Common use of Conduct of Business by the Clause in Contracts

Conduct of Business by the. Company Pending the Merger. The Company covenants and agrees that, between the date of this Agreement and the earlier of the Effective Time and the date, if any, on which this Agreement is terminated pursuant to Section 8.1, except (i) as may be required by Law, (ii) as may be agreed in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) as may be expressly required or permitted pursuant to this Agreement, or (iv) as set forth in Section 6.1 of the Company Disclosure Letter, (x) the business of the Company and its Subsidiaries shall be conducted in the ordinary course of business consistent with past practice, and to the extent consistent therewith, the Company shall use its commercially reasonable efforts to preserve substantially intact the material components and assets of its current business organization, and to preserve in all material respects its present relationships with key customers, suppliers, employees and other persons with which it has material business relations; and (y) the Company shall not, and shall not permit any of its Subsidiaries to: (a) amend or otherwise change the articles of incorporation or bylaws of the Company (or such equivalent organizational or governing documents of any of its Subsidiaries); (b) split, combine, reclassify, redeem, repurchase or otherwise acquire or amend the terms of any capital stock or other equity interests or rights; (c) issue, sell, pledge, dispose, encumber or grant any shares of its or its Subsidiaries’ capital stock, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of its or its Subsidiaries’ capital stock except (i) in connection with the Rights Agreement and (ii) for transactions among the Company and its direct or indirect wholly owned Subsidiaries or among the Company’s direct or indirect wholly owned Subsidiaries; provided, however, that the Company may issue shares of Company Common Stock upon the exercise of any vested Company Option as is outstanding as of the date hereof; (d) declare, authorize, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to the Company’s or any of its Subsidiaries’ capital stock or other equity interests, other than dividends paid by any Subsidiary of the Company to the Company or any wholly owned Subsidiary of the Company; (e) except as required pursuant to existing written Company Benefit Plans that are set forth in Section 4.12(a) of the Company Disclosure Letter or written offer letters for newly hired or promoted employees entered into in the ordinary course of business (in each case whose aggregate compensation is less than $80,000 annually), (A) materially increase the compensation payable or to become payable or benefits provided or to be provided to (x) any member of the Company’s board of directors, or (y) any current or former employees or independent contractors of the Company or any of its Subsidiaries, (B) except under Company Benefit Plans set forth in Section 4.12(a) of the Company Disclosure Letter applicable to newly hired employees hired to fill vacancies in the ordinary course of business of the Company, grant the opportunity to participate in any severance or termination pay plans or (C) establish, adopt, enter into or materially amend any Company Benefit Plan (or any arrangement which in existence as of the date hereof would constitute a Company Benefit Plan), plan, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees of the Company or any of its Subsidiaries or any of their respective beneficiaries; (f) implement any employee layoffs that would require notice under the Worker Adjustment and Retraining Notification Act of 1988, as amended (the “WARN Act”), or any similar foreign state or local Law; (g) acquire (including by merger, consolidation, or acquisition of stock or assets), except in respect of any merger, consolidation, business combination among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, any corporation, partnership, limited liability company, other business organization or any division or material amount of assets thereof, or sell, lease, license (other than any nonexclusive license granted in the ordinary course of business), abandon, permit to lapse or expire or otherwise subject to a Lien other than a Permitted Lien or otherwise dispose of any material properties, rights (including Company Intellectual Property Rights) or assets of the Company or its Subsidiaries other than (1) sales of inventory in the ordinary course of business consistent with past practice or (2) pursuant to agreements existing as of the date hereof and set forth in Section 4.16(a) of the Company Disclosure Letter or entered into after the date hereof and set forth in Section 4.16(a) of the Company Disclosure Letter in accordance with the terms of this Agreement; (h) disclose any trade secret or confidential information to any Person outside of the ordinary course of business consistent with past practice; (i) incur, or amend in any material respect the terms of, any Company Indebtedness or assume or guarantee any such Company Indebtedness for any Person, provided that the Company shall be authorized to incur additional indebtedness under existing lines of credit in an amount not to exceed $500,000 in the aggregate, and provided further that the Company shall provide prompt notice to the Parent of each and every such incurrence of additional indebtedness after it has incurred $100,000 in the aggregate; (j) enter into, modify, amend or terminate (1) any Company Material Contract other than in the ordinary course of business (except as expressly permitted in Section 6.5(d)) or (2) any Contract which if so entered into, modified, amended or terminated could be reasonably likely to (x) have a Company Material Adverse Effect, (y) impair in any material respect the ability of the Company to perform its obligations under this Agreement or (z) prevent or materially delay the consummation of the transactions contemplated by this Agreement; (k) make any material change to its methods of accounting in effect at December 31, 2016, except (i) as required by GAAP (or any interpretation thereof), Regulation S-X or a Governmental Authority or quasi-Governmental Authority (including the Financial Accounting Standards Board or any similar organization) or (ii) as required by a change in applicable Law; (l) adopt or enter into a plan of complete or partial liquidation, dissolution, recapitalization or other reorganization; (m) settle or compromise any litigation other than settlements or compromises of litigation where the amount paid (less the amount reserved for such matters by the Company or otherwise covered by insurance) in settlement or compromise, in each case, does not exceed the amount set forth in Section 6.1(m) of the Company Disclosure Letter; (n) other than in the ordinary course of business or consistent with past practice, make or change any Tax election, change any method of Tax accounting, settle or compromise any material Tax liability, file any amended Tax Return, enter into any closing agreement with respect to any material Tax or surrender any right to claim a refund for a material amount of Tax; (o) take any action that would reasonably be expected to result in any of the conditions set forth in Article VII not being satisfied or that would impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation; (p) make any loans, advances or capital contributions to or investments in any other Person; (q) hire any new employees other than non-officer employees in the ordinary course of business consistent with past practice; (r) terminate any officer or key employee of the Company or any of its Subsidiaries other than for good reason or for reasonable cause; (s) incur or commit to incur any capital expenditures, or any obligations or liabilities in connection therewith that, individually or in the aggregate, are in excess of the amounts set forth in the Company’s annual capital expenditure budget for periods following the date of this Agreement, as provided to Parent, or delay any material capital expenditures; (t) except as otherwise expressly permitted in Section 6.5(d), waive, release, grant or transfer any right of material value, other than in the ordinary course of business consistent with past practice, or waive any material benefits of, or agree to modify in any material adverse respect, or, subject to the terms hereof, fail to enforce, or consent to any material matter with respect to which its consent is required under, any material confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is a party; (u) maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice; (v) enter into any transaction that could give rise to a disclosure obligation as a “reportable transaction” under Section 6011 of the Code and the regulations thereunder; (w) engage in any transaction with, or enter into any agreement, arrangement or understanding with any Affiliate of the Company; (x) grant any material refunds, credits, rebates or other allowances by the Company to any end user, customer, reseller or distributor, in each case, other than in the ordinary course of business; (y) enter into any new line of business outside of its existing business segments; (z) communicate with employees of the Company or any of its Subsidiaries regarding the compensation, benefits or other treatment that they will receive in connection with the Merger, unless any such communications are consistent with prior directives or documentation provided to the Company by Parent (in which case, the Company shall provide Parent with prior notice of and the opportunity to review and comment upon any such communications); or (aa) enter into any agreement to do any of the foregoing.

Conduct of Business by the. Company Pending COMPANY Except as set forth on Schedule 4.1, and except to the Merger. The Company covenants and agrees thatextent consented to by Buyer or as expressly permitted or contemplated by this Agreement, between during the period from the date of this Agreement to the Effective Time, the Company shall carry, and cause its Subsidiaries to, on its business in the earlier usual, regular and ordinary course in substantially the same manner as heretofore conducted and, to the extent consistent therewith, use reasonable efforts to preserve intact its current business organizations, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers, licensors, licensees, distributors and others having business dealings with it to the end that their goodwill and ongoing businesses shall be unimpaired in any material respect at the Effective Time. Without limiting the generality of the Effective Time and the dateforegoing, if any, on which this Agreement is terminated pursuant to Section 8.1, except (i) as may be required by Law, (ii) as may be agreed in writing by Parent without Buyer's consent (which consent shall not be unreasonably withheld, delayed or conditioned), during the period from the date of this Agreement to the Effective Time, Shareholders shall not permit and the Company shall not permit any of its Subsidiaries to: (iiia) as may be expressly required declare, set aside or permitted pursuant pay any dividends on, or make any other distributions in respect of, any of its capital stock, except for distributions of current year subchapter "S" corporation earnings in amounts determined by the Company's Board of Directors to this Agreementreflect the taxes payable on such earnings, (i) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (ivii) as set forth in Section 6.1 purchase, redeem or otherwise acquire any shares of its capital stock or any other securities, or any rights, warrants or options to acquire any such shares or other securities; <PAGE> - 33 - (b) issue, deliver, sell, pledge or otherwise encumber any shares of its capital stock, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities; (c) amend its Certificate of Incorporation or By-laws or other comparable organization documents; (d) acquire or agree to acquire (i) by merging or consolidating with, or by purchasing a substantial portion of the Company Disclosure Letterassets of, or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof, or (xii) any assets that are material, individually or in the business of aggregate, to the Company and its Subsidiaries shall be conducted Company, except purchases in the ordinary course of business consistent with past practice; (e) sell, and to the extent consistent therewithlease, the Company shall use its commercially reasonable efforts to preserve substantially intact the material components and assets of its current business organizationlicense, and to preserve in all material respects its present relationships with key customers, suppliers, employees and other persons with which it has material business relations; and (y) the Company shall not, and shall not permit any of its Subsidiaries to: (a) amend mortgage or otherwise change the articles of incorporation encumber or bylaws of the Company subject to any Lien (other than Liens pursuant to its existing credit facilities) or such equivalent organizational or governing documents otherwise dispose of any of its Subsidiaries); (b) splitproperties or assets which are material, combineindividually or in the aggregate, reclassify, redeem, repurchase or otherwise acquire or amend the terms of any capital stock or other equity interests or rights; (c) issue, sell, pledge, dispose, encumber or grant any shares of its or its Subsidiaries’ capital stock, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of its or its Subsidiaries’ capital stock except (i) in connection with the Rights Agreement and (ii) for transactions among the Company and its direct or indirect wholly owned Subsidiaries or among the Company’s direct or indirect wholly owned Subsidiaries; provided, however, that the Company may issue shares of Company Common Stock upon the exercise of any vested Company Option as is outstanding as of the date hereof; (d) declare, authorize, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to the Company’s or any of its Subsidiaries’ capital stock or other equity interests, other than dividends paid by any Subsidiary of the Company to the Company or any wholly owned Subsidiary of the Company; (e) except as required pursuant to existing written Company Benefit Plans that are set forth in Section 4.12(a) of the Company Disclosure Letter or written offer letters for newly hired or promoted employees entered into in the ordinary course of business consistent with past practice; (f) (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or warrants or other rights to acquire any debt securities, or guarantee any debt securities of another person, except for borrowings under its existing credit facilities in each case whose amounts necessary to make distributions for taxes as described in Section 4.1(a), or for working capital purposes in an aggregate compensation is amount of less than $80,000 annually)1,000,000, (A) materially increase the compensation payable or to become payable or benefits provided or to be provided to (x) any member endorsement of checks in the Company’s board normal course of directorsbusiness and the extension of credit in the normal course of business, or (yii) make any current loans, advances or former capital contributions to, or investments in, any other Person, other than advances to employees or independent contractors of the Company or any of its Subsidiaries, in accordance with past practice; (Bg) except under Company Benefit Plans set forth in Section 4.12(a) of for the Company Disclosure Letter applicable to newly hired employees hired to fill vacancies in the ordinary course of business of items currently contracted for by the Company, grant make or agree to make any new capital expenditure or expenditures which, individually, is in excess of $50,000 or, in the opportunity to participate aggregate, are in excess of $100,000; (h) make any severance material Tax election or termination pay plans settle or compromise any material income Tax liability; (Ci) establishpay, adoptdischarge, enter into settle or materially amend satisfy any Company Benefit Plan claims, liabilities or obligations (absolute, accrued or any arrangement which in existence as of the date hereof would constitute a Company Benefit Plancontingent, asserted or unasserted), plan, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees of the Company or any of its Subsidiaries or any of their respective beneficiaries; (f) implement any employee layoffs that would require notice under the Worker Adjustment and Retraining Notification Act of 1988, as amended (the “WARN Act”), or any similar foreign state or local Law; (g) acquire (including by merger, consolidation, or acquisition of stock or assets), except in respect of any merger, consolidation, business combination among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, any corporation, partnership, limited liability company, other business organization or any division or material amount of assets thereof, or sell, lease, license (other than any nonexclusive license granted in the ordinary course of business)payment, abandondischarge or satisfaction, permit to lapse or expire or otherwise subject to a Lien other than a Permitted Lien or otherwise dispose of any material properties, rights (including Company Intellectual Property Rights) or assets of the Company or its Subsidiaries other than (1) sales of inventory in the ordinary course of business consistent with past practice or (2) pursuant to agreements existing as of the date hereof and set forth in Section 4.16(a) of the Company Disclosure Letter or entered into after the date hereof and set forth in Section 4.16(a) of the Company Disclosure Letter in accordance with the terms their terms, of this Agreement; (h) disclose any trade secret liabilities reflected or confidential information to any Person outside of the ordinary course of business consistent with past practice; (i) incurreserved against in, or amend in any material respect contemplated by, the terms of, any Company Indebtedness or assume or guarantee any such Company Indebtedness for any Person, provided that the Company shall be authorized to incur additional indebtedness under existing lines of credit in an amount not to exceed $500,000 in the aggregate, and provided further that the Company shall provide prompt notice to the Parent of each and every such incurrence of additional indebtedness after it has incurred $100,000 in the aggregate; (j) enter into, modify, amend or terminate (1) any Company Material Contract other than in the ordinary course of business (except as expressly permitted in Section 6.5(d)) or (2) any Contract which if so entered into, modified, amended or terminated could be reasonably likely to (x) have a Company Material Adverse Effect, (y) impair in any material respect the ability of the Company to perform its obligations under this Agreement or (z) prevent or materially delay the consummation of the transactions contemplated by this Agreement; (k) make any material change to its methods of accounting in effect at December 31, 2016, except (i) as required by GAAP most recent consolidated financial statements (or any interpretation thereof), Regulation S-X or a Governmental Authority or quasi-Governmental Authority (including the notes thereto) included in <PAGE> - 34 - the Financial Accounting Standards Board Statements or any similar organization) or (ii) as required by a change in applicable Law; (l) adopt or enter into a plan of complete or partial liquidation, dissolution, recapitalization or other reorganization; (m) settle or compromise any litigation other than settlements or compromises of litigation where the amount paid (less the amount reserved for such matters by the Company or otherwise covered by insurance) in settlement or compromise, in each case, does not exceed the amount set forth in Section 6.1(m) of the Company Disclosure Letter; (n) other than in the ordinary course of business or consistent with past practice, make or change any Tax election, change any method of Tax accounting, settle or compromise any material Tax liability, file any amended Tax Return, enter into any closing agreement with respect to any material Tax or surrender any right to claim a refund for a material amount of Tax; (o) take any action that would reasonably be expected to result in any of the conditions set forth in Article VII not being satisfied or that would impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation; (p) make any loans, advances or capital contributions to or investments in any other Person; (q) hire any new employees other than non-officer employees incurred in the ordinary course of business consistent with past practice; ; (rj) except in the ordinary course of business, modify, amend or terminate any Company Contract, or waive, release or assign any material rights or claims; (k) except as required to comply with applicable law, (i) adopt, enter into or amend any Company Plan, (ii) increase in any material manner the compensation or fringe benefits of, or pay any bonus to, any director, officer or key employee of the Company or any of its Subsidiaries other than (except for good reason normal increases or for reasonable cause; (s) incur or commit to incur any capital expenditures, or any obligations or liabilities in connection therewith that, individually or in the aggregate, are in excess of the amounts set forth in the Company’s annual capital expenditure budget for periods following the date of this Agreement, as provided to Parent, or delay any material capital expenditures; (t) except as otherwise expressly permitted in Section 6.5(d), waive, release, grant or transfer any right of material value, other than bonuses in the ordinary course of business consistent with past practice) or (iii) grant any awards under any Employee Benefit Plan (including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or waive the removal of existing restrictions in any Employee Benefit Plan or agreement or awards made thereunder); (l) other than as required by law or GAAP, make any material benefits change to its accounting policies or procedures; or (m) authorize any of, or commit or agree to modify in take any material adverse respect, or, subject to the terms hereof, fail to enforce, or consent to any material matter with respect to which its consent is required under, any material confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is a party; (u) maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice; (v) enter into any transaction that could give rise to a disclosure obligation as a “reportable transaction” under Section 6011 of the Code and the regulations thereunder; (w) engage in any transaction with, or enter into any agreement, arrangement or understanding with any Affiliate of the Company; (x) grant any material refunds, credits, rebates or other allowances by the Company to any end user, customer, reseller or distributor, in each case, other than in the ordinary course of business; (y) enter into any new line of business outside of its existing business segments; (z) communicate with employees of the Company or any of its Subsidiaries regarding the compensation, benefits or other treatment that they will receive in connection with the Merger, unless any such communications are consistent with prior directives or documentation provided to the Company by Parent (in which caseof, the Company shall provide Parent with prior notice of and the opportunity to review and comment upon any such communications); or (aa) enter into any agreement to do any of the foregoingforegoing actions.

Conduct of Business by the. Company Pending the Merger. The Except as otherwise contemplated by this Agreement or disclosed in Section 5.01 of the Company covenants and agrees thatDisclosure Schedule, between after the date of this Agreement hereof and the earlier of prior to the Effective Time or earlier termination of this Agreement, unless Parent shall otherwise agree in writing, the Company shall, and shall cause its subsidiaries to: (a) conduct their respective businesses in the dateordinary and usual course of business and consistent with past practice, if any, on which this Agreement is terminated pursuant including with respect to Section 8.1, except casino credit policies; (b) not (i) as may be required by Lawamend or propose to amend their respective certificates of incorporation or bylaws or equivalent constitutional documents, (ii) as split, combine or reclassify their outstanding capital stock or (iii) declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise, except for the payment of dividends or distributions to the Company or a wholly-owned subsidiary of the Company by a direct or indirect wholly-owned subsidiary of the Company; (c) not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that the Company may be agreed issue shares upon the exercise of Options outstanding on the date hereof; (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings in the ordinary course of business or borrowings under the existing credit facilities of the Company or any of its subsidiaries up to the existing borrowing limit on the date hereof, and (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent; provided that in no event shall aggregate indebtedness of the Company and its subsidiaries, net of all cash and cash equivalents, exceed $2.15 billion, (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock other than in connection with the exercise of outstanding Options pursuant to the terms of the Company Option Plans, (iii) make any acquisition of any assets or businesses other than expenditures for current assets in the ordinary course of business and expenditures for fixed or capital assets in the ordinary course of business, (iv) without Parent's consent, acquire any gaming property within 150 miles of Detroit, Michigan, (v) sell, pledge, dispose of or encumber any assets or businesses other than (A) sales of businesses or assets disclosed in Section 5.01 of the Company Disclosure Schedule, (B) pledges or encumbrances pursuant to Existing Credit Facilities or other permitted borrowings, (C) sales or dispositions of businesses or assets consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed ) or conditioned)for which consent is not denied within 72 hours after the Company notifies Parent (such notice to be delivered during business hours on a business day) in writing that it desires to effect such sale or disposition, (iiiD) sales of real estate, assets or facilities for cash consideration (including any debt assumed by the buyer of such real estate, assets or facilities) to non-affiliates of the Company of less than $1,000,000 in each such case and $7,000,000 in the aggregate, (E) sales or dispositions of businesses or assets as may be expressly required by applicable law, and (F) sales or permitted pursuant to this Agreement, or (iv) as set forth in Section 6.1 dispositions of the Company Disclosure Letter, (x) the business of the Company and its Subsidiaries shall be conducted assets in the ordinary course of business consistent with past practiceor (vi) except as contemplated by the following proviso, and to the extent consistent therewithenter into any binding contract, the Company shall use its commercially reasonable efforts to preserve substantially intact the material components and assets of its current business organizationagreement, and to preserve in all material respects its present relationships with key customers, suppliers, employees and other persons with which it has material business relations; and (y) the Company shall not, and shall not permit any of its Subsidiaries to: (a) amend commitment or otherwise change the articles of incorporation or bylaws of the Company (or such equivalent organizational or governing documents of any of its Subsidiaries); (b) split, combine, reclassify, redeem, repurchase or otherwise acquire or amend the terms of any capital stock or other equity interests or rights; (c) issue, sell, pledge, dispose, encumber or grant any shares of its or its Subsidiaries’ capital stock, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of its or its Subsidiaries’ capital stock except (i) in connection with the Rights Agreement and (ii) for transactions among the Company and its direct or indirect wholly owned Subsidiaries or among the Company’s direct or indirect wholly owned Subsidiaries; provided, however, that the Company may issue shares of Company Common Stock upon the exercise of any vested Company Option as is outstanding as of the date hereof; (d) declare, authorize, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, arrangement with respect to the Company’s or any of its Subsidiaries’ capital stock or other equity interests, other than dividends paid by any Subsidiary of the Company to the Company or any wholly owned Subsidiary of the Companyforegoing; (e) except as required pursuant use all reasonable efforts to existing written Company Benefit Plans that are set forth in Section 4.12(a) of preserve intact their respective business organizations and goodwill, keep available the Company Disclosure Letter or written offer letters for newly hired or promoted employees entered into in the ordinary course of business (in each case whose aggregate compensation is less than $80,000 annually), (A) materially increase the compensation payable or to become payable or benefits provided or to be provided to (x) any member of the Company’s board of directors, or (y) any current or former employees or independent contractors of the Company or any of its Subsidiaries, (B) except under Company Benefit Plans set forth in Section 4.12(a) of the Company Disclosure Letter applicable to newly hired employees hired to fill vacancies in the ordinary course of business of the Company, grant the opportunity to participate in any severance or termination pay plans or (C) establish, adopt, enter into or materially amend any Company Benefit Plan (or any arrangement which in existence as of the date hereof would constitute a Company Benefit Plan), plan, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees of the Company or any of its Subsidiaries or any services of their respective beneficiaries; (f) implement any employee layoffs that would require notice under present officers and key employees, and preserve the Worker Adjustment goodwill and Retraining Notification Act of 1988, as amended (the “WARN Act”), or any similar foreign state or local Law; (g) acquire (including by merger, consolidation, or acquisition of stock or assets), except in respect of any merger, consolidation, business combination among the Company relationships with customers and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, any corporation, partnership, limited liability company, other others having business organization or any division or material amount of assets thereof, or sell, lease, license (relationships with them other than any nonexclusive license granted in the ordinary course of business), abandon, permit to lapse or expire or otherwise subject to a Lien other than a Permitted Lien or otherwise dispose of any material properties, rights (including Company Intellectual Property Rights) or assets of the Company or its Subsidiaries other than (1) sales of inventory in the ordinary course of business consistent with past practice or (2) pursuant to agreements existing as of the date hereof and set forth in Section 4.16(a) of the Company Disclosure Letter or entered into after the date hereof and set forth in Section 4.16(a) of the Company Disclosure Letter in accordance with expressly permitted by the terms of this Agreement; (hf) disclose any trade secret or confidential information to any Person outside of the ordinary course of business consistent with past practice; (i) incur, or amend in any material respect the terms of, any Company Indebtedness or assume or guarantee any such Company Indebtedness for any Person, provided that the Company shall be authorized to incur additional indebtedness under existing lines of credit in an amount not to exceed $500,000 in the aggregate, and provided further that the Company shall provide prompt notice to the Parent of each and every such incurrence of additional indebtedness after it has incurred $100,000 in the aggregate; (j) enter into, modifyamend, amend modify or terminate (1) renew any Company Material Contract employment, consulting, severance or similar agreements with, or grant any salary, wage or other than increase in the ordinary course of business (except as expressly permitted in Section 6.5(d)) compensation or (2) any Contract which if so entered into, modified, amended or terminated could be reasonably likely to (x) have a Company Material Adverse Effect, (y) impair increase in any material respect the ability employee benefit to, any directors or officers of the Company to perform or its obligations under this Agreement or (z) prevent or materially delay the consummation of the transactions contemplated by this Agreement; (k) make any material change to its methods of accounting in effect at December 31, 2016subsidiaries, except (i) as for changes that are required by GAAP (or any interpretation thereof)applicable law, Regulation S-X or a Governmental Authority or quasi-Governmental Authority (including the Financial Accounting Standards Board or any similar organization) or (ii) to satisfy obligations existing as required by a change in applicable Law; (l) adopt or enter into a plan of complete or partial liquidation, dissolution, recapitalization or other reorganization; (m) settle or compromise any litigation other than settlements or compromises of litigation where the amount paid (less the amount reserved for such matters by the Company or otherwise covered by insurance) in settlement or compromise, in each case, does not exceed the amount set forth in Section 6.1(m) of the Company Disclosure Letter; date hereof, or (niii) other than in the ordinary course of business or consistent with past practice, make or change any Tax election, change any method of Tax accounting, settle or compromise any material Tax liability, file any amended Tax Return, enter into any closing agreement with respect to any material Tax or surrender any right to claim a refund for a material amount of Tax; (o) take any action that would reasonably be expected to result in any of the conditions set forth in Article VII not being satisfied or that would impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation; (p) make any loans, advances or capital contributions to or investments in any other Person; (q) hire any new employees other than non-officer employees in the ordinary course of business consistent with past practice; (rg) terminate not enter into, establish, adopt, amend or modify any officer pension, retirement, stock purchase, savings, profit sharing, deferred compensation, consulting, bonus, group insurance or key other employee benefit, incentive or welfare plan, agreement, program or arrangement, in respect of any directors, officers or employees of the Company or its subsidiaries, except, in each such case, as may be required by applicable law or by the terms of contractual obligations existing as of the date hereof , including any of its Subsidiaries other than for good reason or for reasonable causecollective bargaining agreement; (sh) incur or commit to incur any not make expenditures, including, but not limited to, capital expenditures, or enter into any obligations binding commitment or liabilities contract to make expenditures, except (i) expenditures which the Company or its subsidiaries are currently committed to make, (ii) (A) expenditures relating to the Company's Le Jardin project and ▇▇▇▇▇ ▇▇▇▇ Theatre, meeting, convention and exhibit space project, in each case in accordance with current plans, (B) expenditures not exceeding $1,000,000 in connection therewith thatwith the Bellagio Spa Tower project, and (C) other expenditures not exceeding $3,000,000 individually or $80,000,000 in the aggregate, are (iii) for emergency repairs and other expenditures necessary in excess light of the amounts set forth in the Company’s annual capital expenditure budget for periods following circumstances not anticipated as of the date of this AgreementAgreement which are necessary to avoid significant disruption to the Company's business or operations consistent with past practice (and, as provided to if reasonably practicable, after consultation with Parent), or delay any material capital expenditures; (tiv) except as otherwise expressly permitted in Section 6.5(d), waive, release, grant or transfer any right of material value, other than for repairs and maintenance in the ordinary course of business consistent with past practice, or waive any material benefits of, or agree to modify in any material adverse respect, or, subject . With respect to the terms hereofsubject matter of this paragraph (h), fail to enforce, or consent to any material matter with respect to which its consent is required under, any material confidentiality, standstill or similar agreement to which if the Company requests approval of Parent to exceed the limits set forth herein, Parent shall respond to such request and grant or any withhold approval promptly following receipt of its Subsidiaries is a partysuch request; (ui) maintain insurance at less than current levels not make, change or otherwise in a manner inconsistent with past practice; (v) enter into revoke any transaction that could give rise to a disclosure obligation as a “reportable transaction” under Section 6011 of the Code and the regulations thereunder; (w) engage in material Tax election unless required by law or make any transaction with, agreement or enter into any agreement, arrangement or understanding settlement with any Affiliate of the Company; (x) grant taxing authority regarding any material refunds, credits, rebates amount of Taxes or other allowances by which would reasonably be expected to materially increase the Company to any end user, customer, reseller or distributor, in each case, other than in the ordinary course of business; (y) enter into any new line of business outside of its existing business segments; (z) communicate with employees obligations of the Company or any of its Subsidiaries regarding the compensation, benefits or other treatment that they will receive Surviving Corporation to pay Taxes in connection with the Merger, unless any such communications are consistent with prior directives or documentation provided to the Company by Parent (in which case, the Company shall provide Parent with prior notice of and the opportunity to review and comment upon any such communications); or (aa) enter into any agreement to do any of the foregoingfuture.

Conduct of Business by the. Company Pending the Merger. The Company covenants and agrees that, between the date of Except as otherwise contemplated by this Agreement and the earlier of the Effective Time and the date, if any, on which this Agreement is terminated pursuant to Section 8.1, except (i) as may be required by Law, (ii) as may be agreed in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) as may be expressly required or permitted pursuant to this Agreement, or (iv) as set forth disclosed in Section 6.1 5.01 of the Company Disclosure LetterSchedule, (x) after the business of the Company date hereof and its Subsidiaries shall be conducted in the ordinary course of business consistent with past practice, and prior to the extent consistent therewithEffective Time or earlier termination of this Agreement, unless Parent shall otherwise agree in writing, the Company shall use its commercially reasonable efforts to preserve substantially intact the material components and assets of its current business organization, and to preserve in all material respects its present relationships with key customers, suppliers, employees and other persons with which it has material business relations; and (y) the Company shall notshall, and shall not permit any of cause its Subsidiaries subsidiaries to: (a) conduct their respective businesses in the ordinary and usual course of business and in a manner substantially consistent with past practice; (b) not (i) amend or otherwise change the propose to amend their respective articles of incorporation or bylaws of the Company or equivalent constitutional documents, (or such equivalent organizational or governing documents of any of its Subsidiaries); (bii) split, combine, reclassify, redeem, repurchase combine or otherwise acquire or amend the terms of any capital stock or other equity interests or rights; (c) issue, sell, pledge, dispose, encumber or grant any shares of its or its Subsidiaries’ reclassify their outstanding capital stock, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of its or its Subsidiaries’ capital stock except (i) in connection with the Rights Agreement and (ii) for transactions among the Company and its direct or indirect wholly owned Subsidiaries or among the Company’s direct or indirect wholly owned Subsidiaries; provided, however, that the Company may issue shares of Company Common Stock upon the exercise of any vested Company Option as is outstanding as of the date hereof; (diii) declare, authorize, make set aside or pay any dividend or other distribution, distribution payable in cash, stock, property or otherwise, with respect to except for the Company’s payment of dividends or any of its Subsidiaries’ capital stock or other equity interests, other than dividends paid by any Subsidiary of the Company distributions to the Company or any a wholly owned Subsidiary subsidiary of the Company by a direct or indirect wholly owned subsidiary of the Company; (ec) not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of, their capital stock of any class or any debt or equity securities convertible into or exchangeable for any such capital stock, except as required pursuant to existing written Company Benefit Plans that are set forth in Section 4.12(a) of the Company Disclosure Letter may issue shares upon the exercise of Options outstanding on the date hereof; (d) not (i) incur or written offer letters become contingently liable with respect to any indebtedness for newly hired or promoted employees entered into borrowed money other than (A) borrowings in the ordinary course of business (in each case whose aggregate compensation is less than $80,000 annually), (A) materially increase or borrowings under the compensation payable or to become payable or benefits provided or to be provided to (x) any member of the Company’s board of directors, or (y) any current or former employees or independent contractors existing credit facilities of the Company or of any of its Subsidiariessubsidiaries up to the existing borrowing limit on the date hereof, and (B) except under Company Benefit Plans set forth borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent; provided that in Section 4.12(a) no event shall aggregate indebtedness of the Company Disclosure Letter applicable to newly hired employees hired to fill vacancies in the ordinary course of business of the Company, grant the opportunity to participate in any severance or termination pay plans or (C) establish, adopt, enter into or materially amend any Company Benefit Plan (or any arrangement which in existence as of the date hereof would constitute a Company Benefit Plan), plan, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees of the Company or any of its Subsidiaries or any of their respective beneficiaries; (f) implement any employee layoffs that would require notice under the Worker Adjustment and Retraining Notification Act of 1988, as amended (the “WARN Act”), or any similar foreign state or local Law; (g) acquire (including by merger, consolidation, or acquisition of stock or assets), except in respect of any merger, consolidation, business combination among the Company and its wholly owned Subsidiaries subsidiaries, net of all cash and cash equivalents, exceed Two Million, Seven Hundred Seventy-Five Thousand Dollars ($2,775,000.00), (ii) redeem, purchase, acquire or among the Company’s wholly owned Subsidiaries, offer to purchase or acquire any corporation, partnership, limited liability company, other business organization shares of its capital stock or any division options, warrants or material amount rights to acquire any of assets thereof, its capital stock or sell, lease, license (any security convertible into or exchangeable for its capital stock other than in connection with the exercise of outstanding Options pursuant to the terms of the Company Plans, (iii) make any nonexclusive license granted acquisition of any assets or businesses other than expenditures for current assets for fixed or capital assets in each case in the ordinary course of business), abandon(iv) without Parent's consent, permit to lapse acquire any property, (v) sell, pledge, dispose of or expire encumber any assets or otherwise subject to a Lien businesses other than a Permitted Lien or otherwise dispose (A) sales of any material properties, rights (including Company Intellectual Property Rights) businesses or assets disclosed in Section 5.01 of the Company Disclosure Schedule, (B) pledges or its Subsidiaries encumbrances pursuant to existing credit facilities or other than permitted borrowings, (1C) sales or dispositions of inventory businesses or assets as may be required by applicable law, and (D) sales or dispositions of assets in the ordinary course of business consistent with past practice business, or (2vi) pursuant enter into any binding contract, agreement, commitment or arrangement with respect to agreements existing as any of the date hereof foregoing; (e) use best efforts to preserve intact their respective business organizations and set forth in Section 4.16(a) goodwill, keep available the services of their respective present officers and key employees, and use all reasonable efforts to preserve the Company Disclosure Letter or entered into after the date hereof goodwill and set forth in Section 4.16(a) of the Company Disclosure Letter in accordance business relationships with customers and others having business relationships with them other than as expressly permitted by the terms of this Agreement; (hf) disclose any trade secret or confidential information to any Person outside of the ordinary course of business consistent with past practice; (i) incur, or amend in any material respect the terms of, any Company Indebtedness or assume or guarantee any such Company Indebtedness for any Person, provided that the Company shall be authorized to incur additional indebtedness under existing lines of credit in an amount not to exceed $500,000 in the aggregate, and provided further that the Company shall provide prompt notice to the Parent of each and every such incurrence of additional indebtedness after it has incurred $100,000 in the aggregate; (j) enter into, modifyamend, amend modify or terminate (1) renew any Company Material Contract employment, consulting, severance or similar agreement with, or grant any salary, wage or other than increase in the ordinary course of business (except as expressly permitted in Section 6.5(d)) compensation or (2) any Contract which if so entered into, modified, amended or terminated could be reasonably likely to (x) have a Company Material Adverse Effect, (y) impair increase in any material respect the ability employee benefit to, any director or officer of the Company to perform or of any of its obligations under this Agreement or (z) prevent or materially delay the consummation of the transactions contemplated by this Agreement; (k) make any material change to its methods of accounting in effect at December 31, 2016subsidiaries, except (i) as for changes that are required by GAAP (or any interpretation thereof)applicable law, Regulation S-X or a Governmental Authority or quasi-Governmental Authority (including the Financial Accounting Standards Board or any similar organization) or (ii) to satisfy obligations existing as required by a change in applicable Law; (l) adopt or enter into a plan of complete or partial liquidation, dissolution, recapitalization or other reorganization; (m) settle or compromise any litigation other than settlements or compromises of litigation where the amount paid (less the amount reserved for such matters by the Company or otherwise covered by insurance) in settlement or compromise, in each case, does not exceed the amount set forth in Section 6.1(m) of the Company Disclosure Letter; date hereof, or (niii) other than in the ordinary course of business or consistent with past practice, make or change any Tax election, change any method of Tax accounting, settle or compromise any material Tax liability, file any amended Tax Return, enter into any closing agreement with respect to any material Tax or surrender any right to claim a refund for a material amount of Tax; (o) take any action that would reasonably be expected to result in any of the conditions set forth in Article VII not being satisfied or that would impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation; (p) make any loans, advances or capital contributions to or investments in any other Person; (q) hire any new employees other than non-officer employees in the ordinary course of business consistent with past practice; (rg) terminate not enter into, establish, adopt, amend or modify any pension, retirement, stock purchase, savings, profit sharing, deferred compensation, consulting, bonus, group insurance or other employee benefit, incentive or welfare plan, agreement, program or arrangement, in respect of any director, officer or key employee of the Company or of any of its Subsidiaries other than for good reason subsidiaries, except, in each such case, as may be required by applicable law or for reasonable causeby the terms of contractual obligations existing as of the date hereof, including any collective bargaining agreement; (sh) incur or commit to incur any not make expenditures in excess of expenditures permitted by the Company's last budget approved by the Board of Directors, including, but not limited to, capital expenditures, or enter into any obligations binding commitment or liabilities contract to make expenditures, except (i) expenditures which the Company or its subsidiaries are currently contractually committed to make, (ii) other expenditures not exceeding $50,000 in connection therewith that, individually or each such case and $150,000 in the aggregate, are (iii) for emergency repairs and other expenditures necessary in excess light of the amounts set forth in the Company’s annual capital expenditure budget for periods following circumstances not anticipated as of the date of this AgreementAgreement which are necessary to avoid significant disruption to the Company's business or operations consistent with past practice (and, as provided to if reasonably practicable, after consultation with Parent), or delay any material capital expenditures; (tiv) except as otherwise expressly permitted in Section 6.5(d), waive, release, grant or transfer any right of material value, other than for repairs and maintenance in the ordinary course of business consistent with past practice; provided; however, or waive any material benefits of, or agree to modify in any material adverse respect, orthat all expenditures under Sections 1.10 of the Company Disclosure Schedule shall be permitted, subject to the terms hereof, fail to enforce, or consent to any material matter with respect to which its consent is required under, any material confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is a partythis Agreement; (ui) maintain insurance at less than current levels not make, change or otherwise in a manner inconsistent with past practice; (v) enter into revoke any transaction that could give rise to a disclosure obligation as a “reportable transaction” under Section 6011 of the Code and the regulations thereunder; (w) engage in material Tax election unless required by law or make any transaction with, agreement or enter into any agreement, arrangement or understanding settlement with any Affiliate of the Company; (x) grant taxing authority regarding any material refunds, credits, rebates amount of Taxes or other allowances by which would reasonably be expected to materially increase the Company to any end user, customer, reseller or distributor, in each case, other than in the ordinary course of business; (y) enter into any new line of business outside of its existing business segments; (z) communicate with employees obligations of the Company or the Surviving Corporation to pay Taxes in the future; (j) maintain all existing insurance policies of the Company and any of its Subsidiaries regarding the compensation, benefits or other treatment that they will receive subsidiaries in connection with the Merger, unless any such communications are consistent with prior directives or documentation provided to the Company by Parent (in which case, the Company shall provide Parent with prior notice of full force and the opportunity to review and comment upon any such communications); or (aa) enter into any agreement to do any of the foregoingeffect.

Conduct of Business by the. Company Pending the Merger. The Company covenants and agrees that, between the date of this Agreement and the earlier of the Effective Time and the date, if any, on which this Agreement is terminated pursuant to Section 8.17.1 (the “Pre-Closing Period”), except (i) as may be required by Law, (ii) as may be agreed in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) as may be expressly required or permitted pursuant to this Agreement, or (iv) as set forth in Section 6.1 Schedule 5.1 of the Company Disclosure LetterSchedules, (xw) the business of the Company and its Subsidiaries subsidiaries shall be conducted only in the ordinary course of business and in a manner consistent with past practice in all material respects; (x) the Company shall use its reasonable best efforts to preserve intact its business organization, to keep available the services of its officers and employees and to preserve the relationships with those persons having business relationships with the Company or any of its subsidiaries, in each case in the ordinary course of business consistent with past practice, and to the extent consistent therewith, the Company shall use its commercially reasonable efforts to preserve substantially intact the material components and assets of its current business organization, and to preserve in all material respects its present relationships with key customers, suppliers, employees and other persons with which it has material business relations; practice and (y) without limiting the generality of the foregoing, the Company shall not, and shall not permit any of its Subsidiaries subsidiaries, to: (a) amend or otherwise change the articles Amended and Restated Certificate of incorporation Incorporation or bylaws the Amended and Restated Bylaws of the Company (or such equivalent organizational or governing documents of any of its Subsidiariessubsidiaries), or enter into or adopt any “poison pill” or similar stockholder rights plan; (b) split, combine, reclassify, redeem, repurchase or otherwise acquire or amend the terms of any capital stock or other equity interests or rights; (ci) issue, sell, pledge, dispose, encumber encumber, grant, confer or grant award any shares of its or its Subsidiariessubsidiaries’ capital stock, or any options, warrants, restricted stock units, convertible securities or other rights of any kind to acquire any shares of its or its Subsidiariessubsidiaries’ capital stock except (i) in connection with the Rights or take any action not otherwise contemplated by this Agreement and (ii) for transactions among the Company and its direct or indirect wholly owned Subsidiaries or among the Company’s direct or indirect wholly owned Subsidiariesto cause to be exercisable any otherwise unexercisable option under any existing stock plan; provided, however, that (x) the Company may issue shares of Company Common Stock upon the exercise of any vested Company Option as is outstanding as of the date hereofhereof and (y) the Company may exchange LLC Units solely as required by and consistent with Section 2.1(e); (ii) except as may be required by applicable Law or applicable organizational or governing documents, convene any special meeting (or any adjournment thereof) of the stockholders of the Company; or (iii) enter into any agreement or understanding or arrangement or other contract with respect to the voting or registration of the shares of the Company’s or its subsidiaries’ capital stock or other securities or equity interests (other than entry into an Acceptable Confidentiality Agreement); (dc) (i) declare, authorize, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to the Company’s or any of its Subsidiariessubsidiaries’ capital stock stock, voting securities or other equity interests, other than (A) dividends and distributions paid by any Subsidiary a direct or indirect wholly owned subsidiary of the Company to the Company or any wholly owned Subsidiary of the Company; (e) except as required pursuant to existing written Company Benefit Plans that are set forth in Section 4.12(a) of the Company Disclosure Letter or written offer letters for newly hired or promoted employees entered into its parent in the ordinary course of business (in each case whose aggregate compensation is less than $80,000 annually), (A) materially increase the compensation payable or to become payable or benefits provided or to be provided to (x) any member of the Company’s board of directors, or (y) any current or former employees or independent contractors of the Company or any of its Subsidiaries, (B) except under Company Benefit Plans set forth in Section 4.12(a) of the Company Disclosure Letter applicable to newly hired employees hired to fill vacancies in the ordinary course of business of the Company, grant the opportunity to participate in any severance or termination pay plans or (C) establish, adopt, enter into or materially amend any Company Benefit Plan (or any arrangement which in existence as of the date hereof would constitute a Company Benefit Plan), plan, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees of the Company or any of its Subsidiaries or any of their respective beneficiaries; (f) implement any employee layoffs that would require notice under the Worker Adjustment and Retraining Notification Act of 1988, as amended (the “WARN Act”), or any similar foreign state or local Law; (g) acquire (including by merger, consolidation, or acquisition of stock or assets), except in respect of any merger, consolidation, business combination among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, any corporation, partnership, limited liability company, other business organization or any division or material amount of assets thereof, or sell, lease, license (other than any nonexclusive license granted in the ordinary course of business), abandon, permit to lapse or expire or otherwise subject to a Lien other than a Permitted Lien or otherwise dispose of any material properties, rights (including Company Intellectual Property Rights) or assets of the Company or its Subsidiaries other than (1) sales of inventory in the ordinary course of business consistent with past practice or (2) pursuant to agreements existing as of the date hereof and set forth in Section 4.16(a) of the Company Disclosure Letter or entered into after the date hereof and set forth in Section 4.16(a) of the Company Disclosure Letter in accordance with the terms of this Agreement; (h) disclose any trade secret or confidential information to any Person outside of the ordinary course of business consistent with past practice; (i) incur, or amend in any material respect the terms of, any Company Indebtedness or assume or guarantee any such Company Indebtedness for any Person, provided that the Company shall be authorized to incur additional indebtedness under existing lines of credit in an amount not to exceed $500,000 in the aggregate, and provided further that the Company shall provide prompt notice to the Parent of each and every such incurrence of additional indebtedness after it has incurred $100,000 in the aggregate; (j) enter into, modify, amend or terminate (1) any Company Material Contract other than in the ordinary course of business (except as expressly permitted in Section 6.5(d)) or (2) any Contract which if so entered into, modified, amended or terminated could be reasonably likely to (x) have a Company Material Adverse Effect, (y) impair in any material respect the ability of the Company to perform its obligations under this Agreement or (z) prevent or materially delay the consummation of the transactions contemplated by this Agreement; (k) make any material change to its methods of accounting in effect at December 31, 2016, except (i) as required by GAAP (or any interpretation thereof), Regulation S-X or a Governmental Authority or quasi-Governmental Authority (including the Financial Accounting Standards Board or any similar organization) or (ii) as required by a change in applicable Law; (l) adopt or enter into a plan of complete or partial liquidation, dissolution, recapitalization or other reorganization; (m) settle or compromise any litigation other than settlements or compromises of litigation where the amount paid (less the amount reserved for such matters by the Company or otherwise covered by insurance) in settlement or compromise, in each case, does not exceed the amount set forth in Section 6.1(m) of the Company Disclosure Letter; (n) other than in the ordinary course of business or consistent with past practice, make or change any Tax election, change any method of Tax accounting, settle or compromise any material Tax liability, file any amended Tax Return, enter into any closing agreement with respect to any material Tax or surrender any right to claim a refund for a material amount of Tax; (o) take any action that would reasonably be expected to result in any of the conditions set forth in Article VII not being satisfied or that would impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation; (p) make any loans, advances or capital contributions to or investments in any other Person; (q) hire any new employees other than non-officer employees in the ordinary course of business consistent with past practice; (r) terminate any officer or key employee of the Company or any of its Subsidiaries other than for good reason or for reasonable cause; (s) incur or commit to incur any capital expenditures, or any obligations or liabilities in connection therewith that, individually or in the aggregate, are in excess of the amounts set forth in the Company’s annual capital expenditure budget for periods following the date of this Agreement, as provided to Parent, or delay any material capital expenditures; (t) except as otherwise expressly permitted in Section 6.5(d), waive, release, grant or transfer any right of material value, other than in the ordinary normal course of business consistent with past practice, (B) “Tax Distributions” contemplated by the Limited Liability Company Agreement of Norcraft Companies, LLC and (C) the TRA Termination Payments under the Company Tax Receivable Agreements (or waive any material benefits of, or agree to modify in any material adverse respect, or, subject substantially equivalent payments pursuant to the terms hereofTax Receivable Termination Agreements) immediately prior to the Merger Closing; (ii) split, fail to enforce, combine or consent to any material matter with respect to which its consent is required under, any material confidentiality, standstill or similar agreement to which the Company or reclassify any of its Subsidiaries is a party; capital stock, voting securities or other equity interests, or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, voting securities or other equity interests; or (uiii) maintain insurance at less than current levels purchase, redeem or otherwise in a manner inconsistent with past practice; (v) enter into acquire any transaction that could give rise to a disclosure obligation as a “reportable transaction” under Section 6011 shares of the Code and the regulations thereunder; (w) engage in any transaction withcapital stock, voting securities or other equity interests, or enter into any agreement, arrangement or understanding with any Affiliate of the Company; (x) grant any material refunds, credits, rebates or other allowances by the Company to any end user, customer, reseller or distributor, in each case, other than in the ordinary course of business; (y) enter into any new line of business outside of its existing business segments; (z) communicate with employees securities of the Company or any rights, warrants, calls or options to acquire any such shares of its Subsidiaries regarding the compensationcapital stock, benefits voting securities or other treatment that they will receive in connection with equity interests, except as contemplated by this Agreement or the Merger, unless any such communications are consistent with prior directives or documentation provided to the Company by Parent (in which case, the Company shall provide Parent with prior notice of and the opportunity to review and comment upon any such communications); or (aa) enter into any agreement to do any of the foregoing.Exchange Agreement;

Conduct of Business by the. Company Pending the Merger. The Except as otherwise contemplated by this Agreement or disclosed in Section 5.01 of the Company covenants and agrees thatDisclosure Schedule, between after the date of this Agreement hereof and the earlier of prior to the Effective Time and the dateTime, if any, on which this Agreement is terminated pursuant to Section 8.1, except (i) as may be required by Law, (ii) as may be agreed in writing by Parent without Parent's prior consent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) as may be expressly required or permitted pursuant to this Agreement, or (iv) as set forth in Section 6.1 of the Company Disclosure Letter, (x) the business of the Company and its Subsidiaries shall be conducted in the ordinary course of business consistent with past practice, and to the extent consistent therewith, the Company shall use its commercially reasonable efforts to preserve substantially intact the material components and assets of its current business organization, and to preserve in all material respects its present relationships with key customers, suppliers, employees and other persons with which it has material business relations; and (y) the Company shall notshall, and shall not permit any of cause its Subsidiaries subsidiaries to: (a) amend or otherwise change conduct their respective businesses in the articles ordinary and usual course of incorporation or bylaws of the Company (or such equivalent organizational or governing documents of any of its Subsidiaries)business and consistent with past practice; (b) not (i) amend or propose to amend their respective articles of incorporation or by-laws or equivalent constitutional documents, (ii) split, combine, reclassify, redeem, repurchase combine or otherwise acquire or amend the terms of any capital stock or other equity interests or rights; (c) issue, sell, pledge, dispose, encumber or grant any shares of its or its Subsidiaries’ reclassify their outstanding capital stock, (iii) effect any merger, corporate restructuring or liquidation of the Company or any options, warrants, convertible securities or other rights of any kind to acquire any shares of its subsidiaries, or its Subsidiaries’ capital stock except (i) in connection with the Rights Agreement and (ii) for transactions among the Company and its direct or indirect wholly owned Subsidiaries or among the Company’s direct or indirect wholly owned Subsidiaries; provided, however, that the Company may issue shares of Company Common Stock upon the exercise of any vested Company Option as is outstanding as of the date hereof; (div) declare, authorize, make set aside or pay any dividend or other distribution, distribution payable in cash, stock, property or otherwise, with respect to except for the Company’s payment of dividends or any of its Subsidiaries’ capital stock or other equity interests, other than dividends paid by any Subsidiary of the Company distributions to the Company or any wholly owned Subsidiary its subsidiary by a subsidiary of the CompanyCompany and regular quarterly dividends on Company Common Stock of not more than $.08 per share declared and paid at times consistent with past practice; (ec) not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except as required pursuant to existing written Company Benefit Plans that are set forth in Section 4.12(a) of the Company Disclosure Letter may issue shares upon exercise of Options outstanding on the date hereof; (d) not (i) incur or written offer letters become contingently liable with respect to any indebtedness for newly hired or promoted employees entered into borrowed money other than (A) borrowings in the ordinary course of business (in each case whose aggregate compensation is less than $80,000 annually), (A) materially increase consistent with past practice up to the compensation payable or to become payable or benefits provided or to be provided to (x) any member amount of the existing borrowing limit of the Company’s board 's existing credit facilities on the date hereof (which is $150 million) and (B) borrowings to refinance existing indebtedness on market terms, (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of directorsits capital stock or any options, warrants or (y) rights to acquire any current of its capital stock or former employees any security convertible into or independent contractors exchangeable for its capital stock other than in connection with the exercise of outstanding Options pursuant to the terms of the Company Option Plans, or any of its Subsidiariesto use for the 401(k) Plan, the DRP or the ESPP, (Biii) except under Company Benefit Plans make any acquisition of any assets or businesses in excess of the amounts set forth in Section 4.12(a) 5.01 of the Company Disclosure Letter applicable to newly hired employees hired to fill vacancies Schedule other than expenditures for current assets in the ordinary course of business and expenditures for fixed or capital assets in the ordinary course of business consistent with Section 5.01(i) below, or (iv) sell, pledge, lease, dispose of or encumber any material assets or businesses other than (A) sales of businesses or assets disclosed in the CompanyCompany Disclosure Schedule, grant the opportunity (B) pledges or encumbrances pursuant to participate in any severance Existing Credit Facilities or termination pay plans or other permitted borrowings, (C) establishsales or dispositions of businesses or assets as may be required by applicable law, adoptor (D) sales of idle facilities and related assets; (e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, enter into or materially amend any Company Benefit Plan (or any arrangement which in existence as of keep available the date hereof would constitute a Company Benefit Plan), plan, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees of the Company or any of its Subsidiaries or any services of their respective beneficiariespresent officers and key employees, and preserve the goodwill and business relationships with customers, suppliers and others having business relationships with them other than as contemplated by the terms of this Agreement; (f) implement not enter into or amend any employee layoffs that would require notice under the Worker Adjustment and Retraining Notification Act employment, severance, special pay arrangement with respect to termination of 1988employment or other similar arrangements or agreements with any directors, as amended (the “WARN Act”), officers or key employees or with any similar foreign state or local Law; (g) acquire (including by merger, consolidation, or acquisition of stock or assets)other persons, except in respect of any merger(i) as required to comply with applicable law, consolidation, business combination among (ii) pursuant to previously existing contractual arrangements or policies or (iii) employment agreements entered into with a person who is hired by the Company and or one of its wholly owned Subsidiaries or among subsidiaries after the Company’s wholly owned Subsidiaries, any corporation, partnership, limited liability company, other business organization or any division or material amount of assets thereof, or sell, lease, license (other than any nonexclusive license granted date hereof in the ordinary course of business), abandon, permit to lapse provided that such employment agreement would not qualify as a Material Employment Agreement; (g) not increase the salary or expire or otherwise subject to a Lien other than a Permitted Lien or otherwise dispose monetary compensation of any material properties, rights (including Company Intellectual Property Rights) or assets of the Company or its Subsidiaries other than (1) sales of inventory person except for increases in the ordinary course of business consistent with past practice or (2) except as required to comply with applicable law or pursuant to agreements previously existing as of the date hereof and set forth in Section 4.16(a) of the Company Disclosure Letter or entered into after the date hereof and set forth in Section 4.16(a) of the Company Disclosure Letter in accordance with the terms of this Agreementcontractual arrangements; (h) disclose any trade secret or confidential information to any Person outside of the ordinary course of business consistent with past practice; (i) incurnot adopt, enter into or amend in to increase benefits or obligations of any material respect the terms of, any Company Indebtedness Plan or assume or guarantee any such Company Indebtedness for any Person, provided that the Company shall be authorized to incur additional indebtedness under existing lines of credit in an amount not to exceed $500,000 in the aggregate, and provided further that the Company shall provide prompt notice to the Parent of each and every such incurrence of additional indebtedness after it has incurred $100,000 in the aggregate; (j) enter into, modify, amend or terminate (1) any Company Material Contract other than in the ordinary course of business (except as expressly permitted in Section 6.5(d)) or (2) any Contract which if so entered into, modified, amended or terminated could be reasonably likely to (x) have a Company Material Adverse Effect, (y) impair in any material respect the ability of the Company to perform its obligations under this Agreement or (z) prevent or materially delay the consummation of the transactions contemplated by this Employment Agreement; (k) make any material change to its methods of accounting in effect at December 31, 2016, except (i) as required to comply with changes in applicable law, (ii) any of the foregoing involving any such then existing plans, agreements, trusts, funds or arrangements of any company acquired after the date hereof or (iii) as required pursuant to existing contractual arrangements; (i) not make capital expenditures, or enter into any binding commitment or contract to make such expenditures in excess of the amount specified for years 2000 and 2001 in Section 5.01 of the Company Disclosure Schedules; (j) not enter into any contract or commitment (i) providing for the provision of products by GAAP (the Company or any interpretation thereof), Regulation S-X of its subsidiaries that has a term of more than three years and which is reasonably expected to generate more than $25 million in revenues over its term or a Governmental Authority or quasi-Governmental Authority (including the Financial Accounting Standards Board or any similar organization) more than $10 million in revenues per year or (ii) providing for the purchase of services by the Company or any of its subsidiaries that has a term of more than one year and which is reasonably expected to involve payments of more than $25 million over its term; (k) not make, change or revoke any material Tax election unless required by law or make any agreement or settlement with any taxing authority regarding any material amount of Taxes or which would reasonably be expected to materially increase the obligations of the Company or the Surviving Corporation to pay Taxes in the future; (i) prepare or file any Tax Return inconsistent with past practice or (ii) on such Tax Return, take any position, make any election or adopt any method that is inconsistent with position taken, elections made or methods used in preparing and filing similar Tax Returns in prior years, other than, in either case, as required by a change law and other than in applicable Law; (l) adopt or enter into a plan of complete or partial liquidation, dissolution, recapitalization or other reorganizationthe ordinary course; (m) settle make any change in accounting policies, procedures, methods, assumptions or compromise any litigation principles (other than settlements changes required by law or compromises of litigation where the amount paid (less the amount reserved for such matters by the Company or otherwise covered by insurance) in settlement or compromise, in each case, does not exceed the amount set forth in Section 6.1(m) of the Company Disclosure Lettergenerally accepted accounting principles); (n) other than amend or modify in any material respect any existing material Contract except in the ordinary course of business or consistent with past practice, make or change any Tax election, change any method and except for extensions of Tax accounting, settle or compromise any material Tax liability, file any amended Tax Return, existing agreements; (o) enter into any closing settlement or similar agreement with respect to any material Tax or surrender any right to claim a refund for a material amount of Tax; (o) take any action that would reasonably be expected to result in any of the conditions set forth in Article VII not being satisfied or that would impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation; (p) make any loans, advances or capital contributions to or investments in any other Person; (q) hire any new employees other than non-officer employees in the ordinary course of business consistent with past practice; (r) terminate any officer or key employee of the Company or any of its Subsidiaries other than for good reason or for reasonable cause; (s) incur or commit to incur any capital expenditures, or any obligations or liabilities in connection therewith that, individually or in the aggregate, are in excess of the amounts set forth in the Company’s annual capital expenditure budget for periods following the date of this Agreement, as provided to Parent, or delay any material capital expenditures; (t) except as otherwise expressly permitted in Section 6.5(d), waive, release, grant or transfer any right of material value, other than in the ordinary course of business consistent with past practice, or waive any material benefits of, or agree to modify in any material adverse respect, or, subject to the terms hereof, fail to enforce, or consent to any material matter with respect to which its consent is required under, any material confidentiality, standstill or similar agreement Claim to which the Company or any of its Subsidiaries subsidiaries is a party; (u) maintain insurance at less than current levels , which settlement or otherwise in a manner inconsistent with past practice; (v) enter into any transaction that could give rise to a disclosure obligation as a “reportable transaction” under Section 6011 of the Code and the regulations thereunder; (w) engage in any transaction with, or enter into any agreement, arrangement or understanding with any Affiliate of involves the Company; (x) grant any material refunds, credits, rebates or other allowances payment by the Company to any end user, customer, reseller or distributor, of an amount in each case, other than excess of the amount set forth in the ordinary course of business; (y) enter into any new line of business outside of its existing business segments; (z) communicate with employees Section 5.01 of the Company or any of its Subsidiaries regarding the compensation, benefits or other treatment that they will receive in connection with the Merger, unless any such communications are consistent with prior directives or documentation provided to the Company by Parent (in which case, the Company shall provide Parent with prior notice of and the opportunity to review and comment upon any such communications)Disclosure Schedule; or (aap) enter into any agreement to do any of the foregoing.

Conduct of Business by the. Company Pending the Merger. The Except as otherwise contemplated by this Agreement or disclosed in Section 5.01 of the Company covenants and agrees thatDisclosure Schedule, between after the date of this Agreement hereof and the earlier of prior to the Effective Time or earlier termination of this Agreement, unless Parent shall otherwise agree in writing (which agreement shall not be unreasonably withheld or delayed), the Company shall, and shall cause its subsidiaries to: (a) conduct their respective businesses in the dateordinary course of business consistent with past practice, if any, on which this Agreement is terminated pursuant including with respect to Section 8.1, except casino credit policies; (b) not (i) as may be required by Lawamend or propose to amend their respective articles of incorporation or bylaws or equivalent constitutional documents, (ii) as may be agreed in writing by Parent (which consent shall not be unreasonably withheldsplit, delayed combine or conditioned)reclassify their outstanding capital stock, (iii) as may be expressly required declare, set aside or permitted pursuant pay any dividend or distribution payable in cash, stock, property or otherwise, except for (x) the payment of the dividend of $ .27 per share declared by the Company on June 2, 2004 and (y) the payment of dividends or distributions to this Agreement, the Company or a wholly owned subsidiary of the Company by a direct or indirect wholly owned subsidiary of the Company or (iv) as set forth in Section 6.1 repurchase, redeem or otherwise acquire, or modify or amend, any shares of the capital stock of the Company Disclosure Letteror any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities; (xc) the business not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of, their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that the Company may (i) issue shares upon the exercise of Options outstanding on the date hereof, and its Subsidiaries shall be conducted (ii) grant Options pursuant to obligations existing on June 10, 2004. (d) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings in the ordinary course of business consistent with past practice, and (B) borrowings to the extent consistent therewith, the Company refinance existing outstanding indebtedness on terms which are reasonably acceptable to Parent; provided that in no event shall use its commercially reasonable efforts to preserve substantially intact the material components and assets of its current business organization, and to preserve in all material respects its present relationships with key customers, suppliers, employees and other persons with which it has material business relations; and (y) the Company shall not, and shall not permit any of its Subsidiaries to: (a) amend or otherwise change the articles of incorporation or bylaws aggregate indebtedness of the Company and its subsidiaries, net of all cash and cash equivalents, exceed $3,200,000,000, (or such equivalent organizational or governing documents of any of its Subsidiaries); (bii) split, combine, reclassify, redeem, repurchase or otherwise purchase, acquire or amend the terms of any capital stock offer to purchase or other equity interests or rights; (c) issue, sell, pledge, dispose, encumber or grant any shares of its or its Subsidiaries’ capital stock, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of its or its Subsidiaries’ capital stock except (i) or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock other than in connection with the Rights Agreement and (ii) for transactions among the Company and its direct or indirect wholly owned Subsidiaries or among the Company’s direct or indirect wholly owned Subsidiaries; provided, however, that the Company may issue shares of Company Common Stock upon the exercise of any vested Company Option as is outstanding as of the date hereof; (d) declare, authorize, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect Options pursuant to the Company’s terms thereof, (iii) make any acquisition of any assets or any of its Subsidiaries’ capital stock or other equity interests, businesses other than dividends paid by any Subsidiary of the Company to the Company or any wholly owned Subsidiary of the Company; (e) except as required pursuant to existing written Company Benefit Plans that are set forth in Section 4.12(a) of the Company Disclosure Letter or written offer letters expenditures for newly hired or promoted employees entered into current assets in the ordinary course of business (in each case whose aggregate compensation is less than $80,000 annually), (A) materially increase the compensation payable consistent with past practice and expenditures for fixed or to become payable or benefits provided or to be provided to (x) any member of the Company’s board of directors, or (y) any current or former employees or independent contractors of the Company or any of its Subsidiaries, (B) except under Company Benefit Plans set forth in Section 4.12(a) of the Company Disclosure Letter applicable to newly hired employees hired to fill vacancies capital assets in the ordinary course of business consistent with past practice, (iv) sell, pledge, dispose of or encumber any assets or businesses other than (A) sales of real estate, assets or facilities for cash consideration (including any debt assumed by the buyer of such real estate, assets or facilities) to non-affiliates of the CompanyCompany of less than $1,000,000 in each such case and $7,000,000 in the aggregate, grant the opportunity to participate in any severance (B) sales or termination pay plans dispositions of businesses or assets as may be required by applicable law, and (C) establish, adopt, enter into sales or materially amend any Company Benefit Plan (or any arrangement which in existence as of the date hereof would constitute a Company Benefit Plan), plan, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees of the Company or any of its Subsidiaries or any of their respective beneficiaries; (f) implement any employee layoffs that would require notice under the Worker Adjustment and Retraining Notification Act of 1988, as amended (the “WARN Act”), or any similar foreign state or local Law; (g) acquire (including by merger, consolidation, or acquisition of stock or assets), except in respect of any merger, consolidation, business combination among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, any corporation, partnership, limited liability company, other business organization or any division or material amount dispositions of assets thereof, or sell, lease, license (other than any nonexclusive license granted in the ordinary course of business), abandon, permit to lapse or expire or otherwise subject to a Lien other than a Permitted Lien or otherwise dispose of any material properties, rights (including Company Intellectual Property Rights) or assets of the Company or its Subsidiaries other than (1) sales of inventory in the ordinary course of business consistent with past practice or (2v) pursuant enter into any binding contract, agreement, commitment or arrangement with respect to agreements existing as any of the date hereof foregoing; (e) use all reasonable efforts to preserve intact their respective business organizations and set forth in Section 4.16(a) goodwill, keep available the services of their respective present officers and key employees, and preserve the Company Disclosure Letter or entered into after the date hereof goodwill and set forth in Section 4.16(a) of the Company Disclosure Letter in accordance business relationships with customers and others having business relationships with them, other than as expressly permitted by the terms of this Agreement; (hf) disclose any trade secret or confidential information to any Person outside of the ordinary course of business consistent with past practice; (i) incur, or amend in any material respect the terms of, any Company Indebtedness or assume or guarantee any such Company Indebtedness for any Person, provided that the Company shall be authorized to incur additional indebtedness under existing lines of credit in an amount not to exceed $500,000 in the aggregate, and provided further that the Company shall provide prompt notice to the Parent of each and every such incurrence of additional indebtedness after it has incurred $100,000 in the aggregate; (j) enter into, modifyamend, amend modify or terminate (1) renew any Company Material Contract employment, consulting, severance or similar agreements with, pay any bonus or grant any increase in salary, wage or other than in the ordinary course of business (except as expressly permitted in Section 6.5(d)) compensation or (2) any Contract which if so entered into, modified, amended or terminated could be reasonably likely to (x) have a Company Material Adverse Effect, (y) impair increase in any material respect the ability employee benefit to, any directors, officers or employees of the Company to perform or its obligations under this Agreement or (z) prevent or materially delay the consummation of the transactions contemplated by this Agreement; (k) make any material change to its methods of accounting in effect at December 31, 2016subsidiaries, except in each such case (i) as may be required by GAAP (or any interpretation thereof), Regulation S-X or a Governmental Authority or quasi-Governmental Authority (including the Financial Accounting Standards Board or any similar organization) or applicable law (ii) to satisfy obligations existing as required by a change in applicable Law; (l) adopt or enter into a plan of complete or partial liquidation, dissolution, recapitalization or other reorganization; (m) settle or compromise any litigation other than settlements or compromises of litigation where the amount paid (less the amount reserved for such matters by the Company or otherwise covered by insurance) in settlement or compromise, in each case, does not exceed the amount set forth in Section 6.1(m) of the Company Disclosure Letter; (n) other than in the ordinary course of business or consistent with past practice, make or change any Tax election, change any method of Tax accounting, settle or compromise any material Tax liability, file any amended Tax Return, enter into any closing agreement with respect to any material Tax or surrender any right to claim a refund for a material amount of Tax; (o) take any action that would reasonably be expected to result in any of the conditions set forth in Article VII not being satisfied or that would impair the ability of the Company to consummate the Merger in accordance with the terms date hereof or materially delay such consummation; (piii) make any loans, advances or capital contributions to or investments in any other Person; (q) hire any new employees other than non-officer employees in the ordinary course of business consistent with past practice; (rg) terminate not enter into, establish, adopt, amend or modify any officer pension, retirement, stock purchase, savings, profit sharing, deferred compensation, consulting, bonus, group insurance or key other employee benefit, incentive or welfare plan, agreement, program or arrangement, in respect of any directors, officers or employees of the Company or any of its Subsidiaries other than for good reason subsidiaries, except, in each such case (i) as may be required by applicable law or for reasonable cause; (s) incur or commit pursuant to incur any capital expenditures, or any obligations or liabilities in connection therewith that, individually or in the aggregate, are in excess of the amounts set forth in the Company’s annual capital expenditure budget for periods following the date terms of this Agreement, (ii) to satisfy obligations existing as provided of the date hereof, including pursuant to Parent, any collective bargaining agreement or delay any material capital expenditures; (tiii) except as otherwise expressly permitted in Section 6.5(d), waive, release, grant or transfer any right of material value, other than in the ordinary course of business consistent with past practice; (h) not make capital expenditures or enter into any binding commitment or contract to make capital expenditures, or waive any material benefits of, or agree to modify in any material adverse respect, or, subject to the terms hereof, fail to enforce, or consent to any material matter with respect to which its consent is required under, any material confidentiality, standstill or similar agreement to except (i) capital expenditures which the Company or any of its Subsidiaries is a party; subsidiaries are currently committed to make, (uii) maintain insurance at less than current levels or otherwise capital expenditures consistent with the amounts set forth in a manner inconsistent with past practice; (v) enter into any transaction that could give rise to a disclosure obligation as a “reportable transaction” under Section 6011 of the Code and the regulations thereunder; (w) engage in any transaction with, or enter into any agreement, arrangement or understanding with any Affiliate of the Company; 's consolidated capital spending budget (x) grant any material refunds, credits, rebates or other allowances a copy of which for fiscal year 2005 has been delivered to Parent prior to the date hereof and for fiscal year 2006 will be prepared by the Company and to any end userbe approved by Parent, customersuch approval not to be unreasonably withheld or delayed), reseller plus additional capital expenditures up to an amount not exceeding 10% of the amounts set forth in such budget, (iii) capital expenditures for emergency repairs and other capital expenditures necessary in light of circumstances not anticipated as of the date of this Agreement which are necessary to avoid significant disruption to the Company's business or distributoroperations consistent with past practice (and, in each caseif reasonably practicable, other than after consultation with Parent), or (iv) repairs and maintenance in the ordinary course of business;business consistent with past practice; and (yi) enter into not make, change or revoke any new line material Tax election unless required by law or make any agreement or settlement with any taxing authority regarding any material amount of business outside of its existing business segments; (z) communicate with employees Taxes or which would reasonably be expected to materially increase the obligations of the Company or any of its Subsidiaries regarding the compensation, benefits or other treatment that they will receive Surviving Corporation to pay Taxes in connection with the Merger, unless any such communications are consistent with prior directives or documentation provided to the Company by Parent (in which case, the Company shall provide Parent with prior notice of and the opportunity to review and comment upon any such communications); or (aa) enter into any agreement to do any of the foregoingfuture.

Conduct of Business by the. Company Pending the Merger. The Company covenants and agrees that, between the date of this Agreement and the earlier of Prior to the Effective Time and the dateTime, if any, on which unless Parent or Acquisition Corp. shall otherwise agree in writing or as otherwise contemplated by this Agreement is terminated pursuant to Section 8.1, except Agreement: (i) as may be required by Law, (ii) as may be agreed in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) as may be expressly required or permitted pursuant to this Agreement, or (iv) as set forth in Section 6.1 of the Company Disclosure Letter, (x) the business of the Company and its Subsidiaries shall be conducted only in the ordinary course of business consistent with past practice, and to the extent consistent therewith, the Company shall use its commercially reasonable efforts to preserve substantially intact the material components and assets of its current business organization, and to preserve in all material respects its present relationships with key customers, suppliers, employees and other persons with which it has material business relations; and course; (yii) the Company shall not, and shall not permit any of its Subsidiaries to: (aA) amend directly or otherwise change the articles of incorporation or bylaws of the Company (or such equivalent organizational or governing documents of any of its Subsidiaries); (b) split, combine, reclassify, indirectly redeem, repurchase purchase or otherwise acquire or amend the terms of any capital stock agree to redeem, purchase or other equity interests or rights; (c) issue, sell, pledge, dispose, encumber or grant otherwise acquire any shares of its or its Subsidiaries’ capital stock; (B) amend its Certificate of Incorporation or By-laws; or (C) split, combine or reclassify the outstanding Company Stock or declare, set aside or pay any dividend payable in cash, stock or property or make any distribution with respect to any such stock, other than the one for two reverse stock split of shares of Parent Common Stock (the “Parent Stock Split”). (iii) the Company shall not (A) issue or agree to issue any additional shares of, or any options, warrants, convertible securities warrants or other rights of any kind to acquire any shares of its or its Subsidiaries’ capital stock of, Company Stock, except (i) in connection with the Rights Agreement and (ii) for transactions among the Company and its direct or indirect wholly owned Subsidiaries or among the Company’s direct or indirect wholly owned Subsidiaries; provided, however, that the Company may to issue shares of Company Common Stock upon in connection with the exercise of any vested Company Option as is stock options outstanding as of on the date hereof; (d) declare, authorize, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to the Company’s or any of its Subsidiaries’ capital stock or other equity interests, other than dividends paid by any Subsidiary of the Company to the Company or any wholly owned Subsidiary of the Company; (e) except as required pursuant to existing written Company Benefit Plans that are set forth in Section 4.12(a) of the Company Disclosure Letter or written offer letters for newly hired or promoted employees entered into in the ordinary course of business (in each case whose aggregate compensation is less than $80,000 annually), (A) materially increase the compensation payable or to become payable or benefits provided or to be provided to (x) any member of the Company’s board of directors, or (y) any current or former employees or independent contractors of the Company or any of its Subsidiaries, ; (B) except under Company Benefit Plans set forth in Section 4.12(a) of the Company Disclosure Letter applicable to newly hired employees hired to fill vacancies in the ordinary course of business of the Company, grant the opportunity to participate in any severance acquire or termination pay plans or (C) establish, adopt, enter into or materially amend any Company Benefit Plan (or any arrangement which in existence as of the date hereof would constitute a Company Benefit Plan), plan, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees of the Company or any of its Subsidiaries or any of their respective beneficiaries; (f) implement any employee layoffs that would require notice under the Worker Adjustment and Retraining Notification Act of 1988, as amended (the “WARN Act”), or any similar foreign state or local Law; (g) acquire (including by merger, consolidation, or acquisition of stock or assets), except in respect of any merger, consolidation, business combination among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, any corporation, partnership, limited liability company, other business organization or any division or material amount of assets thereof, or sell, lease, license (other than any nonexclusive license granted in the ordinary course of business), abandon, permit to lapse or expire or otherwise subject to a Lien other than a Permitted Lien or otherwise dispose of any material properties, rights (including Company Intellectual Property Rights) fixed assets or assets acquire or dispose of the Company or its Subsidiaries other than (1) sales of inventory in the ordinary course of business consistent with past practice or (2) pursuant to agreements existing as of the date hereof and set forth in Section 4.16(a) of the Company Disclosure Letter or entered into after the date hereof and set forth in Section 4.16(a) of the Company Disclosure Letter in accordance with the terms of this Agreement; (h) disclose any trade secret or confidential information to any Person outside of the ordinary course of business consistent with past practice; (i) incur, or amend in any material respect the terms of, any Company Indebtedness or assume or guarantee any such Company Indebtedness for any Person, provided that the Company shall be authorized to incur additional indebtedness under existing lines of credit in an amount not to exceed $500,000 in the aggregate, and provided further that the Company shall provide prompt notice to the Parent of each and every such incurrence of additional indebtedness after it has incurred $100,000 in the aggregate; (j) enter into, modify, amend or terminate (1) any Company Material Contract other than in the ordinary course of business (except as expressly permitted in Section 6.5(d)) or (2) any Contract which if so entered into, modified, amended or terminated could be reasonably likely to (x) have a Company Material Adverse Effect, (y) impair in any material respect the ability of the Company to perform its obligations under this Agreement or (z) prevent or materially delay the consummation of the transactions contemplated by this Agreement; (k) make any material change to its methods of accounting in effect at December 31, 2016, except (i) as required by GAAP (or any interpretation thereof), Regulation S-X or a Governmental Authority or quasi-Governmental Authority (including the Financial Accounting Standards Board or any similar organization) or (ii) as required by a change in applicable Law; (l) adopt or enter into a plan of complete or partial liquidation, dissolution, recapitalization or other reorganization; (m) settle or compromise any litigation other than settlements or compromises of litigation where the amount paid (less the amount reserved for such matters by the Company or otherwise covered by insurance) in settlement or compromise, in each case, does not exceed the amount set forth in Section 6.1(m) of the Company Disclosure Letter; (n) other than in the ordinary course of business or consistent with past practice, make or change any Tax election, change any method of Tax accounting, settle or compromise any material Tax liability, file any amended Tax Return, enter into any closing agreement with respect to any material Tax or surrender any right to claim a refund for a material amount of Tax; (o) take any action that would reasonably be expected to result in any of the conditions set forth in Article VII not being satisfied or that would impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation; (p) make any loans, advances or capital contributions to or investments in any other Person; (q) hire any new employees other than non-officer employees in the ordinary course of business consistent with past practice; (r) terminate any officer or key employee of the Company or any of its Subsidiaries other than for good reason or for reasonable cause; (s) incur or commit to incur any capital expenditures, or any obligations or liabilities in connection therewith that, individually or in the aggregate, are in excess of the amounts set forth in the Company’s annual capital expenditure budget for periods following the date of this Agreement, as provided to Parent, or delay any material capital expenditures; (t) except as otherwise expressly permitted in Section 6.5(d), waive, release, grant or transfer any right of material value, other than in the ordinary course of business consistent with past practice, or waive any material benefits of, or agree to modify in any material adverse respect, or, subject to the terms hereof, fail to enforce, or consent to any material matter with respect to which its consent is required under, any material confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is a party; (u) maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice; (v) enter into any transaction that could give rise to a disclosure obligation as a “reportable transaction” under Section 6011 of the Code and the regulations thereunder; (w) engage in any transaction with, or enter into any agreement, arrangement or understanding with any Affiliate of the Company; (x) grant any material refunds, credits, rebates or other allowances by the Company to any end user, customer, reseller or distributor, in each case, substantial assets other than in the ordinary course of business; ; (yC) incur additional Indebtedness or any other liabilities or enter into any other transaction other than in the ordinary course of business; (D) enter into any new line contract, agreement, commitment or arrangement with respect to any of the foregoing; or (E) except as contemplated by this Agreement, enter into any contract, agreement, commitment or arrangement to dissolve, merge, consolidate or enter into any other material business outside of its existing business segmentscombination; (ziv) communicate the Company shall use its best efforts to preserve intact the business organization of the Company, to keep available the service of its present officers and key employees, and to preserve the good will of those having business relationships with employees it; and (v) the Company will not, nor will it authorize any director or authorize or permit any officer or employee or any attorney, accountant or other representative retained by it to, make, solicit, encourage any inquiries with respect to, or engage in any negotiations concerning, any Acquisition Proposal (as defined below). The Company will promptly advise Parent orally and in writing of any such inquiries or proposals (or requests for information) and the substance thereof. As used in this paragraph, “Acquisition Proposal” shall mean any proposal for a merger or other business combination involving the Company or for the acquisition of a substantial equity interest in it or any material assets of its Subsidiaries regarding the compensationit other than as contemplated by this Agreement. The Company will immediately cease and cause to be terminated any existing activities, benefits discussions or other treatment that they will receive in connection negotiations with the Merger, unless any such communications are consistent person conducted heretofore with prior directives or documentation provided respect to the Company by Parent (in which case, the Company shall provide Parent with prior notice of and the opportunity to review and comment upon any such communications); or (aa) enter into any agreement to do any of the foregoing.