Interim Operations of the Company Except (i) as required by Law, (ii) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) contemplated by this Agreement or (iv) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time the Company shall, and shall cause each of its Subsidiaries to, conduct its business only in the usual, regular and ordinary course consistent with past practice and use all reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and preserve its present relationships with customers, suppliers, licensors, licensees, distributors, Governmental Entities and others having business dealings with them to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition, and without limiting the generality of the foregoing, except (w) as required by Law, (x) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), (y) expressly permitted pursuant to this Agreement or (z) as set forth in Section 6.1 of the Company Disclosure Schedule, from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries to, do any of the following:
(a) except for Shares to be issued or delivered pursuant to the exercise of Options or Warrants, the settlement of RSUs or the lapsing of forfeiture restrictions of Restricted Stock Awards, each outstanding on the date hereof or the issuance of the shares of capital stock of any Subsidiary to the Company, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, delivery, sale, disposition or pledge or other encumbrance of (i) any shares of its capital stock of any class or any other ownership interest, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock or any other ownership interest, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any other ownership interest or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock or any other ownership interest (including “phantom” rights and stock appreciation rights), or (ii) any other securities of the Company and its Subsidiaries in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Shares, Options, Warrants or other securities of the Company or any of its Subsidiaries; provided, however, that the Company may (i) withhold Shares to satisfy Tax obligations with respect to Options, Restricted Stock Awards and RSUs granted prior to the date hereof pursuant to the Equity Plans or the Assumed Subsidiary Equity Plans and (ii) acquire Shares in connection with the surrender of Shares by holders of Options or Warrants in order to pay the exercise price of the Options or Warrants;
(c) grant any Options, Restricted Stock Awards, RSUs or other equity-based awards or grant any options to purchase Shares under the Company’s 2007 Employee Stock Purchase Plan;
(d) split, combine, subdivide or reclassify any Shares or declare, set aside for payment or pay any dividend in respect of any Shares or otherwise make any payments or distributions to stockholders of the Company or of any of its Subsidiaries that is not wholly owned (directly or indirectly) by Company in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than the Merger;
(f) acquire (i) by purchase, merger or otherwise, any business or equity interest of any Person or (ii) any asset or assets, except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice or as permitted under Section 6.1(m);
(g) sell, lease, license, mortgage, sell and leaseback or otherwise encumber or dispose of any of its properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company and its wholly owned Subsidiaries, and other than to employees in respect of travel or other related expenses in the ordinary course of business consistent with past practice;
(i) except as required by Law or except as required by the terms of a Benefit Plan in effect as of the date of this Agreement, (i) enter into an employment agreement with any Person or grant to any Person any right to severance, retention, change in control or termination compensation or benefits, or increase any Person’s rights thereto, (ii) grant any current or former director, officer or employee of the Company or any of its Subsidiaries, any increase in compensation other than, with respect to Persons who are not directors or officers and do not report directly to the Company’s President and Chief Operating Officer, ordinary course annual increases consistent with past practice, (iii) enter into, adopt, amend or terminate any collective bargaining agreement or employee benefit plan, program, policy, arrangement or agreement, or (iv) terminate the employment of or hire any Person whose annual compensation exceeded or is reasonably expected to exceed $100,000;
(j) except as required by any Benefit Plan in accordance with its terms as of the date of this Agreement, take any action to fund or in any other way secure the payment of compensation and benefits under any Benefit Plan, take any action to accelerate the vesting or payment of any compensation or benefits under any Benefit Plan or materially change any assumption used to calculate funding obligations with respect to any Benefit Plan or change the manner in which contributions to any Benefit Plan are made or the basis on which such contributions are determined;
(k) change any of the accounting methods used by the Company or its Subsidiaries unless required by GAAP or applicable Law;
(l) amend the Company’s certificate of incorporation or the Company’s bylaws or other comparable charter or organizational documents of any Subsidiary of the Company, except as may be required by applicable Law and except for immaterial amendments under the charter or organizational documents of any Subsidiary of the Company;
(m) authorize or make any commitment with respect to, any capital expenditure or other expenditures (including in respect of research and development), other than those which, individually, are less than or equal to $200,000 or, in the aggregate, are less than or equal to $1,000,000;
(n) (i) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reserved against in the most recent Financial Statements of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such Financial Statements in the ordinary course of business consistent with past practice, (ii) cancel any indebtedness, (iii) waive or assign any claims or rights of substantial value, (iv) waive any benefits of, or agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or consent to any matter with respect to which consent is required under, any standstill or similar contract to which the Company or any of its Subsidiaries is a party or (v) waive any material benefits of, or agree to modify in any material respect, or, subject to the terms hereof, fail to enforce in any material respect, or consent to any matter with respect to which consent is required under, any material confidentiality or similar contract to which the Company or any of its Subsidiaries is a party;
(o) waive the benefits of, or agree to modify in any material manner, any material confidentiality agreement or any standstill or similar agreement to which the Company or any of its Subsidiaries is a party;
(p) except as required by applicable Tax Law, prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(q) sell, transfer or license to any person or modify any rights (i) to any material Company Intellectual Property Rights, except in the ordinary course of business consistent with past practice, or (ii) to distribute, license or co-promote any product of the Company or any of its Subsidiaries (including products under development and products licensed by the Company or any of its Subsidiaries);
(r) enter into any material joint venture or partnership;
(s) engage in any transactions, agreements, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(t) otherwise manage its working capital in a manner other than in the ordinary course of business consistent with past practice;
(u) (i) enter into, amend, renew, modify or consent to the termination of (other than a termination in accordance with its terms) any Material Company Contract over $250,000 or Contract over $250,000 that would be a Material Company Contract if in effect on the date of this Agreement or (ii) amend, waive, modify, fail to enforce or consent to the termination of (other than a termination in accordance with it terms) its material rights thereunder;
(v) create any Subsidiary; or
(w) enter into any contract, agreement, commitment or arrangement to do any of the foregoing.
