Common use of Conduct of Business of Company Clause in Contracts

Conduct of Business of Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, the Company agrees (except to the extent expressly contemplated by this Agreement), to carry on its and its Subsidiaries' business in the ordinary course in substantially the same manner as heretofore conducted, to pay and to cause its Subsidiaries to pay debts and Taxes when due subject to good faith disputes over such debts or taxes, to pay or perform other material obligations when due, and to use its commercially reasonable efforts consistent with past practice and policies to preserve intact its and its Subsidiaries' present business organizations, use its commercially reasonable efforts consistent with past practice to keep available the services of its and its Subsidiaries' present officers and key employees and use its commercially reasonable efforts consistent with past practice to preserve its and its Subsidiaries' relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it or its Subsidiaries, to the end that its and its Subsidiaries' goodwill and ongoing businesses shall be unimpaired at the Effective Time. The Company agrees to promptly notify Parent of any material event or occurrence not in the ordinary course of its or its Subsidiaries' business, and of any event which could reasonably be expected to have a Company Material Adverse Effect. Without limiting the generality of the foregoing, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, the Company shall not do, cause or permit any of the following actions, or allow, cause or permit any of its Subsidiaries to do, cause or permit any of the following actions:

Conduct of Business of Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, the Company agrees (except to the extent expressly contemplated by this AgreementAgreement or as consented to in writing by Parent), to carry on its and its the Company Subsidiaries' business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, . Company further agrees to (i) pay and to cause its the Company Subsidiaries to pay debts and Taxes when due due, subject to good faith disputes over such debts or taxes, to pay or perform other material obligations when dueTaxes, and (ii) to use its commercially all reasonable efforts consistent with past practice and policies to preserve intact its and its the Company Subsidiaries' present business organizations, use its commercially reasonable efforts consistent with past practice to keep available the services of its and its the Company Subsidiaries' present officers and key employees and use its commercially reasonable efforts consistent with past practice to preserve its and its the Company Subsidiaries' relationships with customers, suppliers, distributors, licensors, licensees, licensees and others having business dealings with it or its the Company Subsidiaries, to the end that its and its the Company Subsidiaries' goodwill and ongoing businesses shall be unimpaired at the Effective TimeTime in all material respects. The Company agrees to promptly notify Parent of any material event or occurrence not in the ordinary course of its or its the Company Subsidiaries' business, and of any event which that could reasonably be expected to have a Company Material Adverse EffectEffect on Company. Without limiting the generality of the foregoing, during the period from the date of except as expressly contemplated by this Agreement and continuing until the earlier of the termination of this Agreement or the Effective TimeAgreement, the Company shall not do, cause or permit any of the following actionsfollowing, or allow, cause or permit any of its the Company Subsidiaries to do, cause or permit any of the following actionsfollowing, without the prior written consent of Parent, which consent shall not be unreasonably delayed or withheld:

Conduct of Business of Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective TimeTime (the “Pre-Closing Period”), the Company agrees to (and shall cause the other Acquired Companies to) conduct the business of the Acquired Companies, except to the extent expressly contemplated by this Agreement)that Parent shall otherwise consent in Writing, to carry on its and its Subsidiaries' business in the ordinary course in substantially the same manner as heretofore conductedOrdinary Course, to pay and to cause its Subsidiaries to pay the debts and Taxes of the Acquired Companies when due subject to good faith disputes over such debts or taxesdue, to pay or perform other material obligations when due, and and, to the extent consistent with such business, to use its commercially reasonable efforts consistent with past practice and policies to preserve intact its and its Subsidiaries' the present business organizationsorganizations of the Acquired Companies, use its commercially reasonable efforts consistent with past practice to keep available the services of its and its Subsidiaries' the present officers and key employees of the Acquired Companies and use its commercially reasonable efforts consistent with past practice to preserve its and its Subsidiaries' the relationships of the Acquired Companies with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it or its Subsidiariesthem, to all with the end that its and its Subsidiaries' goal of preserving unimpaired the goodwill and ongoing businesses shall be unimpaired of the Acquired Companies at the Effective Time. The Except as expressly contemplated by this Agreement and except as expressly set forth in Section 4.1 of the Disclosure Schedule, Company agrees to promptly notify Parent of any material event or occurrence not in the ordinary course of its or its Subsidiaries' businessshall not, and shall cause the other Acquired Companies not to, without the prior Written consent of any event which could reasonably be expected to have a Company Material Adverse Effect. Without limiting the generality of the foregoingParent, during the period from and after the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time: (a) enter into any Material Contract out of the Ordinary Course or restricting in any material respect the conduct of its business or enter into any Contract that results in the incurrence by Company of deferred revenue prior to the Closing outside the Ordinary Course; (b) make any loans or investments (other than advances for business expenses to Company’s or its Subsidiaries’ employees in the Ordinary Course); (c) except as required by applicable Laws, increase or decrease the compensation (except pursuant to annual wage increases in the Ordinary Course not to exceed 5% individually or in the aggregate), incentive arrangements or other compensation, or materially increase or decrease benefits (except as required by the terms of any Company Employee Plan) to any officer or employee of Company or its Subsidiaries, hire or terminate any employee, amend any Company Employee Plan (except as may be required in connection with granting Company RSUs); amend any Company Option, or utilize any discretion reserved for Company under any Company Employee Plan (except that, in the case of Continuing Employees whose Company Options are subject to single-trigger acceleration as of the date hereof and Non-Continuing Employees and any consultant, independent contractor or director of any Acquired Company who is not a Continuing Service Provider whose Company Options are subject to double-trigger acceleration as of the date hereof, Company’s Board of Directors may adopt resolutions prior to Closing that cause such acceleration to occur as of a date that is within three (3) Business Days prior to the Closing Date) or issue or grant any capital stock (except for the exercise of outstanding, unexercised options granted under the Company shall not doOption Plan) or equity instrument including stock options, cause warrants, restricted stock units or permit any other equity instrument (except as may be required in connection with granting Company RSUs); (d) redeem, purchase or otherwise acquire directly or indirectly any of the following actionsits issued and outstanding Company Capital Stock or any equity interests of any Acquired Company, or allowany outstanding rights or securities exercisable or exchangeable for or convertible into its Company Capital Stock or any equity interests of any Acquired Company, cause or permit declare or pay or make any distribution or dividend (whether in cash securities or otherwise) to any of its stockholders or other Persons; (e) amend its Charter Documents (other than to increase the number of authorized shares of Company Common Stock to the extent required in connection with granting Company RSUs) or issue or agree to issue any Company Capital Stock (other than pursuant to the exercise of Company Options or Company Warrants) or any equity interests of any Acquired Company or any rights or options to acquire, or securities convertible into or exchangeable for, any of its Company Capital Stock or any equity interests of any Acquired Company; (f) directly or indirectly engage in any transaction, arrangement or Contract with any officer, director, shareholder, trustee or beneficiary of any shareholder, member, manager or other insider or Affiliate of Company or any of its Subsidiaries (other than performing its obligations under any such Contracts that are in effect as of the date hereof); (g) incur or create any Indebtedness (other than trade payables in the Ordinary Course and other than borrowings under its current credit facility that will constitute Indebtedness as set forth on the Closing Statement); (h) purchase, sell, lease or dispose of any material property or assets (other than the purchase and sale of inventory and the purchase of capital equipment in Ordinary Course); (i) take or omit to dotake any action outside the Ordinary Course that would reasonably be expected to have the effect of accelerating to pre-Closing periods sales to trade or other customers that would otherwise be expected to occur after the Closing; (j) delay or postpone the payment of any accounts payable outside the Ordinary Course; (k) accelerate the collection of or discount any accounts receivable outside the Ordinary Course; (l) make any capital expenditures or commitments therefor in excess of $500,000 in the aggregate; (m) make any changes to its normal and customary practices regarding the solicitation, cause booking and fulfillment of orders or permit the shipment and delivery of goods; (n) cease from making accruals for obsolete inventory consistent with the policies, principles, conventions, methodologies and procedures used in preparing the Financials; (o) cease from maintaining levels of inventory consistent with the Ordinary Course or cease from insuring that accounts payable are current consistent with the Ordinary Course; (p) abstain from making payments on any Taxes, principal or interest on borrowed funds and other customary expenses as they become due; (q) make, change or revoke any Tax election, adopt or change any accounting method in respect of any Tax (except as required by applicable Law), file any amended Tax Return, enter into any Tax-sharing or similar agreement or closing agreement, settle or compromise any claim or assessment in respect of any Tax, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of any Tax; (r) adopt or implement any stockholder rights plan; (s) modify the standard warranty terms for Company Products or amend or modify any product warranties in effect as of the date hereof in any manner that is adverse to Company; (t) make any material change in Company’s cash management practices; (u) revalue in any material respect any of its assets or properties, including writing down the value of inventory or writing off notes or accounts receivable (whether tangible or intangible) in a manner that is inconsistent with the policies, principles, conventions, methodologies and procedures used in preparing the Financials by Company; (v) except as required in the Ordinary Course and subject to an appropriate confidentiality or nondisclosure agreement or contractual provision relating to confidentiality and nondisclosure, disclose any trade secrets to any Person, other than to Parent and its officers, directors, employees or Representatives; (w) materially reduce the amount of any insurance coverage provided by existing insurance policies; (x) commence, settle or compromise any pending or threatened actions, suits, proceedings, claims or arbitrations that (i) would involve the payment of an amount greater than $250,000 or would result in a loss of revenue of an amount that would, individually or in the aggregate, reasonably be expected to be greater than $500,000, (ii) involves or results in any restriction on the business or operation of Company or any Subsidiary or in any loss, license or limitation of rights with respect to any Intellectual Property Rights or any Intellectual Property Rights used or held for use in the business of Company or any Subsidiary (including any restriction on the use, protection, enforcement or licensing thereof by Company or any Subsidiary) or (iii) includes any admission of fault or wrongdoing by Company or any Subsidiary; provided, however, that Company shall not be prohibited from (A) commencing any action, suit, proceeding, claim or arbitration for the purposes of enforcing its rights under this Agreement, (B) responding to any action, suit, proceeding, claim or arbitration initiated against the Company in a manner that preserves Company’s right to avail itself of all possible defenses and counterclaims in such action, suit, proceeding, claim or arbitration; or (C) commencing any action, suit, proceeding, claim or arbitration to enforce any Intellectual Property Rights used or held for use in the business of Company or any Subsidiary or with respect to any other matter that would otherwise reasonably be expected to result in irreparable harm to Company or any Subsidiary absent the commencement of such action, suit, proceeding, claim or arbitration; (y) enter into any Written Contract for the development of any material Intellectual Property Rights that will be jointly owned with or owned by another Person; (z) enter into any transaction, arrangement or Contract with any Person except on an arm’s-length basis in the Ordinary Course; (aa) add any beneficiaries to any existing source code escrow arrangement or agreement or enter into any new source code arrangement or agreement; (bb) take, commit or agree in Writing or otherwise to take any of the following actions:actions described in Sections 4.1(a) through 4.1(aa) hereof. Notwithstanding the foregoing, nothing in this Section 4.1 shall prohibit Company from taking any action or omitting to take any action as required by this Agreement.

Conduct of Business of Company. During the period Company covenants and agrees that from the date of this Agreement hereof and continuing until the earlier of the termination of this Agreement or the Effective Time, except as set forth in Section 4.1 of the Company agrees Disclosure Schedules, as expressly contemplated or permitted by this Agreement, or as Parent shall otherwise consent to in writing, the business of Company and its Subsidiaries (including their working capital and cash management practices, the collection of accounts receivable, and the payment of accounts payable (including the writing and mailing of checks and initiating wire transfers and other electronic payments with respect thereto)) shall be conducted only in, and Company and its Subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; to the extent expressly contemplated by this Agreement)consistent therewith, to carry on its Company and its Subsidiaries' business in the ordinary course in substantially the same manner as heretofore conducted, to pay and to cause its Subsidiaries to pay debts and Taxes when due subject to good faith disputes over such debts or taxes, to pay or perform other material obligations when due, and to shall use its their commercially reasonable efforts consistent with past practice and policies to preserve intact its and its Subsidiaries' present business organizationsorganization intact, use its commercially reasonable efforts consistent with past practice to keep available the services of its the current officers and employees and consultants of Company and its Subsidiaries' present officers , maintain its existing relations and key employees and use its commercially reasonable efforts consistent with past practice to preserve its and its Subsidiaries' relationships goodwill with customers, suppliers, distributors, licensorscreditors, licenseeslessors, employees, business associates and other Persons with which Company or any of its Subsidiaries has significant business relations, maintain and keep its material properties and assets in good repair and condition, subject to ordinary wear and tear, and others having business dealings with maintain in effect all governmental permits pursuant to which it or its Subsidiaries, to the end that its and its Subsidiaries' goodwill and ongoing businesses shall be unimpaired at the Effective Time. The Company agrees to promptly notify Parent of any material event or occurrence not in the ordinary course of its or its Subsidiaries' businessSubsidiaries currently operates, and Company shall declare, set aside and pay all dividends to be declared, set aside or paid on the Preferred Shares pursuant to Company’s Fourth Amended and Restated Certificate of any event which could reasonably be expected to have a Company Material Adverse EffectIncorporation in respect of each Dividend Payment Record Date after the date hereof. Without limiting the generality By way of amplification and not limitation, except as expressly contemplated by this Agreement and Section 4.1 of the foregoingCompany Disclosure Schedules, during the period from Company shall not and shall cause its Subsidiaries not to, between the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, the Company shall not directly or indirectly, do, cause or permit propose to do, any of the following actionswithout the prior written consent of Parent: (a) (i) amend or otherwise change its certificate of incorporation or by-laws or the comparable governing instruments of any of its Subsidiaries; (ii) split, combine or allowreclassify its outstanding shares of capital stock; (iii) declare, cause set aside or pay any dividend payable in cash, cash equivalents, marketable securities, stock or property in respect of any capital stock (other than dividends from its direct or indirect wholly owned Subsidiaries to it or a wholly owned Subsidiary in the ordinary course of business and in a manner consistent with past practice or dividends to be declared, set aside or paid on the Preferred Shares pursuant to Company’s Fourth Amended and Restated Certificate of Incorporation in respect of each Dividend Payment Record Date after the date hereof); or (iv) repurchase, redeem or otherwise acquire directly or indirectly any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock or permit any of its Subsidiaries to dopurchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock (other than as required under the Company Stock Plans); (b) issue, sell, pledge, dispose of, grant or encumber (i) any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any Voting Debt (other than the issuance of Shares pursuant to the exercise of a Company Option outstanding on the date hereof under the Company Stock Plans or pursuant to the conversion of Preferred Shares) or (ii) any assets (including cash, cash equivalents or marketable securities) of Company or any of its Subsidiaries, except in the case of this clause (ii) in the ordinary course of business and in a manner consistent with past practice; (c) other than in the ordinary course of business and in a manner consistent with past practice and other than transactions not in excess of $100,000 (one hundred thousand dollars) in the aggregate in any calendar year, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any of its property or assets (including capital stock of any of its Subsidiaries); (d) by any means, (i) make any acquisition of, or investment in, assets or stock (whether by way of merger, consolidation, tender offer, share exchange or other activity) in any transaction or any series of transactions (whether or not related) for an aggregate purchase price or prices, including the assumption of any debt, in excess of $100,000 (one hundred thousand dollars) in the aggregate in any calendar year, except for acquisitions mandated by binding legal commitments existing on the date hereof; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person, or make any loans or advances, or grant any security interest in any of its assets except in the ordinary course of business and in a manner consistent with past practice; (iii) enter into any contract or agreement that contemplates an exchange of value in excess of $100,000 (one hundred thousand dollars) over the life of such contract or agreement, other than in the ordinary course of business and in a manner consistent with past practice; (iv) authorize, or make any commitment with respect to, any single capital expenditure which is in excess of $100,000 (one hundred thousand dollars) or capital expenditures which are, in the aggregate, in excess of $1,000,000 (one million dollars) for Company and the Subsidiaries taken as a whole; provided, that Company shall consult with Parent on all capital expenditures in excess of $100,000 (one hundred thousand dollars) and shall give good-faith consideration to Parent’s comment on such expenditures or (v) enter into or amend any contract, agreement, commitment or arrangement with respect to any matter set forth in this Section 4.1(d); (e) (i) enter into or terminate or, except to the extent that such modification or amendment is in the ordinary course of business and in a manner consistent with past practice, modify or amend, any Material Contract, and Company shall use its commercially reasonable efforts to cause any such Material Contract that is in effect on the date hereof to remain in full force and effect, except to the extent any termination of such Material Contract is in the ordinary course of business consistent with past practices of Company, (ii) waive, release, relinquish or permit assign any such Contract (or any of the following actionsmaterial rights of Company or any of its Subsidiaries thereunder), right or claim, that is material to Company and its Subsidiaries taken as a whole, (iii) grant any power of attorney or (iv) cancel or forgive any material indebtedness owed to Company or any of its Subsidiaries; (f) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, recapitalization or other similar reorganization of Company or any Subsidiary of Company; (g) except in each case for actions necessary to satisfy existing contractual obligations under Company Compensation and Benefit Plans existing as of the date hereof and disclosed on Section 4.1(g) of the Company Disclosure Schedules or as otherwise set forth on Section 4.1(g) of the Company Disclosure Schedules, (i) engage in reductions in force, or grant any severance or termination pay to any individual, (ii) hire additional employees except to fill open positions identified on Section 4.1(g)(ii) of the Company Disclosure Schedules or to replace non-executive employees who terminate their employment with Company or a Subsidiary after the date hereof at a salary and other compensation not greater than that paid to the employee being replaced, (iii) enter into or amend or modify (other than any amendment or modification otherwise required by this Agreement or as necessary to comply with an effective judgment, decree, injunction or other order issued by an administrative agency, administrative tribunal, or court of competent jurisdiction) any employment agreement or offer letter with any Person except for entering into offer letters in accordance with clause (ii) of this paragraph, (iv) terminate, establish, adopt, enter into, make any new grants (other than any grant or award of benefits necessary to comply with an effective judgment, decree, injunction or other order issued by an administrative agency, administrative tribunal, or court of competent jurisdiction) under, amend or otherwise modify any material Company Compensation and Benefit Plans or any other employee benefit plan, (v) increase the salary, wage, bonus or other compensation of any employees, (vi) provide for any transaction or incentive bonus, “stay-put” or other similar compensatory payments to any Company or Subsidiary employee as a result of the execution of this Agreement or the consummation of the transactions contemplated by this Agreement, or (vii) enter into any collective bargaining agreement; (h) fail to maintain with financially responsible insurance companies (or through self insurance) insurance in such amounts and against such risks and losses as are consistent with the insurance maintained by it and its Subsidiaries in the ordinary course of business and in a manner consistent with past practice; (i) except in the ordinary course of business or as may be required by applicable Law and except to the extent required by U.S. GAAP as advised in writing by its current registered independent accountants, change any accounting principle, practice or method in a manner that is inconsistent with past practice; (j) take any action that could reasonably be expected to result in (i) any of the conditions to the Merger set forth in Article VI not being satisfied or (ii) otherwise prevent or materially impair or materially delay the ability of Company to consummate the Merger or the other transactions contemplated hereby; (k) outside the ordinary course of business consistent with past practice, propose or consent to any material change to the pricing of any products sold by Company, or offer any material discounts to any customers of Company; (l) with respect to Taxes: (i) fail to (i) timely file all income and other material Tax Returns required to be filed with any taxing authority in accordance with all applicable Laws; (ii) timely pay all material Taxes due and payable; and (iii) promptly notify Parent of any action, suit, proceeding, investigation, audit or claim pending against or with respect to Company or any Subsidiary of Company in respect of any material amount of Tax of which the Company has been notified in writing; (ii) settle or compromise any material income Tax Liability; (iii) except as required by applicable Law or U.S. GAAP, (A) request a Tax ruling, (B) amend any Tax Return, (C) file any Tax Return in a manner that is materially inconsistent with past custom and practice, (D) make or rescind any material election relating to Taxes, (E) settle or compromise any material claim, action, suit, litigation, arbitration, investigation, audit or controversy relating to Taxes, or (F) make any material change to any of its methods of accounting or methods of reporting income or deductions for Tax or accounting practice or policy from those employed in the preparation of its most recent Tax Return; (m) grant any license, non-assert or other right under, or sell, allow to lapse, encumber or otherwise dispose of, any Company Intellectual Property Right, except license agreements entered into in the ordinary course of business and in a manner consistent with past practice that provide customers with the non-exclusive, non-transferable, non-sublicenseable right to use a Company Software internally solely in object code form for such customer’s (or its Affiliates’) benefit, but provides no: (i) exclusivity to such customers or restrictions on the ability of Company to conduct any business; (ii) rights to distribute Company Software or make any modifications thereto, or (iii) most favored nation commitments to such customers; (n) enter into or amend or modify any agreement, contract or instrument currently in effect that obligates Company not to compete with any business or activity, whether within a certain geographic area or otherwise, or which restricts the right of Company to use or disclose any information in its possession (excluding in each case customary restrictive covenants contained in agreements entered into in the ordinary course of business and in a manner consistent with past practice and Acceptable Confidentiality Agreements entered in compliance with Section 5.2); (o) enter into, amend or modify any indemnification, consulting, collective bargaining or other agreement, contract or instrument between Company and any of its officers or directors, or other employees or consultants of Company who are entitled to compensation thereunder in excess of $100,000 per year; (p) outside of the ordinary course of business, make any materially adverse change in pricing or royalties set or charged by Company or any of its Subsidiaries to its customers or licensees or in pricing or royalties set or charged under existing license or royalty agreements by Persons who are licensing Intellectual Property to Company or any of its Subsidiaries; (q) take any action to render inapplicable, or to exempt any third party from, any standstill arrangements or the restrictions contained in Section 203 of the DGCL applicable to a “business combination” (as defined in Section 203); (r) commence or settle any litigation, suit, claim or proceeding, other than in an amount less than $100,000 (one hundred thousand dollars); (s) fail to make in a timely manner any filings with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder; (t) accelerate or delay collection of notes or accounts receivable in advance of or beyond their regular due dates, or revalue, discount or write off any notes or accounts receivable, other than in the ordinary course of business and in a manner consistent with past practice; (u) delay the payment of any accounts payable or other liabilities; or (v) authorize or enter into an agreement to do anything prohibited by any of the foregoing.

Conduct of Business of Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective TimeTime (the “Pre-Closing Period”), the Company agrees (except to the extent expressly contemplated by this Agreement), to carry on its and its Subsidiaries' the business of the Acquired Corporations in the ordinary course and in substantially the same manner as heretofore conductedconducted since September 30, 2004, to pay and to cause its Subsidiaries to pay debts and Taxes when due subject to good faith disputes over such debts or taxes, to pay or perform other material obligations when due, and, except as otherwise limited by the terms and conditions of this Agreement, to use its commercially reasonable efforts consistent with past practice and policies to preserve intact its and its Subsidiaries' ’ present business organizations, use its commercially reasonable efforts consistent with past practice to keep available the services of its and its Subsidiaries' ’ present officers and key employees and use its commercially reasonable efforts consistent with past practice to preserve its and its Subsidiaries' ’ relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it or its Subsidiaries, to the end that its and its Subsidiaries' ’ goodwill and ongoing businesses shall be unimpaired at the Effective Time. The Company agrees to promptly notify Parent of any material event or occurrence not in the ordinary course of its or its Subsidiaries' ’ business, and of any event which could reasonably be expected to have a Company Material Adverse Effect. Without limiting the generality of the foregoing, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, the Company shall not do, cause or permit any of the following actions, or allow, cause or permit any of its Subsidiaries to do, cause or permit any of the following actions:

Conduct of Business of Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective TimeClosing, the Selling Stockholders other than SGAM AI, shall cause the Company agrees (except to the extent expressly contemplated by this AgreementAgreement or as consented to in writing by the Acquiror, such consent not to be unreasonably withheld or delayed), to carry on its and its Subsidiaries' ’ business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, to pay and to cause its Subsidiaries to pay debts and Taxes when due due, subject to good faith disputes over the Acquiror’s consent (such debts consent not to be unreasonably withheld or taxesdelayed) to the filing of material Tax Returns, to pay or perform other material obligations when due, and to use its commercially all reasonable efforts consistent with past practice and policies to preserve intact its and its Subsidiaries' ’ present business organizationsorganization, use its commercially reasonable efforts consistent with past practice to keep available the services of its and its Subsidiaries' ’ present officers and key employees Key Employees and use its commercially reasonable efforts consistent with past practice to preserve its and its Subsidiaries' ’ relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it or its Subsidiaries, to the end that its and its Subsidiaries' ’ goodwill and ongoing businesses shall be unimpaired at the Effective TimeClosing. The Company agrees to Selling Stockholders shall promptly notify Parent the Acquiror of any material event or occurrence not in the ordinary course of its the Company or its Subsidiaries' ’ business, and of any event which could reasonably be expected to have a Company Material Adverse Effect. Without limiting the generality of the foregoing, during the period from the date of except as expressly contemplated by this Agreement and continuing until the earlier of the termination of this Agreement or the Effective TimeAgreement, the Selling Stockholders other than SGAM AI shall cause the Company shall not to do, cause or permit any of the following actionsfollowing, or allow, cause or permit any of its Subsidiaries to do, cause or permit any of the following actions:following, without the prior written consent of the Acquiror (such consent not to be unreasonably withheld or delayed):

Conduct of Business of Company. During the period from the date of this Agreement and continuing until through the earlier of the termination of this Agreement in accordance with Article VII or the Effective TimeClosing Date (the “Pre-Closing Period”), the Company agrees except (except i) to the extent expressly contemplated by necessary to comply with Company’s obligations under this Agreement), (ii) as reasonably necessary to ensure that the Company complies with applicable Legal Requirements, or (iii) as consented to in writing by Parent (A) the Company shall use reasonable best efforts to (1) carry on its and its Subsidiaries' business in a manner that does not depart materially from the ordinary course manner in substantially the same manner as heretofore conducted, which such business was being conducted prior to pay and to cause its Subsidiaries to pay debts and Taxes when due subject to good faith disputes over such debts or taxes, to pay or perform other material obligations when due, and to use its commercially reasonable efforts consistent with past practice and policies to preserve intact its and its Subsidiaries' present business organizations, use its commercially reasonable efforts consistent with past practice to keep available the services of its and its Subsidiaries' present officers and key employees and use its commercially reasonable efforts consistent with past practice to preserve its and its Subsidiaries' relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it or its Subsidiaries, to the end that its and its Subsidiaries' goodwill and ongoing businesses shall be unimpaired at the Effective Time. The Company agrees to promptly notify Parent of any material event or occurrence not in the ordinary course of its or its Subsidiaries' business, and of any event which could reasonably be expected to have a Company Material Adverse Effect. Without limiting the generality of the foregoing, during the period from the date of this Agreement and continuing until in the earlier ordinary course of business consistent with past practice, (2) preserve intact its present business organization, (3) maintain and preserve intact the business and franchise of the termination Company and to preserve the rights, franchises, goodwill and relationships of this Agreement its employees, customers, licensees, licensors, distributors, lenders, suppliers, regulators and otheconrs having business relationships with the Company, (4) pay its debts, Taxes and other obligations when due, (5) defend and protect its properties and assets from infringement or the Effective Timeusurpation, (6) preserve and maintain all of its Permits, and (7) comply in all material respects with all applicable Legal Requirements, and (B) the Company shall not, without the prior written consent of Parent (which consent may not dobe unreasonably withheld, conditioned or delayed): (a) amend the Company Charter or the Amended and Restated Bylaws of the Company or permit the amendment of any of the organizational documents of any Subsidiary; (b) issue or sell any equity securities (other than in connection with the exercise of Company Options or Company Warrants) or otherwise change its capitalization as it exists on the date hereof, or issue, grant, or sell any options, warrants, conversion rights or other rights, securities or commitments obligating it to issue or sell any Company Shares, or any securities or obligations convertible into, or exercisable or exchangeable for, any Company Shares; (c) enter into or amend any agreements pursuant to which Company (i) transfers or licenses exclusively to any Person any material Owned Intellectual Property, or (ii) otherwise grants to any person exclusive rights in any material Owned Intellectual Property; (d) sell, lease or license to any Person, or permit the imposition of any Encumbrance (other than Permitted Encumbrances) on, any of its properties or assets that are material to the Company and its Subsidiaries, taken as a whole; (e) form any Subsidiary or acquire any material equity interest in any other Person (except for short-term investments); (f) incur any Indebtedness in excess of $25,000 outside the ordinary course of business; (g) enter into any contract or agreement that would be a Material Contract, Lease or Third Party Intellectual Property if it had been in existence on the date hereof, or terminate, modify or amend in any material respect any Material Contract, Lease or Third Party Intellectual Property; (h) materially reduce the amount of any insurance coverage provided by existing insurance policies other than upon the expiration of any such policy; (i) waive any material right under any Material Contract; (j) acquire or agree to acquire by merging with, or by purchasing a substantial portion of the equity interests or assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets that are material individually or in the aggregate, to the Company’s business, taken as a whole; (k) make or change any material election in respect of Taxes, adopt or change any material accounting method in respect of Taxes, enter into any closing agreement with any taxing authority, settle any material claim or assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any material assessment in respect of Taxes, in each case if such election, change, settlement or consent would have the effect of materially increasing the Tax liability of the Company for any period ending after the Closing Date; (l) cause the Company not to take or permit any of the following actions, or allow, action that would cause or permit any of its Subsidiaries to do, cause or permit any of the following actions:changes, events or conditions described in Section 2.29 to occur; or (m) enter into a binding agreement to take any of the actions described in Sections 4.1(a) through 4.1(l). For the purposes of this Article IV, references to the Company include any Subsidiary of the Company.

Conduct of Business of Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to Section 8.1 or the Effective Time, the Company agrees (except to the extent expressly contemplated by this Agreement), Agreement or as consented to in writing by Parent): (a) to carry on its and its Subsidiaries' business in the ordinary course Ordinary Course of Business in substantially the same manner as heretofore conducted, ; (b) to pay and to cause its Subsidiaries to pay debts and Taxes when due subject to good faith disputes over such debts or taxesTaxes; provided that, the foregoing notwithstanding, Company may use available cash to repay any Indebtedness of Company prior to Closing, (c) to pay or perform other material obligations when due, and ; (d) to use its all commercially reasonable efforts consistent with past practice and policies to preserve intact its and its Subsidiaries' present business organizations, use its commercially reasonable efforts consistent with past practice to keep available the services of its and its Subsidiaries' present officers and key employees (other than terminations for cause) and use its commercially reasonable efforts consistent with past practice to preserve its and its Subsidiaries' relationships with customers, suppliers, distributors, licensors, licensees, licensees and others having business dealings with it or its Subsidiariesit, to the end that its and its Subsidiaries' goodwill and ongoing businesses shall be unimpaired at the Effective Time; (e) use commercially reasonable efforts to maintain and keep its properties and assets in as good repair and condition as at present, ordinary wear and tear excepted; (f) use commercially reasonable efforts to prevent the lapse of any material Intellectual Property of Company; (g) operate its business in all material respects in compliance with all applicable Laws; (h) subject to applicable Law provide updates to Parent concerning operational matters of a material nature; and (i) maintain in effect and, when necessary, renew the insurance policies of Company and notify Parent prior to making any modifications to the insurance policies of Company. The Company agrees to promptly notify Parent of (i) any material event or occurrence not in the ordinary course Ordinary Course of its or its Subsidiaries' businessBusiness, and of any event which could that would reasonably be expected to have a Company Material Adverse Effect. Without limiting the generality of the foregoingEffect on Company, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, the Company shall not do, cause or permit (ii) any of the following actions, or allow, cause or permit any of change in its Subsidiaries to do, cause or permit any of the following actions:capitalization as set forth in Section 3.2.

Conduct of Business of Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, the Company agrees (except to the extent expressly contemplated by this Agreement), that Parent shall otherwise consent in writing) to carry on its and its Subsidiaries' business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, to pay and to cause its Subsidiaries to pay debts and Taxes when due subject to unless validly withheld or contested in good faith disputes over such debts or taxesfaith, to pay or perform other material obligations when due, and, to the extent consistent with such business and except as agreed to by Parent and the Company in writing, use its commercially reasonable efforts consistent with past practice and policies to preserve intact its and its Subsidiaries' Company's present business organizationsorganization, use its commercially reasonable efforts consistent with past practice to keep available the services of its and its Subsidiaries' present officers and key employees employees, and use its commercially reasonable efforts consistent with past practice to preserve its and its Subsidiaries' relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it or its Subsidiariesit, to with the end that its and its Subsidiaries' goal of preserving unimpaired Company's goodwill and ongoing businesses shall be unimpaired at the Effective Time. The In particular, Company agrees to shall not take any action outside the ordinary course of business, which materially increases its current liabilities or materially decreases its current assets. Company shall promptly notify Parent of (i) developments to, and relating actions to be taken in connection with, the matters described in Section 3.4 of the Company Disclosure Letter, (ii) any material event or occurrence or emergency not in the ordinary course of its or its Subsidiaries' businessbusiness of Company, and of (iii) any event which could reasonably be expected to have having a Company Material Adverse EffectEffect on Company. Without limiting the generality foregoing and except as expressly contemplated by this Agreement, Company shall not, without the prior written consent of Parent, such consent not to be unreasonably withheld or delayed: (a) Enter into any material Contract or transaction not in its ordinary course of business and consistent with past practices, or any commitment or transaction of the foregoingtype described in Section 3.7 hereof; (b) Transfer to any Person any rights to Company's Intellectual Property (other than pursuant to end user or existing licenses in the ordinary course of business and consistent with past practices); (c) Acquire or agree to acquire by merging or consolidating with, during the period from the date of this Agreement and continuing until the earlier or by purchasing a substantial portion of the termination assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of this Agreement Company; (d) Make or change any material election in respect of Taxes, adopt or change any accounting method in respect of Taxes, enter into any closing agreement, settle any claim or assessment in respect of Taxes, or consent to any extension or waiver of the Effective Timelimitation period applicable to any claim or assessment in respect of Taxes; or (e) Take, the Company shall not door agree in writing or otherwise to take, cause or permit any of the following actionsactions described in Sections 5.1(a) through (d) above, or allow, any other action that would prevent Company from performing or cause or permit any of Company not to perform its Subsidiaries to do, cause or permit any of the following actions:covenants hereunder.

Conduct of Business of Company. During the period from the date of this Agreement and continuing until through the earlier of Closing Date (the termination of “Pre-Closing Period”), except (i) as expressly provided in this Agreement or set forth in Section 4.1 of the Effective TimeCompany Disclosure Schedule or (ii) as consented to in writing by Parent (which consent will not be unreasonably withheld, delayed or conditioned), the Company agrees will, and will cause the Company Subsidiaries to, (except to the extent expressly contemplated by this Agreement), to carry on its and its Subsidiaries' 1) conduct their business in the ordinary course in substantially the same manner as heretofore conductedof business, to pay (2) preserve intact their present business organization, operations and to cause its Subsidiaries to pay debts and Taxes when due subject to good faith disputes over such debts or taxes, to pay or perform other material obligations when duegoodwill, and to use its commercially reasonable efforts consistent with past practice and policies to (3) preserve intact its and its Subsidiaries' present business organizations, use its commercially reasonable efforts consistent with past practice to keep available the services of its and its Subsidiaries' present officers and key employees and use its commercially reasonable efforts consistent with past practice to preserve its and its Subsidiaries' their relationships with customers, suppliers, distributors, licensors, licensees, licensees and others having business dealings with it or its Subsidiaries, to whom the end that its Company and its Subsidiaries' goodwill and ongoing businesses shall be unimpaired at the Effective Time. The Company agrees to promptly notify Parent of any Subsidiaries have material event or occurrence not in the ordinary course of its or its Subsidiaries' business, and of any event which could reasonably be expected to have a Company Material Adverse Effectcontractual obligations. Without limiting the generality of the foregoing, during the period from Pre-Closing Period the Company will not, and the Company will cause the Company Subsidiaries not to, without the prior written consent of Parent (which consent will not be unreasonably withheld, delayed or conditioned), except as expressly provided in this Agreement or set forth in Section 4.1 of the Company Disclosure Schedule: (a) amend the Company Charter or the bylaws of the Company or any of the organizational documents of any of the Company Subsidiaries; (b) transfer, issue, sell, pledge, encumber or dispose of any Company Shares or other securities of, or ownership interests in, the Company or any of the Company Subsidiaries, or otherwise change the capitalization of the Company and the Company Subsidiaries as it exists on the date hereof, or issue, grant or sell any options, warrants, conversion rights or other rights, securities or commitments obligating it to issue or sell any Company Shares or any securities of this Agreement and continuing until any of the earlier Company Subsidiaries, or any securities or obligations convertible into, or exercisable or exchangeable for, any Company Shares or any securities of any of the Company Subsidiaries, except for (i) processing any transfer of Company Shares between Company stockholders that the Company is not contractually entitled to refuse to process in its sole discretion, (ii) issuing Company Shares upon the exercise of Company Options that are outstanding on the date hereof, or (iii) issuing Company Shares upon the exercise of Company Warrants that are outstanding on the date hereof; (c) (i) effect any recapitalization, reclassification, stock split, combination or like change in the capitalization of the Company or any of the Company Subsidiaries, or amend the terms of any outstanding securities of the Company or any of the Company Subsidiaries or the underlying agreements related thereto; (ii) declare, set aside or pay any dividend or other distribution payable in stock or other property whether or not in respect of its capital stock; or (iii) redeem, purchase or otherwise acquire directly or indirectly any of the capital stock of the Company, except for repurchases of shares of Company capital stock upon the termination of this Agreement service of Company Employees; (d) spend or commit to any new capital expenditures (other than capital expenditures already reserved pursuant to the Effective Timebudget for the current fiscal year) in excess of $100,000, whether individually or in the aggregate; (e) enter into or amend any agreement pursuant to which the Company shall not do, cause or permit any of the following actionsCompany Subsidiaries grants or receives rights in or to any Intellectual Property outside the ordinary course of business; (f) fail to pay any fee required in connection with the renewal, continuation, or allowcontinued prosecution of any Owned Intellectual Property; (g) except in the ordinary course of business, cause (i) grant or announce any increase in the salary, severance or other direct or indirect compensation or benefits payable or to become payable to any employee or consultant (except as required by law or under any Employee Plan existing on the date hereof); (ii) grant any bonus other than a bonus that is a Company Change in Control Payment, benefit or other direct or indirect compensation to any employee or consultant not required by any of the existing Employee Plans as in effect on the date hereof; (iii) loan or advance any money or other property to any employee or consultant (except advancement of expenses as required by any of the existing Employee Plans as in effect on the date hereof in the ordinary course of business); or (iv) except as required by applicable Legal Requirements, amend, terminate, modify, extend, or materially increase the rate or terms of benefits provided under any Employee Plan or enter into, grant, or adopt any arrangement that would be an Employee Plan if in effect on the date hereof; (h) sell, assign, lease, transfer or license to any Person, or permit the imposition of any Encumbrance (other than Permitted Encumbrances) on, any of its Subsidiaries material properties or assets, other than in the ordinary course of business; (i) form any Subsidiary or acquire any interest in any other Person (except for short-term investments in the ordinary course of business); (j) incur, create or assume any Indebtedness for borrowed money or amend, modify or make any changes to dothe terms of any Indebtedness for borrowed money, cause except (1) in an amount not to exceed $100,000, whether individually or permit in the aggregate or (2) borrowings under existing lending or credit facilities; (1) acquire or agree to acquire by merging with, or by purchasing a substantial portion of the equity interests or assets of, or by any other manner, any business or any Person or division thereof or otherwise acquire or (2) agree to acquire any assets that are material individually or in the aggregate to the business of the Company or any of the following actions:Company Subsidiaries, except in the ordinary course of business; (l) amend, modify or change any of their accounting policies, practices or procedures, except as required by GAAP; (m) amend, modify or make any changes in the standardized or other sales terms and conditions of the Company or any of the Company Subsidiaries, other than in the ordinary course of business; (n) enter into any contract or agreement that would be a Material Contract if it had been in existence on the date hereof, or amend, modify, elect not to renew or terminate any Material Contract, except, in each case, in the ordinary course of business; (o) amend, modify, terminate or make any changes to the coverage levels of any insurance coverage provided by existing insurance policies, other than in the ordinary course of business or so as to comply with any contract to which it is or becomes a party; (p) institute any legal proceeding or claim, or compromise, settle, or fail to defend any pending legal proceeding or any claim, except for settlements or compromises in an amount less than $100,000, whether individually or in the aggregate, for which the Company receives a full release; (q) communicate with any Governmental Authority regarding the businesses of the Company and the Company Subsidiaries with respect to any matter that would, or would reasonably be expected to, have a Company Material Adverse Effect or result in the institution of any investigation or legal proceeding against the Company; (r) waive any right of material value outside of the ordinary course of business; (s) make, amend, modify, revoke or change any election in respect of Taxes, amend, modify, adopt or change (or make a request to change) any accounting method in respect of Taxes, enter into any Tax sharing, Tax indemnity or closing agreement, settle or compromise any claim, notice, audit report or assessment in respect of Taxes, surrender any claim for a refund of Taxes, file any Tax return other than one prepared in the ordinary course of business, file any amended Tax return or consent to any extension or waiver of the limitation period applicable to any Tax return, Tax claim or assessment in respect of Taxes; (t) knowingly enter into any commitment or transaction that would constitute a material breach of the representations, warranties or agreements contained in this Agreement, or knowingly take any action or fail to take an action or, to the extent within the Company’s control, permit to occur any event that, individually or in the aggregate, would reasonably be expected to result in a Company Material Adverse Effect (provided, that in the event any matter would constitute both a violation of this subsection (t) and a breach of any of the Company’s representations and warranties set forth in Section 2, any indemnification claim for such matter must be brought on the grounds of a breach of representation or warranty (and not a breach of covenant or agreement) and subject to the associated limitations on liability set forth in Section 8); or (u) agree or commit, whether in writing or otherwise, to take any of the actions described in Sections 4.1(a) through 4.1(t).

Conduct of Business of Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement Agreement, the Effective Time or the Effective TimeOutside Closing Date, the Company agrees (except to the extent expressly contemplated by this Agreementunless SciQuest shall give its prior consent in writing), to carry on its and its Subsidiaries' business in the ordinary course and in substantially the same manner as heretofore conductedaccordance with Company's 2000 Operating Plan, to pay and to cause its Subsidiaries to pay debts Liabilities and Taxes consistent with Company's past practices (and in any event when due subject to good faith disputes over such debts or taxesdue), to pay or perform other material obligations when duedue consistent with Company's past practices (other than Liabilities, Taxes and other obligations, if any, contested in good faith through appropriate proceedings), and, to the extent consistent with such business, to use its commercially reasonable efforts consistent with past practice and institute all policies to preserve intact its and its Subsidiaries' present business organizationsorganization, use its commercially reasonable efforts consistent with past practice to keep available the services of its and its Subsidiaries' present officers and key employees and use its commercially reasonable efforts consistent with past practice to preserve its and its Subsidiaries' relationships with customers, suppliers, distributors, licensors, licensees, independent contractors and others other Persons having business dealings with it or it, all with the express purpose and intent of preserving unimpaired its Subsidiaries, to the end that its and its Subsidiaries' goodwill and ongoing businesses shall be unimpaired at the Effective Time. The Except as expressly contemplated by this Agreement, Company agrees shall not, without the prior written consent of SciQuest, take or agree in writing or otherwise to promptly notify Parent take, any action that would result in the occurrence of any material event of the changes described in Section 2.8 of this Agreement, ----------- or occurrence not in the ordinary course any other action that would make any of its representations or warranties contained in this Agreement untrue or incorrect in any material respect or prevent Company from performing or cause Company not to perform its Subsidiaries' business, agreements and of any event which could reasonably be expected to have a Company Material Adverse Effectcovenants in this Agreement. Without limiting the generality of the foregoing, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, except as set forth in the Company Disclosure Schedule or as required or expressly permitted by this Agreement or in the ordinary course of business, Company shall not do, cause or permit any of the following actionsfollowing, or allow, cause or permit any without the prior written consent of its Subsidiaries to do, cause or permit any of the following actionsSciQuest:

Conduct of Business of Company. During the period from From the date of this Agreement hereof through the Closing Date, the Company shall, and continuing until the earlier of Seller shall cause the termination of Company, except as expressly contemplated or permitted by this Agreement or the Effective Time, the Company agrees (except to the extent expressly contemplated by this Agreementthat Purchaser shall otherwise consent in writing (such consent not to be unreasonably withheld or delayed), use commercially reasonable efforts to carry on its business and affairs in such a manner so that the representations and warranties contained in Section 2.1 shall continue to be true and correct in all material respects on and as of the Closing as if made again by the Company on the Closing Date, and the Company shall carry on its Subsidiaries' business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, to pay and to cause its Subsidiaries to pay debts and Taxes when due subject to good faith disputes over such debts or taxes, to pay or perform other material obligations when due, and to use its commercially reasonable efforts consistent with past practice and policies to preserve intact its and its Subsidiaries' present business organizationsorganization, use its commercially reasonable efforts consistent with past practice to keep available the services of its and its Subsidiaries' present officers and key employees and use its commercially reasonable efforts consistent with past practice to preserve its and its Subsidiaries' relationships with customers, suppliers, distributors, licensors, licensees, suppliers and others having business dealings with it or its Subsidiaries, to the end that its and its Subsidiaries' goodwill and ongoing businesses shall be unimpaired at the Effective Time. The Company agrees to promptly notify Parent of any material event or occurrence not in the ordinary course of its or its Subsidiaries' business, and of any event which could reasonably be expected to have a Company Material Adverse Effectthem. Without limiting the generality of the foregoing, during prior to the period from the date of Closing, and except as expressly contemplated or permitted by this Agreement and continuing until the earlier of the termination of this Agreement or the Effective TimeAgreement, the Company shall will not, without the prior written consent of Purchaser: (a) split, combine or reclassify any shares of its capital stock or other equity interests, declare, pay or set aside for payment any dividend or other distribution in respect of its capital stock or other equity interests, or directly or indirectly, redeem, purchase or otherwise acquire any shares of its capital stock or other securities; (b) issue, sell, pledge, dispose of, encumber or deliver (whether through the issuance or granting of any options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock or other equity interests of any class of the Company or any securities convertible into or exercisable or exchangeable for shares of stock or other equity interests of any class of the Company; (c) incur any liability or obligation other than in the ordinary and usual course of business and consistent with past practice, issue any debt securities, make, create, incur, assume or suffer to exist any Lien on its assets, or assume, guarantee, endorse or otherwise as an accommodation become responsible for the liabilities of any other person or entity; (d) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division or significant assets thereof or acquire, directly or indirectly, any equity interest in any person or entity; (e) amend, modify or waive compliance with the Certificate of Incorporation or Bylaws of the Company; (f) sell, lease, license, encumber or otherwise dispose of any assets with a book or fair market value in excess of $100,000 individually or $250,000 in the aggregate other than sales of inventory in the ordinary course of business; (g) make any change in financial or tax accounting methods, principles or practices or make or cause to be made any elections on tax returns of the Company; (h) enter into, amend or terminate, or agree to enter into, amend or terminate, any Contract other than in the ordinary course of business unless, in each case, such amendment, termination, or agreement, singly or together with other such actions, will not dohave a material adverse effect on the Company; (i) fail to maintain and keep in full force and effect all insurance on assets and property or for the benefit of employees of the business, cause all liability and other casualty insurance, and all bonds on personnel, presently carried, fail to present all claims under such insurance policies in a proper and timely manner or permit breach any obligation under such insurance policies; (j) fail to maintain its books, accounts and records in the usual, regular and ordinary manner on a basis consistent with prior years; (k) directly or indirectly engage in any transaction with any officer, director or stockholder or any Affiliate of any such person which is not at arm's length; (l) adopt, amend or terminate any Company Benefit Plan, other than changes in employee welfare or benefit arrangements with respect to officers and employees of the Company made in the ordinary course consistent with past practice; (m) grant, or become obligated to grant, any increase in the compensation of officers or employees of the Company, including any such increase pursuant to any Company Benefit Plan (except for increases in compensation in the ordinary course of business consistent with past practice); (n) enter into any employment, severance, stay bonus or similar agreement or arrangement with any employee of the Company or any independent contractor to provide services to the Company; or (o) agree, in writing or otherwise, to do any of the following actions, or allow, cause or permit any of its Subsidiaries to do, cause or permit any of the following actions:foregoing.

Conduct of Business of Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, the Company agrees (except to the extent expressly contemplated by this AgreementAgreement or as consented to in writing by the other), to carry on its and its Subsidiariessubsidiaries' business in the usual regular and ordinary course in substantially the same manner as heretofore conducted, ; to pay and to cause its Subsidiaries subsidiaries to pay debts and Taxes when due subject (i) to good faith disputes over such debts or taxesTaxes and (ii) in the case of Taxes of Company or any of its subsidiaries, to Parent's consent to the filing of Tax Returns if applicable; to pay or perform other material obligations when due, and to use its commercially all reasonable efforts consistent with past practice and policies to preserve intact its and its Subsidiaries' present business organizations, use its commercially reasonable efforts consistent with past practice to keep available the services of its and its Subsidiariessubsidiaries' present officers and key employees and use its commercially reasonable efforts consistent with past practice to preserve its and its Subsidiariessubsidiaries' relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it or its Subsidiariessubsidiaries, to the end that its and its Subsidiariessubsidiaries' goodwill and ongoing businesses shall be unimpaired at the Effective Time. The Company agrees to promptly notify the Parent of (x) any material event or occurrence not in the ordinary course of its or its Subsidiariessubsidiaries' business, and of any event which could reasonably be expected to have a Company Material Adverse EffectEffect and (y) any change in its capitalization as set forth in Section 2.5 with respect to the Company. Without limiting the generality of the foregoing, during the period from the date of this Agreement and continuing until the earlier of the termination of except as expressly contemplated by this Agreement or the Effective TimeCompany Disclosure Schedule, the Company shall not do, cause or permit any of the following actionsfollowing, or allow, cause or permit any of its Subsidiaries subsidiaries to do, cause or permit any of the following actionsfollowing, without the prior written consent of Parent:

Conduct of Business of Company. During the period from and including the date of this Agreement and continuing until the earlier of the termination of this Agreement in accordance with its terms or the Effective Time, the Company agrees (except as consented to the extent expressly contemplated in writing by this Agreement), Parent) to carry on its and each of its Subsidiaries' business businesses in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, . Company further agrees to pay its and to cause each of its Subsidiaries to pay Subsidiaries' debts and Taxes when due subject to good faith disputes over such debts or taxesdue, to pay or perform its and each of its Subsidiaries' other material obligations when due, and to use its commercially all reasonable efforts consistent with past practice and policies to preserve intact its and each of its Subsidiaries' present business organizations, use its commercially reasonable efforts consistent with past practice to keep available the services of its and each of its Subsidiaries' present officers and key employees and use its commercially reasonable efforts consistent with past practice to preserve its and each of its Subsidiaries' relationships with customers, suppliers, distributors, licensors, licensees, consultants, joint venture partners, collaborators, and others having business dealings with it or and each of its Subsidiaries, Subsidiaries to the end that its and each of its Subsidiaries' goodwill and ongoing businesses shall be unimpaired at the Effective Time. The Company agrees to promptly notify Parent of any material event or occurrence not in the ordinary course of its business or which could have a Material Adverse Effect on Company or any of its Subsidiaries' business. By way of amplification and not limitation, Company and each of any event which could reasonably be expected to have a Company Material Adverse Effect. Without limiting the generality of the foregoingits Subsidiaries shall not, during the period from between the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, directly or indirectly, do, or agree to do, any of the Company following without the prior written consent of Parent, which consent shall not do, be unreasonably withheld: (a) cause or permit any amendments to their Certificates of Incorporation, Bylaws or other charter documents, as applicable, except as contemplated by Section 5.17; (b) declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of their capital stock, or split, combine or reclassify any of their capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of their capital stock, or repurchase or otherwise acquire, directly or indirectly, any shares of their capital stock except from former employees, directors and consultants in accordance with agreements providing for the repurchase of shares in connection with any termination of service; (c) enter into any material contract or commitment, or violate, amend or otherwise modify or waive any of the following actionsterms of any of the Material Contracts; (d) issue, deliver or sell or authorize or propose the issuance, delivery or sale of, any shares of their capital stock or securities exchangeable for or convertible into, or allowsubscriptions, cause rights, warrants or permit options to acquire, or other agreements or commitments of any character obligating them to issue any such shares or other convertible or exchangeable securities, other than the issuance of shares of Company Common Stock pursuant to the exercise of stock options, warrants or other rights or the conversion of Series A Preferred outstanding as of the date of this Agreement and the issuance of the Amended Warrants as contemplated by Section 5.20; (e) transfer to any person or entity any rights to any Intellectual Property Rights of Company or any of its Subsidiaries Subsidiaries; (f) sell, lease, license or otherwise dispose of or encumber any of Company's or any of its Subsidiaries' properties or assets; (g) incur any indebtedness for borrowed money or guarantee any such indebtedness or issue or sell any debt securities or guarantee any debt securities of others; (h) enter into any operating lease which is not included in the fiscal year 2001 Company budget attached hereto as EXHIBIT N (the "BUDGET") or pursuant to dowhich payments in excess of twenty thousand dollars ($20,000) may be required; (i) pay, cause discharge or permit satisfy, any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise) which is not included in the Budget or in an amount in excess of twenty thousand dollars ($20,000) in any one case or sixty thousand dollars ($60,000) in the aggregate, other than the payment, discharge or satisfaction of liabilities reflected or reserved against in the Financial Statements or incurred in the ordinary course of business consistent with past practice and reasonable expenses incurred in connection with the transactions contemplated by this Agreement, subject to Section 9.1; 34 (j) make any capital expenditures, capital additions or capital improvements; (k) terminate or waive any right of substantial value; (l) adopt or amend any employee benefit or stock purchase or option plan, or hire any new director, officer, consultant or employee (other than secretarial staff), pay any special bonus or special remuneration to any officer, employee, consultant or director or increase the salaries, wage rates, bonus or compensation of any director, officer, employee or consultant; (m) grant any severance or termination pay to any director, officer, consultant or employee; (n) commence a lawsuit; (o) acquire or agree to acquire by merging or consolidating with, purchasing equity interests, or purchasing a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets; (p) make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any amendment to a material Tax Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; (q) take any other action outside the ordinary course of their business consistent with past practice; or (r) take or agree in writing or otherwise to take, any of the following actions:actions described in Sections 4.1(a) through (q), or any action which would make any of Company's representations or warranties contained in this Agreement untrue or incorrect in any material respect or prevent Company from performing or cause it not to perform its covenants hereunder in any material respect.