangement with respect to any directormatter set forth in Section 4.2(f) or this Section 4.2(g); (h) sell, officerlease, partner license, mortgage, pledge or Affiliate thereof otherwise encumber or subject to any Company Stockholder (who is not a director, officer Lien or partner) or Affiliate otherwise dispose of any Company Stockholder (of its properties or assets, other than business expenses incurred sales or licenses of products in the Ordinary Course ordinary course of Business)business consistent with past practice; (i) mortgagetake any action, pledge other than in the ordinary course of business consistent with past practice, with respect to accounting policies or subject procedures (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivables); (j) make any Tax election or settle or compromise any federal, state, local or foreign Tax liability; (k) settle or compromise any pending or threatened suit, action or claim which is material or which relates to any lien of the transactions contemplated by this Agreement; (l) pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of its assetsbusiness consistent with past practice, of liabilities reflected or reserved against in the Interim Balance Sheet or subsequently incurred in the ordinary course of business consistent with past practice; (iim) acquire any assets except in connection with the sale or license of the Company’s products in the ordinary course of business consistent with past practice, sell, assign, transfer, conveylicense, lease sublicense, pledge or otherwise dispose of encumber any assets of the Company, except, in the case of clause (ii), in the Ordinary Course of Business’s Intellectual Property Rights; (in) cancel except as required by law or compromise as contemplated by Section 4.2(o), enter into, adopt, amend or terminate any Indebtedness Company Benefit Plan or amendany other agreement, cancelarrangement, terminateplan or policy involving the Company or any of the Company Subs, relinquishand one or more of its directors, waive officers, employees or release consultants, or materially change any contract actuarial or rightother assumption used to calculate funding obligations with respect to any pension plan, or change the manner in each casewhich contributions to any pension plan are made or the basis on which such contributions are determined; provided, except however, that the Company shall be permitted to submit to its stockholders for their consideration and approval the amendments to the Company Stock Options Plans and the Company Stock Purchase Plan described in the Ordinary Course Company Disclosure Schedule if the Offer has not been consummated within 50 Business Days after the commencement date of Business, and whichthe Offer; (o) except for normal increases in the ordinary course of business consistent with past practice that, in the aggregate, would do not be material to materially increase benefits or compensation expenses of the Company taken or the Company Subs, or as contemplated hereby or by the terms of any employment agreement in existence on the date hereof, increase the cash compensation of any director, officer or other key employee 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; except that the Company may hire up to 20 persons (none of whom shall be officers of the Company) on an at will basis (with no employment, severance or similar agreements) and grant to such persons options to purchase up to 200,000 shares of Company Common Stock in the aggregate; provided that no portion of any such options shall vest or otherwise become exercisable (including, without limitation, as a whole; (jresult of the Offer or the Merger) make or commit within one year of the date of hire; provided further that the Company shall notify each such person prior to make hiring that the options being granted shall be canceled for no value upon the consummation of the transactions contemplated by this Agreement; and provided further that any capital expenditures or capital additions or betterments such hiring at an annual salary in excess of $30,000 individually or $75,000 in 110,000 shall be subject to the aggregate;prior approval of Parent, which approval shall not be unreasonably withheld; or (kp) issueannounce an intention, create, incur, assume, guarantee, endorse commit or otherwise become liable or responsible with respect agree to (whether directly, contingently, or otherwise) do any Indebtedness where such Indebtedness of the Company exceeds, in the aggregate, $100,000 other than legal fees and expenses in connection with the Merger and the Private Placement; (l) institute or settle any legal proceeding; and (m) agree, commit, arrange or enter into any understanding to do anything set forth in this Section 5.02foregoing.

Prohibited Actions Pending Closing. Unless otherwise expressly permitted herein or provided for herein, approved by Parent Lucent in writingwriting or set forth in Schedule 5.2, from the date hereof until the Closing, the Company shall not: (a) amend or otherwise change its Certificate of Incorporation or By-laws; (b) issue or sell or authorize for issuance or sale, or grant any options or make other agreements with respect to, any shares of its capital stock or any other of its securities, except for the grant of stock options to purchase up to 200,000 shares of Company Common Stock granted to employees of the Company hired after the date hereof consistent with past practice and with an exercise price reflecting such Company Common Stock's fair market value and which were granted in the ordinary course of business and except for those provisions of the agreement with the Exchange Agent which provisions are in furtherance of this Agreement; (c) declare, set aside aside, make or pay any dividend or other distribution distribution, payable in cash, stock, property or otherwise with respect to any of any shares of its capital stock of the Company or repurchase, redeem or acquire any outstanding shares of capital stock or other securities of, or other ownership interest in, the Company; (b) merge, consolidate or adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization involving the Company, other than the Merger; (c) split, combine or reclassify any shares of capital stock of the Company or other securities of the Company or amend the terms of any such stock or securitiesstock; (d) change accounting reclassify, combine, split, subdivide or tax reporting principlesredeem, methods purchase or policies otherwise acquire, directly or indirectly, any of the Companyits capital stock; (ei) makeacquire (including, change without limitation, by merger, consolidation, or rescind acquisition of stock or assets) any corporation, partnership, other business organization or any division thereof or any material election concerning taxes amount of assets; (ii) incur any indebtedness for borrowed money (other than as contemplated by Section 5.16) or tax returnsissue any debt securities or assume, file guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any amended tax returnPerson, or make any loans or advances, except for interest and fees on Indebtedness set forth on Schedule 3.6 incurred in the ordinary course of business and consistent with past practice; (iii) enter into any closing contract or agreement (or series of related contracts or agreements) in excess of $100,000 other than in the ordinary course of business, consistent with past practice; (iv) authorize any capital commitment which is in excess of $25,000 or capital expenditures which are, in the aggregate, in excess of $100,000; or (v) enter into or amend any contract, agreement, commitment or arrangement with respect to taxes, settle or compromise any material tax claim or assessment or surrender any right to claim a refund of taxes or obtain any tax rulingmatter set forth in this Section 5.2(e); (f) enter into any transaction other than in the Ordinary Course of Business; (g) make any loans, advances or capital contributions to, or investments in, any Person or pay any fees to any director, officer, partner or Affiliate thereof or to any Company Stockholder (who is not a director, officer or partner) or Affiliate of any Company Stockholder (other than business expenses incurred in the Ordinary Course of Business); (i) mortgage, pledge or subject to any lien Lien, any of its assetsassets or properties or agree to do so except for Permitted Liens; (g) assume, guarantee or otherwise become responsible for the obligations of any other Person or agree to so do; (h) enter into or agree to enter into or terminate (prior to the expiration date thereof) any employment agreement; (i) increase the compensation or benefits payable or to become payable to its officers or employees, except for increases to employees of the Company who are not officers in the ordinary course of business and in accordance with past practices in salaries or wages of employees of the Company who are not officers of the Company, or grant any severance or termination pay to, or enter into any severance agreement with any director, officer or other employee of the Company, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any such director, officer or employee; (j) take any action, other than in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivables); (k) make any material Tax election or settle or compromise any material federal, state, local or foreign income Tax liability; (l) settle or compromise any pending or threatened suit, action or claim which is material or which relates to any of the transactions contemplated by this Agreement; (m) pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than (i) the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of liabilities reflected or reserved against in the Balance Sheet or subsequently incurred in the ordinary course of business and consistent with past practice and (ii) acquire any assets other claims, liabilities or obligations (qualified as aforesaid) that in the aggregate do not exceed $25,000 and as to which the Company's failure to so pay, discharge or satisfy could not reasonably be expected to have a Material Adverse Effect on the Company; (n) except in connection with the sale of the Company's products in the ordinary course of business and consistent with past practice, sell, assign, transfer, conveylicense, lease sublicense, pledge or otherwise dispose of encumber any assets of the Company, except, in the case of clause (ii), in the Ordinary Course of Business;Intellectual Property Rights; or (io) cancel announce an intention, commit or compromise agree to do any Indebtedness or amend, cancel, terminate, relinquish, waive or release any contract or right, in each case, except in the Ordinary Course of Business, and which, in the aggregate, would not be material to the Company taken as a whole; (j) make or commit to make any capital expenditures or capital additions or betterments in excess of $30,000 individually or $75,000 in the aggregate; (k) issue, create, incur, assume, guarantee, endorse or otherwise become liable or responsible with respect to (whether directly, contingently, or otherwise) any Indebtedness where such Indebtedness of the Company exceeds, in the aggregate, $100,000 other than legal fees and expenses in connection with the Merger and the Private Placement; (l) institute or settle any legal proceeding; and (m) agree, commit, arrange or enter into any understanding to do anything set forth in this Section 5.02foregoing.

Prohibited Actions Pending Closing. Unless otherwise expressly permitted provided ---------------------------------- for herein or approved by Parent Lucent in writingwriting (which Lucent approval in the case of any matters covered under subsection (j) below cannot be unreasonably withheld), from the date hereof until the Closing, the Company shall not, and shall not permit any of its Subsidiaries to: (a) amend or otherwise change its Certificate of Incorporation or By-laws; (b) issue or sell or authorize for issuance or sale (other than (i) any issuance of Company Common Stock upon the exercise of any outstanding option or warrant to purchase Company Common Stock which option or warrant was issued prior to the date hereof in accordance with the terms of the relevant stock option or warrant agreement, or (ii) the issuance of Company Common Stock pursuant to the Option Agreement), or grant any options or make other agreements with respect to, any shares of its capital stock or any other of its securities, except for the issuance of stock options to new employee hires consistent with past practice and for those provisions of the agreement with the Exchange Agent which provisions are in furtherance of this Agreement; (c) declare, set aside aside, make or pay any dividend or other distribution distribution, payable in cash, stock, property or otherwise with respect to any of any shares of its capital stock of the Company or repurchase, redeem or acquire any outstanding shares of capital stock or other securities of, or other ownership interest in, the Company; (b) merge, consolidate or adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization involving the Company, other than the Merger; (c) split, combine or reclassify any shares of capital stock of the Company or other securities of the Company or amend the terms of any such stock or securitiesstock; (d) change accounting reclassify, combine, split, subdivide or tax reporting principlesredeem, methods purchase or policies otherwise acquire, directly or indirectly, any of the Companyits capital stock; (e) makeincur any indebtedness for borrowed money or issue any debt securities or assume, change guarantee or rescind endorse, or otherwise as an accommodation become responsible for, the obligations of any material election concerning taxes Person, or tax returnsmake any loans or advances, file except (i) short-term borrowings incurred in the ordinary course of business (or to refinance existing or maturing indebtedness) and (ii) intercompany indebtedness between the Company and any amended tax return, enter into any closing agreement with respect to taxes, settle of its Subsidiaries or compromise any material tax claim or assessment or surrender any right to claim a refund of taxes or obtain any tax rulingbetween Subsidiaries; (f) (i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any corporation, partnership, other business organization or any division thereof or any material amount of assets, (ii) enter into any transaction contract or agreement other than in the Ordinary Course ordinary course of Businessbusiness consistent with past practice, (iii) authorize any capital commitment which is in excess of $500,000 or capital expenditures which are, in the aggregate, in excess of $2,000,000, or (iv) enter into or amend any contract, agreement, commitment or arrangement with respect to any matter set forth in Section 4.2(e) or this Section 4.2(f); (g) make any loans, advances or capital contributions to, or investments in, any Person or pay any fees to any director, officer, partner or Affiliate thereof or to any Company Stockholder (who is not a director, officer or partner) or Affiliate of any Company Stockholder (other than business expenses incurred in the Ordinary Course of Business); (i) mortgage, pledge or subject to any lien Lien, any of its assets, or (ii) acquire any assets or properties or agree to do so except for Permitted Liens; (h) sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of any of its properties or assets (including securitizations), other than sales or licenses of finished goods in the ordinary course of business consistent with past practice; (i) assume, guarantee or otherwise become responsible for the obligations of any other Person or agree to so do; (j) enter into or agree to enter into any employment agreement; (k) take any action, other than in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivables); (l) make any material Tax election or settle or compromise any material federal, state, local or foreign income Tax liability; (m) settle or compromise any pending or threatened suit, action or claim which is material or which relates to any of the transactions contemplated by this Agreement; (n) pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business or in accordance with their terms, of liabilities reflected or reserved against in the most recently audited balance sheet (and the notes thereto) included in the Company SEC Documents or subsequently incurred in the ordinary course of business and consistent with past practice; (o) except in connection with the sale of the Company's products in the ordinary course of business and consistent with past practice, sell, assign, transfer, conveylicense, lease sublicense, pledge or otherwise dispose of encumber any assets of the Company, except, in Intellectual Property Rights of the case of clause (ii), in the Ordinary Course of BusinessCompany or its Subsidiaries; (ip) cancel except as required by law or compromise any Indebtedness or amend, cancel, terminate, relinquish, waive or release any contract or right, in each case, contemplated hereby and except for labor agreements negotiated in the Ordinary Course of Businessordinary course, enter into, adopt or amend in any material respect or terminate any Company Benefit Plan or any other agreement, plan or policy involving the Company or its Subsidiaries, and whichone or more of its directors, officers or employees, or materially change any actuarial or other assumption used to calculate funding obligations with respect to any pension plan, or change the manner in which contributions to any pension plan are made or the basis on which such contributions are determined; (q) except for normal increases in the ordinary course of business consistent with past practice that, in the aggregate, would do not be material to the Company taken as a whole; (j) make materially increase benefits or commit to make any capital expenditures or capital additions or betterments in excess of $30,000 individually or $75,000 in the aggregate; (k) issue, create, incur, assume, guarantee, endorse or otherwise become liable or responsible with respect to (whether directly, contingently, or otherwise) any Indebtedness where such Indebtedness compensation expenses of the Company exceedsor its Subsidiaries, or as contemplated hereby or by the terms of any employment agreement in existence on the aggregatedate hereof, $100,000 increase the cash compensation of any director, executive officer or other than legal fees and expenses key employee or pay any benefit or amount not required by a plan or arrangement as in connection effect on the date of this Agreement to any such Person; provided that nothing contained herein shall prohibit the Company from -------- paying 1999 bonuses that have been earned under its incentive bonus plans in accordance with the Merger and terms of such plans as in effect on the Private Placement;date hereof consistent with past practice; or (lr) institute announce an intention, commit or settle any legal proceeding; and (m) agree, commit, arrange or enter into any understanding agree to do anything set forth in this Section 5.02any of the foregoing.

Prohibited Actions Pending Closing. Unless otherwise expressly permitted herein or approved by Parent in writingwriting (which approval shall not be unreasonably withheld or delayed), from the date hereof until the Closing, neither the Company shall notnor the Subsidiary will: (a) declare, set aside or pay adopt any dividend or other distribution change in respect of any shares of capital stock of the Company or repurchase, redeem or acquire any outstanding shares of capital stock or other securities of, or other ownership interest in, the Companyits organizational documents; (b) merge, consolidate or adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization involving the CompanyCompany or the Subsidiary, other than the Mergertransactions contemplated hereby; (c) split, combine or reclassify any shares of capital stock of the Company or other securities of the Company or the Subsidiary, amend the terms of any such stock or other securities (except as specifically contemplated by this Agreement), or issue or grant any securities (whether or not under the Plan), other than upon exercise or conversion of outstanding securities; (d) increase the salaries or wages of the employees or officers of the Company or the Subsidiary, enter into any employment, deferred compensation, severance or similar agreement (or amend any such agreement), increase the compensation payable or to become payable by it to any of its directors, or increase the coverage or benefits available under any severance pay, termination pay, vacation pay, company awards, salary continuation for disability, sick leave, deferred compensation, bonus or other incentive compensation, insurance, pension or other employee benefit plan, payment or arrangement made to, for or with the directors, officers or employees of the Company and the Subsidiary; (e) change accounting or tax Tax reporting principles, methods or policies of the CompanyCompany or the Subsidiary, except as required by applicable Law; (ef) make, change or rescind any material election concerning taxes Taxes or tax returnsTax Returns, file any amended tax returnTax Return, enter into any closing agreement with respect to taxes, Taxes or settle or compromise any material tax Tax claim or assessment or surrender any right to claim a refund of taxes or obtain any tax ruling; (f) enter into any transaction other than in the Ordinary Course of Businessassessment, except as required by applicable Law; (g) make any loans, advances or capital contributions to, or investments in, any Person or pay any fees to any director, officer, partner or Affiliate thereof or to any other than the Company Stockholder (who is not a director, officer or partner) or Affiliate of any Company Stockholder and the Subsidiary (other than advances to employees for business expenses incurred in the Ordinary Course ordinary course of Businessbusiness of the Company’s or the Subsidiary’s business, in an amount not to exceed $10,000 individually or $25,000 in the aggregate); (i) mortgage, pledge or subject to any lien Lien any of its assets, other than Permitted Liens, or (ii) acquire any assets or sell, assign, transfer, convey, lease or otherwise dispose of any assets of the CompanyCompany or the Subsidiary, except, other than in the case ordinary course of clause (ii), in the Ordinary Course of Businessbusiness; (i) cancel or compromise any Indebtedness or Materially amend, cancel, terminate, relinquish, waive or release any contract Contract, license or other right, in each case, except in the Ordinary Course of Business, and which, in the aggregate, would not be material to the Company taken as a whole; (j) make or commit to make any capital expenditures or capital additions or betterments in excess of $30,000 individually or $75,000 25,000 in the aggregate; (k) issuemake any material payments, createengage in any discount activity or pay any other consideration to any customers or suppliers, incur, assume, guarantee, endorse or otherwise become liable or responsible with respect to (whether directly, contingently, or otherwise) any Indebtedness where such Indebtedness of the Company exceeds, other than in the aggregate, $100,000 other than legal fees and expenses in connection with the Merger and the Private Placementordinary course of business; (l) make any material change in the manner of billing of, or the credit lines made available to, any customers; (m) make any material change in the selling, distribution, pricing, advertising, terms of sale or collection practices or timing that is inconsistent with past practice; (n) grant any license or sublicense of any rights under or with respect to any Intellectual Property, other than in the ordinary course of business, or abandon any rights relating to any Intellectual Property; (o) institute any Proceeding or settle any legal proceeding; andProceeding; (mp) declare, set aside, make or pay any dividend or other distribution of any assets with respect to any capital stock of the Company or the Subsidiary; provided, however, that the Company shall be permitted to distribute any cash in excess of the amount required to ensure that Net Working Capital as reflected on the Working Capital Estimate is a smaller negative number or equal to Target Working Capital; or (q) amend the Carve-Out Plan in any way; (r) agree, commit, arrange or enter into any understanding to do anything set forth in this Section 5.026.2.

Prohibited Actions Pending Closing. Unless otherwise expressly permitted provided for herein or approved by Parent Lucent in writing, from the date hereof until the Closing, the Company shall not:not (and shall not permit any of its Subsidiaries to): (a) amend or otherwise change its Articles of Incorporation or By-laws; (b) issue or sell or authorize for issuance or sale (other than (i) any issuance of Company Common Stock upon the exercise of any outstanding option or warrant to purchase Company Common Stock which option or warrant was issued prior to the date hereof in accordance with the terms of the relevant stock option or warrant agreement, or (ii) the issuance of Company Common Stock pursuant to the Option Agreement or the Offering), or grant any options or make other agreements with respect to, any shares of its capital stock or any other of its securities, except for those provisions of the agreement with the Exchange Agent which provisions are in furtherance of this Agreement; (c) declare, set aside aside, make or pay any dividend or other distribution distribution, payable in cash, stock, property or otherwise with respect to any of any shares of its capital stock of the Company or repurchase, redeem or acquire any outstanding shares of capital stock or other securities of, or other ownership interest in, the Company; (b) merge, consolidate or adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization involving the Company, other than the Merger; (c) split, combine or reclassify any shares of capital stock of the Company or other securities of the Company or amend the terms of any such stock or securitiesstock; (d) change accounting reclassify, combine, split, subdivide or tax reporting principlesredeem, methods purchase or policies otherwise acquire, directly or indirectly, any of the Companyits capital stock; (e) makeincur any indebtedness for borrowed money or issue any debt securities or assume, change guarantee or rescind endorse, or otherwise as an accommodation become responsible for, the obligations of any material election concerning taxes Person, or tax returnsmake any loans or advances, file except (i) short-term borrowings incurred in the ordinary course of business (or to refinance existing or maturing indebtedness) and (ii) intercompany indebtedness between the Company and any amended tax return, enter into any closing agreement with respect to taxes, settle of its Subsidiaries or compromise any material tax claim or assessment or surrender any right to claim a refund of taxes or obtain any tax rulingbetween Subsidiaries; (f) (i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any corporation, partnership, other business organization or any division thereof or any material amount of assets; (ii) enter into any transaction contract or agreement other than in the Ordinary Course ordinary course of Businessbusiness, consistent with past practice; (iii) authorize any capital commitment which is in excess of $50,000 or capital expenditures which are, in the aggregate, in excess of $100,000; or (iv) enter into or amend any contract, agreement, commitment or arrangement with respect to any matter set forth in Section 4.2(e) or this Section 4.2(f); (g) make any loans, advances or capital contributions to, or investments in, any Person or pay any fees to any director, officer, partner or Affiliate thereof or to any Company Stockholder (who is not a director, officer or partner) or Affiliate of any Company Stockholder (other than business expenses incurred in the Ordinary Course of Business); (i) mortgage, pledge or subject to any lien Lien, any of its assets, or (ii) acquire any assets or properties or agree to do so except for Permitted Liens; (h) sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of any of its properties or assets (including securitizations), other than sales or licenses of finished goods in the ordinary course of business consistent with past practice; (i) assume, guarantee or otherwise become responsible for the obligations of any other Person or agree to so do; (j) enter into or agree to enter into any employment agreement; (k) take any action, other than in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivables); (l) make any Tax election or settle or compromise any material federal, state, local or foreign income Tax liability; (m) settle or compromise any pending or threatened suit, action or claim which is material or which relates to any of the transactions contemplated by this Agreement; (n) pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of liabilities reflected or reserved against in the most recently audited balance sheet contained in the Company SEC Documents or subsequently incurred in the ordinary course of business and consistent with past practice; (o) except in connection with the sale of the Company's products in the ordinary course of business and consistent with past practice, sell, assign, transfer, conveylicense, lease sublicense, pledge or otherwise dispose of encumber any assets of the Company, except, in the case of clause (ii), in the Ordinary Course of BusinessIntellectual Property Rights; (ip) cancel except as required by law or compromise any Indebtedness or amend, cancel, terminate, relinquish, waive or release any contract or right, in each case, contemplated hereby and except for labor agreements negotiated in the Ordinary Course of Businessordinary course, enter into, adopt or amend in any material respect or terminate any Company Benefit Plan or any other agreement, plan or policy involving the Company or its Subsidiaries, and whichone or more of its directors, officers or employees, or materially change any actuarial or other assumption used to calculate funding obligations with respect to any pension plan, or change the manner in which contributions to any pension plan are made or the basis on which such contributions are determined; (q) except for normal increases in the ordinary course of business consistent with past practice that, in the aggregate, would do not be material to the Company taken as a whole; (j) make materially increase benefits or commit to make any capital expenditures or capital additions or betterments in excess of $30,000 individually or $75,000 in the aggregate; (k) issue, create, incur, assume, guarantee, endorse or otherwise become liable or responsible with respect to (whether directly, contingently, or otherwise) any Indebtedness where such Indebtedness compensation expenses of the Company exceedsor its Subsidiaries, or as contemplated hereby or by the terms of any employment agreement in existence on the aggregatedate hereof, $100,000 increase the cash compensation of any director, executive officer or other than legal fees and expenses key employee or pay any benefit or amount not required by a plan or arrangement as in connection effect on the date of this Agreement to any such Person; provided that nothing contained herein shall prohibit the Company from paying 1998 bonuses that have been earned under its incentive bonus plans in accordance with the Merger and terms of such plans as in effect on the Private Placement;date hereof consistent with past practice; or (lr) institute announce an intention, commit or settle any legal proceeding; and (m) agree, commit, arrange or enter into any understanding agree to do anything set forth in this Section 5.02any of the foregoing.

Prohibited Actions Pending Closing. Unless otherwise expressly permitted herein or approved by Parent in writing, from the date hereof until the Closing, neither the Company shall notnor the Operating Company will: (a) declare, set aside propose or pay adopt any dividend change in its organizational or other distribution in respect of any shares of capital stock of the Company or repurchase, redeem or acquire any outstanding shares of capital stock or other securities of, or other ownership interest in, the Companygoverning documents; (b) merge, consolidate or adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization involving the Company or the Operating Company, other than the Merger; (c) split, combine or reclassify any shares of capital stock of the Company or other securities of the Company or the Operating Company, amend the terms of any such stock or other securities, or issue or grant any securities (whether or not under the Company Option Plan), other than upon exercise or conversion of outstanding securities; (d) except as set forth in Schedule 6.2(d) or as accrued in the Financial Statements, award or pay any bonuses to any of the employees, officers or directors of the Company or the Operating Company; except for increases in accordance with past practices in salaries or wages of employees of the Company or the Operating Company who are not officers or directors of the Company or the Operating Company, increase the salaries or wages of the employees or officers of the Company and the Operating Company; enter into any employment, deferred compensation, severance or similar agreement (or amend any such agreement); increase the compensation payable or to become payable by it to any of the Company’s or the Operating Company’s directors; or increase the coverage or benefits available under any severance pay, termination pay, vacation pay, company awards, salary continuation for disability, sick leave, deferred compensation, bonus or other incentive compensation, insurance, pension or other employee benefit plan, payment or arrangement made to, for or with the directors, officers or employees of the Company and the Operating Company; (e) change accounting or tax Tax reporting principles, methods or policies of the Company or the Operating Company, except as required by applicable Law; (ef) make, change or rescind any material election concerning taxes Taxes or tax returnsTax Returns, file any amended tax returnTax Return, enter into any closing agreement with respect to taxes, Taxes or settle or compromise any material tax Tax claim or assessment or surrender any right to claim a refund of taxes or obtain any tax ruling; (f) enter into any transaction other than in the Ordinary Course of Businessassessment, except as required by applicable Law; (g) make any loans, advances or capital contributions to, or investments in, any Person or pay any fees to any director, officer, partner or Affiliate thereof or to any Company Stockholder (who is not a director, officer or partner) or Affiliate of any Company Stockholder (other than business expenses incurred in the Ordinary Course of Business)Company and the Operating Company; (i) mortgage, pledge or subject to any lien Lien any of its assets, other than Permitted Liens, or (ii) acquire any assets or sell, assign, transfer, convey, lease or otherwise dispose of any assets of the Company or the Operating Company, except, in the case of clause (ii), otherwise than in the Ordinary Course of Business; (i) cancel or compromise any Indebtedness or amend, cancel, terminate, relinquish, waive or release any contract Material Contract, License or other right, other than to compromise the Company’s minimum payment obligations under the Company’s Material Contracts specified in each case, Schedule 6.14; (j) except with respect to capital expenditures and capital additions or betterments set forth in the Company’s budget heretofore delivered to Parent and except for purchases of the active pharmaceutical ingredients of the Company’s products made in the Ordinary Course of Business, and which, in the aggregate, would not be material to the Company taken as a whole; (j) make or commit to make any capital expenditures or capital additions or betterments in excess of $30,000 individually or $75,000 50,000 in the aggregate; (k) issuemake any material payments, createengage in any discount activity or pay any other consideration to any customers or suppliers, incur, assume, guarantee, endorse or otherwise become liable or responsible with respect to (whether directly, contingently, or otherwise) any Indebtedness where such Indebtedness of the Company exceeds, other than in the aggregate, $100,000 other than legal fees and expenses in connection with the Merger and the Private PlacementOrdinary Course of Business; (l) make any material change in the manner of billing of, or the credit lines made available to, any customers of the Business; (m) make any material change in the selling, distribution, pricing, advertising, terms of sale or collection practices or timing that is inconsistent with past practice; (n) engage in any “channel stuffing” or any similar program, activity or other action (including any rebate, discount, chargeback or refund policy or practice) that in each case is intended or would reasonably be expected to result in a trade buy-in that is materially in excess of normal customer purchasing patterns consistent with past course of dealing with the Business during the twelve (12) months prior to the date hereof; (o) grant any license or sublicense of any rights under or with respect to any Intellectual Property Rights except in the Ordinary Course of Business or abandon any material rights relating to any material Intellectual Property; (p) institute any Proceeding (other than a Proceeding with respect to this Agreement or a Proceeding related to a Scheduled Indemnity Matter) or settle any legal proceeding; andProceeding (other than a Proceeding with respect to this Agreement or a Proceeding related to a Scheduled Indemnity Matter) if such settlement requires a payment in excess of $1,000,000. (mq) declare, set aside, make or pay any dividend or other distribution of any assets with respect to any capital stock of the Company or the Operating Company; or (r) agree, commit, arrange or enter into any understanding to do anything set forth in this Section 5.026.2.

Prohibited Actions Pending Closing. Unless otherwise expressly permitted provided for herein or approved by Parent in writing, or unless otherwise set forth in ITEM 4.2 of the Company Disclosure Schedule, from the date hereof until the Closing, the Company shall not:not (and shall not permit any of the Company Subs to): (a) amend or otherwise change any of its Organizational Documents; (b) except as contemplated by Section 3.1(c)(v), amend the Rights Agreement or take any action with respect to, or make any determination under, the Rights Agreement, including a redemption of the Rights to facilitate an Alternative Transaction (as defined below); (c) except as contemplated by Section 4.2(o), issue or sell or authorize for issuance or sale (other than any issuance of Company Common Stock upon the exercise of any outstanding option to purchase Company Common Stock which option was issued prior to the date hereof in accordance with the terms of the relevant stock option agreement), or grant any options or make other agreements with respect to, any shares of its capital stock or any other of its securities; (d) declare, set aside aside, make or pay any dividend or other distribution distribution, payable in cash, stock, property or otherwise with respect to any of any shares of its capital stock of the Company or repurchase, redeem or acquire any outstanding shares of capital stock or other securities of, or other ownership interest in, the Company; (b) merge, consolidate or adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization involving the Company, other than the Merger; (c) split, combine or reclassify any shares of capital stock of the Company or other securities of the Company or amend the terms of any such stock or securities; (d) change accounting or tax reporting principles, methods or policies of the Companystock; (e) makereclassify, change combine, split, subdivide or rescind redeem, purchase or otherwise acquire, directly or indirectly, any material election concerning taxes or tax returns, file any amended tax return, enter into any closing agreement with respect to taxes, settle or compromise any material tax claim or assessment or surrender any right to claim a refund of taxes or obtain any tax rulingits capital stock; (f) enter into incur any transaction other than indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any Person, or make any loans or advances, except (i) short-term borrowings incurred in the Ordinary Course ordinary course of Businessbusiness consistent with past practice and (ii) intercompany indebtedness between the Company and any of the Company Subs or between the Company Subs; (g) make (i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any loanscorporation, advances partnership, other business organization or any division thereof or any material amount of assets; (ii) except as contemplated by Section 4.2(o), enter into any contract or agreement other than in the ordinary course of business consistent with past practice; (iii) authorize any capital commitment which is in excess of $100,000 or capital contributions toexpenditures which are, in the aggregate, in excess of $250,000; or investments in(iv) enter into or amend any contract, any Person agreement, commitment or pay any fees arrangement with respect to any directormatter set forth in Section 4.2(f) or this Section 4.2(g); (h) sell, officerlease, partner license, mortgage, pledge or Affiliate thereof otherwise encumber or subject to any Company Stockholder (who is not a director, officer Lien or partner) or Affiliate otherwise dispose of any Company Stockholder (of its properties or assets, other than business expenses incurred sales or licenses of products in the Ordinary Course ordinary course of Business)business consistent with past practice; (i) mortgagetake any action, pledge other than in the ordinary course of business consistent with past practice, with respect to accounting policies or subject procedures (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivables); (j) make any Tax election or settle or compromise any federal, state, local or foreign Tax liability; (k) settle or compromise any pending or threatened suit, action or claim which is material or which relates to any lien of the transactions contemplated by this Agreement; (l) pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of its assetsbusiness consistent with past practice, of liabilities reflected or reserved against in the Interim Balance Sheet or subsequently incurred in the ordinary course of business consistent with past practice; (iim) acquire any assets except in connection with the sale or license of the Company's products in the ordinary course of business consistent with past practice, sell, assign, transfer, conveylicense, lease sublicense, pledge or otherwise dispose of encumber any assets of the Company, except, in the case of clause (ii), in the Ordinary Course of Business's Intellectual Property Rights; (in) cancel except as required by law or compromise as contemplated by Section 4.2(o), enter into, adopt, amend or terminate any Indebtedness Company Benefit Plan or amendany other agreement, cancelarrangement, terminateplan or policy involving the Company or any of the Company Subs, relinquishand one or more of its directors, waive officers, employees or release consultants, or materially change any contract actuarial or rightother assumption used to calculate funding obligations with respect to any pension plan, or change the manner in each casewhich contributions to any pension plan are made or the basis on which such contributions are determined; provided, except however, that the Company shall be permitted to submit to its stockholders for their consideration and approval the amendments to the Company Stock Options Plans and the Company Stock Purchase Plan described in the Ordinary Course Company Disclosure Schedule if the Offer has not been consummated within 50 Business Days after the commencement date of Business, and whichthe Offer; (o) except for normal increases in the ordinary course of business consistent with past practice that, in the aggregate, would do not be material to materially increase benefits or compensation expenses of the Company taken or the Company Subs, or as contemplated hereby or by the terms of any employment agreement in existence on the date hereof, increase the cash compensation of any director, officer or other key employee 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; except that the Company may hire up to 20 persons (none of whom shall be officers of the Company) on an at will basis (with no employment, severance or similar agreements) and grant to such persons options to purchase up to 200,000 shares of Company Common Stock in the aggregate; provided that no portion of any such options shall vest or otherwise become exercisable (including, without limitation, as a whole; (jresult of the Offer or the Merger) make or commit within one year of the date of hire; provided further that the Company shall notify each such person prior to make hiring that the options being granted shall be canceled for no value upon the consummation of the transactions contemplated by this Agreement; and provided further that any capital expenditures or capital additions or betterments such hiring at an annual salary in excess of $30,000 individually or $75,000 in 110,000 shall be subject to the aggregate;prior approval of Parent, which approval shall not be unreasonably withheld; or (kp) issueannounce an intention, create, incur, assume, guarantee, endorse commit or otherwise become liable or responsible with respect agree to (whether directly, contingently, or otherwise) do any Indebtedness where such Indebtedness of the Company exceeds, in the aggregate, $100,000 other than legal fees and expenses in connection with the Merger and the Private Placement; (l) institute or settle any legal proceeding; and (m) agree, commit, arrange or enter into any understanding to do anything set forth in this Section 5.02foregoing.

Prohibited Actions Pending Closing. Unless otherwise expressly permitted herein provided for herein, or otherwise necessary in order to comply with the Company's obligations hereunder or as may be required for the Company and Parent to comply with applicable Laws, or as may be approved by Parent in writing, or as disclosed on SCHEDULE 5.2, from the date hereof until the Closing, the Company and each of its Subsidiaries shall operate in the ordinary course of business and shall not: (a) amend or otherwise change the Company Charter Documents or the Company Rights Plan; (b) issue or sell or authorize for issuance or sale, or grant any options or make other agreements with respect to, any shares of its capital stock or any other of its securities, other than (i) the issuance of Company Common Stock (and the associated Company Rights) upon the exercise of Company Stock Options currently outstanding or in accordance with awards currently outstanding under the Company Benefit Plans in accordance with their present terms and (ii) issuances in accordance with the Company Rights Agreement, (c) declare, set aside aside, make or pay any dividend or other distribution distribution, payable in cash, stock, property or otherwise with respect to any of any shares of its capital stock of the Company or repurchase, redeem or acquire any outstanding shares of capital stock or other securities of, or other ownership interest in, the Company; (b) merge, consolidate or adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization involving the Company, other than the Merger; (c) split, combine or reclassify any shares of capital stock of the Company or other securities of the Company or amend the terms of any such stock or securitiesstock; (d) change accounting reclassify, combine, split, subdivide or tax reporting principlesredeem, methods purchase or policies otherwise acquire, directly or indirectly, any of its capital stock except for repurchases of unvested shares in connection with the Companytermination of any employee pursuant to stock option or purchase agreements; (e) makeincur any indebtedness for borrowed money or issue any debt securities or assume, change guarantee or rescind endorse, or otherwise as an accommodation become responsible for, the obligations of any material election concerning taxes Person, or tax returns, file make any amended tax return, enter into any closing agreement with respect to taxes, settle loans or compromise any material tax claim or assessment or surrender any right to claim a refund of taxes or obtain any tax rulingadvances; (fi) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or Assets) any corporation, partnership, other business organization or any division thereof or any material amount of Assets; (ii) enter into any transaction contract or agreement or amend, modify or terminate any Material Contract, other than in the Ordinary Course ordinary course of Businessbusiness, consistent with past practice; or (iii) authorize any capital commitment or capital lease or authorize any capital expenditures which are not included in the Company's capital budget for 2002, a complete copy of which has been delivered to Parent; (g) make any loans, advances or capital contributions to, or investments in, any Person or pay any fees to any director, officer, partner or Affiliate thereof or to any Company Stockholder (who is not a director, officer or partner) or Affiliate of any Company Stockholder (other than business expenses incurred in the Ordinary Course of Business); (i) mortgage, pledge or subject to any lien Encumbrance, any of its assetsmaterial Assets or properties or agree to do so, except as may be necessary to secure indebtedness permitted pursuant to SECTION 5.2(e); (h) enter into or agree to enter into any employment agreement other than employment agreements entered into in the ordinary course of business, consistent with past practice, to persons other than officers or persons likely to become officers; provided, that, such employment agreements do not contain any special rights , privileges or payments that are dependent upon or related to change of control. (i) except pursuant to binding contracts, programs or arrangements in effect on the date hereof, all of which are set forth on SCHEDULE 2.15(A), increase the compensation payable or to become payable to its officers or employees, or grant any severance or termination pay to, or enter into any severance agreement with any director, officer or other employee of the Company, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any such director, officer or employee, except that (iix) acquire the Company may make reasonable salary increases in connection with the customary officer and employee performance review process and pay customary bonuses consistent with past practices and (y) the Company may make any assets amendments to existing employee benefit plans to the extent necessary to maintain their compliance with applicable Laws; (j) except as required by GAAP, take any action to change in any respect its accounting policies or procedures (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivables); (k) make any material Tax election or settle or compromise any federal, state, local or foreign income material Tax liability (it being understood that Parent's consent to making any such Tax election or settling or compromising any such Tax Liability shall not be unreasonably withheld); (l) settle or compromise any material pending or threatened suit, action or claim on terms other than those set forth on Schedule 5.2 (it being understood that Parent's consent to any settlement or compromise not on such terms shall not be unreasonably withheld); (m) pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of liabilities reflected or reserved against in the latest balance sheet included in the Company Reports or subsequently incurred in the ordinary course of business and consistent with past practice; (n) sell, assign, transfer, conveylicense or sublicense (other than in the ordinary course of business and consistent with past practice), lease pledge or otherwise dispose of encumber any assets of the Company, except, in the case of clause (ii), in the Ordinary Course of BusinessIntellectual Property Rights; (io) cancel or compromise initiate any Indebtedness or amendlitigation against any third party, cancel, terminate, relinquish, waive or release other than litigation against Parent and Merger Sub under this Agreement (it being understood that Parent's consent to any contract or right, in each case, except in the Ordinary Course of Business, and which, in the aggregate, would such litigation shall not be material to the Company taken as a wholeunreasonably withheld); (jp) make adopt any new shareholder rights or commit to make any capital expenditures or capital additions or betterments in excess of $30,000 individually or $75,000 in the aggregate;similar plans; or (kq) issue, create, incur, assume, guarantee, endorse agree in writing or otherwise become liable or responsible with respect to (whether directly, contingently, or otherwise) take any Indebtedness where such Indebtedness of the Company exceeds, actions described in the aggregate, $100,000 other than legal fees and expenses in connection with the Merger and the Private Placement; SECTIONS 5.2(a) through (lp) institute or settle any legal proceeding; and (m) agree, commit, arrange or enter into any understanding to do anything set forth in this Section 5.02above.

Prohibited Actions Pending Closing. Unless Except as provided in or otherwise expressly permitted herein contemplated by this Agreement or approved by as set forth in the Disclosure Schedules or to the extent Parent and Ucansi shall otherwise consent in writing, during the period from the date hereof until of this Agreement to the ClosingEffective Time, none of Parent, Merger Sub or Ucansi shall, other than in the Company shall notordinary course of business: (a) create any Lien on any of its properties or assets, whether tangible or intangible, other than (i) Permitted Liens and (ii) Liens that will be released at or prior to, or in connection with the Closing; (b) sell, assign, transfer, lease or otherwise dispose of or agree to sell, assign, transfer, lease or otherwise dispose of any material assets or, except as otherwise provided for in this Agreement, cancel any Indebtedness owed to it; (c) change any method of accounting or accounting practice used by it, other than such changes required by GAAP; (d) issue or sell any shares of the capital stock of, or other equity interests in it, or securities convertible into or exchangeable for such shares or equity interests, or issue or grant any options, warrants, calls, subscription rights or other rights of any kind to acquire additional shares of such capital stock, such other equity interests or such securities other than: (i) upon exercise, conversion or exchange of outstanding options, warrants or convertible securities outstanding as of the date hereof; or (ii) in connection with the Concurrent Financing; (e) amend or otherwise change its organizational documents; (f) declare, set aside or pay any dividend or other distribution in with respect to any share of any shares of capital stock of the Company or repurchase, redeem or acquire any outstanding shares of its capital stock or other securities ofdeclare or effectuate a stock dividend, stock split or other ownership interest in, the Company; (b) merge, consolidate or adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization involving the Company, other than the Merger; (c) split, combine or reclassify any shares of capital stock of the Company or other securities of the Company or amend the terms of any such stock or securities; (d) change accounting or tax reporting principles, methods or policies of the Company; (e) make, change or rescind any material election concerning taxes or tax returns, file any amended tax return, enter into any closing agreement with respect to taxes, settle or compromise any material tax claim or assessment or surrender any right to claim a refund of taxes or obtain any tax ruling; (f) enter into any transaction other than in the Ordinary Course of Businesssimilar event; (g) issue any note, bond, or other debt security or create, incur, assume, or guarantee any Indebtedness for borrowed money or capitalized lease obligation; (h) make any loansequity investment in, advances or capital contributions make any loan to, or investments in, any Person acquire the securities or pay any fees to any director, officer, partner or Affiliate thereof or to any Company Stockholder (who is not a director, officer or partner) or Affiliate assets of any Company Stockholder other Person (other than business expenses incurred any equity investment in, loan to, or acquisition of the securities or assets of any of Ucansi’s direct or indirect Subsidiaries in existence on the Ordinary Course of Businessdate hereof); (i) mortgageother than as specifically provided for in this Agreement, pledge or subject make any payments out of the ordinary course of business to any lien any of its assetsofficers, directors, employees or stockholders; (iij) acquire other than as specifically provided for in this Agreement, pay, discharge, satisfy or settle any assets liability (absolute, accrued, asserted or unasserted, contingent or otherwise) other than in the ordinary course of business; (k) sell, assign, transfer, conveylicense, lease abandon, let lapse, encumber or otherwise dispose of any assets of the Company, except, in the case of clause (ii), in the Ordinary Course of Business; (i) cancel or compromise any Indebtedness or amend, cancel, terminate, relinquish, waive or release any contract or right, in each case, except in the Ordinary Course of Business, and which, in the aggregate, would not be material to the Company taken as a whole; (j) make or commit to make any capital expenditures or capital additions or betterments in excess of $30,000 individually or $75,000 in the aggregate; (k) issue, create, incur, assume, guarantee, endorse or otherwise become liable or responsible with respect to (whether directly, contingently, or otherwise) any Indebtedness where such Indebtedness of the Company exceeds, in the aggregate, $100,000 other than legal fees and expenses in connection with the Merger and the Private PlacementIntellectual Property; (l) institute agree in writing or settle otherwise take any legal proceeding; andaction that would, or would reasonably be expected to, prevent, impair or materially delay the ability of Parent, Ucansi or Merger Sub to consummate the Contemplated Transactions; (m) agree, commit, arrange form or enter into acquire any understanding additional Subsidiaries; or (n) agree to do anything set forth take any of the actions specified in this Section 5.026.13.

Prohibited Actions Pending Closing. Unless Except as set forth in the Company Disclosure Schedules and as contemplated by this Agreement, including, without limitation, the payment of a dividend of $3.5 million to stockholders of the Company of record on December 29, 2005, the payment of a dividend of $250,000 to stockholders of the Company of record on December 30, 2005 and the payment of the cash bonus contemplated by the Amendment to the Amended and Restated Change of Control Bonus Agreement between the Company and Xxx Xxxxx, and the bonus to employees contemplated by Section 5.9, unless otherwise expressly permitted provided for herein or otherwise necessary in order to comply with Laws or the Company’s or Subsidiary’s obligations hereunder or approved by the Buyer or Parent in writing, including, without limitation, by electronic mail, (which approval shall not be unreasonably withheld, conditioned or delayed), from the date hereof until the Closing, each of the Company and the Subsidiary shall operate in the Ordinary Course of Business and shall not: (a) amend or otherwise change the Articles of Incorporation or the bylaws of the Company or organizational documents of the Subsidiary; (b) issue or sell or authorize for issuance or sale, or grant any options or restricted stock or make other agreements with respect to, any shares of its capital stock or any other of its securities; (c) declare, set aside aside, make or pay any dividend or other distribution distribution, payable in cash, stock, property or otherwise with respect to any of any shares of its capital stock of the Company or repurchase, redeem or acquire any outstanding shares of capital stock or other securities of, or other ownership interest in, the Company; (b) merge, consolidate or adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization involving the Company, other than the Merger; (c) split, combine or reclassify any shares of capital stock of the Company or other securities of the Company or amend the terms of any such stock or securitiesstock; (d) change accounting reclassify, combine, split, subdivide or tax reporting principlesredeem, methods purchase or policies otherwise acquire, directly or indirectly, any of the Companyits capital stock; (e) makeincur any indebtedness for borrowed money or issue any debt securities or assume, change guarantee or rescind endorse, or otherwise as an accommodation become responsible for, the obligations of any material election concerning taxes Person, or tax returnsmake any loans or advances, file any amended tax returnexcept in the Ordinary Course of Business, enter into any closing agreement consistent with respect to taxes, settle or compromise any material tax claim or assessment or surrender any right to claim a refund of taxes or obtain any tax rulingpast practice; (f) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or Assets) any corporation, partnership, other business organization or any division thereof or any material amount of Assets; (g) enter into any transaction contract or agreement other than in the Ordinary Course of Business that would constitute a Material Contract; (h) authorize any capital commitment or capital lease in an amount, in excess of $50,000, individually or $100,000, in the aggregate; (i) mortgage, pledge or subject to Encumbrance other than Permitted Encumbrances, any of its Assets or properties or agree to do so other than in the Ordinary Course of Business; (gj) make assume, guarantee or otherwise become responsible for the obligations of any loansother Person, advances or capital contributions agree to so do; (k) hire any executive officer or senior member of management, or enter into or agree to enter into any employment agreement (other than the Amendments to the Amended and Restated Change of Control Bonus Agreements with the individuals listed on Schedule 6.1(q)); (l) increase the compensation payable or to become payable to its officers or employees, or grant any severance or termination pay to, or investments in, enter into any Person or pay severance agreement with any fees to any director, officer, partner or Affiliate thereof or to any Company Stockholder (who is not a director, officer or partner) other employee of the Company, or Affiliate establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any Company Stockholder such director, officer or employee (other than business expenses the Amendments to the Amended and Restated Change of Control Bonus Agreements with the individuals listed on Schedule 6.1(q)), except that the Company may make any amendments to existing employee benefit plans to the extent necessary to maintain their compliance with applicable Laws; (m) take any action to change in any respect its accounting policies or procedures (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivables), except as required by GAAP or applicable Law; (n) change any Tax election or settle or compromise any federal, state, local or foreign income material Tax liability; (o) settle or compromise any pending or threatened Action or initiate any Action against any third party, except in respect of the Company’s ongoing defense of its trademarks; (p) pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the Ordinary Course of Business and consistent with past practice, of liabilities reflected or reserved against in the latest balance sheet included in the Financial Statements provided to the Buyer or subsequently incurred in the Ordinary Course of Business)Business and consistent with past practice in amounts not in excess of $50,000, individually, or $100,000, in the aggregate; (iq) mortgage, pledge or subject to any lien any of its assets, or (ii) acquire any assets or sell, assign, transfer, conveylicense or sublicense, lease pledge or otherwise dispose encumber any of any assets of the Company, except, its rights in the case of clause Intellectual Property (ii), other than in the Ordinary Course of Business; Business and consistent with past practice); or (ir) cancel or compromise agree to do any Indebtedness or amend, cancel, terminate, relinquish, waive or release any contract or right, in each case, except in the Ordinary Course of Business, and which, in the aggregate, would not be material to the Company taken as a whole; (j) make or commit to make any capital expenditures or capital additions or betterments in excess of $30,000 individually or $75,000 in the aggregate; (k) issue, create, incur, assume, guarantee, endorse or otherwise become liable or responsible with respect to (whether directly, contingently, or otherwise) any Indebtedness where such Indebtedness of the Company exceeds, in the aggregate, $100,000 other than legal fees and expenses in connection with the Merger and the Private Placement; (l) institute or settle any legal proceeding; and (m) agree, commit, arrange or enter into any understanding to do anything set forth in this Section 5.02foregoing.

Prohibited Actions Pending Closing. Unless otherwise expressly permitted herein Except as provided in this Agreement and as disclosed in either the Company Disclosure Schedule or approved by Parent in writingDisclosure Schedule, during the period from the date hereof until of this Agreement to the ClosingEffective Time, neither the Company shall notnor Parent shall: (ai) declareamend or otherwise change its Certificate of Incorporation, set aside or pay any dividend Bylaws or other distribution in governing documents; (ii) issue or sell or authorize for issuance or sale, or grant any options or make other agreements with respect of to, any shares of capital stock of the Company or repurchase, redeem or acquire any outstanding shares of their capital stock or any other of their securities of(other than (A) the exercise of presently outstanding options, or other ownership interest in(B) the conversion of presently outstanding Company Preferred Stock, and (C) the Companyissuance of stock options to Ronald L. Goode, Ph.D. and to continuing and non-continuing dixxxxxxx xx xxx Company and Parent); (biii) mergeauthorize or incur any debt for money borrowed or incur any long-term debt, consolidate or adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization involving the Company, other than the Merger; (c) split, combine or reclassify any shares of capital stock of the Company or other securities of the Company or amend the terms of any such stock or securities; (d) change accounting or tax reporting principles, methods or policies of the Company; (e) make, change or rescind any material election concerning taxes or tax returns, file any amended tax return, enter into any closing agreement with respect to taxes, settle or compromise any material tax claim or assessment or surrender any right to claim a refund of taxes or obtain any tax ruling; (f) enter into any transaction other than in the Ordinary Course of Business; (g) make any loans, advances or capital contributions toto any third parties; (iv) mortgage, pledge, grant a security interest in or otherwise subject to lien or other encumbrance any of the its properties or agree to do so; (v) enter into or agree to enter into any agreement, contract or commitment, or investments inmodify, amend or terminate any Person agreement, contract or commitment, other than any agreement, contract or commitment involving aggregate payments of less than $20,000 in any one year where such entry, modification, amendment or termination occurs in the ordinary course of business consistent with past practice; (vi) declare, set aside, make or pay any fees dividend or other distribution to its stockholders, or redeem, purchase or otherwise acquire, directly or indirectly, any directorof their capital stock, officeror authorize or effect any split-up or any recapitalization or make any changes in their authorized or issued capital stock; (vii) hire or increase or agree to increase, partner or Affiliate thereof or to any Company Stockholder (who is not a director, officer or partner) or Affiliate the compensation of any Company Stockholder of their officers, directors or employees by means of salary increase, bonus or otherwise (other than business expenses incurred any salary increase, bonus or otherwise of less than $20,000 in any one year and which occurs in the Ordinary Course ordinary course of Businessbusiness consistent with past practice), or hire any employee (full time or part time) or retain any consultant; (iviii) mortgagesell, pledge license or subject otherwise dispose of, or agree to any lien sell, license or dispose of, any of its assetsassets or properties, or (ii) acquire other than any assets or sellproperties valued at less than $20,000 where such sale, assign, transfer, convey, lease license or otherwise dispose of any assets of the Company, except, disposition occurs or is to occur in the case ordinary course of clause (ii), in the Ordinary Course of Businessbusiness consistent with past practice; (iix) cancel amend or compromise terminate any Indebtedness lease (other than the lease for the Present New York Office), contract, undertaking or amend, cancel, terminate, relinquish, waive or release any contract or right, in each case, except other commitment listed in the Ordinary Course Company Disclosure Schedule or the Parent Disclosure Schedule, as the case may be, or take action or fail to take any action, constituting any event of Business, and which, in the aggregate, would not be material to the Company taken as a wholedefault thereunder; (jx) make assume, guarantee or commit otherwise become responsible for the obligations of any other party or agree to make any capital expenditures or capital additions or betterments in excess of $30,000 individually or $75,000 in the aggregateso do; (kxi) issuetake any action or omit to take any action for the purpose of preventing, create, incur, assume, guarantee, endorse delaying or otherwise become liable or responsible with respect to (whether directly, contingently, or otherwise) any Indebtedness where such Indebtedness impeding the consummation of the Company exceedsMerger or the other transactions contemplated hereby; (xii) except as disclosed in Sections 3.17 or 4.18, in the aggregate, $100,000 other than legal pay any finders or investment bankers' fees and expenses in connection with the Merger and the Private Placement;transactions contemplated by this Agreement; or (lxiii) institute or settle take any legal proceeding; and (m) agree, commit, arrange or enter into action prior to the Effective Time which would breach any understanding to do anything set forth of the representations and warranties contained in this Section 5.02Agreement.

Prohibited Actions Pending Closing. Unless otherwise expressly permitted provided for herein or approved by Parent in writing, from the date hereof until the Closing, the Company Diomed shall notnot and shall cause each Acquired Subsidiary not to: (a) declareissue or sell or authorize for issuance as sale, set aside or pay grant any dividend options or make other distribution in agreements with respect of to, any shares of capital stock or any of the Company or repurchase, redeem or acquire any outstanding shares of capital stock or other securities of, or other ownership interest in, the Companyits securities; (b) merge, consolidate or adopt a plan increase the number of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization involving the Company, other than the Mergershares eligible for grant under any stock option; (c) reclassify, combine, split, combine subdivide or reclassify redeem, purchase or otherwise acquire, directly or indirectly, any shares of its capital stock of the Company or other securities of the Company or amend the terms of any such stock or securitiesstock; (d) change accounting acquire (including by merger, consolidation, or tax reporting principlesacquisition of stock or assets) any corporation, methods partnership, other business organization or policies of the Companyany division thereof; (e) makemortgage, change pledge or rescind subject to Lien, any material election concerning taxes of its assets or tax returns, file any amended tax return, enter into any closing agreement with respect properties or agree to taxes, settle or compromise any material tax claim or assessment or surrender any right to claim a refund of taxes or obtain any tax rulingdo so except for Permitted Liens; (f) enter into take any transaction action, other than in the Ordinary Course ordinary course of Businessbusiness and consistent with past practice, with respect to accounting policies or procedures (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivables); (g) make any loansmaterial Tax election or settle or compromise any material federal, advances state, local or capital contributions toforeign Tax liability; (h) settle or compromise any pending or threatened suit, action or investments in, any Person claim which is material or pay any fees which relates to any director, officer, partner or Affiliate thereof or to any Company Stockholder (who is not a director, officer or partner) or Affiliate of any Company Stockholder (other than business expenses incurred in the Ordinary Course of Business)transactions contemplated by this Agreement; (i) mortgageexcept in connection with the sale of any Acquired Entity's products in the ordinary course of business and consistent with past practice, pledge or subject to any lien any of its assets, or (ii) acquire any assets or sell, assign, transfer, conveylicense, lease sublicense, pledge or otherwise dispose of encumber any assets of the Company, except, in the case of clause (ii), in the Ordinary Course of Business; (i) cancel or compromise any Indebtedness or amend, cancel, terminate, relinquish, waive or release any contract or right, in each case, except in the Ordinary Course of Business, and which, in the aggregate, would not be material to the Company taken as a whole;Intellectual Property Rights; or (j) make announce an intention, commit or commit agree to make do any capital expenditures or capital additions or betterments in excess of $30,000 individually or $75,000 in the aggregate; (k) issue, create, incur, assume, guarantee, endorse or otherwise become liable or responsible with respect to (whether directly, contingently, or otherwise) any Indebtedness where such Indebtedness of the Company exceeds, in the aggregate, $100,000 other than legal fees and expenses in connection with the Merger and the Private Placement; (l) institute or settle any legal proceeding; and (m) agree, commit, arrange or enter into any understanding to do anything set forth in this Section 5.02foregoing.

Prohibited Actions Pending Closing. Unless Except as otherwise set forth in the Memorandum, unless otherwise expressly permitted herein or approved by Parent in writing, from the date hereof until the Closing, the Company shall not: (a) declare, set aside or pay any dividend or other distribution in respect of any shares of capital stock of the Company or repurchase, redeem or acquire any outstanding shares of capital stock or other securities of, or other ownership interest in, the Company; (b) take any action to solicit, initiate, encourage or assist the submission of any proposal, negotiation or offer from any person or entity other than the Parent relating to the sale or issuance, of any of the capital stock of the Company or the acquisition, sale, lease, license or other disposition of the Company or any material part of the stock or assets of the Company, or (ii) enter into any discussions, negotiations or execute any agreement related to any of the foregoing; (c) merge, consolidate or adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization involving the Company, other than the Merger; (cd) split, combine or reclassify any shares of capital stock of the Company or other securities of the Company or amend the terms of any such capital stock or securitiesof the Company; (de) change accounting or tax reporting principles, methods or policies of the Company; (e) make, change or rescind any material election concerning taxes or tax returns, file any amended tax return, enter into any closing agreement with respect to taxes, settle or compromise any material tax claim or assessment or surrender any right to claim a refund of taxes or obtain any tax ruling; (f) enter into any transaction other than in the Ordinary Course of Business; (g) make any loans, advances or capital contributions to, or investments in, any Person or pay any fees to any director, officer, partner or Affiliate thereof or to any Company Stockholder (who is not a director, officer or partner) or Affiliate of any Company Stockholder (other than business expenses incurred in the Ordinary Course of Business); (i) mortgage, pledge or subject to any lien any of its assets, or (ii) acquire any assets or sell, assign, transfer, convey, lease or otherwise dispose of any assets of the Company, except, in the case of clause (ii), in the Ordinary Course of Business; (i) cancel or compromise any Indebtedness or amend, cancel, terminate, relinquish, waive or release any contract or right, in each case, except in the Ordinary Course of Business, and which, in the aggregate, would not be material to the Company taken as a whole; (j) make or commit to make any capital expenditures or capital additions or betterments in excess of $30,000 individually or $75,000 in the aggregate; (kh) issue, create, incur, assume, guarantee, endorse or otherwise become liable or responsible with respect to (whether directly, contingently, or otherwise) any Indebtedness where such Indebtedness of the Company exceeds, in the aggregate, $100,000 other than legal fees and expenses in connection with the Merger and the Private PlacementPPO; (li) institute negotiate with any other placement agent or settle any legal proceedingunderwriter with respect to a private offering of the Company’s debt or equity securities; andor (mj) agree, commit, arrange or enter into any understanding to do anything set forth in this Section 5.026.02.

Prohibited Actions Pending Closing. Unless otherwise expressly permitted provided for herein or approved by Parent in writing, or unless otherwise set forth in Item 4.2 of the -------- Company Disclosure 27 Schedule, from the date hereof until the Closing, the Company shall not:not (and shall not permit any of the Company Subs to): (a) amend or otherwise change any of its Organizational Documents; (b) except as contemplated by Section 3.1(c)(v), amend the Rights Agreement or take any action with respect to, or make any determination under, the Rights Agreement, including a redemption of the Rights to facilitate an Alternative Transaction (as defined below); (c) except as contemplated by Section 4.2(o), issue or sell or authorize for issuance or sale (other than any issuance of Company Common Stock upon the exercise of any outstanding option to purchase Company Common Stock which option was issued prior to the date hereof in accordance with the terms of the relevant stock option agreement), or grant any options or make other agreements with respect to, any shares of its capital stock or any other of its securities; (d) declare, set aside aside, make or pay any dividend or other distribution distribution, payable in cash, stock, property or otherwise with respect to any of any shares of its capital stock of the Company or repurchase, redeem or acquire any outstanding shares of capital stock or other securities of, or other ownership interest in, the Company; (b) merge, consolidate or adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization involving the Company, other than the Merger; (c) split, combine or reclassify any shares of capital stock of the Company or other securities of the Company or amend the terms of any such stock or securities; (d) change accounting or tax reporting principles, methods or policies of the Companystock; (e) makereclassify, change combine, split, subdivide or rescind redeem, purchase or otherwise acquire, directly or indirectly, any material election concerning taxes or tax returns, file any amended tax return, enter into any closing agreement with respect to taxes, settle or compromise any material tax claim or assessment or surrender any right to claim a refund of taxes or obtain any tax rulingits capital stock; (f) enter into incur any transaction other than indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any Person, or make any loans or advances, except (i) short-term borrowings incurred in the Ordinary Course ordinary course of Businessbusiness consistent with past practice and (ii) intercompany indebtedness between the Company and any of the Company Subs or between the Company Subs; (g) make (i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any loanscorporation, advances partnership, other business organization or any division thereof or any material amount of assets; (ii) except as contemplated by Section 4.2(o), enter into any contract or agreement other than in the ordinary course of business consistent with past practice; (iii) authorize any capital commitment which is in excess of $100,000 or capital contributions toexpenditures which are, in the aggregate, in excess of $250,000; or investments in(iv) enter into or amend any contract, any Person agreement, commitment or pay any fees arrangement with respect to any directormatter set forth in Section 4.2(f) or this Section 4.2(g); (h) sell, officerlease, partner license, mortgage, pledge or Affiliate thereof otherwise encumber or subject to any Company Stockholder (who is not a director, officer Lien or partner) or Affiliate otherwise dispose of any Company Stockholder (of its properties or assets, other than business expenses incurred sales or licenses of products in the Ordinary Course ordinary course of Business)business consistent with past practice; (i) mortgagetake any action, pledge other than in the ordinary course of business consistent with past practice, with respect to accounting policies or subject procedures (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivables); (j) make any Tax election or settle or compromise any federal, state, local or foreign Tax liability; (k) settle or compromise any pending or threatened suit, action or claim which is material or which relates to any lien of the transactions contemplated by this Agreement; (l) pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of its assetsbusiness consistent with past practice, of liabilities reflected or reserved against in the Interim Balance Sheet or subsequently incurred in the ordinary course of business consistent with past practice; (iim) acquire any assets except in connection with the sale or license of the Company's products in the ordinary course of business consistent with past practice, sell, assign, transfer, conveylicense, lease sublicense, pledge or otherwise dispose of encumber any assets of the Company, except, in the case of clause (ii), in the Ordinary Course of Business's Intellectual Property Rights; (in) cancel except as required by law or compromise as contemplated by Section 4.2(o), enter into, adopt, amend or terminate any Indebtedness Company Benefit Plan or amendany other agreement, cancelarrangement, terminateplan or policy involving the Company or any of the Company Subs, relinquishand one or more of its directors, waive officers, employees or release consultants, or materially change any contract actuarial or rightother assumption used to calculate funding obligations with respect to any pension plan, or change the manner in each casewhich contributions to any pension plan are made or the basis on which such contributions are determined; provided, except however, that the Company shall be permitted to submit to its stockholders for their consideration and approval the amendments to the Company Stock Options Plans and the Company Stock Purchase Plan described in the Ordinary Course Company Disclosure Schedule if the Offer has not been consummated within 50 Business Days after the commencement date of Business, and whichthe Offer; (o) except for normal increases in the ordinary course of business consistent with past practice that, in the aggregate, would do not be material to materially increase benefits or compensation expenses of the Company taken or the Company Subs, or as contemplated hereby or by the terms of any employment agreement in existence on the date hereof, increase the cash compensation of any director, officer or other key employee 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; except that the Company may hire up to 20 persons (none of whom shall be officers of the Company) on an at will basis (with no employment, severance or similar agreements) and grant to such persons options to purchase up to 200,000 shares of Company Common Stock in the aggregate; provided that no portion of any such options shall vest or otherwise become exercisable (including, without limitation, as a whole; (jresult of the Offer or the Merger) make or commit within one year of the date of hire; provided further that the Company shall notify each such person prior to make hiring that the options being granted shall be canceled for no value upon the consummation of the transactions contemplated by this Agreement; and provided further that any capital expenditures or capital additions or betterments such hiring at an annual salary in excess of $30,000 individually or $75,000 in 110,000 shall be subject to the aggregate;prior approval of Parent, which approval shall not be unreasonably withheld; or (kp) issueannounce an intention, create, incur, assume, guarantee, endorse commit or otherwise become liable or responsible with respect agree to (whether directly, contingently, or otherwise) do any Indebtedness where such Indebtedness of the Company exceeds, in the aggregate, $100,000 other than legal fees and expenses in connection with the Merger and the Private Placement; (l) institute or settle any legal proceeding; and (m) agree, commit, arrange or enter into any understanding to do anything set forth in this Section 5.02foregoing.

Prohibited Actions Pending Closing. Unless otherwise expressly permitted provided for herein or approved by Parent Lucent in writing, from the date hereof until the Closing, the Company shall not: (a) amend or otherwise change its Articles of Organization or By-laws; (b) issue or sell or authorize for issuance or sale, or grant any options, warrants or make other agreements with respect to, any shares of its capital stock or any other of its securities or warrants; (c) except as described in Schedule 5.2(c), declare, set aside aside, make or pay any dividend or other distribution distribution, payable in cash, stock, property or otherwise with respect to any of any shares of its capital stock of the Company or repurchase, redeem or acquire any outstanding shares of capital stock or other securities of, or other ownership interest in, the Company; (b) merge, consolidate or adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization involving the Company, other than the Merger; (c) split, combine or reclassify any shares of capital stock of the Company or other securities of the Company or amend the terms of any such stock or securitiesstock; (d) change accounting reclassify, combine, split, subdivide or tax reporting principlesredeem, methods purchase or policies otherwise acquire, directly or indirectly, any of the Companyits capital stock; (ei) makeacquire (including, change without limitation, by merger, consolidation, or rescind acquisition of stock or assets) any corporation, partnership, other business organization or any division thereof or any material election concerning taxes amount of assets; (ii) incur any indebtedness for borrowed money or tax returnsissue any debt securities or assume, file guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any amended tax returnPerson, or make any loans or advances, except in the ordinary course of business and consistent with past practice; (iii) enter into any closing contract or agreement other than in the ordinary course of business, consistent with past practice; (iv) authorize any capital commitment which is in excess of $20,000 or capital expenditures which are, in the aggregate, in excess of $50,000; or (v) enter into or amend any contract, agreement, commitment or arrangement with respect to taxes, settle or compromise any material tax claim or assessment or surrender any right to claim a refund of taxes or obtain any tax rulingmatter set forth in this Section 5.2(e); (f) enter into any transaction other than in the Ordinary Course of Business; (g) make any loans, advances or capital contributions to, or investments in, any Person or pay any fees to any director, officer, partner or Affiliate thereof or to any Company Stockholder (who is not a director, officer or partner) or Affiliate of any Company Stockholder (other than business expenses incurred in the Ordinary Course of Business); (i) mortgage, pledge or subject to any lien Lien, any of its assets, or (ii) acquire any assets or properties or agree to do so except for Permitted Liens; (g) assume, guarantee or otherwise become responsible for the obligations of any other Person or agree to so do; (h) enter into or agree to enter into any employment agreement; (i) enter into any compensation arrangement or increase the compensation or benefits payable or to become payable to its officers or employees except for increases in accordance with past practices in salaries or wages of officers or employees which increases for all officers and employees in the aggregate shall not exceed 9% of the (j) take any action, other than in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivables); (k) make any Tax election or settle or compromise any material federal, state, local or foreign income Tax liability; (l) settle or compromise any pending or threatened suit, action or claim which is material or which relates to any of the transactions contemplated by this Agreement; (m) pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of liabilities reflected or reserved against in the Balance Sheet or subsequently incurred in the ordinary course of business and consistent with past practice; (n) except in connection with the sale of the Company's products in the ordinary course of business and consistent with past practice, sell, assign, transfer, conveylicense, lease sublicense, pledge or otherwise dispose of encumber any assets of the Company, except, in the case of clause (ii), in the Ordinary Course of Business;Intellectual Property Rights; or (io) cancel announce an intention, commit or compromise agree to do any Indebtedness or amend, cancel, terminate, relinquish, waive or release any contract or right, in each case, except in the Ordinary Course of Business, and which, in the aggregate, would not be material to the Company taken as a whole; (j) make or commit to make any capital expenditures or capital additions or betterments in excess of $30,000 individually or $75,000 in the aggregate; (k) issue, create, incur, assume, guarantee, endorse or otherwise become liable or responsible with respect to (whether directly, contingently, or otherwise) any Indebtedness where such Indebtedness of the Company exceeds, in the aggregate, $100,000 other than legal fees and expenses in connection with the Merger and the Private Placement; (l) institute or settle any legal proceeding; and (m) agree, commit, arrange or enter into any understanding to do anything set forth in this Section 5.02foregoing.

Prohibited Actions Pending Closing. Unless Except as provided in this Agreement or as disclosed in the Disclosure Schedule or to the extent Parent and Winston shall otherwise expressly permitted herein or approved consent in writing (such consents to be provided by Parent in writingtheir respective presidents), during the period from the date hereof until of this Agreement to the ClosingEffective Time, the Company shall notnone of Parent, Merger Sub or any Acquired Entity shall: (a) create any Lien on any of its properties or assets (whether tangible or intangible), other than (A) Permitted Liens and (B) Liens that will be released at or prior to or in connection with the Closing. (b) sell, assign, transfer, lease or otherwise dispose of or agree to sell, assign, transfer, lease or otherwise dispose of any its assets or cancel any Indebtedness owed to it. (c) change any method of accounting or accounting practice used by it, other than such changes required by GAAP. (d) except as otherwise contemplated by this Agreement, issue or sell any shares of the capital stock of, or other equity interests in it, or securities convertible into or exchangeable for such shares or equity interests, or issue, grant or amend any options, warrants, calls, subscription rights or other rights of any kind to acquire additional shares of such capital stock, such other equity interests or such securities. (e) except as otherwise contemplated by this Agreement, amend or otherwise change their respective Certificates of Incorporation or other governing documents. (f) declare, set aside or pay any dividend or other distribution in with respect to any share of any shares of capital stock of the Company or repurchase, redeem or acquire any outstanding shares of its capital stock or other securities ofdeclare or effectuate a stock dividend, stock split or other ownership interest in, the Company; (b) merge, consolidate or adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization involving the Company, other than the Merger; (c) split, combine or reclassify any shares of capital stock of the Company or other securities of the Company or amend the terms of any such stock or securities; (d) change accounting or tax reporting principles, methods or policies of the Company; (e) make, change or rescind any material election concerning taxes or tax returns, file any amended tax return, enter into any closing agreement with respect to taxes, settle or compromise any material tax claim or assessment or surrender any right to claim a refund of taxes or obtain any tax ruling; (f) enter into any transaction other than in the Ordinary Course of Business;similar event. (g) make issue any loansnote, advances or capital contributions tobond, or investments in, any Person other debt security or pay any fees to any director, officer, partner or Affiliate thereof or to any Company Stockholder (who is not a director, officer or partner) or Affiliate of any Company Stockholder (other than business expenses incurred in the Ordinary Course of Business); (i) mortgage, pledge or subject to any lien any of its assets, or (ii) acquire any assets or sell, assign, transfer, convey, lease or otherwise dispose of any assets of the Company, except, in the case of clause (ii), in the Ordinary Course of Business; (i) cancel or compromise any Indebtedness or amend, cancel, terminate, relinquish, waive or release any contract or right, in each case, except in the Ordinary Course of Business, and which, in the aggregate, would not be material to the Company taken as a whole; (j) make or commit to make any capital expenditures or capital additions or betterments in excess of $30,000 individually or $75,000 in the aggregate; (k) issue, create, incur, assume, guaranteeor guarantee any Indebtedness for borrowed money or capitalized lease obligation. (h) make any capital investment in, endorse make any loan to, or otherwise become liable acquire the securities or responsible with respect assets of any other Person. (i) except as disclosed on the Disclosure Schedule and as contemplated by this Agreement, enter into any new or additional agreements or materially modify any existing agreements relating to the employment of any officer or any written agreements of any of its employees, except in the ordinary course of business. (whether directlyj) make any payments out of the ordinary course of business to any of its officers, contingentlydirectors, employees or stockholders. (k) pay, discharge, satisfy or settle any liability (absolute, accrued, asserted or unasserted, contingent or otherwise) any Indebtedness where such Indebtedness of the Company exceeds, except in the aggregate, $100,000 other than legal fees and expenses in connection with the Merger and the Private Placement;ordinary course of business. (l) institute sell, transfer, license, abandon, let lapse, encumber or settle otherwise dispose of any legal proceedingIntellectual Property; andprovided, however, Winston may license civamide cream to a third party for marketing in North America only. (m) agreeagree in writing or otherwise take any action that would, commitor would reasonably be expected to, arrange prevent, impair or materially delay the ability of Parent or any Acquired Entity, as the case may be, to consummate the transactions contemplated by this Agreement. (n) make any material Tax elections, change any method of Tax accounting, amend any material Tax Return, or settle any Tax controversy or claim. (o) enter into or amend any understanding agreement or arrangement with any affiliate. (p) amend or waive any material right under any material agreement. (q) increase the compensation of any employee or consultant, including base, incentive or other compensation. (r) agree to do anything set forth take any of the actions specified in this Section 5.026.10.

Prohibited Actions Pending Closing. Unless otherwise expressly permitted provided for herein or approved by Parent Buyer in writing, from the date hereof until the ClosingClosing Date, BIB shall cause, and the other Sellers shall use their commercially reasonable efforts to cause, SMI and the Company shall notnot to: (a) amend or otherwise change their respective Certificates of Incorporation, By-Laws, Certificate of Formation or Amended and Restated Limited Liability Company Operating Agreement; (b) repurchase, redeem or otherwise acquire or exchange any shares of their capital stock, membership interests, or any other of their securities or equity interests; (c) issue or sell or authorize for issuance or sale, or grant any options or make other agreements with respect to, any shares of their capital stock, membership interests, or any other of their securities or equity interests; (d) declare, set aside aside, make or pay any dividend or other distribution (whether in respect of any shares of capital stock of the Company or repurchasecash, redeem or acquire any outstanding shares of capital stock or other securities of, property or other ownership interest in, the Company; (b) merge, consolidate or adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization involving the Company, other than the Merger; (c) split, combine or reclassify any shares of capital stock of the Company or other securities of the Company or amend the terms of any such stock or securities; (d) change accounting or tax reporting principles, methods or policies of the Companycombination thereof); (e) make, change or rescind any material election concerning taxes or tax returns, file any amended tax return, enter into any closing agreement with respect to taxes, settle or compromise any material tax claim or assessment or surrender any right to claim a refund of taxes or obtain any tax ruling; (f) enter into any transaction other than under the Hellxx Xxxebtedness pursuant to the terms thereof as in effect on the Ordinary Course of Business; (g) date hereof, issue any debt securities or make any loans, advances or capital contributions to, or investments in, in any Person or pay any fees to any director, officer, partner or Affiliate thereof or to any Company Stockholder (who is not a director, officer or partner) or Affiliate of any Company Stockholder (other than business expenses incurred in the Ordinary Course of Business)Person; (if) authorize or incur any additional debt for money borrowed other than in the ordinary course of business consistent with past practices; (g) mortgage, pledge or subject to any lien or other Encumbrance any of its assetstheir material properties or agree to do so, except for liens set forth in Section 5.3(g) of the Disclosure Schedules; (h) enter into or agree to enter into any material Commitment other than in the ordinary course of business; (iii) acquire enter into or adopt or amend any assets existing Commitment relating to severance, enter into or adopt or amend any existing severance plan, enter into or adopt or amend any employment agreement or employee plan (including, without limitation, the plans, programs, agreements and arrangements referred to in Section 2.1(v)) or increase or agree to increase, the compensation of any of their officers, directors or employees (other than scheduled increases in salary in the ordinary course of business consistent with past practices), by means of salary increase, bonus or otherwise; (j) sell, assign, transfer, convey, lease or otherwise dispose of, or agree to sell or dispose of, any of any their material assets or properties (other than the sale and replacement of inventory in the ordinary course of business in a manner consistent with past practices at customary gross margins and except for assets replaced by other assets of the Company, except, in the case of clause (iicomparable value and for comparable use), in the Ordinary Course of Business; (ik) cancel amend or terminate any lease, contact, undertaking or other Commitment listed in any Disclosure Schedules to which any of them is a party, or to take action or fail to take any action, constituting any event of material default thereunder; (l) assume, guarantee or otherwise become responsible for the obligations of any other Person or agree to so do except in the ordinary course of business consistent with past practices; (m) acquire (by merger, consolidation or acquisition of stock) any Person or substantially all of, or any material portion of, the assets of any Person; (n) change any method of accounting or accounting practice used by the Company or SMI, other than such changes required by U.S. GAAP and changes of tax accounting methods to the extent the Code requires conformity of financial and tax accounting methods; (o) make, revoke or change any Tax election, compromise or settle any Indebtedness federal, state, local, foreign or amendother Tax liability or make any payment under any Tax sharing, cancelallocation or indemnity agreement; (p) accelerate or delay the purchase of raw materials, terminatethe manufacture, relinquishshipment or sale of inventory (including, waive but not limited to, any delay in the manufacture of inventory necessary for sales expected to be made by SMI or release any contract the Company in the fourth fiscal quarter of 1998), the collection of accounts or rightnotes receivable or the payment of bank indebtedness (including, but not limited to, the Hellxx Xxxebtedness), accounts or notes payable or accrued liabilities or expenses or otherwise operate the Business, in each case, except in a manner that would be outside the Ordinary Course ordinary course of Business, and which, in the aggregate, would not be material to the Company taken as a wholebusiness or inconsistent with past practices; (jq) make except as set forth in Section 5.3(q) of the Disclosure Schedules engage in any transaction with any of the Sellers or commit to make any capital expenditures or capital additions or betterments in excess of $30,000 individually or $75,000 in the aggregatetheir Affiliates; (kr) issue, create, incur, assume, guarantee, endorse or otherwise become liable or responsible with respect to (whether directly, contingently, or otherwise) allow the lapse of any Indebtedness where such Indebtedness of the rights of ownership of Intellectual Property of SMI, the Company exceeds, in or La Loren or use by a third party of any Intellectual Property which are necessary for the aggregate, $100,000 other than legal fees and expenses in connection with Company or SMI to conduct the Merger and the Private PlacementBusiness; (ls) institute make any sales of Products with payment terms, discounts, promotional incentives, shipment or settle any legal proceeding; andother terms more favorable to customers than customarily offered to such customers for products of the Business; (mt) agreetake any action prior to the Closing Date which would breach any of the representations, commitwarranties or covenants contained in this Agreement; (u) sell any Product which includes significantly different decorative labeling or decorative cartons that have not been previously used by SMI or the Company, arrange other than the Company's new aromatherapy product line; (v) except as contemplated regarding prepayment penalties in Section 6.18, request Dilmun or enter into Hellxx xx any understanding of their respective Affiliates to do anything set forth waive, forfeit, forgive or otherwise discharge any obligations owed to Dilmun or Hellxx; (w) agree to take any of the actions specified in this Section 5.025.3.