Conduct of Business by Company and Parent. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Closing (the “Interim Period”), each of the Company, Parent and Merger Sub shall, except to the extent that the other party shall otherwise consent in writing (which consents shall not be unreasonably withheld or delayed), carry on its business in the usual, regular and ordinary course consistent with past practices, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations (except where noncompliance would not have a Material Adverse Effect), pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as required or permitted by the terms of this Agreement or as set forth in Schedule 4.1 hereto without the prior written consent of the other party (which shall not be unreasonably withheld or delayed), during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Closing, each of the Company, Parent and Merger Sub shall not do any of the following: (a) Transfer or license to any person or otherwise extend, amend or modify any material rights to any intellectual property of the Company or Parent, as applicable, or enter into grants to transfer or license to any person future patent rights, other than in the ordinary course of business consistent with past practices provided that in no event shall the Company or Parent license on an exclusive basis or sell any intellectual property of the Company, or Parent as applicable; (b) 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; (c) Issue, deliver, sell, authorize, pledge or otherwise encumber, or agree to any of the foregoing with respect to, any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible or exchangeable securities, other than the grant of options to purchase Company Common Stock in the ordinary course of business consistent with past practices, and other than the issuance of Company Common Stock prior to the Closing in connection with the exercise of any Company Options or Company Warrants or the conversion of the Company Convertible Securities; (d) Amend its Charter Documents unless required to do so hereunder; (e) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a 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 which are material, individually or in the aggregate, to the business of Parent or the Company as applicable, or enter into any joint ventures, strategic partnerships or alliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party’s ability to compete or to offer or sell any products or services; (f) Sell, lease, license, encumber or otherwise dispose of any properties or assets, except (A) sales of services and licenses of software in the ordinary course of business consistent with past practice, (B) sales of inventory in the ordinary course of business consistent with past practice, (C) and the sale, lease or disposition (other than through licensing) of property or assets that are not material, individually or in the aggregate, to the business of such party in the ordinary course of business consistent with past practices; (i) In the case of the Company, incur any indebtedness for borrowed money in excess of $50,000 in the aggregate (other than purchase money debt in connection with the acquisition by the Company of vehicles, office equipment, new locations and operating equipment not exceeding $500,000 in the aggregate) or (ii) with case of Parent, incur any indebtedness for borrowed money; or in either case, 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 Parent or the Company, as applicable, enter into any “keep well” or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing; (h) Adopt or amend any employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or enter into any employment contract or 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”), pay any special bonus or special remuneration to any director or employee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants, except in the ordinary course of business consistent with past practices, and except in connection with the implementation of employment or equity incentive agreements or arrangements, as may be considered appropriate by the Company, resulting from the Company’s acquisition of Capital Telecommunications, Inc. (“CTI”, and, with reference to such acquisition, the “CTI Acquisition”); (i) Except in the ordinary course of business consistent with past practices, in the case of the Company, incur or enter into any agreement, contract or commitment requiring such party to pay in excess of $100,000 in any 12-month period; (j) Engage in any action that would reasonably be expected to cause the Merger to fail to qualify as a “reorganization” under Section 368(a) of the Code; (k) Form, establish or acquire any subsidiary except as contemplated by this Agreement; (l) Enter into any transaction with or distribute or advance any assets or property to any of its officers, directors, partners, stockholders or other affiliates (other than payment of salary and benefits in the ordinary course of business consistent with past practice); or (m) Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 4.1(a) through (l) above.
Appears in 2 contracts
Samples: Merger Agreement (U S Wireless Data Inc), Merger Agreement (U S Wireless Data Inc)
Conduct of Business by Company and Parent. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Closing (the “Interim Period”)Closing, each of the Company, Parent and Merger Sub shall, except to the extent that the other party shall otherwise consent in writing (which consents shall not be unreasonably withheld or delayed)writing, carry on its business in the usual, regular and ordinary course consistent with past practices, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations (except where noncompliance would not have a Material Adverse Effect), pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. As used in this Article V, the term “Company” includes the Subsidiaries unless the context clearly indicates otherwise. In addition, except as required or permitted by the terms of this Agreement or as set forth in on Schedule 4.1 hereto 5.1, without the prior written consent of the other party (which shall not be unreasonably withheld or delayed)party, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Closing, each of the Company, Parent and Merger Sub shall not do any of the following:
(a) Other than as expressly contemplated by this Agreement, including, without limitation, pursuant to the terms of the Employment Agreements, attached hereto as Exhibits B and C (the “Employment Agreements”) waive any stock repurchase rights, accelerate, amend or (except as specifically provided for herein) change the period of exercisability of options, warrants or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Other than as expressly contemplated by this Agreement, including, without limitation, pursuant to the terms of the Employment Agreements, grant any severance or termination pay to any officer or key employee except pursuant to applicable law, written agreements outstanding, or policies existing on the date hereof and as previously or concurrently disclosed in writing or made available to the other party, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof;
(c) Transfer or license to any person or otherwise extend, amend or modify any material rights to any intellectual property Intellectual Property of the Company or Parent, as applicableCompany, or enter into grants to transfer or license to any person future patent rights, other than in the ordinary course of business consistent with past practices provided that in no event shall the Company or Parent license on an exclusive basis or sell any intellectual property of the Company, or Parent as applicablepractices;
(bd) 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 stockcapital;
(ce) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company and Parent, as applicable, other than repurchases of unvested shares at cost in connection with the termination of the relationship with any employee or consultant pursuant to stock option or purchase agreements in effect on the date hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber, or agree to any of the foregoing with respect to, any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible or exchangeable securities, securities other than the grant of options to purchase Company Common Stock in the ordinary course of business consistent with past practices, and other than the issuance of Company Common Stock prior to the Closing in connection with the exercise exercise, exchange or conversion of any Company Options or Company Warrants or the conversion securities of the Company Convertible Securitiesoutstanding on the date hereof;
(dg) Amend its Charter Documents unless required to do so hereunderDocuments;
(eh) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a 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 which are material, individually or in the aggregate, to the business of Parent or the Company as applicable, or or, without concurrently advising Parent, enter into any joint ventures, strategic partnerships or alliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party’s ability to compete or to offer or sell any products or services;
(fi) Sell, lease, license, encumber or otherwise dispose of any properties or assets, except (A) sales of services and licenses of software Intellectual Property in the ordinary course of business consistent with past practice, (B) sales of inventory in the ordinary course of business consistent with past practice, (C) and the sale, lease or disposition (other than through licensing) of property or assets that are not material, individually or in the aggregate, to the business of such party in party, and (D) extend any leases of real property or personal property outstanding as of the ordinary course of business consistent with past practicesdate hereof;
(ij) In the case of the CompanyOther than as set forth in Schedule 5.1(j), incur any indebtedness for borrowed money in excess of $50,000 150,000 in the aggregate (other than purchase money debt in connection with the acquisition by the Company of vehicles, office equipment, new locations and operating equipment not exceeding $500,000 in the aggregate) or (ii) with case of Parent, incur any indebtedness for borrowed money; or in either case, 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 Parent or the Company, as applicable, enter into any “keep well” or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing;
(hk) Adopt Other than as expressly contemplated by the Employment Agreements, adopt or amend any employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or enter into any employment contract or 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”), pay any special bonus or special remuneration to any director or employee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants, except in the ordinary course of business consistent with past practicespractice, and except as provided in connection with Section 5.1(k) of the implementation of employment Company Schedule or equity incentive agreements or arrangements, as may be considered appropriate by the Company, resulting from the Company’s acquisition of Capital Telecommunications, Inc. (“CTI”, and, with reference to such acquisition, the “CTI Acquisition”)in Section 7.3(g) hereof;
(il) Pay, discharge, settle or satisfy any claims, 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, in the ordinary course of business consistent with past practices or in accordance with their terms, or liabilities recognized or disclosed in the Unaudited Financial Statements or in the most recent financial statements included in the Parent SEC Reports filed prior to the date of this Agreement, as applicable, or incurred since the date of such financial statements, or disclosed in the Company Schedule, or that would be eliminated in the consolidation process in the preparation of such financial statements, or waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality agreement to which the Company is a party or of which the Company is a beneficiary or to which Parent is a party or of which Parent is a beneficiary, as applicable;
(m) Except in the ordinary course of business consistent with past practices, in enter into, modify, amend or terminate any Company Contract, as applicable, or waive, delay the case exercise of, release or assign any material rights or claims thereunder;
(n) Except as required by Israeli GAAP or by the conversion of the Company’s financial statements to GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(o) Except in the ordinary course of business consistent with past practices, incur or enter into any agreement, contract or commitment requiring such party to pay in excess of $100,000 25,000 in any 12-12 month period;
(jp) Engage in any action that would could reasonably be expected to cause the Merger to fail to qualify as a “reorganization” under Section 368(a) of the Code;
(kq) Make or rescind any Tax elections that, individually or in the aggregate, could be reasonably likely to adversely affect in any material respect the Tax liability or Tax attributes of such party, settle or compromise any material income tax liability or, except as required by applicable law, materially change any method of accounting for Tax purposes or prepare or file any Return in a manner inconsistent with past practice;
(r) Form, establish or acquire any subsidiary except as contemplated by this Agreement;
(ls) Permit any Person to exercise any of its discretionary rights under any Plan to provide for the automatic acceleration of any outstanding options, the termination of any outstanding repurchase rights or the termination of any cancellation rights issued pursuant to such plans;
(t) Make capital expenditures except in accordance with prudent business and operational practices consistent with prior practice;
(u) Take or omit to take any action which would be reasonably anticipated to have a Material Adverse Effect;
(v) Enter into any transaction with or distribute or advance any assets or property to any of its officers, directors, partners, stockholders or other affiliates (affiliates, other than (A) the payment of salary and salaries for services rendered, (B) the reimbursement of reasonable expenses incurred on behalf of the Company or Parent (as applicable), or (C) the providing of other employee benefits in the ordinary course of business consistent with past practice)made generally available to all employees; or
(mw) Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 4.1(a5.1 (a) through (lw) above.
Appears in 2 contracts
Samples: Merger Agreement (Israel Technology Acquisition Corp.), Merger Agreement (Israel Technology Acquisition Corp.)
Conduct of Business by Company and Parent. During Section 7.1 Conduct of Business by the period from Company Pending the Merger.
(a) From the date of this Agreement and continuing hereof until the earlier of the termination of this Agreement pursuant to its terms or the Closing (the “Interim Period”)Effective Time, each of the Company, unless Parent and Merger Sub shall, except to the extent that the other party shall otherwise consent in writing (writing, which consents consent shall not be unreasonably withheld withheld, or delayed)except as listed on Schedule 7.1(a) of the Company Disclosure Schedule or as otherwise expressly permitted by or provided for in this Agreement, carry on the Company shall, and shall cause each of the Company Subsidiaries to, conduct its business in the usual, regular Ordinary Course of Business and ordinary course consistent with past practices, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations (except where noncompliance would not have a Material Adverse Effect), pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and shall use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present business organizationorganization and goodwill and relationships with Third Parties, to maintain each rating classification, published or indicative, assigned as of the date hereof by A. M. Best Company, Inc. (ii“A. M. Best”) and Standard & Poor’s, a division of the MxXxxx-Xxxx Companies (“Standard & Poor’s”) and, except as would not cause a Company Material Adverse Effect, to keep available the services of its present officers and employees and (iii) preserve its relationships with customerscurrent key employees, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as required or permitted by subject to the terms of this Agreement Agreement. In addition to and without limiting the generality of the foregoing, except as listed on Schedule 7.1(a) of the Company Disclosure Schedule or as set forth otherwise expressly permitted by or provided for in Schedule 4.1 hereto this Agreement, from the date hereof until the Effective Time, without the prior written consent of the other party (Parent, which consent shall not be unreasonably withheld withheld:
(i) the Company shall not adopt or delayed), during propose any material change in its Organizational Documents except for such amendments (A) required by Applicable Law or the period from the date of this Agreement rules and continuing until the earlier regulations of the termination of this Agreement pursuant to its terms SEC or the ClosingNASDAQ or (B) that do not have a material adverse effect on the Merger and would not materially restrict the operation of the Company or any Company Subsidiary business; provided, each however, that notwithstanding the foregoing, any such amendments permitted by this Section 7.1(a)(i) shall not cause any changes to the capital structure of the Company, Parent including any changes to the rights, preferences or other terms of any class of securities of the Company or the authorized number of shares of any such class; and Merger Sub the Company shall not permit its Subsidiaries to adopt or propose any material change in their Organizational Documents except for such amendments that do not have a material adverse effect on the Merger and would not materially restrict the operation of any Company Subsidiary Business;
(ii) without the prior written consent of Parent, which may be withheld in Parent’s sole discretion, the Company shall not, and shall not permit its Subsidiaries to, enter into any Company Alternative Transaction or agree to do so;
(iii) the Company shall not, and shall not permit its Subsidiaries to, change any method of accounting or accounting principles or practices by the Company or any Company Subsidiary, except for any such change required by Applicable Law or by a change in Applicable Law, U.S. GAAP or SAP;
(iv) the Company shall not, and shall not permit its Subsidiaries to, fail to (A) timely file or furnish to or with the SEC or any Insurance Regulator all reports, schedules, forms, statements and other documents required to be filed or furnished or (B) comply in all material respects with the requirements of the Sxxxxxxx-Xxxxx Act applicable to it; and
(v) the Company shall not, and shall not permit any Company Subsidiary to, agree or commit to do any of the following:
(a) Transfer or license to any person or otherwise extend, amend or modify any material rights to any intellectual property of the Company or Parent, as applicable, or enter into grants to transfer or license to any person future patent rights, other than in the ordinary course of business consistent with past practices provided that in no event shall the Company or Parent license on an exclusive basis or sell any intellectual property of the Company, or Parent as applicable;
(b) 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;
(c) Issue, deliver, sell, authorize, pledge or otherwise encumber, or agree to any of the foregoing with respect to, any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible or exchangeable securities, other than the grant of options to purchase Company Common Stock in the ordinary course of business consistent with past practices, and other than the issuance of Company Common Stock prior to the Closing in connection with the exercise of any Company Options or Company Warrants or the conversion of the Company Convertible Securities;
(d) Amend its Charter Documents unless required to do so hereunder;
(e) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a 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 which are material, individually or in the aggregate, to the business of Parent or the Company as applicable, or enter into any joint ventures, strategic partnerships or alliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party’s ability to compete or to offer or sell any products or services;
(f) Sell, lease, license, encumber or otherwise dispose of any properties or assets, except (A) sales of services and licenses of software in the ordinary course of business consistent with past practice, (B) sales of inventory in the ordinary course of business consistent with past practice, (C) and the sale, lease or disposition (other than through licensing) of property or assets that are not material, individually or in the aggregate, to the business of such party in the ordinary course of business consistent with past practices;
(i) In the case of the Company, incur any indebtedness for borrowed money in excess of $50,000 in the aggregate (other than purchase money debt in connection with the acquisition by the Company of vehicles, office equipment, new locations and operating equipment not exceeding $500,000 in the aggregate) or (ii) with case of Parent, incur any indebtedness for borrowed money; or in either case, 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 Parent or the Company, as applicable, enter into any “keep well” or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing;
(h) Adopt or amend any employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or enter into any employment contract or 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”), pay any special bonus or special remuneration to any director or employee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants, except in the ordinary course of business consistent with past practices, and except in connection with the implementation of employment or equity incentive agreements or arrangements, as may be considered appropriate by the Company, resulting from the Company’s acquisition of Capital Telecommunications, Inc. (“CTI”, and, with reference to such acquisition, the “CTI Acquisition”);
(i) Except in the ordinary course of business consistent with past practices, in the case of the Company, incur or enter into any agreement, contract or commitment requiring such party to pay in excess of $100,000 in any 12-month period;
(j) Engage in any action that would reasonably be expected to cause the Merger to fail to qualify as a “reorganization” under Section 368(a) of the Code;
(k) Form, establish or acquire any subsidiary except as contemplated by this Agreement;
(l) Enter into any transaction with or distribute or advance any assets or property to any of its officers, directors, partners, stockholders or other affiliates (other than payment of salary and benefits in the ordinary course of business consistent with past practice); or
(m) Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 4.1(a) through (l) above.
Appears in 2 contracts
Samples: Merger Agreement (Pxre Group LTD), Merger Agreement (Pxre Group LTD)
Conduct of Business by Company and Parent. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Closing (the “Interim Period”)Closing, each of the Company, Parent and Merger Sub shall, except to the extent that the other party shall otherwise consent in writing (which consents shall not be unreasonably withheld or delayed)writing, carry on its business in the usual, regular and ordinary course consistent with past practices, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations (except where noncompliance would not have a Material Adverse Effect), pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as required or permitted by the terms of this Agreement or as set forth in on Schedule 4.1 hereto hereto, without the prior written consent of the other party (which shall not be unreasonably withheld or delayed)party, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Closing, each of the Company, Parent and Merger Sub shall not do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or (except as specifically provided for herein) change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to applicable law, written agreements outstanding, or policies existing on the date hereof and as previously or concurrently disclosed in writing or made available to the other party, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof;
(c) Transfer or license to any person or otherwise extend, amend or modify any material rights to any intellectual property Intellectual Property of the Company or Parent, as applicable, or enter into grants to transfer or license to any person future patent rights, other than in the ordinary course of business consistent with past practices provided that in no event shall the Company or Parent license on an exclusive basis or sell any intellectual property Intellectual Property of the Company, or Parent as applicable;
(bd) 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;
(ce) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company and Parent, as applicable, including repurchases of unvested shares at cost in connection with the termination of the relationship with any employee or consultant pursuant to stock option or purchase agreements in effect on the date hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber, or agree to any of the foregoing with respect to, any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible or exchangeable securities, other than the grant of options to purchase Company Common Stock in the ordinary course of business consistent with past practices, and other than the issuance of Company Common Stock prior to the Closing in connection with the exercise of any Company Options or Company Warrants or the conversion of the Company Convertible Securities;
(dg) Amend its Charter Documents unless required to do so hereunderDocuments;
(eh) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a 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 which are material, individually or in the aggregate, to the business of Parent or the Company as applicable, or enter into any joint ventures, strategic partnerships or alliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party’s 's ability to compete or to offer or sell any products or services;
(fi) Sell, lease, license, encumber or otherwise dispose of any properties or assets, except (A) sales of services and licenses of software in the ordinary course of business consistent with past practice, (B) sales of inventory in the ordinary course of business consistent with past practice, and (C) and the sale, lease or disposition (other than through licensing) of property or assets that are not material, individually or in the aggregate, to the business of such party in the ordinary course of business consistent with past practicesparty;
(ij) In the case of the Company, incur Incur any indebtedness for borrowed money in excess of $50,000 25,000 in the aggregate (other than purchase money debt in connection with the acquisition by the Company of vehicles, office equipment, new locations and operating equipment not exceeding $500,000 in the aggregate) or (ii) with case of Parent, incur any indebtedness for borrowed money; or in either case, 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 Parent or the Company, as applicable, enter into any “"keep well” " or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing;
(hk) Adopt or amend any employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or enter into any employment contract or 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”"), pay any special bonus or special remuneration to any director or employee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants, except in the ordinary course of business consistent with past practicespractices and except, as to employment agreements to be entered into with Xxxxxxx Xxxx and except Xxxxxx Xxxx, substantially in connection accordance with the implementation terms of employment or equity incentive agreements or arrangementsthe offer letters with them, as may be considered appropriate by the Companydated July 1, resulting from the Company’s acquisition of Capital Telecommunications2005 and June 21, Inc. (“CTI”2005, and, with reference to such acquisition, the “CTI Acquisition”)respectively;
(il) Pay, discharge, settle or satisfy any claims, 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, in the ordinary course of business consistent with past practices or in accordance with their terms, or liabilities recognized or disclosed in the Unaudited Financial Statements or in the most recent financial statements included in the Parent SEC Reports filed prior to the date of this Agreement, as applicable, or incurred since the date of such financial statements, or waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which the Company is a party or of which the Company is a beneficiary or to which Parent is a party or of which Parent is a beneficiary, as applicable;
(m) Except in the ordinary course of business consistent with past practices, modify, amend or terminate any Company Contract or Parent Contract, as applicable, or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(n) Except as required by U.S. GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(o) Except in the case ordinary course of the Companybusiness consistent with past practices, incur or enter into any agreement, contract or commitment requiring such party to pay in excess of $100,000 in any 12-12 month period;
(jp) Engage in any action that would could reasonably be expected to cause the Merger to fail to qualify as a “"reorganization” " under Section 368(a) of the Code;
(kq) Settle any litigation;
(r) Make or rescind any Tax elections that, individually or in the aggregate, could be reasonably likely to adversely affect in any material respect the Tax liability or Tax attributes of such party, settle or compromise any material income tax liability or, except as required by applicable law, materially change any method of accounting for Tax purposes or prepare or file any Return in a manner inconsistent with past practice;
(s) Form, establish or acquire any subsidiary except as contemplated by this Agreement;
(lt) Permit any Person to exercise any of its discretionary rights under any Plan to provide for the automatic acceleration of any outstanding options, the termination of any outstanding repurchase rights or the termination of any cancellation rights issued pursuant to such plans;
(u) Make capital expenditures except in accordance with prudent business and operational practices consistent with prior practice;
(v) Make or omit to take any action which would be reasonably anticipated to have a Material Adverse Effect;
(w) Enter into any transaction with or distribute or advance any assets or property to any of its officers, directors, partners, stockholders or other affiliates (other than payment of salary and benefits in the ordinary course of business consistent with past practice)affiliates; or
(mx) Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 4.1(a4.1 (a) through (lw) above.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Cea Acquisition Corp)
Conduct of Business by Company and Parent. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Closing (the “Interim Period”)Closing, each of the Company, Parent and Merger Sub shall, except to the extent that the other party shall otherwise consent in writing (which consents shall not be unreasonably withheld or delayed)writing, carry on its business in the usual, regular and ordinary course consistent with past practices, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations (except where noncompliance would not have a Material Adverse Effect), pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as required or permitted by the terms of this Agreement or as set forth in Schedule 4.1 hereto Agreement, without the prior written consent of the other party (which shall not be unreasonably withheld or delayed)party, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Closing, each of the CompanyCompany and its Subsidiaries, Parent and Merger Sub shall not do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or (except as specifically provided for herein) change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to applicable law, written agreements outstanding, or policies existing on the date hereof and as previously or concurrently disclosed in writing or made available to the other party, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof;
(c) Transfer or license to any person or otherwise extend, amend or modify any material rights to any intellectual property Intellectual Property of the Company or Parent, as applicable, or enter into grants any agreements to transfer or license to any person future patent rights, other than in the ordinary course of business consistent with past practices practices, provided that in no event shall the Company or Parent license on an exclusive basis or sell any intellectual property Intellectual Property of the CompanyCompany or Parent, or Parent as applicable;
(bd) DeclareExcept for the Reverse Split by Parent to be completed following the Closing, 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;
(ce) Except as set forth in Schedule 4.1(e) hereof, purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company and Parent, as applicable, except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee pursuant to stock option or purchase agreements in effect on the date hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber, or agree to any of the foregoing with respect to, any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible or exchangeable securities, other than the grant of options to purchase Company Common Stock in the ordinary course of business consistent with past practices, and other than the issuance of Company Common Stock prior to the Closing in connection with the exercise of any Company Options or Company Warrants or the conversion of the Company Convertible Securities;
(dg) Amend its their respective Charter Documents unless required except as contemplated by the filing of the Certificate of Designations to do so hereunderbe filed by Parent prior to Closing;
(eh) Acquire Except as disclosed in Schedule 4.1(h) hereto, acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a 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 which are material, individually or in the aggregate, to the business of Parent or the Company as applicable, or enter into any joint ventures, strategic partnerships or alliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party’s ability to compete or to offer or sell any products or services;
(fi) Sell, lease, license, encumber or otherwise dispose of any properties or assets, except (A) sales of services and licenses of software in the ordinary course of business consistent with past practice, (B) sales of inventory in the ordinary course of business consistent with past practicepractice and, (C) and except for the sale, lease or disposition (other than through licensing) of property or assets that which are not material, individually or in the aggregate, to the business of such party in the ordinary course of business consistent with past practicesparty;
(ij) In the case of the CompanyExcept as disclosed in Schedule 4.1(j) hereto, incur any indebtedness for borrowed money in excess of $50,000 in the aggregate (other than purchase money debt in connection with the acquisition by the Company of vehicles, office equipment, new locations and operating equipment not exceeding $500,000 in the aggregate) or (ii) with case of Parent, incur any indebtedness for borrowed money; or in either case, 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 Parent or the Company, as applicable, enter into any “keep well” or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing;
(hk) Adopt Except as disclosed in Schedule 4.1(k) hereto or as contemplated by this Agreement, adopt or amend any employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or enter into any employment contract or 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”), pay any special bonus or special remuneration to any director or employee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants, except in the ordinary course of business consistent with past practices, and except in connection with the implementation of employment or equity incentive agreements or arrangements, as may be considered appropriate by the Company, resulting from the Company’s acquisition of Capital Telecommunications, Inc. (“CTI”, and, with reference to such acquisition, the “CTI Acquisition”);
(l) Except as disclosed in Schedule 4.1(1) hereto, (i) pay, discharge, settle or satisfy any claims, 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, in the ordinary course of business consistent with past practices or in accordance with their terms, or liabilities recognized or disclosed in the most recent financial statements (or the notes thereto) of the Company or of Parent included in Parent SEC Reports, as applicable, or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which the Company is a party or of which the Company is a beneficiary or to which Parent is a party or of which Parent is a beneficiary, as applicable;
(m) Except as disclosed on Schedule 4.2(m) and except in the ordinary course of business consistent with past practices, in the case modify, amend or terminate any Contract of the Company, or Parent, as applicable, or other material contract or material agreement to which the Company, or Parent is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(n) Except as required by U.S. GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(o) Except as set forth in Schedule 4.1(o) hereto or in the ordinary course of business consistent with past practices, incur or enter into any agreement, contract or commitment requiring such party to pay in excess of $100,000 50,000 in any 12-12 month period;
(jp) Engage in any action that would could reasonably be expected to cause the Merger Transaction to fail to qualify as a “reorganization” under Section 368(a) of the Code;
(kq) Except as set forth in Schedule 4.1(q) hereto, settle any litigation;
(r) Make or rescind any Tax elections that, individually or in the aggregate, could be reasonably likely to adversely affect in any material respect the Tax liability or Tax attributes of such party, settle or compromise any material income tax liability or, except as required by applicable law, materially change any method of accounting for Tax purposes or prepare or file any Return in a manner inconsistent with past practice;
(s) Form, establish or acquire any subsidiary Subsidiary except as contemplated by this Agreement;
(lt) Enter into Permit any transaction with or distribute or advance any assets or property Person to exercise any of its officersdiscretionary rights under any Plan to provide for the automatic acceleration of any outstanding options, directors, partners, stockholders the termination of any outstanding repurchase rights or other affiliates (other than payment the termination of salary and benefits in the ordinary course of business consistent with past practice)any cancellation rights issued pursuant to such plans; or
(mu) Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 4.1(a4.1 (a) through (lt) above. For purposes of this Article IV, the term “Company” shall mean the Company and each of its Subsidiaries.
Appears in 1 contract
Samples: Merger Agreement (Multi Link Telecommunications Inc)
Conduct of Business by Company and Parent. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Closing (the “Interim Period”)Date, each of the Company, Company and Parent and Merger Sub shall, except to the extent that the other party parties shall otherwise consent in writing (which consents shall not be unreasonably withheld or delayed)writing, carry on its business in the usual, regular and ordinary course consistent with past practices, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations Laws (except where noncompliance would not have a Material Adverse Effect), pay its debts and taxes Taxes when due subject to good faith disputes over such debts or taxesTaxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present managers, officers and employees employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as permitted or required or permitted by the terms of this Agreement or as set forth in Schedule 4.1 hereto Agreement, without the prior written consent of the other party (which shall not be unreasonably withheld or delayed)party, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the ClosingClosing Date, each of the Company, Company and Parent and Merger Sub shall not do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or (except as specifically provided for herein) change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to applicable Law, written agreements outstanding, or policies existing on the date hereof and as previously or concurrently disclosed in writing or made available to the other party, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof;
(c) Transfer or license to any person or otherwise extend, amend or modify any material rights to any intellectual property Intellectual Property of the Company or Parent, as applicable, Parent or enter into grants to transfer or license to any person future patent rights, other than in the ordinary course of business consistent with past practices provided that in no event shall the Company or Parent license on an exclusive basis or sell any intellectual property Intellectual Property of the CompanyCompany or Parent, or Parent as applicable;
(bd) 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;
(ce) Except as provided herein, purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock or Stockholders interest of Company and Parent, as applicable;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber, or agree to any of the foregoing with respect to, any shares of capital stock stock, or any securities convertible into or exchangeable for shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into or exchangeable for shares of capital stockstock or Shares, or enter into other agreements or commitments of any character obligating it to issue any such shares of capital stock, shares or convertible or exchangeable securities, other than the grant of options to purchase Company Common Stock in the ordinary course of business consistent with past practices, and other than the issuance of Company Common Stock prior to the Closing in connection with the exercise of any Company Options or Company Warrants or the conversion of the Company Convertible Securities;
(dg) Amend Except as provided herein or as disclosed to the other party, amend its Charter Documents unless required to do so hereunderDocuments;
(eh) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a 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 which are material, individually or in the aggregate, to the business of Parent or the Company Company, as applicable, or enter into any joint ventures, strategic partnerships or alliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party’s ability to compete or to offer or sell any products or services;
(fi) Sell, lease, license, encumber or otherwise dispose of any properties or assets, except (A) sales of services and licenses of software in the ordinary course of business consistent with past practice, (B) sales of inventory in the ordinary course of business consistent with past practicepractice and, (C) and except for the sale, lease or disposition (other than through licensing) of property or assets that which are not material, individually or in the aggregate, to the business of such party in the ordinary course of business consistent with past practicesparty;
(ij) In the case of the Company, incur Incur any indebtedness for borrowed money in excess of $50,000 in the aggregate (other than purchase money debt in connection with the acquisition by the Company of vehicles, office equipment, new locations and operating equipment not exceeding $500,000 25,000 in the aggregate) , or (ii) with case of Parent, incur any indebtedness for borrowed money; or in either case, 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 Parent or the Company, as applicable, enter into any “keep well” or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing;
(hk) Adopt Except as set forth in the Company Disclosure Letter or the Parent Disclosure Letter, adopt or amend any employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or enter into any employment contract or 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”), pay any special bonus or special remuneration to any manager, director or employee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its managers, directors, officers, employees or consultants, except in the ordinary course of business consistent with past practices, and except in connection with the implementation of employment or equity incentive agreements or arrangements, as may be considered appropriate by the Company, resulting from the Company’s acquisition of Capital Telecommunications, Inc. (“CTI”, and, with reference to such acquisition, the “CTI Acquisition”);
(i1) pay, discharge, settle or satisfy any claims, 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, in the ordinary course of business consistent with past practices or in accordance with their terms, or liabilities recognized or disclosed in the most recent financial statements (or the notes thereto) of Company or of Parent, as applicable, or incurred since the date of such financial statements, or (2) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary or to which Parent is a party or of which Parent is a beneficiary, as applicable;
(m) Except in the ordinary course of business consistent with past practices, modify, amend or terminate any Contract of Company or Parent, as applicable, or other material contract or material agreement to which Company or Parent is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(n) Except as appropriate to fairly represent Company’s financial condition or results of operations, revalue any of its assets or adjust its revenue or expenses;
(o) Except for in the case ordinary course of the Companybusiness, incur or enter into any agreement, contract or commitment requiring such party to pay in excess of $100,000 25,000 in any 12-12 month period;
(jp) Engage in Settle any action that would reasonably be expected to cause the Merger to fail to qualify as litigation for a “reorganization” under Section 368(a) total sum of the Codegreater than $25,000;
(kq) FormMake or rescind any Tax elections that, individually or in the aggregate, could be reasonably likely to adversely affect in any material respect the Tax liability or Tax attributes of such party, settle or compromise any material income tax liability or, except as required by applicable Law, materially change any method of accounting for Tax purposes or prepare or file any Return in a manner inconsistent with past practice;
(r) Except as set forth in the Company Disclosure Letter or the Parent Disclosure Letter, form, establish or acquire any subsidiary except as contemplated by this Agreementsubsidiary;
(ls) Enter into Permit any transaction with or distribute or advance any assets or property Person to exercise any of its officersdiscretionary rights under any Plan to provide for the automatic acceleration of any outstanding options, directors, partners, stockholders the termination of any outstanding repurchase rights or other affiliates (other than payment the termination of salary and benefits in the ordinary course of business consistent with past practice)any cancellation rights issued pursuant to such plans; or
(mt) Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 4.1(aSections 6.1 (a) through (ls) above.
Appears in 1 contract
Conduct of Business by Company and Parent. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Closing (the “Interim Period”)Closing, each of the CompanyCompany (including its Subsidiaries), Parent and Merger Sub shall, except to the extent that the other party (either the Company or Parent, as applicable) shall otherwise consent in writing (writing, which consents consent shall not be unreasonably withheld or delayed)withheld, carry on its business in the usual, regular and ordinary course consistent with past practices, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations (except where noncompliance would not have a Company Material Adverse Effect or a Project Material Adverse Effect), pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (iA) preserve substantially intact its present business organization, (iiB) keep available the services of its present officers and employees and (iiiC) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. Unless otherwise noted, all references to the Company and its Subsidiaries in this Article IV shall mean the Company on an as reorganized basis as such reorganization is set forth on Schedule 2.2(a) hereto. In addition, except as required or permitted by the terms of this Agreement or as set forth in Schedule 4.1 hereto hereto, without the prior written consent of the other party (party, which consent shall not be unreasonably withheld or delayed)withheld, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Closing, each of the Company, Parent and Merger Sub shall not do any of the following:
(a) Waive any stock repurchase or similar rights, accelerate, amend or (except as specifically provided for herein) change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock (or similar) plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to applicable law, written agreements outstanding, or policies existing on the date hereof and as previously or concurrently disclosed in writing or made available to the other party, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof;
(c) Transfer or license to any person or otherwise extend, amend or modify any material rights to any intellectual property Intellectual Property of the Company (or its Subsidiaries) or Parent, as applicable, or enter into grants to transfer or license to any person future patent rights, other than in the ordinary course of business consistent with past practices provided that in no event shall the Company or Parent license on an exclusive basis or sell any intellectual property Intellectual Property of the CompanyCompany (or its Subsidiaries), or Parent as applicable;
(bd) 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 stockstock except, after notice to Parent, for: (i) distributions made to the Members for payment of taxes with respect to income of the Company (or its Subsidiaries), which shall include reserves for the payment of taxes due after Closing with respect to income of the Company earned prior to Closing subject to post-Closing adjustments based on actual tax liability incurred; and (ii) distributions of $20,000,000 to pay back loans from Members;
(ce) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock or membership interests, as applicable, of the Company (or its Subsidiaries) and Parent, as applicable, including repurchases of unvested shares or membership interests, as applicable, at cost in connection with the termination of the relationship with any employee or consultant pursuant to stock or purchase agreements in effect on the date hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber, or agree to any of the foregoing with respect to, any shares of capital stock or membership interests, as applicable, or any securities convertible into or exchangeable for shares of capital stockstock or membership interests, as applicable, or subscriptions, rights, warrants or options to acquire any shares of capital stock or membership interests, as applicable, or any securities convertible into or exchangeable for shares of capital stockstock or membership interests, as applicable, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible or exchangeable securities, other than . In the grant of options to purchase event that the Company Common Stock in the ordinary course of business consistent with past practices, and other than the issuance of Company Common Stock issues any membership or similar ownership interests prior to Closing, the Closing transferee will agree to be bound by the terms and conditions of this Agreement, such agreement to be in connection with the exercise of any Company Options or Company Warrants or the conversion of the Company Convertible Securitiesform and substance reasonably satisfactory to Parent;
(dg) Amend its Charter Documents charter documents unless required to do so hereunder;
(eh) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a 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 which are material, individually or in the aggregate, to the business of Parent or the Company (or any of its Subsidiaries) as applicable, or enter into any joint ventures, strategic partnerships or alliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party’s ability to compete or to offer or sell any products or servicesservices except as otherwise contemplated by this Agreement;
(fi) Sell, lease, license, encumber or otherwise dispose of any properties or assets, except (A) sales of services and licenses of software individual condominium units in the ordinary course of business consistent with past practicepractice at fair market value to unaffiliated purchasers who, together with their affiliates, are not purchasing more than an aggregate of ten units in any individual project; and (B) sales of inventory in the ordinary course of business consistent with past practice, (C) and the sale, lease or disposition (other than through licensing) of property or assets that are not material, individually or in the aggregate, to the business of such party in the ordinary course of business consistent with past practicesparty;
(ij) In the case of the Company, incur Incur any indebtedness for borrowed money in excess of $50,000 1,000,000 in the aggregate (other than purchase money debt in connection with the acquisition by the Company of vehicles, office equipment, new locations equipment and operating equipment not exceeding $500,000 1,000,000 in the aggregate) or in connection with the purchase of real property (iiincluding any personal property directly or indirectly related to such real property) with case of Parent, incur any indebtedness for borrowed money; or in either case, 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 Parent or the CompanyCompany (or its Subsidiaries), as applicable, enter into any “keep well” or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing; provided that notwithstanding the foregoing, the Company may without Parent’s consent (i) obtain a line of credit of up to $100,000,000 with a commercial bank on customary terms, and (ii) enter into the Bridge Loan as described on Schedule 6.2(n) hereto;
(hk) Adopt or amend any employee compensation or benefit plan, policy or arrangement, any employee stock or membership interest purchase or employee stock or membership interest option plan, or enter into any employment contract or 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”), grant or pay any special bonus or special remuneration to any director or employee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants, except in the ordinary course of business consistent with past practices, practices and except in connection with the implementation of employment or equity incentive agreements or arrangements, as may be considered appropriate otherwise contemplated by the Company, resulting from the Company’s acquisition of Capital Telecommunications, Inc. (“CTI”, and, with reference to such acquisition, the “CTI Acquisition”)this Agreement;
(il) Except in the ordinary course of business consistent with past practices, pay, discharge, settle or satisfy any claims, 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, in the case ordinary course of business consistent with past practices or in accordance with their terms, or liabilities recognized or disclosed in the CompanyUnaudited Financial Statements or in the most recent financial statements included in the Parent SEC Reports filed prior to the date of this Agreement, as applicable, or incurred since the date of such financial statements, or waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which the Company (or its Subsidiaries) is a party or of which the Company (or its Subsidiaries) is a beneficiary or to which Parent is a party or of which Parent is a beneficiary, as applicable;
(m) Except in the ordinary course of business consistent with past practices, modify, amend or terminate any Material Company Contract or Parent Contract, as applicable, or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(n) Except as required by U.S. GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(o) Except in the ordinary course of business consistent with past practices or as set forth below in this Section 4.1(o), incur or enter into any agreement, contract or commitment requiring such party to pay in excess of $100,000 1,000,000 in any 12-12 month period;, other than the Company under a Routine Operating Contract; provided, that, notwithstanding the foregoing the Company may (i) without Parent’s consent enter into any agreement, contract or commitment requiring such party to pay in excess of $2,000,000 in any 12 month period if such agreement provides for a refundable deposit in favor of the Company and the Company provides written notice to the Parent of the material terms and conditions of such agreement, contract or commitment within one week after such agreement, contract or commitment becomes effective, (ii) without Parent’s consent enter into any agreement, contract or commitment requiring such party to pay in excess of $2,000,000 in any 12 month period if such agreement provides for a refundable deposit in favor of the Company and the Company provides prior written notice to the Parent of the material terms and conditions of such agreement, contract or commitment, (iii) without Parent’s consent enter into any agreement, contract or commitment requiring such party to pay up to $1,000,000 in any 12 month period if such agreement provides for a non-refundable deposit payable by the Company and the Company provides written notice to Parent of the material terms and conditions of such agreement, contract or commitment within one week after such agreement, contract or commitment becomes effective, (iv) with prior written consent of Parent consent enter into any agreement, contract or commitment requiring such party to pay in excess of $1,000,000 in any 12 month period if such agreement provides for a non-refundable deposit payable by the Company, or (v) without Parent’s consent, enter into an agreement with an Optioned Property Provider that does not create any liability to the Company in excess of $1,000,000 provided that the Company notifies Parent of such agreement within five business days of the date of entering into such agreement.
(jp) Engage in Take any action that would reasonably (without regard to any action taken, or agreed to be expected to cause taken, by Parent or any of its Affiliates) could prevent the Merger to fail to qualify transactions contemplated by this Agreement from qualifying as a “reorganization” under tax-free contribution within the meaning of Section 368(a351(a) of the Code;
(kq) Make or rescind any Tax elections that, individually or in the aggregate, could be reasonably likely to adversely affect in any material respect the Tax liability or Tax attributes of such party, settle or compromise any material income tax liability or, except as required by applicable law, materially change any method of accounting for Tax purposes or prepare or file any Return in a manner inconsistent with past practice;
(r) Form, establish or acquire any subsidiary Subsidiary except as contemplated by this Agreement;
(ls) Permit any Person to exercise any of its discretionary rights under any Plan to provide for the automatic acceleration of any outstanding options, the termination of any outstanding repurchase rights or the termination of any cancellation rights issued pursuant to such plans;
(t) Make capital expenditures except in accordance with prudent business and operational practices consistent with prior practice;
(u) Take or omit to take any action, the taking or omission of which would be reasonably anticipated to have a Material Adverse Effect;
(v) Enter into any transaction with or distribute or advance any assets or property to any of its officers, directors, partners, stockholders or other affiliates (other than payment of salary and benefits in the ordinary course of business consistent with past practice);
(w) Amend, modify, waive, terminate or otherwise change any of the terms or conditions of the Optioned Property Provider Agreement; or
(mx) Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 4.1(a4.1 (a) through (lw) above. In the event that Parent does not consent to any action proposed to be taken by the Company pursuant to this Section 4.1, nothing shall prevent the Members from taking such action by the way of another entity or individually.
Appears in 1 contract
Samples: Merger Agreement (Key Hospitality Acquisition CORP)
Conduct of Business by Company and Parent. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Closing (the “Interim Period”)Closing, each of the Company, Parent and Merger Sub shall, except to the extent that the other party shall otherwise consent in writing (which consents shall not be unreasonably withheld or delayed)writing, carry on its business in the usual, regular and ordinary course consistent with past practices, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations (except where noncompliance would not have a Material Adverse Effect), pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as required or permitted by the terms of this Agreement or as set forth in Schedule 4.1 hereto Agreement, without the prior written consent of the other party (which shall not be unreasonably withheld or delayed)party, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Closing, each of the Company, Parent and Merger Sub shall not do any of the following:
(a) Waive any stock repurchase rights, accelerate (except as disclosed in the Company Schedule), amend or (except as specifically provided for herein) change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to applicable law, written agreements outstanding, or policies existing on the date hereof and as previously or concurrently disclosed in writing or made available to the other party, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof;
(c) Transfer or license to any person or otherwise extend, amend or modify any material rights to any intellectual property Intellectual Property of the Company or Parent, as applicable, or enter into grants to transfer or license to any person future patent rights, other than in the ordinary course of business consistent with past practices practices, provided that in no event shall the Company or Parent license on an exclusive basis or sell any intellectual property Intellectual Property of the Company, or Parent as applicable;
(bd) 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;
(ce) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company and Parent, as applicable, including repurchases of unvested shares at cost in connection with the termination of the relationship with any employee or consultant pursuant to stock option or purchase agreements in effect on the date hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber, or agree to any of the foregoing with respect to, any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible or exchangeable securities, other than the grant of options to purchase Company Common Stock in the ordinary course of business consistent with past practices, and other than except for (i) the issuance of Company Common Stock prior to the Closing in connection with common stock upon the exercise of any outstanding Company Stock Options or Company Warrants warrants, or issuance of common stock upon the conversion of the any Company Convertible SecuritiesPreferred Stock;
(dg) Amend its Charter Documents unless required to do so hereunder;
(eh) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a 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 which are material, individually or in the aggregate, to the business of Parent or the Company as applicable, or enter into any joint ventures, strategic partnerships or alliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party’s ability to compete or to offer or sell any products or services, other than franchise and area development agreements entered into in the ordinary course of business upon prior notice to Parent;
(fi) Sell, lease, license, encumber or otherwise dispose of any properties or assets, except (A) sales of services and licenses of software in the ordinary course of business consistent with past practice, (B) sales of inventory in the ordinary course of business consistent with past practice, practice and (CB) and the sale, lease or disposition (other than through licensing) of property or assets that are not material, individually or in the aggregate, to the business of such party party;
(j) Incur Indebtedness, except for up to $22,000,000 of Indebtedness (including Total Indebtedness) incurred in the ordinary course of business consistent to carry out the business plan. For purposes of the foregoing, “Indebtedness” shall mean (a) all obligations of the Company for borrowed money or with past practices;
respect to deposits or advances of any kind (iother than deposits or advances in respect of deferred revenue), (b) In all obligations of the case Company evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of the Company upon which interest is customarily paid, (d) all obligations of the Company for purchase money financing, including obligations under conditional sale or other title retention agreements or issued or assumed in respect of deferred purchase price, relating to assets purchased by the Company, (e) all guarantees by the Company of any obligation of the type described in the clauses hereof of any other person, (f) all capital lease obligations of the Company, incur any indebtedness for borrowed money (g) all interest rate protection, foreign currency exchange or other interest or exchange rate hedging agreements and (h) all obligations of the Company as an account party in excess respect of $50,000 bankers’ acceptances, in the aggregate (other than purchase money debt in connection with the acquisition by the Company of vehicles, office equipment, new locations and operating equipment not exceeding $500,000 in the aggregate) or (ii) with case of Parent, incur any indebtedness for borrowed money; or in either case, 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 Parent or the Companyeach clause above, as applicable, enter into any “keep well” or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoingsuch date;
(hk) Adopt or amend any employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or enter into any employment contract or 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”), pay any special bonus or special remuneration to any director or employee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants, except in the ordinary course of business consistent with past practices, and except in connection with the implementation of employment or equity incentive agreements or arrangements, as may be considered appropriate by the Company, resulting from the Company’s acquisition of Capital Telecommunications, Inc. (“CTI”, and, with reference to such acquisition, the “CTI Acquisition”);
(il) Pay, discharge, settle or satisfy any claims, 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, in the ordinary course of business consistent with past practices or in accordance with their terms, or liabilities recognized or disclosed in the Unaudited Financial Statements or in the most recent financial statements included in the Parent SEC Reports filed prior to the date of this Agreement, as applicable, or incurred since the date of such financial statements, or waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which the Company is a party or of which the Company is a beneficiary or to which Parent is a party or of which Parent is a beneficiary, as applicable;
(m) Except in the ordinary course of business consistent with past practices, modify, amend or terminate any Material Company Contract or Parent Contract, as applicable, or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(n) Except as required by U.S. GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(o) Except in the case ordinary course of the Companybusiness consistent with past practices, incur or enter into any agreement, contract or commitment requiring such party to pay in excess of $100,000 250,000 in any 12-12 month period, other than the Company under a Routine Operating Contract;
(jp) Engage Make or rescind any Tax elections that, individually or in the aggregate, could be reasonably likely to adversely affect in any action that would reasonably be expected to cause material respect the Merger to fail to qualify Tax liability or Tax attributes of such party, settle or compromise any material income tax liability or, except as required by applicable law, materially change any method of accounting for Tax purposes or prepare or file any Return in a “reorganization” under Section 368(a) of the Codemanner inconsistent with past practice;
(kq) Form, establish or acquire any subsidiary except as contemplated by this Agreement;
(lr) Except as set forth in the Company Schedule, permit any Person to exercise any of its discretionary rights under any Plan to provide for the automatic acceleration of any outstanding options, the termination of any outstanding repurchase rights or the termination of any cancellation rights issued pursuant to such plans;
(s) Make capital expenditures except in accordance with prudent business and operational practices consistent with prior practice;
(t) Take or omit to take any action, the taking or omission of which would be reasonably anticipated to have a Material Adverse Effect;
(u) Enter into any transaction with or distribute or advance any assets or property to any of its officers, directors, partners, stockholders or other affiliates (other than payment of salary and benefits in the ordinary course of business consistent with past practice);
(v) enter into any material area development agreement or enter into any franchise agreement or area development agreement without first amending the Company’s effective UFOCs to include such information regarding the transactions contemplated by this Agreement as required by applicable Law; or
(mw) Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 4.1(a4.1 (a) through (lv) above.
Appears in 1 contract
Samples: Merger Agreement (Services Acquisition Corp. International)
Conduct of Business by Company and Parent. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Closing (the “Interim Period”)Closing, each of the Company, Parent and Merger Sub shall, except to the extent that the other party shall otherwise consent in writing (which consents shall not be unreasonably withheld or delayed)writing, carry on its business in the usual, regular and ordinary course consistent with past practices, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations (except where noncompliance would not have a Material Adverse Effect), pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as required or permitted by the terms of this Agreement or as set forth in Schedule 4.1 hereto Agreement, without the prior written consent of the other party (which shall not be unreasonably withheld or delayed)party, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Closing, each of the Company, Parent and Merger Sub shall not do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or (except as specifically provided for herein) change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to applicable law, written agreements outstanding, or policies existing on the date hereof and as previously or concurrently disclosed in writing or made available to the other party, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof;
(c) Transfer or license to any person or otherwise extend, amend or modify any material rights to any intellectual property Intellectual Property of the Company or Parent, as applicable, or enter into grants to transfer or license to any person future patent rights, other than in the ordinary course of business consistent with past practices provided that in no event shall the Company or Parent license on an exclusive basis or sell any intellectual property Intellectual Property of the Company, or Parent as applicable;
(bd) DeclareExcept for the Reverse Split by Parent, 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;
(ce) IssueExcept as set forth in Schedule 4.1(e) hereof, purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company and Parent, as applicable, except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee pursuant to stock option or purchase agreements in effect on the date hereof;
(f) Except the Private Placement by Parent, issue, deliver, sell, authorize, pledge or otherwise encumber, or agree to any of the foregoing with respect to, any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible or exchangeable securities, other than the grant of options to purchase Company Common Stock in the ordinary course of business consistent with past practices, and other than the issuance of Company Common Stock prior to the Closing in connection with the exercise of any Company Options or Company Warrants or the conversion of the Company Convertible Securities;
(dg) Amend its Charter Documents unless required to do so hereunderexcept as contemplated by the Reverse Split and Name Change;
(eh) Acquire Except as disclosed in Schedule 4.1(h) hereto, acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a 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 which are material, individually or in the aggregate, to the business of Parent or the Company as applicable, or enter into any joint ventures, strategic partnerships or alliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party’s 's ability to compete or to offer or sell any products or services;
(fi) Sell, lease, license, encumber or otherwise dispose of any properties or assets, except (A) sales of services and licenses of software in the ordinary course of business consistent with past practice, (B) sales of inventory in the ordinary course of business consistent with past practicepractice and, (C) and except for the sale, lease or disposition (other than through licensing) of property or assets that which are not material, individually or in the aggregate, to the business of such party in the ordinary course of business consistent with past practicesparty;
(ij) In the case of the CompanyExcept as disclosed in Schedule 4.1(j) hereto, incur any indebtedness for borrowed money in excess of $50,000 in the aggregate (other than purchase money debt in connection with the acquisition by the Company of vehicles, office equipment, new locations and operating equipment not exceeding $500,000 in the aggregate) or (ii) with case of Parent, incur any indebtedness for borrowed money; or in either case, 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 Parent or the Company, as applicable, enter into any “"keep well” " or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing;
(hk) Adopt Except as disclosed in Schedule 4.1(k) hereto or as contemplated by this Agreement, adopt or amend any employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or enter into any employment contract or 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”"), pay any special bonus or special remuneration to any director or employee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants, except in the ordinary course of business consistent with past practices, and except in connection with the implementation of employment or equity incentive agreements or arrangements, as may be considered appropriate by the Company, resulting from the Company’s acquisition of Capital Telecommunications, Inc. (“CTI”, and, with reference to such acquisition, the “CTI Acquisition”);
(l) Except as disclosed in Schedule 4.1
(1) hereto, (i) pay, discharge, settle or satisfy any claims, 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, in the ordinary course of business consistent with past practices or in accordance with their terms, or liabilities recognized or disclosed in the most recent financial statements (or the notes thereto) of Company or of Parent included in Parent SEC Reports, as applicable, or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which Company is a party or of which Company is a beneficiary or to which Parent is a party or of which Parent is a beneficiary, as applicable;
(m) Except as disclosed on Schedule 4.2(m) and except in the ordinary course of business consistent with past practices, modify, amend or terminate any Contract of Company, or Parent, as applicable, or other material contract or material agreement to which Company, or Parent is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(n) Except as required by U.S. GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(o) Except as set forth in Schedule 4.1(o) hereto or in the case ordinary course of the Companybusiness consistent with past practices, incur or enter into any agreement, contract or commitment requiring such party to pay in excess of $100,000 50,000 in any 12-12 month period;
(jp) Engage in any action that would could reasonably be expected to cause the Merger Transaction to fail to qualify as a “"reorganization” " under Section 368(a) of the Code;
(kq) Except as contemplated by Article V herein or as set forth in Schedule 4.1(q) hereto, settle any litigation;
(r) Make or rescind any Tax elections that, individually or in the aggregate, could be reasonably likely to adversely affect in any material respect the Tax liability or Tax attributes of such party, settle or compromise any material income tax liability or, except as required by applicable law, materially change any method of accounting for Tax purposes or prepare or file any Return in a manner inconsistent with past practice;
(s) Form, establish or acquire any subsidiary Subsidiary except as contemplated by this Agreement;
(lt) Enter into Permit any transaction with or distribute or advance any assets or property Person to exercise any of its officersdiscretionary rights under any Plan to provide for the automatic acceleration of any outstanding options, directors, partners, stockholders the termination of any outstanding repurchase rights or other affiliates (other than payment the termination of salary and benefits in the ordinary course of business consistent with past practice)any cancellation rights issued pursuant to such plans; or
(mu) Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 4.1(a4.1 (a) through (lt) above.
Appears in 1 contract
Samples: Merger Agreement (Chiste Corp)
Conduct of Business by Company and Parent. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Closing (the “Interim Period”)Closing, each of the Company, Parent and Merger Sub shall, except to the extent that the other party shall otherwise consent in writing (which consents shall not be unreasonably withheld or delayed)writing, carry on its business in the usual, regular and ordinary course consistent with past practices, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations (except where noncompliance would not have a Material Adverse Effect), pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as required or permitted by the terms of this Agreement or as set forth in Schedule 4.1 hereto Agreement, without the prior written consent of the other party (which shall not be unreasonably withheld or delayed)party, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Closing, each of the CompanyCompany and its Subsidiaries, Parent and Merger Sub shall not do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or (except as specifically provided for herein) change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to applicable law, written agreements outstanding, or policies existing on the date hereof and as previously or concurrently disclosed in writing or made available to the other party, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof;
(c) Transfer or license to any person or otherwise extend, amend or modify any material rights to any intellectual property Intellectual Property of the Company or Parent, as applicable, or enter into grants any agreements to transfer or license to any person future patent rights, other than in the ordinary course of business consistent with past practices practices, provided that in no event shall the Company or Parent license on an exclusive basis or sell any intellectual property Intellectual Property of the CompanyCompany or Parent, or Parent as applicable;
(bd) DeclareExcept for the 10 for 1 forward common stock split, 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;
(ce) Except as set forth in Schedule 4.1(e) hereof, purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company and Parent, as applicable, except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee pursuant to stock option or purchase agreements in effect on the date hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber, or agree to any of the foregoing with respect to, any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible or exchangeable securities, other than the grant of options to purchase Company Common Stock in the ordinary course of business consistent with past practices, and other than the issuance of Company Common Stock prior to the Closing in connection with the exercise of any Company Options or Company Warrants or the conversion of the Company Convertible Securities;
(dg) Amend its their respective Charter Documents unless required except as contemplated by the filing of the Amended Articles of Incorporation to do so hereunderbe filed by Parent prior to Closing;
(eh) Acquire Except as disclosed in Schedule 4.1(h) hereto, acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a 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 which are material, individually or in the aggregate, to the business of Parent or the Company as applicable, or enter into any joint ventures, strategic partnerships or alliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party’s ability to compete or to offer or sell any products or services;
(fi) Sell, lease, license, encumber or otherwise dispose of any properties or assets, except (A) sales of services and licenses of software in the ordinary course of business consistent with past practice, (B) sales of inventory in the ordinary course of business consistent with past practicepractice and, (C) and except for the sale, lease or disposition (other than through licensing) of property or assets that which are not material, individually or in the aggregate, to the business of such party in the ordinary course of business consistent with past practicesparty;
(ij) In the case of the CompanyExcept as disclosed in Schedule 4.1(j) hereto, incur any indebtedness for borrowed money in excess of $50,000 5,000 in the aggregate (other than purchase money debt in connection with the acquisition by the Company of vehicles, office equipment, new locations and operating equipment not exceeding $500,000 in the aggregate) or (ii) with case of Parent, incur any indebtedness for borrowed money; or in either case, 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 Parent or the Company, as applicable, enter into any “keep well” or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing;
(hk) Adopt Except as disclosed in Schedule 4.1(k) hereto or as contemplated by this Agreement, adopt or amend any employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or enter into any employment contract or 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”), pay any special bonus or special remuneration to any director or employee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants, except in the ordinary course of business consistent with past practices, and except in connection with the implementation of employment or equity incentive agreements or arrangements, as may be considered appropriate by the Company, resulting from the Company’s acquisition of Capital Telecommunications, Inc. (“CTI”, and, with reference to such acquisition, the “CTI Acquisition”);
(l) Except as disclosed in Schedule 4.1(1) hereto, (i) pay, discharge, settle or satisfy any claims, 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, in the ordinary course of business consistent with past practices or in accordance with their terms, or liabilities recognized or disclosed in the most recent financial statements (or the notes thereto) of the Company or of Parent included in Parent SEC Reports, as applicable, or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which the Company is a party or of which the Company is a beneficiary or to which Parent is a party or of which Parent is a beneficiary, as applicable;
(m) Except as disclosed on Schedule 4.2(m) and except in the ordinary course of business consistent with past practices, in the case modify, amend or terminate any Contract of the Company, or Parent, as applicable, or other material contract or material agreement to which the Company, or Parent is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(n) Except as required by U.S. GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(o) Except as set forth in Schedule 4.1(o) hereto or in the ordinary course of business consistent with past practices, incur or enter into any agreement, contract or commitment requiring such party to pay in excess of $100,000 5,000 in any 12-12 month period;
(jp) Engage in any action that would could reasonably be expected to cause the Merger Transaction to fail to qualify as a “reorganization” under Section 368(a) of the Code;
(kq) Except as set forth in Schedule 4.1(q) hereto, settle any litigation;
(r) Make or rescind any Tax elections that, individually or in the aggregate, could be reasonably likely to adversely affect in any material respect the Tax liability or Tax attributes of such party, settle or compromise any material income tax liability or, except as required by applicable law, materially change any method of accounting for Tax purposes or prepare or file any Return in a manner inconsistent with past practice;
(s) Form, establish or acquire any subsidiary Subsidiary except as contemplated by this Agreement;
(lt) Enter into Permit any transaction with or distribute or advance any assets or property Person to exercise any of its officersdiscretionary rights under any Plan to provide for the automatic acceleration of any outstanding options, directors, partners, stockholders the termination of any outstanding repurchase rights or other affiliates (other than payment the termination of salary and benefits in the ordinary course of business consistent with past practice)any cancellation rights issued pursuant to such plans; or
(mu) Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 4.1(a4.1 (a) through (lt) above. For purposes of this Article IV, the term “Company” shall mean the Company and each of its Subsidiaries.
Appears in 1 contract
Conduct of Business by Company and Parent. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Closing (the “Interim Period”)Closing, each of the Company, Company and Parent and Merger Sub shall, except to the extent that the other party shall otherwise consent in writing (which consents shall not be unreasonably withheld or delayed)writing, carry on its business in the usual, regular and ordinary course consistent with past practices, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations (except where noncompliance would not have a Material Adverse Effect), pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as required or permitted by the terms of this Agreement or as set forth in Schedule 4.1 hereto hereto, without the prior written consent of the other party (which shall not be unreasonably withheld or delayed)party, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Closing, each of the Company, Company and Parent and Merger Sub shall not do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or (except as specifically provided for herein) change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to applicable law, written agreements outstanding, or policies existing on the date hereof and as previously or concurrently disclosed in writing or made available to the other party, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof;
(c) Transfer or license to any person or otherwise extend, amend or modify any material rights to any intellectual property Intellectual Property of the Company or Parent, as applicable, or enter into grants to transfer or license to any person future patent rights, other than in the ordinary course of business consistent with past practices provided that in no event shall the Company or Parent license on an exclusive basis or sell any intellectual property Intellectual Property of the Company, or Parent as applicable;
(bd) 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;
(ce) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company and Parent, as applicable, including repurchases of unvested shares at cost in connection with the termination of the relationship with any employee or consultant pursuant to agreements in effect on the date hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber, or agree to any of the foregoing with respect to, any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible or exchangeable securities, other than the grant of options to purchase Company Common Stock in the ordinary course of business consistent with past practices, and other than the issuance of Company Common Stock prior to the Closing in connection with the exercise of any Company Options or Company Warrants or the conversion of the Company Convertible Securities;
(dg) Amend its Charter Documents unless required to do so hereunderDocuments;
(eh) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a 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 which are material, individually or in the aggregate, to the business of Parent or the Company as applicable, to the extent that the aggregate consideration to be paid with respect thereto is in excess of $1,000,000, or enter into any joint ventures, strategic partnerships or alliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party’s 's ability to compete or to offer or sell any products or services;
(fi) Sell, lease, license, encumber or otherwise dispose of any properties or assets, except (A) sales of services and licenses of software in the ordinary course of business consistent with past practice, (B) sales of inventory in the ordinary course of business consistent with past practice, and (CB) and the sale, lease or disposition (other than through licensing) of property or assets that are not material, individually or in the aggregate, to the business of such party in the ordinary course of business consistent with past practicesparty;
(ij) In the case of the Company, incur Incur any indebtedness for borrowed money in excess of $50,000 1,000,000 in the aggregate (other than purchase money debt in connection with the acquisition by the Company of vehicles, office equipment, new locations and operating equipment not exceeding $500,000 in the aggregate) or (ii) with case of Parent, incur any indebtedness for borrowed money; or in either case, 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 Parent or the Company, as applicable, enter into any “"keep well” " or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing;
(hk) Adopt or amend any employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or enter into any employment contract or 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”"), pay any special bonus or special remuneration to any director or employee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants, except in the ordinary course of business consistent with past practices, and except in connection with the implementation of employment or equity incentive agreements or arrangements, as may be considered appropriate by the Company, resulting from the Company’s acquisition of Capital Telecommunications, Inc. (“CTI”, and, with reference to such acquisition, the “CTI Acquisition”);
(il) Pay, discharge, settle or satisfy any claims, 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, in the ordinary course of business consistent with past practices or in accordance with their terms, or liabilities recognized or disclosed in the Unaudited Financial Statements or in the most recent financial statements included in the Parent SEC Reports filed prior to the date of this Agreement, as applicable, or incurred since the date of such financial statements, or waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which the Company is a party or of which the Company is a beneficiary or to which Parent is a party or of which Parent is a beneficiary, as applicable;
(m) Except in the ordinary course of business consistent with past practices, modify, amend or terminate any Material Company Contract or Parent Contract, as applicable, or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(n) Except as required by U.S. GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(o) Except in the case ordinary course of the Companybusiness consistent with past practices, incur or enter into any agreement, contract or commitment requiring such party to pay in excess of $100,000 250,000 in any 12-12 month period;
(jp) Engage in any action that would could reasonably be expected to cause the Merger to fail to qualify as a “"reorganization” " under Section 368(a) of the Code;
(kq) Form, establish Settle any litigation to which an Insider is a party or acquire any subsidiary except as contemplated where the consideration given by this Agreementthe Company is other than monetary;
(lr) Make or rescind any Tax elections that, individually or in the aggregate, could be reasonably likely to adversely affect in any material respect the Tax liability or Tax attributes of such party, settle or compromise any material income tax liability or, except as required by applicable law, materially change any method of accounting for Tax purposes or prepare or file any Return in a manner inconsistent with past practice;
(s) Permit any Person to exercise any of its discretionary rights under any Plan to provide for the automatic acceleration of any outstanding options, the termination of any outstanding repurchase rights or the termination of any cancellation rights issued pursuant to such plans;
(t) Make capital expenditures except in accordance with prudent business and operational practices consistent with prior practice;
(u) Make or omit to take any action which would be reasonably anticipated to have a Material Adverse Effect;
(v) Enter into any transaction with or distribute or advance any assets or property to any of its officers, directors, partners, stockholders or other affiliates (other than the payment of salary and benefits in the ordinary course of business consistent with past prior practice); or
(mw) Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 4.1(a4.1 (a) through (lv) above.
Appears in 1 contract
Conduct of Business by Company and Parent. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Closing (the “Interim Period”)Closing, each of the Company, Parent and Merger Sub shall, except to the extent that the other party shall otherwise consent in writing (which consents shall not be unreasonably withheld or delayed)writing, carry on its business in the usual, regular and ordinary course consistent with past practices, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations (except where noncompliance would not have a Material Adverse Effect), pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as required or permitted by the terms of this Agreement or as set forth in Schedule 4.1 hereto hereto, without the prior written consent of the other party (which shall not be unreasonably withheld or delayed)party, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Closing, each of the Company, Parent and Merger Sub shall not do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or (except as specifically provided for herein) change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to applicable law, written agreements outstanding, or policies existing on the date hereof and as previously or concurrently disclosed in writing or made available to the other party, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof.
(c) Transfer or license to any person or otherwise extend, amend or modify any material rights to any intellectual property Intellectual Property of the Company or Parent, as applicable, or enter into grants to transfer or license to any person future patent rights, other than in the ordinary course of business consistent with past practices provided that in no event shall the Company or Parent license on an exclusive basis or sell any intellectual property Intellectual Property of the Company, or Parent as applicable;
(bd) 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;
(ce) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company and Parent, as applicable, including repurchases of unvested shares at cost in connection with the termination of the relationship with any employee or consultant pursuant to stock option or purchase agreements in effect on the date hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber, or agree to any of the foregoing with respect to, any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible or exchangeable securities, other than the grant of options to purchase Company Common Stock in the ordinary course of business consistent with past practices, and other than the issuance of Company Common Stock prior to the Closing in connection with the exercise of any Company Options or Company Warrants or the conversion of the Company Convertible Securities;
(dg) Amend its Charter Documents unless required to do so hereunder;
(eh) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a 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 which are material, individually or in the aggregate, to the business of Parent or the Company as applicable, or enter into any joint ventures, strategic partnerships or alliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party’s ability to compete or to offer or sell any products or services;
(fi) Sell, lease, license, encumber or otherwise dispose of any properties or assets, except (A) sales of services and licenses of software in the ordinary course of business consistent with past practice, (B) sales of inventory in the ordinary course of business consistent with past practice, (C) and the sale, lease or disposition (other than through licensing) of property or assets that are not material, individually or in the aggregate, to the business of such party in the ordinary course of business consistent with past practicesparty;
(ij) In the case of the Company, incur Incur any indebtedness for borrowed money in excess of $50,000 25,000 in the aggregate (other than purchase money debt in connection with the acquisition by the Company of vehicles, office equipment, new locations and operating equipment not exceeding $500,000 in the aggregate) or (ii) with case of Parent, incur any indebtedness for borrowed money; or in either case, 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 Parent or the Company, as applicable, enter into any “keep well” or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing;
(hk) Adopt Except as contemplated by this Agreement, adopt or amend any employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or enter into any employment contract or 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”), pay any special bonus or special remuneration to any director or employee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants, except in the ordinary course of business consistent with past practices, and except in connection with the implementation of employment or equity incentive agreements or arrangements, as may be considered appropriate by the Company, resulting from the Company’s acquisition of Capital Telecommunications, Inc. (“CTI”, and, with reference to such acquisition, the “CTI Acquisition”);
(il) Pay, discharge, settle or satisfy any claims, 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, in the ordinary course of business consistent with past practices or in accordance with their terms, or liabilities recognized or disclosed in the Unaudited Financial Statements or in the most recent financial statements included in the Parent SEC Reports filed prior to the date of this Agreement, as applicable, or incurred since the date of such financial statements, or waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which the Company is a party or of which the Company is a beneficiary or to which Parent is a party or of which Parent is a beneficiary, as applicable;
(m) Except in the ordinary course of business consistent with past practices, modify, amend or terminate any Material Company Contract or Parent Contract, as applicable, or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(n) Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(o) Except in the case ordinary course of the Companybusiness consistent with past practices, incur or enter into any agreement, contract or commitment requiring such party to pay in excess of $100,000 in any 12-12 month period;
(jp) Engage Make or rescind any Tax elections that, individually or in the aggregate, could be reasonably likely to adversely affect in any action that would reasonably be expected to cause material respect the Merger to fail to qualify Tax liability or Tax attributes of such party, settle or compromise any material income tax liability or, except as required by applicable law, materially change any method of accounting for Tax purposes or prepare or file any Return in a “reorganization” under Section 368(a) of the Codemanner inconsistent with past practice;
(kq) Form, establish or acquire any subsidiary except as contemplated by this Agreement;
(lr) Permit any Person to exercise any of its discretionary rights under any plan to provide for the automatic acceleration of any outstanding options, the termination of any outstanding repurchase rights or the termination of any cancellation rights issued pursuant to such plans;
(s) Make capital expenditures except in accordance with prudent business and operational practices consistent with prior practice;
(t) Make or omit to take any action which would be reasonably anticipated to have a Material Adverse Effect;
(u) Enter into any transaction with or distribute or advance any assets or property to any of its officers, directors, partners, stockholders or other affiliates (other than payment of salary and benefits in the ordinary course of business consistent with past practice); or
(mv) Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 4.1(aSections 4.1 (a) through (lu) above.
Appears in 1 contract
