Required Consent In addition, without limiting the generality of Section 4.1(a), except as permitted by the terms of this Agreement, and except as provided in Article IV of the Company Disclosure Letter or as required by applicable Legal Requirements or the regulations or requirements of Nasdaq, during the period from the date hereof and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, the Company shall not do any of the following, and shall not permit any of its Subsidiaries to do any of the following, without the prior written consent of Parent:
(i) Enter into any new line of business (it being understood that this clause (i) shall not prohibit the Company or its Subsidiaries from introducing, in the ordinary course of business consistent with past practice, any new products or applications within the Company’s current line of businesses);
(ii) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock, other than any such transaction by a wholly-owned Subsidiary of it that remains a wholly-owned Subsidiary of it after consummation of such transaction in the ordinary course of business; provided, however, that nothing herein shall be construed as prohibiting the Company from granting Company Options that are Routine Grants;
(iii) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of its capital stock or the capital stock of its Subsidiaries, other than repurchases of unvested shares at cost or for de minimis consideration in connection with either the termination of the employment relationship with any employee or upon the resignation of any director or consultant, in each case, pursuant to stock option or purchase agreements in effect on the date hereof;
(iv) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of capital stock, Voting Debt or any securities convertible into shares of capital stock or Voting Debt, or subscriptions, rights, warrants or options to acquire any shares of capital stock or Voting Debt or any securities convertible into shares of capital stock or Voting Debt, or enter into other agreements or commitments of any character obligating it to issue any such securities or rights, other than: (A) issuances of Company Common Stock upon the exercise of Company Options, warrants or other rights of the Company existing on the date hereof in accordance with their present terms or granted pursuant to clauses (B) or (C) hereof, (B) grants of stock options to purchase Company Common Stock granted in the ordinary course of business consistent with past practice and on Standard Terms (as defined below) to new Company employees under the Company Stock Plans outstanding on the date hereof, and (C) grants of stock options to purchase Company Common Stock granted to existing Company employees (other than to directors and officers), under the Company Stock Plans outstanding on the date hereof in the ordinary course of business consistent with past practice in connection with annual compensation reviews or ordinary course promotions and in each case on Standard Terms; provided, however, that the stock option grants pursuant to clause (C) shall not exceed grants of options to acquire 30,000 shares of Company Common Stock to any individual or grants of options to acquire 300,000 shares of Company Common Stock to all such individuals in the aggregate (the grants described, and subject to the limitations, in clauses (B) and (C), the “Routine Grants”, and for purposes of this Section 4.1(b)(iv), “Standard Terms” shall mean options to purchase Company Common Stock with the following terms (1) a per share exercise price that is no less than the current market price at the time of grant of a share of Company Common Stock, (2) a vesting schedule no more favorable than one-quarter (1/4) on the one-year anniversary of the date of grant, and one-forty-eighth (1/48) on each monthly anniversary of the date of grant thereafter, (3) which do not accelerate, or become subject to acceleration, directly or indirectly, (whether pursuant to the terms of such grant or any other Contract with the Company (directly or indirectly)) as a result of the approval or consummation of the Merger or the transactions contemplated hereby and/or the termination of employment following the Merger and (4) with a period for exercisability under such option following termination of employment of no greater than ninety (90) days following a termination of employment for any reason other than retirement, death or total and permanent disability);
(v) Cause, permit or propose any amendments to the Company Charter Documents or any of the Subsidiary Charter Documents of the Company’s Subsidiaries;
(vi) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity or voting interest in or a portion of the assets of, or by any other manner, any business or any Person or division thereof, or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of the Company and its Subsidiaries, taken as a whole;
(vii) Enter into any binding agreement, agreement in principle, letter of intent, memorandum of understanding or similar agreement with respect to any material joint venture, strategic partnership or alliance, excluding any stream partner, reseller, channel partner or similar agreements, in each case, entered into, and containing terms, in the ordinary course of business consistent with past practice, in each case, that is terminable by the Company or any of its Subsidiaries upon no more than twelve (12) months prior notice and which does not contain any exclusive dealing arrangements;
(viii) Sell, lease, license, encumber or otherwise dispose of any properties or assets except (A) the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate to the business of the Company and its Subsidiaries, taken as a whole, or (B) perpetual licenses of the Company Products in the ordinary course of business consistent with past practice having no material support, maintenance or service obligations other than those obligations that are terminable by the Company or any of its Subsidiaries upon no more than one (1) year notice without liability or financial obligation to the Company or its Subsidiaries or (C) for the provision of the Company Products on a hosted services basis in the ordinary course of business consistent with past practice other than those terminable by the Company or any of its Subsidiaries within no more than three (3) years without liability or financial obligation to the Company or its Subsidiaries;
(ix) Make any loans, advances or capital contributions to, or investments in, any other Person, other than: (A) loans or investments by it or a wholly-owned Subsidiary of it to or in it or any wholly-owned Subsidiary of it, or (B) employee loans or advances made in the ordinary course of business consistent with past practices;
(x) Except as required by GAAP, as concurred in by its independent auditors, or by a Governmental Entity, make any material change in its methods or principles of accounting since the date of the Company Balance Sheet;
(xi) Make or change any material Tax election, adopt or change any material Tax accounting method, settle or compromise any material Tax liability, file any amended Tax Return or consent to any extension or waiver of any limitation period with respect to Taxes;
(xii) Revalue any of its assets or make any change in accounting methods, principles or practices, other than as required by GAAP or by a Governmental Entity;
(xiii) (A) Pay, discharge, settle or satisfy any material claims (including any Tax claim), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement), other than the payment, discharge, settlement, or satisfaction for money, of claims, liabilities, obligations or litigation (x) to the extent subject to reserves on the Company Financials existing as of the date hereof in accordance with GAAP, (y) that are accounts payable incurred in the ordinary course of business for goods and services or (z) otherwise in the ordinary course of business consistent with past practice or in accordance with their terms, of claims not in excess of $100,000 individually or $1,000,000 in the aggregate, provided, that with respect to any matter under this clause (A) that requires Parent’s consent, such consent shall not be unreasonably withheld, conditioned or delayed, or (B) waive the benefits of, agree to modify in any manner materially adverse to the Company, terminate, release any person from or knowingly fail to enforce any material confidentiality or similar agreement to which Company or any of its Subsidiaries is a party or of which Company or any of its Subsidiaries is a beneficiary;
(xiv) Except as required by Legal Requirements or as required by any Company Employee Plan or Employee Agreement in existence as of the date hereof and as set forth in Section 2.12(a) of the Company Disclosure Letter), (1) increase in any manner the amount of compensation or fringe benefits of, pay any bonus or special remuneration (cash, equity or otherwise) to or g▇▇▇▇ ▇▇▇▇▇▇▇▇▇ or termination pay to any Employee, consultant or director of the Company or any Subsidiary of the Company (other than salary increases and bonuses, in each case, made in the ordinary course of business consistent with past practice with respect to employees who are not executive officers of the Company or directors of the Company), (2) make any increase in or commitment to increase any Company Employee Plan (including any severance plan), adopt or amend or make any commitment to adopt or amend any Company Employee Plan or make any contribution, other than regularly scheduled contributions or contributions required by the terms of the Company Employee Plan as in effect as of the date hereof, to any Company Employee Plan, (3) waive any stock repurchase rights, accelerate, amend or change the period of exercisability of Company Options or Company Restricted Stock, or reprice any Company Options or authorize cash payments in exchange for any Company Options, (4) enter into any employment, severance, termination or indemnification agreement with any Company Employee or enter into any collective bargaining agreement, (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable “at will” without the Company or its Subsidiaries incurring any material liability or financial obligation and who are not officers), (5) make any material oral or written representation or commitment with respect to any material aspect of any Company Employee Plan that is not materially in accordance with the existing written terms and provision of such Company Employee Plan, (6) grant any stock appreciation right, phantom stock award, stock-related award or performance award (whether payable in cash, shares or otherwise) to any Person (including any Company Employee), or (7) enter into any agreement with any Company Employee the benefits of which are (in whole or in part) contingent or the terms of which are materially altered upon the occurrence of a transaction involving the Company of the nature contemplated hereby; provided, however, that nothing herein shall be construed as prohibiting the Company from granting Company Options that are Routine Grants; and provided, further, that nothing herein shall limit the Company’s ability to amend Company Employee Plans, Employee Agreements, employment, severance, termination or indemnification agreements to the extent necessary (A) to bring such plans or agreements into compliance with Section 409A of the Code or to secure an exemption from Section 409A of the Code, or (B) to reduce or prevent the imposition on any Employee or other “disqualified individual” (as defined in Code Section 280G and the regulations thereunder) of excise taxes pursuant to Section 4999 of the Code with respect to payments or benefits thereunder. Notwithstanding the foregoing, the form and substance of any such amendments shall be subject to Parent’s prior review and approval, which review shall be prompt and approval not unreasonably withheld;
(xv) Grant any exclusive rights with respect to any Company Intellectual Property;
(xvi) Enter into, or renew, any Contracts containing, or otherwise subject the Surviving Corporation or Parent to, any non-competition, exclusivity or other material restrictions on the Company or the Surviving Corporation or Parent, or any of their respective businesses, which is material to the business of the Company and its Subsidiaries, taken as a whole, or, following the Effective Time, to the Parent and its Subsidiaries, taken as a whole; provided, however, that the Company may renew such Contracts for a period of one (1) year or less on the same terms in place prior to the date of this Agreement so long as none of Parent nor any of its Subsidiaries (other than, following the Closing, the Surviving Corporation or any of its Subsidiaries) are, or following the Closing would be subject to, any such non-competition, exclusivity or other restrictions provided therein;
(xvii) Enter into any agreement or commitment the effect of which would be to grant to a third party following the Merger any actual or potential right of license to any material Intellectual Property owned by Parent or any of its Subsidiaries (excluding for the avoidance of doubt, the Company and its Subsidiaries);
(xviii) Take, or agree to take, any action that would prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code;
(xix) Hire employees other than in the ordinary course of business;
(xx) Terminate any employees of the Company or its Subsidiaries or otherwise cause any employees of the Company or its Subsidiaries to resign, in each case other than (x) in the ordinary course of business or (y) for cause or poor performance (documented in accordance with the Company’s past practices);
(xxi) Make any representations or issue any communications (including electronic communications) to employees that are inconsistent with this Agreement or the transactions contemplated hereby, including any representations regarding offers of employment or other benefits from Parent;
(xxii) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of any other Person (other than any wholly-owned Subsidiary of it) or enter into any arrangement having the economic effect of any of the foregoing, other than borrowings (and guarantees by the Subsidiaries of indebtedness incurred by the Company) of up to $15,000,000 at any time outstanding (in the aggregate) pursuant to (x) the Loan and Security Agreement, dated as of February 23, 2007, entered into by the Company and Silicon Valley Bank (the “SVB Facility”), as amended from time to time, or (y) any replacement credit facility on terms not materially less favorable (including with respect to guarantees by Subsidiaries) to the Company than the SVB Facility (provided that prior to or concurrently with entering into any replacement facility, the Company shall pay all liabilities, obligations and fees owed under the SVB Facility);
(xxiii) Make any individual or series of related payments in excess of $250,000 outside of the ordinary course of business or make or commit to make any capital expenditures in excess of $750,000 beyond those contained in the Company’s capital expenditure budget in effect on
