Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in the usual, regular and ordinary course and in compliance with all applicable laws and regulations, pay its debts and taxes when due and pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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 business dealings, except in each case as set forth in Section 4.1 of the Company Schedule. In addition, except as expressly permitted by the terms of this Agreement and, except in each case as set forth in Section 4.1 of the Company Schedule, without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following: (a) Waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Schedule; (b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance plan; (c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, 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 Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property; (d) 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; (e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregate; (g) Cause, permit or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries); (h) 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 or enter into any joint ventures, strategic partnerships or alliances; (i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries; (j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practice; (k) 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; (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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary; (m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule); (n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder; (o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis; (p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices; (q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually; (r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV; (s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement; (t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability; or (u) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a) through (t) above.
Appears in 4 contracts
Samples: Merger Agreement (Harbinger Corp), Merger Agreement (Peregrine Systems Inc), Agreement and Plan of Merger and Reorganization (Harbinger Corp)
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in the usual, regular and ordinary course course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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 business dealings. In addition, except in each case as set forth in Section 4.1 Company will promptly notify Parent of the Company Scheduleany material event involving its business or operations. In addition, except as expressly permitted by the terms of this Agreement andAgreement, and except in each case as set forth provided in Section 4.1 of the Company Schedule, without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, 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 Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiariesCompany, 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 propose any of the foregoing with respect toof, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options therefor outstanding as of the date of this Agreement or granted pursuant to clause (y) hereofAgreement, and (ii) shares of Company Common Stock issuable to participants in the ESPP Periodic Purchase Plan consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under (and the Director Plan issuance of Common Stock upon exercise thereof), in the ordinary course of business and consistent with past practices, in an amount not to exceed options to purchase 135,000 (and the issuance of Common Stock upon exercise thereof) 150,000 shares in the aggregateaggregate or 50,000 shares to any one individual;
(g) Cause, permit or propose any amendments to the Company Charter Documents (its Certificate of Incorporation, Bylaws or similar governing instruments of any of its subsidiaries)other charter documents;
(h) 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 or enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, and except for the sale, lease or disposition (other than through licensing) of a property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiariesCompany;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than (i) in connection with the financing of ordinary course trade payables consistent with past practicepractice or (ii) pursuant to existing credit facilities in the ordinary course of business;
(k) Adopt or amend any employee benefit plan, policy plan 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;
(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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(ml) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule)$100,000;
(nm) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(on) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basisCompany;
(po) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(qp) Incur or enter into any agreement, contract agreement or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 100,000 individually; provided, however, Company may place orders and incur obligations to purchase products from its existing foundry suppliers to satisfy Company's demands in its ordinary course of business, such obligations to be limited to orders requiring delivery of products within 90 days of the order date;
(rq) Engage in any action that could reasonably be expected to (i) cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the CodeCode or (ii) interfere with Parent's ability to account for the Merger as a pooling of interests, whether or not (in each case) otherwise permitted by the provisions of this Article IV;
(sr) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability; or
(us) Hire any employee with an annual compensation level in excess of $100,000; or
(t) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a) through (ts) above.
Appears in 3 contracts
Samples: Agreement and Plan of Reorganization and Merger (Seeq Technology Inc), Agreement and Plan of Reorganization and Merger (Lsi Logic Corp), Agreement and Plan of Reorganization and Merger (Lsi Logic Corp)
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, business in the usual, regular and ordinary course course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulationsLegal Requirements, pay its debts and taxes Taxes when due and subject to good faith disputes over such debts or Taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, Company will promptly notify Parent of any event that would reasonably be expected to have a Material Adverse Effect on Company. In addition, without limiting the generality of the foregoing, except as expressly contemplated by this Agreement or provided in each case as set forth in Section Part 4.1 of the Company Schedule. In addition, except as expressly permitted by the terms of this Agreement and, except in each case as set forth in Section 4.1 of the Company ScheduleDisclosure Letter, without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries any Company Subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employeeCompany Stock Plan, consultant, director or other stock plans or authorize cash payments in exchange for any options granted except as contemplated under any Section 1.6(d) of such plans except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Schedulethis Agreement;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstandingin effect, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parentthe Company Disclosure Letter, or adopt any new severance planplan or policies;
(c) (i) Transfer or license to any person Person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rightsIP Rights, other than with respect to non-exclusive licenses in the ordinary course of business and consistent with past practice; (ii) disclose to any Person, other than Company employees and representatives of Parent not subject to a nondisclosure agreement, any material trade secret except in the ordinary course of business consistent with past practices; (iii) transfer, provided that modify or terminate any agreement pursuant to which the Company has licensed Intellectual Property Rights from any Person except in no event shall Company license the ordinary course of business consistent with past practices and which would be immaterial to the business of the Company; and (iv) disclose any source code to any person or entity on an exclusive basis or sell any Company Intellectual Propertythird party except in the ordinary course of business consistent with past practices;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiariesthe Company Subsidiaries, 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 other agreements in effect on the date hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance issuance, delivery and/or and sale of (i) shares of Company Common Stock pursuant to the exercise of stock options Company Stock Options or Company Warrants outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregateAgreement;
(g) Cause, permit or propose any amendments to the Company Charter Documents its Articles of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiariesCompany Subsidiaries);
(h) Acquire Incur or prepay any indebtedness for borrowed money, guarantee any such indebtedness of another Person, issue, sell or repurchase any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, enter into any “keep well” or other Contract to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing, other than borrowings under Company’s existing Loan and Security Agreement with Comerica Bank (and any renewals or extensions thereof on substantially the same terms as in effect on the date hereof), in any case with an aggregate loan amount not to exceed $6 million in the ordinary course of business consistent with past practices;
(i) Make any loans, advances or capital contributions to, or investments in, any other Person, other than to any direct or indirect wholly owned Company Subsidiary;
(j) (i) Adopt or amend any employee benefit plan or employee stock purchase or employee stock option plan, (ii) enter into any employment contract or collective bargaining agreement, other than an offer letter on Company's standard form that is terminable at will without severance or other continuing obligation following termination of employment, (iii) pay any special bonus or special remuneration to any officer, director or employee (other than year-end bonuses in accordance with Company's existing bonus plan or program approved by Company's Board of Directors, (iv) increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its officers, directors, employees or consultants, (v) make any other change in the compensation or benefits payable or to become payable to any of its employees, agents or consultants, or members of the board of directors of the Company, (vi) enter into or amend any employment, severance, consulting, termination or other agreement or employee benefit plan or make any loans to any of its directors, officers, employees, affiliates, agents or consultants, (vii) make any change in its existing borrowing or lending arrangements for or on behalf of any of such directors, officers, employees, agents, consultants, (viii) pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director, employee or affiliate or pay or agree to pay or make any accrual or arrangement for payment to any officers, directors, employees or affiliates of any amount relating to unused vacation days, except payments and accruals made in the ordinary course of business consistent with past practices, (ix) offer, grant or issue any stock options or take any action to accelerate, amend or change the period of vesting or 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, (x) hire or terminate any officer (other than terminations for cause) or encourage any officer or employee to resign, or materially increase or decrease the number of employees, or (xi) amend in any material respect any such existing plan, agreement or arrangement in a manner inconsistent with the foregoing;
(k) Make any capital expenditures in excess of amounts specifically allocated for capital expenditures in the Company’s 2006 operating budget approved by its Board of Directors (a copy of which budget specifically setting forth such capital expenditures has been provided to Parent);
(l) Permit to be cancelled or terminated, without reasonable efforts to maintain coverage, or cancel or terminate any insurance policy naming it as a beneficiary or loss payee, unless such policy is replaced by a policy with comparable coverage, or otherwise fail to maintain insurance at less than current levels or otherwise in a manner consistent with past practices in all material respects;
(m) (i) Modify or amend in any material respect or terminate any of the Company Contracts, other than in the ordinary course of business consistent with past practices, (ii) waive, release or assign any material rights or claims under any of the Company Contracts, other than in the ordinary course of business consistent with past practices, (iii) enter into any material commitment or transaction, including entering into any material purchase, sale or lease of assets or real estate, (iv) enter into any material strategic alliance, material joint development or joint marketing agreement, or (v) enter into any agreement pursuant to which Parent or the Surviving Corporation or any Parent Subsidiary, or the Company or any Company Subsidiary will be subject to any exclusivity, noncompetition, nonsolicitation, most favored nations or other similar restriction or requirement on their respective businesses following the Closing;
(n) Fail to make in a timely manner any filings with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder (subject to extension pursuant to Section 12b-25 under the Exchange Act);
(i) Make any change in any material method of accounting, method of accounting principles or practice, except for such change required by reason of a concurrent change in GAAP or compliance with the applicable requirements of the rules and regulations promulgated by the SEC, (ii) make any Tax election or change any Tax election already made, adopt any Tax accounting method, except for such changes required by applicable Legal Requirements, rule or regulation, change any Tax accounting method, except for such changes required by applicable Legal Requirements, rule or regulation, enter into any closing agreement or settle any claim or assessment relating to Taxes other than settlements or assessments the result of which would not be material to the Company and the Company Subsidiaries, taken as a whole, or consent to any claim or assessment relating to Taxes or any waiver of the statute of limitations for any such claim or assessment, (iii) file any material federal or state income Tax return without Parent’s review and consent, which shall not be unreasonably withheld, or (iv) revalue any of its material assets, except as required by GAAP, applicable accounting requirements or the published rules and regulations of the SEC with respect thereto in effect during the periods involved other than in the ordinary course of business consistent with past practices;
(p) Pay, discharge or satisfy any material claims, material liabilities or material obligations (whether absolute, accrued, contingent or otherwise), other than (i) the payment, discharge or satisfaction of any such claims, liabilities or obligations in the ordinary course of business consistent with past practices, (ii) the settlement of claims that do not require a monetary payment in excess of $50,000 or restrictions on the Company’s business or (iii) claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto);
(i) Adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization (other than the Merger), (ii) acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion or all 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 or enter into any joint venturesor, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice andpractices, except for the sale, lease otherwise acquire or disposition (other than through licensing) of property or agree to acquire any assets which that are not material, individually or in the aggregate, to the business of Company and the Company Subsidiaries, taken as a whole, or (iii) sell, transfer, lease, mortgage, pledge, license exclusively, encumber, or otherwise dispose of, any of its subsidiariesproperties or assets that are material, individually or in the aggregate, to the Company and the Company Subsidiaries, taken as a whole;
(jr) Incur Take any indebtedness for borrowed money action that would, or guarantee any such indebtedness of another personis reasonably likely to, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of result in any of the foregoing other than conditions to the Merger set forth in connection Article VI not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any material respect at, or as of any time prior to, the Effective Time, or that would impair the ability of the Company to consummate the Merger in accordance with the financing of ordinary course trade payables consistent with past practiceterms hereof or materially delay such consummation;
(kA) Adopt Commence any litigation (except actions commenced in the ordinary course of business against third parties) 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 B) except in the ordinary course of business consistent with past practice with employees who are terminable "at will")practices or as required by applicable Legal Requirements, pay seek a judicial order or decree or settle any special bonus litigation, it being understood that any settlement of litigation involving the payment by the Company or special remuneration to any director or employee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) Company Subsidiary of its directors, officers, employees or consultants;
(i) Pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or an amount in excess of $100,000 is 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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiarybusiness;
(mt) Make Take any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreementsaction, or obligations relating permit any Company Subsidiary to the distributiontake any action, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually;
(r) Engage in any action that could cause would prevent the Merger to fail to qualify from qualifying as a "“reorganization" under ” within the meaning of Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability; or
(u) Agree in writing or otherwise commit to take any of the actions described in Section 4.1 (a4.1(a) through (t) above.
Appears in 3 contracts
Samples: Merger Agreement (Vitalstream Holdings Inc), Merger Agreement (Vitalstream Holdings Inc), Agreement and Plan of Merger (Internap Network Services Corp)
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, business in the usual, regular and ordinary course course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable material laws and regulations, pay its debts and taxes Taxes when due and subject to good faith disputes over such debts or Taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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 business dealings. In addition, except in each case as set forth in Section 4.1 Company will promptly notify Parent of the Company Scheduleany material adverse event involving its business or operations. In addition, except as expressly permitted by the terms of this Agreement, and except as contemplated by this Agreement and, except or the Related Agreements or provided in each case as set forth in Section Part 4.1 of the Company ScheduleDisclosure Letter, without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstandingin effect, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights, other than non-exclusive licenses in the ordinary course of business and consistent with past practices, provided that in no event shall Company license to any person or entity on an exclusive basis or sell any Company Intellectual Propertypractice;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance grant, issuance, delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options Company Options outstanding as of on the date of this Agreement Agreement, or granted pursuant to in accordance with clause (yiii) hereofof this Section 4.1(f), and (ii) shares of Company Common Stock issuable to participants in the Company ESPP consistent with the terms thereof thereof, (iii) Company Options granted to newly-hired employees in the ordinary course of business in amounts comparable to similarly situated Company employees, and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an aggregate amount not to exceed options to purchase 135,000 330,870, none of which Company Options shall provide for or permit any acceleration of the exercisability thereof in connection with the Merger or any of the transactions contemplated by this Agreement, and (iv) shares of Company Common Stock issued in the aggregateconnection with acquisitions and commercial transactions permitted under Section 4.1(h) below;
(g) Cause, permit or propose any amendments to the Company Charter Documents its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) 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 Company or enter into any material joint ventures, strategic partnerships relationships or alliances, or enter into any commercial transaction involving the issuance or potential issuance of equity securities of Company; provided, that Company shall not be prohibited hereunder from making or agreeing to make acquisitions, or entering into commercial transactions involving the issuance or potential issuance of Company Common Stock, all of which together do not involve the issuance or potential issuance of more than 290,000 shares of Company Common Stock in the aggregate, and none of which acquisitions, agreements or commercial transactions could reasonably be expected to delay the effectiveness of the Registration Statement, the consummation of the Merger or the other transactions contemplated by this Agreement or the Related Agreements; provided, further, that Company shall provide written notice to Parent prior to signing any agreement regarding any such acquisition or transaction;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiariesCompany;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than (i) in connection with the financing of ordinary course trade payables consistent with past practice, (ii) pursuant to existing credit facilities in the ordinary course of business or (iii) in aggregate amount not to exceed $1,000,000;
(ki) Adopt or amend any employee benefit plan, policy plan 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"), or (ii) 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;
(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) consultants other than the payment, discharge, settlement or satisfaction, in the ordinary course of business business, consistent with past practice or in accordance with their termspractice, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify change in any manner, terminate, release material respect any person from management policies or fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiaryprocedures;
(m1) Make any individual or series of related payments capital expenditures outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company capital expenditures in excess of $350,000 500,000, individually;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that$4,000,000, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability; or
(u) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a) through (t) above.;
Appears in 3 contracts
Samples: Merger Agreement (Eclipsys Corp), Merger Agreement (Neoforma Com Inc), Merger Agreement (Eclipsys Corp)
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, business in the usual, regular and ordinary course course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes Taxes when due and subject to good faith disputes over such debts or Taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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 business dealings. In addition, except in each case as set forth in Section 4.1 during that period Company will promptly notify Parent of any material event involving its business or operations consistent with the Company Scheduleagreements contained herein. In addition, except as expressly permitted by the terms of this Agreement, and except as contemplated by this Agreement and, except or provided in each case as set forth in Section Part 4.1 of the Company ScheduleDisclosure Letter, without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice re-price (by amendment or substitution) 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described other than options vesting in the Company Scheduleconnection with an employee terminated in an isolated instance;
(b) Grant any severance or termination pay to any officer or employee except (i) pursuant to written agreements outstandingin effect, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, (ii) in an amount not to exceed three months base pay of the terminated person or pursuant to terms and provisions that are substantially similar to such plans adopted by Parent or (iii) as consented to by Parent, whose consent shall not be unreasonably withheld or delayed, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the any Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practicespractice or, provided if granted on terms different from past practice or outside the ordinary course, are granted on terms and in a manner that in no event shall Company license are generally favorable to any person or entity on an exclusive basis or sell any Company Intellectual Propertythe Company;
(d) 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 of Company or split, combine or reclassify any capital stock of Company or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stockstock of Company;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereofCompany Options, and (ii) shares of Company Common Stock issuable to participants in the ESPP Company ESPP, (iii) shares of Company Common Stock issuable to participants in the Company's 401(k) Plan, (iv) shares of Company Common Stock issuable to holders of Company Warrants, in the case of (i), (ii), (iii), (iv) and (v) consistent with the terms thereof thereof, and (yv) subject to Section 4.1(a), pursuant to grants of Company Options to newly hired employees, upon promotions of existing employees, or as part of Company's annual option grant program, in each case, in the granting ordinary course of non-discretionary stock options to non-employee directors under the Director Plan in an amount business, consistent with past practice, and not to exceed options to purchase 135,000 shares in the aggregate;aggregate pursuant to this clause (v), 1,000,000 shares of Company Common Stock issued pursuant to the Company Stock Option Plan (with individual grants or awards included within that 1,000,000 figure not to exceed 250,000 shares of Company Common Stock issued to any one person without prior approval of Parent's Chairman of the Board).
(g) Cause, permit or propose any amendments to the Company Charter Documents its Articles of Incorporation Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) 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 or enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practice;
(k) 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;
(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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability; or
(u) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a) through (t) above.
Appears in 2 contracts
Samples: Merger Agreement (Interland Inc), Merger Agreement (Micron Electronics Inc)
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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 business dealings. In addition, except in each case as set forth in Section 4.1 Company will promptly notify Parent of the Company Scheduleany material event involving its business or operations. In addition, except as expressly permitted by the terms of this Agreement andAgreement, and except as provided in each case as set forth in Section 4.1 Article 4 of the Company ScheduleSchedules, without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights, other than non-exclusive licenses in the ordinary course of business and consistent with past practices, provided that in no event shall Company license to any person or entity on an exclusive basis or sell any Company Intellectual Propertypractice;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee employee, consultant or director pursuant to stock option or purchase agreements in effect on the date hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect toof, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance delivery and/or sale of (i) options pursuant to any of the Company Stock Option Plans with strike prices equal to fair market value at the time of grant or options pursuant to the ESPP, in each case, in the ordinary course of business, consistent with past practice, and subject to and in compliance with the restrictions of Section 4.1(p), (ii) shares of Company Common Stock pursuant to the exercise of stock options therefor outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (iiiii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregatethereof;
(g) Cause, permit or propose any amendments to the Company Charter Documents its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its material subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material 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 Company or enter into any material joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company Company, except sales of product and its subsidiariesinventory in the ordinary course of business consistent with past practice;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than (i) in connection with the financing of ordinary course trade payables consistent with past practicepractice or (ii) pursuant to existing credit facilities in the ordinary course of business;
(k) Adopt or amend any employee benefit plan, policy plan 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;
(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) consultants other than the payment, discharge, settlement or satisfaction, in the ordinary course of business business, consistent with past practice or in accordance with their termspractice, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify change in any manner, terminate, release material respect any person from management policies or fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiaryprocedures;
(ml) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule)$1 million;
(nm) Except except in the ordinary course of business consistent with past practicebusiness, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(on) Enter enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basisother than in the ordinary course of business consistent with past practice;
(po) Revalue revalue any of its material assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(qp) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually;
(r) Engage in Take any action that could cause would be reasonably likely to interfere with Parent's ability to account for the Merger to fail to qualify as a "reorganization" under Section 368(a) pooling of the Code, interests whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability; or
(uq) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a4.1(a) through (tp) above.
Appears in 2 contracts
Samples: Merger Agreement (Network Associates Inc), Agreement and Plan of Reorganization (Network General Corporation)
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in the usualordinary course, regular and ordinary course in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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 business dealings, except in each case as set forth in Section 4.1 of the Company Schedule. In addition, except as expressly permitted by the terms of this Agreement and, and except in each case as set forth in on Section 4.1 of the Company ScheduleSchedule(1), without the prior written consent of Parent, during ----------- 1 Will include parameters of agreed upon stay bonus program. 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights, Property other than in the ordinary course of business consistent with past practices, provided that in no event shall Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance issuance, delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options and Company Warrants outstanding as of the date of this Agreement or stock options granted pursuant to clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof hereof and (y) the granting of non-discretionary stock options to non-employee directors under new hires, in the Director Plan ordinary course of business and consistent with past practices (but in no event to include any provision providing for accelerated vesting), in an amount not to exceed options to purchase 135,000 250,000 shares in the aggregate;
(g) Cause, permit or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(h) 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 (other than in the ordinary course of business consistent with past practice) or enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice andpractice, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables and truck lease financing, in each case consistent with past practice;
(k) 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 as required by law or 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 (it being understood by the parties that payments pursuant to Company's quarterly bonus program as conducted in the ordinary course of business consistent with past practice do not constitute special bonuses 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 consultantsconsultants other than annual review salary increases for non-officer employees in the ordinary course of business consistent with past practice;
(i) Pay, discharge, settle or satisfy any material 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) in which Company is a defendant other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports or incurred in the ordinary course of business consistent with past practice 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule)$50,000;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into any agreement, contract or materially modify any contracts, agreements, or obligations relating commitment which if in existence on the date hereof would be required to be listed on Section 2.17 of the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basisSchedule;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
; (q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 50,000 individually;
(r) Engage in any action that could would reasonably be expected to cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax Tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax Tax liability or tax Tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax Tax liability;
(t) Make or authorize (i) any capital expenditure in excess of $5 million with respect to any distribution center or $15 million in the aggregate or (ii) any marketing expenditure in excess of $6 million in the aggregate during any successive thirty (30) day period following the date hereof or $15 million in the aggregate during any successive ninety (90) day period following the date hereof;
(u) Enter into any collective bargaining agreements; or
(uv) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a) through (tu) above.
Appears in 2 contracts
Samples: Agreement and Plan of Reorganization (Homegrocer Com Inc), Agreement and Plan of Reorganization (Homegrocer Com Inc)
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in a manner consistent with the usual, regular and ordinary course winding down of Company and in compliance with all applicable laws and regulations, pay its debts and taxes when due subject to good faith disputes over such debts or taxes and pay or perform other material obligations when due. In addition, subject to good faith disputes over such debts, taxes, and obligations, and use Company will promptly notify Parent of any material event involving its commercially reasonable efforts, consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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 business dealings, except in each case as set forth in Section 4.1 of the Company Scheduleor operations. In addition, except as expressly permitted by the terms of this Agreement andAgreement, and except as provided in each case as set forth in Section 4.1 Article 4 of the Company ScheduleDisclosure Letter, without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
: (a) Waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Schedule;
plans; (b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance plan;
; (c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, 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 Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
; (d) 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;
; (e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregate;
(g) Cause, permit or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(h) 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 or enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practice;
(k) 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;
(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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability; or
(u) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a) through (t) above.A-20
Appears in 2 contracts
Samples: Merger Agreement (Keravision Inc /Ca/), Agreement and Plan of Reorganization (Transcend Therapeutics Inc)
Conduct of Business by Company. 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 Effective Time, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts Liabilities and taxes Taxes when due and pay or perform other material obligations when due, (subject to good faith disputes over such debtsLiabilities or Taxes), taxespay or perform other obligations when due, and obligationstake such actions as set forth in Section 4.1(a) of the Company Schedule, and use its commercially all reasonable efforts, consistent with past practices (except as set forth in Schedule 4.1)and policies, and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees employees, and (iii) preserve its relationships with customers, suppliers, distributors, consultants, licensors, licensees, licensees and others with which it has significant business dealings, except in each case as set forth in Section 4.1 of the Company Schedule. In addition, except as expressly permitted by the terms of this Agreement and, except in each case as set forth in Section 4.1 of the Company Scheduleshall promptly notify Parent of any event that would have a Material Adverse Effect on the Company. In addition, without the prior written consent of Parent, except as permitted or required by this Agreement, 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 Effective Time, Company shall not do any of the following not, and shall not permit its subsidiaries to to, do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, 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 Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregate;
(g) Cause, permit or propose submit to a vote of the Company’s stockholders any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(hb) 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 or enter into any joint ventures, strategic partnerships or similar alliances, or create or acquire any subsidiary, or change the form of ownership or percentage interest of the Company in any of its subsidiaries;
(c) Issue, deliver, sell, authorize or designate (including by certificate of designation) or pledge or otherwise encumber, or propose any of the foregoing with respect to any shares of capital stock of the Company or its subsidiaries or any securities convertible into shares of capital stock of the Company or its subsidiaries, or subscriptions, rights, warrants or options to acquire any shares of capital stock of the Company or its subsidiaries or any securities convertible into shares of capital stock of the Company or its subsidiaries, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Company Stock Options or Company Warrants outstanding as of the date of this Agreement which are either vested on the date hereof or vest after the date hereof in accordance with their terms on the date hereof, in each case as disclosed on Section 2.3 of the Company Schedule;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, securities or property) in respect of any capital stock of the Company or its subsidiaries or split, combine or reclassify any capital stock of the Company or its subsidiaries or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock of the Company or its subsidiaries;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries or any other securities of the Company or its subsidiaries or any options, warrants, calls or rights to acquire any such shares or other securities, except repurchases of unvested shares at or below 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 of this Agreement, provided that no such repurchase shall be permitted in the event the per share repurchase price is greater than the Merger Consideration;
(f) Waive any stock repurchase rights (other than as permitted by Section 4.1(e)), accelerate, amend or 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;
(i) SellExcept pursuant to written agreements outstanding on the date hereof and as disclosed on Section 2.11 of the Company Schedule, leasegrant any equity-based compensation, licensewhether payable in cash, encumber securities or otherwise dispose property, or grant or pay any severance or termination pay or any bonus or other special remuneration (whether in cash, securities or property) or any increase thereof to any director, officer, consultant or employee, (ii) 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 (including without limitation any retention, change of control or similar agreement), or (iii) enter into any properties agreement the benefits of which are contingent or assets except sales the terms of inventory which are materially altered upon the occurrence of a transaction involving the Company of the nature contemplated hereby;
(h) Grant any loans or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition advances (other than through licensingcustomary travel or expense advances in compliance with the Company’s policies) of property to employees, officers, directors or assets which are not materialother third parties, individually make any investments in or in the aggregatecapital contributions to any person, to the business of Company and its subsidiaries;
(j) Incur incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practice;
(ki) Adopt (i) Increase the compensation or benefits payable or to become payable to officers, directors, consultants, or employees (other than pursuant to existing agreements disclosed on Section 2.11 of the Company Schedule), (ii) enter into any new or amend any employee benefit planexisting Company Employee Plan, policy Employment Agreement, indemnification, collective bargaining, or arrangementsimilar agreement, except as required by applicable law, (iii) hire any employee stock purchase or employee stock option planconsultant (including any temporary employee, independent contractor, consultant 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"intern), pay (iv) terminate any special bonus employee (including any temporary employee), (v) change the position, title or special remuneration to principal office location of any director or employee, or increase the salaries (vi) take any action that would allow any employee to claim a constructive termination or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultantstermination for good reason;
(ij) PayExcept as permitted by Section 6.3(g), pay, discharge, settle or satisfy any claimsLiabilities, 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 practice or in accordance with their terms, or liabilities terms of Liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company SEC Reports or incurred since the date Interim Balance Sheet Date in the ordinary course of such financial statements, or business consistent with past practices;
(iik) waive Waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any the confidentiality or similar agreement nondisclosure provisions of any material Contract to which the Company or any of its subsidiaries is a party or of which the Company or any of its subsidiaries is a beneficiary;
(ml) Make (A) Enter into, renew, or modify or amend in any individual material respect any Contract relating to the distribution, sale, license or series marketing by third parties of related payments outside the products or services of the Company or its subsidiaries (including Company Products or other Company Intellectual Property) or products or services licensed by the Company or its subsidiaries (including any IP Licenses), (B) sell, lease, license, transfer or otherwise dispose of, or otherwise extend, amend or modify in any material respect, any rights to, Company Products or other Company Intellectual Property, (C) enter into, renew, or modify or amend in any material respect any Contract relating to the design, manufacture, marketing or sale of products relating to the Company’s Embedded Mobility Business, or (D) transfer or license to any person future rights to the Company Intellectual Property, other than, in the case of (A), (B) and (D) above, non-exclusive licenses granted to end-users in the ordinary course of business and consistent with past practice; provided that in no event shall the Company (i) license on an exclusive basis, or sell, any Company Intellectual Property; or (ii) enter into any Contract (v) providing for any site licenses, (w) containing pricing or discounting terms or provisions other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modify(x) requiring the Company to use its “best efforts”, (y) limiting the right of the Company to engage in any line of business or to compete with any person, or (z) not otherwise in compliance with Section 4.1(m);
(m) Enter into, renew or modify or amend in any material respect any Contract (i) requiring the Company to purchase a minimum amount of products or services with aggregate commitments over the life of all such Contracts in excess of $100,000 individually or $500,000 in the aggregate, per month, or (ii) requiring the Company to provide (x) a minimum amount of products or services (including professional services or software implementation, deployment or development services) with aggregate commitments over the life of all such Contracts in excess of $150,000 individually or (y) products or services at a later date at a fixed price (excluding non-exclusive licenses granted by the Company to end users or Distributors in the ordinary course of business consistent with past practice, which licenses allow the end user or Distributor to license additional seats or copies of software from the Company at a per seat or per copy price set forth in the license agreement with the end user or Distributor);
(n) Sell, lease, license, encumber or otherwise dispose of any properties or assets except for the sale, lease, licensing, encumbering or disposition (other than through licensing unless permitted by Section 4.1(l)) of property or assets not in excess of $50,000 individually or $150,000 in the aggregate, provided such property or assets are not material, individually or in the aggregate, to the business of the Company and its subsidiaries;
(o) Make or commit to make any capital expenditures in excess of $50,000 individually or $100,000 in the aggregate, other than any commitments for capital expenditures reflected on the Interim Balance Sheet;
(p) Enter into (unless otherwise permitted by this Section 4.1), or modify or amend (unless such amendment, if it were a new Contract, would be otherwise permitted by this Section 4.1), or terminate (other than by non renewal), any material contract or agreement to which Company real estate lease or any subsidiary thereof is Contract of a party nature required to be listed as a Company Contract in Section 2.18 of the Company Schedule or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(oq) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties new line of Company's products or products licensed by Company on an exclusive basisbusiness;
(pr) Revalue Except as required by GAAP or the rules and regulations of the SEC, revalue any of its material assets or, except as required by GAAP, (including without limitation writing down the value of inventory or writing off notes or accounts receivable other than in the ordinary course of business consistent with past practice) or make any change in accounting methods, principles or practices;
(qs) Incur Cancel or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually;
(r) Engage in any action that could cause the Merger to fail to qualify renew, without reasonable substitutes, any insurance policy naming the Company or any subsidiary as a "reorganization" under Section 368(a) of the Code, whether beneficiary or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreementloss payee;
(t) Make any tax Tax election or accounting method change (except as required by GAAP) that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax Tax liability or tax Tax attributes of the Company or any of its subsidiaries or subsidiaries, settle or compromise any material income tax liability; orTax liability or refund, file any amendment to a Return, enter into any closing agreement or consent to any extension or waiver of any limitation period with respect to Taxes;
(u) Engage in any action with the intent to, directly or indirectly, adversely impact or materially delay the consummation of the Transactions;
(v) Make or commit to make any individual or series of related payments outside of the ordinary course of business (including payments to legal, accounting or other professional service advisors) in excess of $200,000 in the aggregate, other than the payment of Liabilities reflected on the Interim Balance Sheet;
(w) Commence or settle any pending or threatened litigation, proceeding or investigation (whether or not commenced prior to the date of this Agreement) (other than any litigation to enforce any of its rights under the Agreement or normal collection activities in the ordinary course of business) consistent with past practice);
(x) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a4.1(a) through (t4.1(w) above. Notwithstanding Section 7.5 or Section 8.2, if the Company desires to take any action which would be prohibited pursuant to Section 4.1 without the written consent of Parent, prior to taking such action the Company may request such written consent by sending an e-mail or facsimile to the individuals identified in Section 4.1 of the Company Schedule, and may not take such action until such consent in writing (including by way of reply e-mail or facsimile) has been received from one of such individuals. Parent will use all reasonable efforts to respond to any such request for consent within three business days.
Appears in 2 contracts
Samples: Merger Agreement (Sybase Inc), Merger Agreement (Sybase Inc)
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except (i) as permitted by the terms of this Agreement or except as provided in Section 4.1 of the Company Schedule, or (ii) to the extent that Parent shall otherwise consent in writingwriting (which consent, or refusal thereof, shall not be unreasonably delayed), carry on its business, business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and in substantial compliance with all applicable laws and regulations, pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, due subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, licensees and others with which it has significant business dealings. In addition, except in each case as set forth in Section 4.1 Company will promptly notify Parent of any material event involving its business or operations occurring outside the Company Scheduleordinary course of business. In addition, except as expressly permitted by the terms of this Agreement and, and except in each case as set forth provided in Section 4.1 of the Company Schedule, without the prior written consent of ParentParent (which consent, or refusal thereof, shall not be unreasonably 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive Except as required by law or pursuant to the terms of a Plan in effect as of the date hereof, and except as may be requested to enable Parent to account for the Merger as a pooling of interests, waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, 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 Other than in the ordinary course of business consistent with past practices, transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, 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 Company license to any person or entity on an exclusive basis or sell any Company Intellectual PropertyProperty (other than in connection with the abandonment of immaterial Company Intellectual Property after at least five business days' written notice to Parent);
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 (or any such agreements entered into in the ordinary course consistent with past practice by Company with employees hired after the date hereof);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to, to any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance issuance, delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options or warrants outstanding as of the date of this Agreement or granted pursuant to clause (y) hereofAgreement, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof thereof, and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares new employees in the aggregate;ordinary course of business in such amounts and in all other respects and consistent with past practices and with similar vesting terms.
(g) Cause, permit or propose submit to a vote of Company's stockholders any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(h) 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 or enter into any joint ventures, ventures or strategic partnerships or alliancespartnerships;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice andpractice, except for the sale, lease lease, licensing, encumbering or disposition (other than through licensinglicensing permitted by clause (c)) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables working capital consistent with past practice;
(k) Adopt or amend any employee benefit plan, policy Plan 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 consultantsconsultants except, in each case, as may be required by law;
(i) Paypay, discharge, settle or satisfy any litigation (whether or not commenced prior to the date of this Agreement) or any material 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 practice or in accordance with their terms, or of liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports or incurred since the date of such financial statementsstatements or disclosed in Section 2.8 or Section 2.9 of the Company Schedule, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any the confidentiality or similar nondisclosure provisions of any agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract Contract disclosed in Section 2.17(g) or agreement to which Section 2.18 of the Company or any subsidiary thereof is a party Schedule or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(on) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue any of its assets or, except Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(qo) Incur or enter into any agreement, contract or commitment outside requiring Company or any of the ordinary course of business calling for payments by Company its subsidiaries to pay in excess of $350,000 individually3,000,000;
(rp) Engage in any action that could would reasonably be expected to (i) cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the CodeCode or (ii) interfere with Parent's ability to account for the Merger as a pooling of interests, whether or not (in each case) otherwise permitted by the provisions of this Article IV;
(sq) Make any Tax election or accounting method change (except as required by GAAP) inconsistent with past practice that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the Tax liability or Tax attributes of Company or any of its subsidiaries, settle or compromise any material Tax liability or consent to any extension or waiver of any limitation period with respect to Taxes;
(r) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in Agreement other than to the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liabilityextent permitted by Section 5.4; or
(us) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a) through (tr) above.
Appears in 2 contracts
Samples: Agreement and Plan of Reorganization (PMC Sierra Inc), Agreement and Plan of Reorganization (Quantum Effect Devices Inc)
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except (i) as set forth in Section 4.1 of the Company Schedule, (ii) in connection with specific actions that Company is explicitly required to take pursuant to this Agreement or (iii) to the extent that Parent shall otherwise consent in writingwriting (which consent shall not be unreasonably delayed), carry on its business, in the usual, regular and ordinary course course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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 business dealings. In addition, except (i) in each case connection with specific actions that Company is explicitly required to take pursuant to this Agreement, (ii) as set forth in Section 4.1 of the Company Schedule. In addition, except as expressly permitted by Schedule or (iii) to the terms of this Agreement and, except extent that Parent shall otherwise consent in each case as set forth in Section 4.1 of the Company Schedule, without the prior written writing (which consent of Parentshall not be unreasonably 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay (cash, equity or otherwise) to any officer or employee employee, except (x) pursuant to written agreements outstanding, or policies existing, on the date hereof and (y) as previously disclosed in writing or made available to ParentParent in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual PropertyProperty that are material to the business of Company as currently conducted, or enter into grants to transfer or license to any person future patent rights, rights other than in the ordinary course of business consistent with past practices, provided that in no event shall Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance issuance, delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options options, in the ordinary course of business and consistent with past practices, to non-employee directors under the Director Plan newly hired employees in an amount not to exceed options to purchase 135,000 100,000 shares in the aggregate;
(g) Cause, permit or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(h) 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 or enter into any joint ventures, strategic partnerships or alliancesalliances in any case for any amount in excess of $250,000;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice andpractice, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practice;
(k) 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 (cash, equity or otherwise) to any director or employeeemployee (other than payments to non-officer employees in accordance with past practice), or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultantsconsultants (other than increases for non-officer employees or consultants in accordance with past practice);
(i) Paypay, 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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than including payments to financial, legal, accounting or other professional service advisors, other than reasonable payments to such professional service advisors not in connection with the Merger and the transactions contemplated thereby) in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule)$200,000;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter Except in the ordinary course of business consistent with past practice, enter into or materially modify any material contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basisCompany;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 250,000 individually;
(r) Engage in Intentionally take any action that could reasonably be expected to cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV, or fail to take any action reasonably necessary to cause the Merger to so qualify;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability; or;
(t) Make any loan, advance or capital contribution to or investment in any person (other than a subsidiary of Company) other than in the ordinary course of business consistent with past practice, but in no event in the amount (to persons other than subsidiaries) of more than $100,000 in the aggregate, and other than investments in cash equivalents made in the ordinary course of business consistent with past practice;
(u) Modify or amend in any manner that is adverse to Company, or terminate, any confidentiality agreement entered into by Company or any subsidiary in the ordinary course of business, or release or waive any material rights for claims, or modify or amend in any manner adverse to Company, any confidentiality, standstill or similar agreements to which Company or any of its subsidiaries is a party;
(v) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(w) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a4.1(a) through (tv) above.
Appears in 1 contract
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in the usual, regular and ordinary course course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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 business dealings, except in each case as set forth in Section 4.1 of the Company Schedule. In addition, except as expressly permitted by the terms of this Agreement and, except in each case as set forth in Section 4.1 of the Company ScheduleAgreement, without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights, rights other than in the ordinary course of business consistent with past practices, provided that in no event shall Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options or warrants outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under new hires in the Director Plan ordinary -30- course of business and consistent with past practice, after consulting with Parent, in an amount not to exceed options to purchase 135,000 200,000 shares in the aggregateaggregate (none of which options (other than those granted to new hires employed by the Company on the data hereof) shall provide for acceleration based upon the transactions contemplated hereby);
(g) Cause, permit or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(h) ; 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 (other than non-material acquisitions in the ordinary course of business) or enter into any joint ventures, strategic partnerships or alliances, except as disclosed in Section 4.1 of the Company Schedule;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or nonand the grant of end-exclusive user licenses of Company intellectual property in the ordinary course of business consistent with past practice andpractice, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practice;
(k) 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 (except for increases in the ordinary course of business for non-officer employees) or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants; provided that the Company shall terminate the ESPP in accordance with its terms;
(i) Paypay, 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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than including payments to financial, legal, accounting or other professional service advisors not advisors) in excess of the estimates thereof set forth $250,000, except as disclosed in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basisCompany;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for requiring payments to or by Company or a subsidiary in excess of $350,000 250,000 individually;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, Code whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability; or
(u) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a) through (t) above.
Appears in 1 contract
Samples: Merger Agreement (Opentv Corp)
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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 business dealings. In addition, except in each case as set forth permitted by the terms of this Agreement, and except as provided in Section 4.1 of the Company Schedule. In addition, except as expressly permitted by the terms of this Agreement and, except in each case as set forth in Section 4.1 of the Company ScheduleDisclosure Letter, without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
: (a) Waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Schedule;
plans; (b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance plan;
; (c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights, other than non-exclusive licenses in the ordinary course of business and consistent with past practices, provided that in no event shall Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
practice; (d) 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;
; (e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the employment service 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 propose any of the foregoing with respect toof, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance delivery and/or and/ or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options or warrants therefor outstanding as of the date of this Agreement or granted pursuant to clause (y) hereofAgreement, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under (and the Director Plan issuance of Common Stock upon exercise thereof), in the ordinary course and consistent with past practices, in an amount not to exceed options to purchase 135,000 (and the issuance of Common Stock upon exercise thereof) 60,000 shares in the aggregate;
; (g) Cause, permit or propose any amendments to the Company Charter Documents its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
; (h) 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 or enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practice;
(k) 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;
(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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability; or
(u) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a) through (t) above.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Red Brick Systems Inc)
Conduct of Business by Company. 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 Effective Time, Company shall, and shall cause each of its subsidiaries shallto, except to the extent that Parent shall otherwise consent in writing, carry on its business, in the usual, regular and ordinary course course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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 business dealings, except in each case as set forth in Section 4.1 of the Company Schedule. In addition, except as expressly permitted by the terms of this Agreement and, except in each case as set forth in Section 4.1 of the Company ScheduleAgreement, without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant (whether in cash, stock, equity securities, property or otherwise) any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights, rights other than in the ordinary course of business consistent with past practices, provided that in no event shall Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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, grant, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance issuance, delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of (i) stock options outstanding as of the date of this Agreement, (ii) up to an aggregate of 200,000 stock options granted to new hires (who are not officers or directors) in the ordinary course of business after the date of this Agreement or granted pursuant to clause (y) hereofin reasonable amounts consistent with Company's past practices, and (iiiii) shares of Company Common Stock issuable options granted or deemed to participants have been granted in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors any offering period under the Director Company Stock Purchase Plan that is in an amount not to exceed options to purchase 135,000 shares in progress on, or commences after, the aggregatedate of this Agreement;
(g) Cause, permit or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries)Documents;
(h) 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 or enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive product licenses of Company intellectual property to end users in the ordinary course of business consistent with past practice andpractice, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and or any of its subsidiaries, or lend funds to any third party (other than intercompany loans in the ordinary course of business or advances to employees for travel and other reasonable business expenses in the ordinary course of business);
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than (i) in connection with the financing of ordinary course trade payables consistent with past practice;, and (ii) pursuant to credit facilities existing as of the date of this Agreement.
(k) Adopt Except as set forth in Section 4.1(k) of the Company Schedule, 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 salaries, wage rates or rates, fringe benefits (including rights to severance or indemnification) or other compensation of any of its directors, officers, employees or consultantsconsultants or those of any of its subsidiaries, or grant any equity-based compensation award (whether payable in cash, shares or otherwise);
(i) Paypay, 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, (A) in the ordinary course of business consistent with past practice or in accordance with their terms, or of liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports or incurred since the date of such financial statements, and (B) of such other claims, liabilities and obligations which do not, in the aggregate, exceed $150,000, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or fail to enforce any material confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to in excess of $150,000, provided that it is understood that payment by Company, before or after the Effective Time, of the reasonable actual fees and expenses of any financial, legal, accounting or other professional service advisors for services provided prior to the Effective Time with respect to the transactions contemplated by this Agreement or otherwise, shall not in excess constitute a payment outside of the estimates thereof set forth in Section 4.1 ordinary course of the Company Schedule)business;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary of its subsidiaries thereof is a party if doing so would be adverse to the Company or any of its subsidiaries or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify in any manner adverse to Company or any of its subsidiaries contracts, agreements, or obligations relating to the distribution, sale, license (other than to end users in the ordinary course of business) or marketing by third parties of Company's the products of Company or any of its subsidiaries or products licensed by Company on an exclusive basisor any of its subsidiaries;
(p) Revalue any of the assets of Company or any of its assets subsidiaries or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 150,000 individually;
(r) Engage in any action that could would be reasonably likely to cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, Code whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability; or
(ut) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a) through (ts) above.
Appears in 1 contract
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in the usualordinary course, regular and ordinary course in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due and pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve intact its present business organizationorganization as set forth in the Opexa Business Plan March 2004, as previously provided to Parent and Merger Sub, (ii) keep available the services of its present officers and employees employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. Additionally, except Company shall provide Parent's management access to meet with employees for the purposes of discussing continued employment. Notwithstanding anything in each case as set forth in this Section 4.1 to the contrary, Parent hereby acknowledges and agrees that the Company shall (i) have the right to accelerate the Company Options, (ii) if needed, forgiveness of the options exercise price, but not to exceed $105,000, and (iii) terminate the Company ScheduleWarrants. In addition, except as expressly permitted by the terms of this Agreement and, and except in each case as set forth in Section Schedule 4.1 of the Company Schedule, without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of warrants or options or restricted stock, or reprice options Company Warrants or Company 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parentwriting, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, 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 Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
(d) 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 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance issuance, delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options Company Options and Company Warrants outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregateAgreement;
(g) Cause, permit or propose any amendments to the Company Charter Documents charter documents, other than the amendment of the Series A Preferred Stock designation as contemplated in Section 6.3 of the Agreement (or similar governing instruments of any of its subsidiaries);
(h) 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 or enter into any joint venturesassets, strategic partnerships or alliances;
(i) Sell, lease, license, pledge, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiariesassets;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practicepractice (other than as contemplated in Section 5.10 hereof) except in the ordinary course of business consistent with past practice or as otherwise deemed necessary by the Board of Directors to maintain the Company's current operations and the written consent of Parent;
(k) 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 agreement, hire, terminate, re-title, reclassify, promote, demote, or any manner alter the ordinary course status of business consistent with past practice with employees who are terminable "at will")any current employee, 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;
(i) Pay, discharge, settle or satisfy any material 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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of which Company included in the Company SEC Reports or incurred since the date of such financial statementsis a defendant, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modifyModify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunderthereunder without the written consent of Parent;
(n) Incur and enter into any agreement, contract or commitment which if in existence on the date hereof would be required to be listed in Company Schedule 2.17 except in the ordinary course of business consistent with past practice to maintain the Company's current operations;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually;
(rp) Engage in any action that could would reasonably be expected to cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(tq) Make any tax Tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax Tax liability or tax Tax attributes of Company or Parent or any of its subsidiaries or settle or compromise any material income tax Tax liability;
(r) Make any disbursements or payments, other than in the ordinary course of business to maintain the Company's current operations;
(s) Engage in any conduct, solicited or otherwise, relating to business development, business combination, financing, disposition of assets, licensing, joint venture or other related discussions on behalf of the Company with any third parties, other than in the ordinary course of business or as otherwise deemed necessary by the Board of Directors to maintain the Company's current operations with the written consent of Parent;
(t) Engage in any conduct in breach of Section 5.3 or 5.4 of this Agreement; or
(u) Agree in writing or otherwise to take any of the actions described in Section Sections 4.1 (a) through (t) above.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Pharmafrontiers Corp)
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, business in the usual, regular and ordinary course course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes Taxes when due and subject to good faith disputes over such debts or Taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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 business dealings. In addition, except in each case as set forth in Section 4.1 during that period Company will promptly notify Parent of any material event involving its business or operations consistent with the Company Scheduleagreements contained herein. In addition, except as expressly permitted by the terms of this Agreement, and except as contemplated by this Agreement and, except or provided in each case as set forth in Section Part 4.1 of the Company ScheduleDisclosure Letter, without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice re-price (by amendment or substitution) 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described other than options vesting in the Company Scheduleconnection with an employee terminated in an isolated instance;
(b) Grant any severance or termination pay to any officer or employee except (i) pursuant to written agreements outstandingin effect, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, (ii) in an amount not to exceed three months base pay of the terminated person or pursuant to terms and provisions that are substantially similar to such plans adopted by Parent or (iii) as consented to by Parent, whose consent shall not be unreasonably withheld or delayed, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the any Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practicespractice or, provided if granted on terms different from past practice or outside the ordinary course, are granted on terms and in a manner that in no event shall Company license are generally favorable to any person or entity on an exclusive basis or sell any Company Intellectual Propertythe Company;
(d) 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 of Company or split, combine or reclassify any capital stock of Company or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stockstock of Company;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereofCompany Options, and (ii) shares of Company Common Stock issuable to participants in the ESPP Company ESPP, (iii) shares of Company Common Stock issuable to participants in the Company's 401(k) Plan, (iv) shares of Company Common Stock issuable to holders of Company Warrants, in the case of (i), (ii), (iii), (iv) and (v) consistent with the terms thereof thereof, and (yv) subject to Section 4.1(a), pursuant to grants of Company Options to newly hired employees, upon promotions of existing employees, or as part of Company's annual option grant program, in each case, in the granting ordinary course of non-discretionary stock options to non-employee directors under the Director Plan in an amount business, consistent with past practice, and not to exceed options to purchase 135,000 shares in the aggregate;aggregate pursuant to this clause (v), 1,000,000 shares of Company Common Stock issued pursuant to the Company Stock Option Plan (with individual grants or awards included within that 1,000,000 figure not to exceed 250,000 shares of Company Common Stock issued to any one person without prior approval of Parent's Chairman of the Board).
(g) Cause, permit or propose any amendments to the Company Charter Documents its Articles of Incorporation Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) 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 that are material, individually or in the aggregate, to the business of Company or enter into any material joint ventures, strategic partnerships relationships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which that are not material, individually or in the aggregate, to the business of Company and its subsidiariesCompany;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than (i) in connection with the financing of ordinary course trade payables of business, consistent with past practice, (ii) pursuant to existing credit facilities, in the ordinary course of business or (iii) pursuant to equipment financing;
(k) Adopt Except as required to comply with any Legal Requirement, adopt or amend any employee benefit plan, policy plan 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 providing for compensation and other benefits generally commensurate with employees who are terminable "at will")similarly situated employees) or collective bargaining agreement, 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 (other than directors fees to non-employee directors), officers, employees or consultantsconsultants other than in the ordinary course of business, consistent with past practice and Section 4.1(a) hereof, or change in any material respect any management policies or procedures;
(i1) Pay, discharge, settle or satisfy Make any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced material capital expenditures other than capital expenditures contained in the capital budget of Company approved by Company prior to the date of this Agreement) other than the payment; PROVIDED, dischargeHOWEVER, settlement or satisfaction, in the ordinary course of business that Company may continue to enter into capital leases consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability; or
(u) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a) through (t) above.
Appears in 1 contract
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in the usual, regular and ordinary course course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws -29- 34 and regulations, pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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 business dealings, except in each case as set forth in Section 4.1 of the Company Schedule. In addition, except as expressly permitted by the terms of this Agreement and, except in each case as set forth in Section 4.1 of the Company ScheduleAgreement, without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights, rights other than in the ordinary course of business consistent with past practices, provided that in no event shall Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregate;
(g) Cause, permit or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(h) 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 or enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practice;
(k) 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;
(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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability; or
(u) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a) through (t) above.
Appears in 1 contract
Samples: Merger Agreement (Spyglass Inc)
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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 business dealings. In addition, except in each case as set forth in Section 4.1 Company will promptly notify Parent of the Company Scheduleany material event involving its business or operations. In addition, except as expressly permitted by the terms of this Agreement andAgreement, and except as provided in each case as set forth in Section 4.1 Article 4 of the Company ScheduleSchedules, without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights, other than non-exclusive licenses in the ordinary course of business and consistent with past practices, provided that in no event shall Company license to any person or entity on an exclusive basis or sell any Company Intellectual Propertypractice;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee employee, consultant or director pursuant to stock option or purchase agreements in effect on the date hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect toof, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance delivery and/or sale of (i) options pursuant to any of the Company Stock Option Plans with strike prices equal to fair market value at the time of grant or options pursuant to the ESPP, in each case, in the ordinary course of business, consistent with past practice, and subject to and in compliance with the restrictions of Section 4.1(p), (ii) shares of Company Common Stock pursuant to the exercise of stock options therefor outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (iiiii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregatethereof;
(g) Cause, permit or propose any amendments to the Company Charter Documents its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its material subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material 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 Company or enter into any material joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company Company, except sales of product and its subsidiariesinventory in the ordinary course of business consistent with past practice;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than (i) in connection with the financing of ordinary course trade payables consistent with past practicepractice or (ii) pursuant to existing credit facilities in the ordinary course of business;
(k) Adopt or amend any employee benefit plan, policy plan 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;
(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) consultants other than the payment, discharge, settlement or satisfaction, in the ordinary course of business business, consistent with past practice or in accordance with their termspractice, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify change in any manner, terminate, release material respect any person from management policies or fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiaryprocedures;
(ml) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule)$1 million;
(nm) Except except in the ordinary course of business consistent with past practicebusiness, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(on) Enter enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basisother than in the ordinary course of business consistent with past practice;
(po) Revalue revalue any of its material assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(qp) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually;
(r) Engage in Take any action that could cause would be reasonably likely to interfere with Parent's ability to account for the Merger to fail to qualify as a "reorganization" under Section 368(a) pooling of the Code, interests whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability; or
(uq) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a4.1(a) through (tp) above.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (McAfee Associates Inc)
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except (i) as set forth in Section 4.1 of the Company Schedule, (ii) in connection with specific actions that Company is explicitly required to take pursuant to this Agreement or (iii) to the extent that Parent shall otherwise consent in writingwriting (which consent shall not be unreasonably delayed), carry on its business, in the usual, regular and ordinary course course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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 business dealings. In addition, except (i) in each case connection with specific actions that Company is explicitly required to take pursuant to this Agreement, (ii) as set forth in Section 4.1 of the Company Schedule. In addition, except as expressly permitted by Schedule or (iii) to the terms of this Agreement and, except extent that Parent shall otherwise consent in each case as set forth in Section 4.1 of the Company Schedule, without the prior written writing (which consent of Parentshall not be unreasonably 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay (cash, equity or otherwise) to any officer or employee employee, except (x) pursuant to written agreements outstanding, or policies existing, on the date hereof and (y) as previously disclosed in writing or made available to ParentParent in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual PropertyProperty that are material to the business of Company as currently conducted, or enter into grants to transfer or license to any person future patent rights, rights other than in the ordinary course of business consistent with past practices, provided that in no event shall Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance issuance, delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options options, in the ordinary course of business and consistent with past practices, to non-employee directors under the Director Plan newly hired employees in an amount not to exceed options to purchase 135,000 100,000 shares in the aggregate;
(g) Cause, permit or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(h) 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 or enter into any joint ventures, strategic partnerships or alliancesalliances in any case for any amount in excess of $250,000;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice andpractice, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practice;
(k) 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 (cash, equity or otherwise) to any director or employeeemployee (other than payments to non-officer employees in accordance with past practice), or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultantsconsultants (other than increases for non-officer employees or consultants in accordance with past practice);
(i) Paypay, 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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than including payments to financial, legal, accounting or other professional service advisors, other than reasonable payments to such professional service advisors not in connection with the Merger and the transactions contemplated thereby) in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule)$200,000;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter Except in the ordinary course of business consistent with past practice, enter into or materially modify any material contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basisCompany;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 250,000 individually;
(r) Engage in Intentionally take any action that could reasonably be expected to cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV, or fail to take any action reasonably necessary to cause the Merger to so qualify;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability; or;
(t) Make any loan, advance or capital contribution to or investment in any person (other than a subsidiary of Company) other than in the ordinary course of business consistent with past practice, but in no event in the amount (to persons other than subsidiaries) of more than $100,000 in the aggregate, and other than investments in cash equivalents made in the ordinary course of business consistent with past practice;
(u) Modify or amend in any manner that is adverse to Company, or terminate, any confidentiality agreement entered into by Company or any subsidiary in the ordinary course of business, or release or waive any material rights for claims, or modify or amend in any manner adverse to Company, any confidentiality, standstill or similar agreements to which Company or any of its subsidiaries is a party;
(v) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(w) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a4.1(a) through (tv) above.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Proxim Inc /De/)
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in the usualordinary course, regular and ordinary course in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings, except in each case as set forth in Section 4.1 of the Company Schedule. In addition, except as expressly permitted by the terms of this Agreement and, and except in each case as set forth in Section Schedule 4.1 of the Company Schedule, without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of warrants or options or restricted stock, or reprice warrants or options granted under any employee, consultant, director or other stock plans or agreements or authorize cash payments in exchange for any options granted under any of such plans except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parentwriting, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights, Property other than in the ordinary course of business consistent with past practices, provided that in no event shall Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance issuance, delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options and Company Warrants outstanding as of the date of this Agreement or granted pursuant to clause (y) hereofAgreement, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting issuance of nonCompany common stock in connection with the possible acquisition of Link-discretionary stock options to non-employee directors under the Director Plan Two Communications, Inc. in an amount not to exceed options to purchase 135,000 9,000,000 shares in the aggregate, and (z) the issuance of up to 500,000 shares of Company common stock to executive officers of Company;
(g) Cause, permit permit, or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(h) 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 (other than in the ordinary course of business consistent with past practice) or enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice andpractice, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practice;
(k) 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 as required by law or 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 consultantsconsultants other than annual review salary increases for non-officer employees in the ordinary course of business consistent with past practice;
(i) Pay, discharge, settle or satisfy any material 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) in which Company is a defendant other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports or incurred in the ordinary course of business consistent with past practice 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule)$10,000;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into any agreement, contract or materially modify any contracts, agreements, or obligations relating commitment which if in existence on the date hereof would be required to the distribution, sale, license or marketing by third parties of Company's products or products licensed by be listed in Company on an exclusive basisSchedule 2.17;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 10,000 individually;
(r) Engage in any action that could would reasonably be expected to cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax Tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax Tax liability or tax Tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax Tax liability;
(t) Enter into any collective bargaining agreements; or
(u) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a) through (t) above.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Eagle Wireless International Inc)
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in the usualordinary course, regular and ordinary course in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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 business dealings, except in each case as set forth in Section 4.1 of the Company Schedule. In addition, except as expressly permitted by the terms of this Agreement and, and except in each case as set forth in on Section 4.1 of the Company ScheduleSchedule(1), without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights, Property other than in the ordinary course of business consistent with past practices, provided that in no event shall Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
(1) Will include parameters of agreed upon stay bonus program.
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance issuance, delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options and Company Warrants outstanding as of the date of this Agreement or stock options granted pursuant to clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof hereof and (y) the granting of non-discretionary stock options to non-employee directors under new hires, in the Director Plan ordinary course of business and consistent with past practices (but in no event to include any provision providing for accelerated vesting), in an amount not to exceed options to purchase 135,000 250,000 shares in the aggregate;
(g) Cause, permit or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(h) 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 (other than in the ordinary course of business consistent with past practice) or enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice andpractice, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables and truck lease financing, in each case consistent with past practice;
(k) 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 as required by law or 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 (it being understood by the parties that payments pursuant to Company's quarterly bonus program as conducted in the ordinary course of business consistent with past practice do not constitute special bonuses 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 consultantsconsultants other than annual review salary increases for non-officer employees in the ordinary course of business consistent with past practice;
(i) Pay, discharge, settle or satisfy any material 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) in which Company is a defendant other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports or incurred in the ordinary course of business consistent with past practice 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule)$50,000;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into any agreement, contract or materially modify any contracts, agreements, or obligations relating commitment which if in existence on the date hereof would be required to be listed on Section 2.17 of the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basisSchedule;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 50,000 individually;
(r) Engage in any action that could would reasonably be expected to cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax Tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax Tax liability or tax Tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax Tax liability;
(t) Make or authorize (i) any capital expenditure in excess of $5 million with respect to any distribution center or $15 million in the aggregate or (ii) any marketing expenditure in excess of $6 million in the aggregate during any successive thirty (30) day period following the date hereof or $15 million in the aggregate during any successive ninety (90) day period following the date hereof;
(u) Enter into any collective bargaining agreements; or
(uv) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a) through (tu) above.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Webvan Group Inc)
Conduct of Business by Company. 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 Effective Time, Company each of Company, Title and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writingwriting or as otherwise specifically required or permitted by this Agreement or as set forth in Part 5.1 of the Company Schedules or Title Schedules, carry on its business, their business in all material respects in the usual, regular and ordinary course course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve intact its their present business organization, (ii) keep available the services of its their present officers and employees and (iii) preserve its their relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has they have business dealings. In addition, except in each case as set forth in Section 4.1 Company and Title will promptly notify Parent of the Company Scheduleany material event involving its business or operations. In addition, except as expressly permitted by the terms of this Agreement andor as otherwise specifically required or permitted by this Agreement, and except as provided in each case as set forth in Section 4.1 Part 5.1 of the Company ScheduleSchedules or in Part 5.1 of the Title Schedules, without the prior written consent of 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 Effective Time, Company and Title shall not do any of the following and shall not permit its their subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or repurchase of restricted stockstock (including Company Stock Subject to Forfeiture and Title Stock Subject to Forfeiture), 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance plan, except pursuant to written agreements in effect, or written plans or policies existing, except as otherwise disclosed in writing to Parent before the dated of this Agreement and expressly approved by Parent in writing in advance, or permitted by Section 5.1(k), and except for making any severance or termination payments that do not exceed $10,000 individually or $200,000 in the aggregate between both Company and Title;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, 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 Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregate;
(g) Cause, permit or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(h) 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 or enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practice;
(k) 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;
(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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise rights to any material income tax liability; or
(u) Agree in writing Company Intellectual Property or otherwise to take any of the actions described in Section 4.1 (a) through (t) above.Title
Appears in 1 contract
Conduct of Business by Company. 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 Effective TimeAppointment Date, Company and each of its subsidiaries shall, except as permitted by this Agreement, as set forth in Section 5.1 of the Company Schedule or to the extent that Parent shall otherwise consent in writingwriting (which consent shall not be unreasonably delayed or withheld), carry on its business, business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and in compliance with all applicable laws Laws and regulations, pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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, licensees and others with which it has significant business dealings, except in each case as set forth in Section 4.1 of the Company Schedule. In addition, except as expressly permitted by the terms of this Agreement and, and except in each case as set forth provided in Section 4.1 5.1 of the Company Schedule, without the prior written consent of ParentParent (which consent shall not be unreasonably delayed or 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 Effective TimeAppointment Date, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stockstock (except as specified in Section 6.8(d) hereof), 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, 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 entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, 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 Company license to any person or entity on an exclusive basis or sell any Company Intellectual PropertyProperty (other than in connection with the abandonment of immaterial Company Intellectual Property after the provision of at least five business days' written notice to Parent);
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 (or any such agreements entered into in the ordinary course consistent with past practice by Company with employees hired after the date hereof);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to, to any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereofAgreement, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under (and the Director Plan issuance of Common Stock upon exercise thereof), in the ordinary course of business and consistent with past practices, in an amount not to exceed options to purchase 135,000 (and the issuance of Company Common Stock upon exercise thereof) 150,000 shares in the aggregate;.
(g) Cause, permit or propose any amendments to the Company Charter Documents Company's Certificate of Incorporation or Bylaws (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material 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 or enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice andpractice, except for the sale, lease or disposition (other than through licensinglicensing permitted by clause (c)) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries; modify or amend in any material respect or terminate any existing lease, license or contract affecting the use, possession or operation of any such properties or assets; grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment or charge affecting any owned property or leased property or any part thereof; convey, assign, sublease, license or otherwise transfer all or any portion of any owned property or leased property or any interest or rights therein; or make any material changes in the construction or condition of any such property;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another personperson (other than (i) in the ordinary course of business consistent with past practice in an amount not to exceed $500,000 and (ii) performance guarantees, letters of credit and similar arrangements entered into with respect to the commercial contracts in the ordinary course of business consistent with past practice), issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables working capital consistent with past practice;
(k) 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 consultantsconsultants (other than the payment of bonuses and salary increases and the issuance of retention options (in compliance with Section 5.1(f)(y)), in each case in the ordinary course of business consistent with past practice) except, in each case, as may be required by law;
(i) Paypay, discharge, settle or satisfy any material litigation (whether or not commenced prior to the date of this Agreement) or any material 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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports or incurred since the date of such financial statements, or (ii) waive the any material 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 or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(on) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue any of its assets or, except Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(qo) Incur or enter into any agreement, contract or commitment outside requiring Company or any of the ordinary course of business calling for payments by Company its subsidiaries to pay in excess of $350,000 individually500,000;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(tp) Make any tax Tax election or accounting method change inconsistent with past practice that, individually or in the aggregate, is would be reasonably likely to adversely affect in any material respect the tax Tax liability or tax Tax attributes of Company or any of its subsidiaries or subsidiaries, settle or compromise any material income tax Tax liability; or, or consent to any extension or waiver of any limitation period with respect to Taxes;
(uq) Agree in writing or otherwise to take any of the actions described in Section 4.1 5.1 (a) through (tp) above.
Appears in 1 contract
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, business in the usual, regular and ordinary course course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes Taxes when due and subject to good faith disputes over such debts or Taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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 business dealings. In addition, except in each case as set forth in Section 4.1 during that period Company will promptly notify Parent of any material event involving its business or operations consistent with the Company Scheduleagreements contained herein. In addition, except as expressly permitted by the terms of this Agreement, and except as contemplated by this Agreement and, except or provided in each case as set forth in Section Schedule 4.1 of the Company ScheduleDisclosure Letter, without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except (i) pursuant to written agreements outstandingin effect, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, (ii) in an amount not to exceed four months base pay of the terminated person or (iii) as consented to by Parent, whose consent shall not be unreasonably withheld or delayed, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the material Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights, other than non-exclusive licenses in the ordinary course of business and consistent with past practices, provided that in no event shall Company license to any person or entity on an exclusive basis or sell any Company Intellectual Propertypractice;
(d) DeclareExcept for the two-for-one stock dividend payable on Company Common Stock on March 10, 2000, 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 of Company or split, combine or reclassify any capital stock of Company or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stockstock of Company;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereofCompany Options, and (ii) shares of Company Common Stock issuable to participants in the ESPP Company ESPP, (iii) shares of Company Common Stock issuable to participants in the Company's 401(k) Plan, in the case of (i), (ii) and (iii), consistent with the terms thereof thereof, and (yiv) pursuant to grants of Company Options to newly hired employees, upon promotions of existing employees, or as part of Company's annual option grant program, in each case, in the granting ordinary course of non-discretionary stock options to non-employee directors under the Director Plan in an amount business, consistent with past practice, and not to exceed options to purchase 135,000 shares in the aggregateaggregate pursuant to this clause (iv), 500,000 shares of Company Common Stock;
(g) Cause, permit or propose any amendments to the Company Charter Documents its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) 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 Company or enter into any material joint ventures, strategic partnerships relationships or alliances; provided, that Company shall not be prohibited under this clause (h) from (i) making or agreeing to make debt or equity investments which do not exceed (A) the lesser of (x) 20% of the fully diluted ownership of the entity or (y) $10 million, individually, or (B) $100 million, in the aggregate, or (ii) making or agreeing to make acquisitions which do not (A) exceed $200 million per acquisition, (B) exceed $500 million in the aggregate (which valuations shall be determined upon the signing of agreements regarding such transactions), or (C) which could reasonably be expected to delay the Merger or the other transactions contemplated hereby; provided, further, that Company shall provide written notice to Parent prior to signing any agreement regarding any such acquisition;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiariesCompany;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than (i) in connection with the financing of ordinary course trade payables of business, consistent with past practicepractice or (ii) pursuant to existing credit facilities, in the ordinary course of business;
(k) Adopt Except as required to comply with any Legal Requirement, adopt or amend any employee benefit plan, policy plan 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 providing for compensation and other benefits generally commensurate with employees who are terminable "at will")similarly situated employees) or collective bargaining agreement, 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 consultantsconsultants other than in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures that are material to the business of Company; provided, that any unilateral amendment by SAIC of any employee benefit plan in which Company participates shall not be a violation of this Section 4.1(k);
(i1) Pay, discharge, settle or satisfy Make any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced material capital expenditures other than capital expenditures contained in the capital budget of Company approved by Company prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability; or
(u) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a) through (t) above.
Appears in 1 contract
Conduct of Business by Company. 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 Effective Time, Company shall, and shall cause each of its subsidiaries shallto, except as set forth in Section 4.1 of the Company Schedule or to the extent that Parent shall otherwise consent in writing, (i) carry on its business, in the usualordinary course, regular and ordinary course in substantially the same manner as heretofore conducted and in material compliance with all applicable laws and regulations, (ii) pay its debts and taxes when due and pay or perform other material obligations Taxes when due, subject to good faith disputes over such debtsdebts or Taxes, taxes(iii) pay or perform other material obligations when due, and obligations, and (iv) use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (iA) preserve 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 business dealings. In addition, except in each case as set forth in Section 4.1 of the Company Schedule. In addition, except as expressly permitted by Schedule or to the terms of this Agreement and, except extent that Parent shall otherwise consent in each case as set forth in Section 4.1 of the Company Schedule, without the prior written consent of Parentwriting, 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of Company options or restricted stock, or reprice Company options granted under any employee, consultant, director or other stock plans Company Option Plans or authorize cash payments in exchange for any Company options granted under any of such plans except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay (cash, equity or otherwise) to any officer or employee Employee, except pursuant to written agreements outstanding, or policies existing, on the date hereof and as that have been previously disclosed in writing or made available to ParentParent in the Company Schedule, or adopt any new severance or termination plan, program or arrangement;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual PropertyProperty that are material to the business of Company as currently conducted, or enter into grants to transfer or license to any person future patent rights, in each case other than in the ordinary course of business consistent with past practices, ; provided that in no event shall Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 hereofhereof or issued in compliance with Section 4.1(f);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance issuance, delivery and/or sale of (i) shares of Company Common Stock pursuant to (i) the exercise of stock options Company Options, Company Warrants or other Company securities outstanding as of the date of this Agreement or granted pursuant to clause Agreement, (yii) hereofthe Company ESPP, and (iiiii) grants of Company Options to purchase no more than an aggregate of 1,000,000 shares of Company Common Stock issuable to participants new hires in the ESPP ordinary course of business consistent with past practices in amounts consistent with the limitations set forth in Section 4.1(f) of the Company Schedule and the vesting of which Company Options do not accelerate by the occurrence of any of the transactions contemplated by this Agreement (either alone or in combination with any subsequent event or events) and which Company Options have a vesting schedule and other terms thereof of exercisability no more favorable than Company's standard vesting schedule and (y) the granting terms of non-discretionary stock options to non-employee directors under the Director Plan exercisability contained in an amount not to exceed options to purchase 135,000 shares in the aggregateCompany's standard form of option agreement, respectively;
(g) Cause, permit or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(h) 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 or enter into any joint ventures, ventures or strategic partnerships or alliancespartnerships;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except (a) sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for or (b) the sale, lease or disposition (other than through licensing) of property properties or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practice;
(k) Adopt Adopt, amend or amend terminate any employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, Company Employee Plan or enter into any employment contract or collective bargaining agreement Company Employee Plan (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"); provided, that such letters or letter agreements shall not provide for the extension, obligation or promise to pay any severance, whether in cash, equity or otherwise, or accelerate any equity compensation awards, including, without limitation, Company Options), pay any special bonus or special remuneration (cash, equity or otherwise) to any director or employeeemployee (other than payments to current non-officer employees in accordance with past practice), or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultantsconsultants (other than increases for current non-officer employees in accordance with past practice);
(il) Enter into any material Company Contracts relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company, other than in the ordinary course of business consistent with past practice;
(m) 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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports or incurred since the date of such financial statementspractice, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of to which Company or any of its subsidiaries is a beneficiary;
(mn) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of $250,000 in the estimates thereof set forth in Section 4.1 of the Company Schedule)aggregate;
(no) Except in the ordinary course of business consistent with past practice, modifyModify, amend or terminate any material contract or agreement Contract to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to other than in the distribution, sale, license or marketing by third parties ordinary course of Company's products or products licensed by Company on an exclusive basisbusiness consistent with past practices;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually;
(r) Engage in Intentionally take any action that could reasonably be expected to cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV, or fail to take any action reasonably necessary to cause the Merger to so qualify;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(tr) Make any tax Tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax Tax liability or tax Tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax Tax liability;
(i) Make any loan or advance to any person (except a subsidiary of Company) other than in the ordinary course of business consistent with past practice, but in no event in the amount (to persons other than subsidiaries) of more than $100,000 in the aggregate; provided, that in no event shall Company or any of Company's subsidiaries make any loan, or change the terms of any existing loans which loan or change would be in violation of Section 402 of the Sarbanes-Oxley Act or (ii) make any capital contribution to, or invesxxxxx xx, xxx person (except in a wholly owned subsidiary of Company) other than investments in publicly traded securities which constitute cash equivalents in connection with Company's cash management program in the ordinary course of business consistent with past practices;
(t) Release or waive any material rights for claims, or modify or amend in any manner materially adverse to Company, or terminate any confidentiality or standstill agreements to which Company or any of its subsidiaries is a party;
(u) Adopt or amend any stockholder rights plan;
(v) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business in excess of $250,000 individually or $2,000,000 in the aggregate;
(w) Hire any employee in any of the functions set forth in Section 4.1(w) of the Company Schedule; or
(ux) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a4.1(a) through (tw) above.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Juniper Networks Inc)
Conduct of Business by Company. 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 Effective Time, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, (i) carry on its business, business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulationsmaterial Legal Requirements, (ii) pay its debts Liabilities and taxes Taxes when due and (subject to good faith disputes over such Liabilities or Taxes), (iii) pay or perform other material obligations when due, due (subject to good faith disputes over such debtspayments or performance), taxes(iv) use its reasonable efforts to assure that each of its material Contracts entered into after the date of this Agreement will not require the procurement of any consent, waiver or novation or provide for any material change in the obligations of any party in connection with, or terminate as a result of the consummation of, the Merger, (v)notify and give Cloudtech the opportunity to participate in the defense or settlement of any litigation to which the Company may become a party, and obligations, and (vi) use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (iA) preserve intact its present business organization, (iiB) keep available the services of its present officers and employees Employees, and (iiiC) preserve its relationships with customers, suppliers, distributors, consultants, licensors, licensees, licensees and others with which it has business dealings, except in each case as set forth in Section 4.1 of the Company Schedule. In addition, except as expressly permitted by the terms of this Agreement and, except in each case as set forth in Section 4.1 of the Company Schedule, without the prior written consent of ParentCloudtech, 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 Effective Time, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive Enter into any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company ScheduleContract;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, 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 Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregate;
(g) Cause, permit or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(h) 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 or enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practice;
(k) 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;
(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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability; or
(u) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a) through (t) above.
Appears in 1 contract
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, business in the usual, regular and ordinary course course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulationsLegal Requirements, pay its debts and taxes Taxes when due and subject to good faith disputes over such debts or Taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, Company will promptly notify Parent of any material event involving its business, operations or financial condition. In addition, without limiting the generality of the foregoing, except as expressly contemplated by this Agreement or provided in each case as set forth in Section Part 4.1 of the Company Schedule. In addition, except as expressly permitted by the terms of this Agreement and, except in each case as set forth in Section 4.1 of the Company ScheduleDisclosure Letter, without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or 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 plans, except pursuant to plans and agreements existing as contemplated under Section 1.6(d) of the date hereof the relevant terms of which are described in the Company Schedulethis Agreement;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstandingin effect, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance planplan or policies;
(ci) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rightsIP Rights, other than with respect to non-exclusive licenses in the ordinary course of business and consistent with past practice; (ii) disclose to any Person other than Company employees and representatives of Parent any material trade secret except in the ordinary course of business consistent with past practices; (iii) transfer, provided that modify or terminate any agreement pursuant to which the Company has licensed Intellectual Property Rights from any Person except in no event shall Company license the ordinary course of business consistent with past practices and which would be immaterial to the business of the Company; and (iv) disclose any material source code to any person or entity on an exclusive basis or sell any Company Intellectual Propertythird party except in the ordinary course of business consistent with past practices;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 other agreements in effect on the date hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance issuance, delivery and/or and sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregateOptions;
(g) Cause, permit or propose any amendments to the Company Charter Documents its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion substantially all 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 enter into any joint venturesin the aggregate, strategic partnerships or alliancesto the business of Company;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which that are not material, individually or in the aggregate, to the business of Company and its subsidiariesother than in the ordinary course of business consistent with past practices;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, enter into any "“keep well" ” or other agreement Contract to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than borrowings under Company’s line of credit up to an aggregate of $3.5 million in connection with the financing of ordinary course trade payables of business consistent with past practicepractices;
(k) Adopt or amend any employee benefit plan, policy plan 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")agreement, pay any special bonus or special remuneration to any officer, director or employee, make any loan or provide any advance to any officer, director or employee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its officers, directors, employees or consultants or (ii) (A) make any change in the compensation or benefits payable or to become payable to any of its employees, agents or consultants, or members of the board of directors of the Company, (B) enter into or amend any employment, severance, consulting, termination or other agreement or employee benefit plan or make any loans to any of its directors, officers, employees, affiliates, agents or consultants, (C) make any change in its existing borrowing or lending arrangements for or on behalf of any of such directors, officers, employees, agents, consultants, (D) pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director, employee or affiliate or pay or agree to pay or make any accrual or arrangement for payment to any officers, directors, employees or consultants;
(i) Payaffiliates of any amount relating to unused vacation days, 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, except payments and accruals made in the ordinary course of business consistent with past practice practices, (E) offer, grant or in accordance with their termsissue any stock options or take any action to accelerate, amend or change the period of vesting or exercisability of options or restricted stock, or liabilities recognized reprice options granted under any employee, consultant, director or disclosed other stock plans or authorize cash payments in exchange for any options granted under any of such plans, (F) hire or terminate any officer (other than terminations for cause) or encourage any officer or employee to resign, or increase the number of employees in the most recent consolidated financial statements net aggregate by more than eight (or the notes thereto) of Company included in the Company SEC Reports or incurred since the date of such financial statements8), or (iiG) waive the benefits of, agree to modify amend in any mannermaterial respect any such existing plan, terminate, release agreement or arrangement in a manner inconsistent with the foregoing;
(l) Make any person from or fail to enforce any confidentiality or similar agreement to which Company or any capital expenditures in excess of amounts allocated for capital expenditures in the Company’s 2004 operating budget approved by its subsidiaries is a party or Board of which Company or any of its subsidiaries is a beneficiaryDirectors;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(qn) Incur Permit to be cancelled or terminated, without reasonable efforts to maintain coverage, or cancel or terminate any insurance policy naming it as a beneficiary or loss payee unless such policy is replaced by a policy with comparable coverage;
(A) Materially modify, amend or terminate any of the Company Contracts, (B) waive, release or assign any material rights on claims under any of the Company Contracts that are material to the business of the Company and the Company Subsidiaries, taken as a whole, (C) enter into any material commitment or transaction including entering into any material purchase, sale or lease of assets or real estate, (D) enter into any material strategic alliance, material joint development or joint marketing agreement, contract or commitment outside of other than in the ordinary course of business calling consistent with past practices, or (E) enter into any agreement pursuant to which Parent or the Surviving Corporation or any of their respective subsidiaries, or the Company or any Company Subsidiary will be subject to any material exclusivity, non-compete or other similar restriction on their respective businesses following the Closing;
(p) Fail to make in a timely manner any filings with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder;
(A) Make any change in any material method of accounting, method of accounting principles or practice, except for payments such change required by reason of a concurrent change in GAAP or compliance with the applicable requirements of the rules and regulations promulgated by the SEC, (B) make any Tax election or change any Tax election already made, adopt any Tax accounting method, except for such changes required by applicable law, rule or regulation, change any Tax accounting method, except for such changes required by applicable law, rule or regulation, enter into any closing agreement or settle any claim or assessment relating to Taxes other than settlements or assessments the result of which would not be material to the Company and the Company Subsidiaries, taken as a whole, or consent to any claim or assessment relating to Taxes or any waiver of the statute of limitations for any such claim or assessment, (C) file the 0000 Xxxxxx Xxxxxx federal income Tax return for the taxable year ending June 27, 2003 without Parent’s review and consent, which shall not be unreasonably withheld, or (D) revalue any of its material assets, except as required by GAAP, applicable accounting requirements or the published rules and regulations of the SEC with respect thereto in excess effect during the periods involved other than in the ordinary course of $350,000 individuallybusiness consistent with past practices;
(r) Engage Pay, discharge or satisfy any material claims, material liabilities or material obligations (whether absolute, accrued, contingent or otherwise), other than (i) the payment, discharge or satisfaction of any such claims, liabilities or obligations in any action the ordinary course of business consistent with past practices, (ii) the settlement of claims that could cause do not require a monetary payment or restrictions on the Merger to fail to qualify as a "reorganization" under Section 368(aCompany’s business or (iii) of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the Code, whether consolidated financial statements (or not otherwise permitted by the provisions of this Article IVnotes thereto);
(sA) Engage in any action with Adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization (other than the intent to directly Merger) other than liquidations, dissolutions, mergers, consolidations, restructurings, recapitalizations or indirectly adversely impact any other reorganizations of Company Subsidiaries that would not have a material effect on the business of the transactions contemplated Company and the Company Subsidiaries, taken as a whole, (B) acquire or agree to acquire by this Agreement;
(t) Make purchasing any tax election thatequity interest in or a material portion or all of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or, except in the ordinary course of business consistent with past practices, otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the Company and the Company Subsidiaries, taken as a whole, or (C) sell, transfer, lease, mortgage, pledge, license, encumber, or otherwise dispose of, any of its properties or assets that are material, individually or in the aggregate, to the Company and the Company Subsidiaries, taken as a whole;
(t) Take any action that would or is reasonably likely to adversely affect result in any of the conditions to the Merger set forth in Article VI not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any material respect at, or as of any time prior to, the tax liability Effective Time, or tax attributes that would impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(A) Commence any litigation (except actions commenced in the ordinary course of business against third parties) or (B) except in the ordinary course of business consistent with past practices or as required by law, seek a judicial order or decree or settle any litigation, it being understood that any settlement of litigation involving the payment by the Company or any Company Subsidiary of its subsidiaries or settle or compromise any material income tax liabilityan amount in excess of $100,000 is not in the ordinary course of business; or
(uv) Agree in writing or otherwise commit or negotiate to take any of the actions described in Section 4.1 (a4.1(a) through (tu) above.
Appears in 1 contract
Samples: Merger Agreement (Sciquest Inc)
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, business in all material respects in the usual, regular and ordinary course course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, due subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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 business dealings. In addition, except in each case as set forth in Section 4.1 Company will promptly notify Parent of the Company Scheduleany material event involving its business or operations. In addition, except as expressly permitted by the terms of this Agreement andAgreement, and except as provided in each case as set forth in Section Part 4.1 of the Company ScheduleLetter, without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or repurchase of restricted stockstock (including Company 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstandingin effect, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights, other than non-exclusive licenses in the ordinary course of business and consistent with past practices, provided that in no event shall Company license to any person or entity on an exclusive basis or sell any Company Intellectual Propertypractice;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into into, or exercisable 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 convertible, exercisable or exchangeable securities, other than (xi) grants of Company Options to newly hired employees, consistent with Company's past practices regarding such grants, not to exceed Company Options in respect of 100,000 shares of Company Common Stock in the aggregate, and (ii) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options Company Options or Company Warrants outstanding as of the date of this Agreement or July 9, 1999 and Company Options granted pursuant to the preceding clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregatei);
(g) Cause, permit or propose any amendments to the Company Charter Documents its Articles of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) 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 Company or enter into any material joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiariesCompany;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practiceforegoing;
(k) Adopt or amend any employee benefit plan, policy plan or arrangement, any employee stock purchase or employee stock option plan; enter into, amend, terminate or enter into waive any rights under any employment contract agreement 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 other than in the ordinary course of business, consistent with past practice) of, or make any change with respect to the rights to severance severance, indemnification, acceleration of options, or indemnification) lapse or termination of repurchase or similar rights of Company Restricted Stock for, its directors, officers, employees or consultants; change in any material respect any management policies or procedures;
(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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m1) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or 50,000 in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any capital expenditures, capital additions or capital improvements in excess of its subsidiaries or settle or compromise any material income tax liability; or
(u) Agree $100,000 in writing or otherwise to take any of the actions described in Section 4.1 (a) through (t) above.aggregate;
Appears in 1 contract
Samples: Merger Agreement (Imall Inc)
Conduct of Business by Company. 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 Effective TimeClosing, the Company and each of its subsidiaries shall, except to the extent that Parent the other party shall otherwise consent in writing, carry on its business, 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 regulationsregulations (except where noncompliance would not have a Material Adverse Effect), pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), 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, except in each case as set forth in Section 4.1 of the Company Schedule. In addition, except as expressly required or permitted by the terms of this Agreement and, except in each case as or set forth in Section Schedule 4.1 of the Company Schedulehereto, without the prior written consent of 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 Effective TimeClosing, the Company shall not do any of the following and shall not permit its subsidiaries to 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to applicable law, written agreements outstanding, or policies existing, existing on the date hereof and as previously or concurrently disclosed in writing or made available to Parentthe 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 entity or otherwise extend, amend or modify any material rights to the Company any Intellectual Property, Property 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 license to any person or entity on an exclusive basis or sell any Company Intellectual PropertyProperty of the Company;
(d) DeclareExcept as provided in Section 1.15, 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;
(e) PurchaseExcept as provided in Section 1.15, purchase, redeem or otherwise acquire, directly or indirectly, any shares of its capital stock of Company or its subsidiariesstock, except including repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee or consultant pursuant to stock option or purchase agreements in effect on the date hereof;
(f) IssueExcept as provided in Section 1.15, issue, deliver, sell, authorize, pledge or otherwise encumber encumber, or propose 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 (x) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregate;
(g) Cause, permit or propose any amendments to the Company Amend its Charter Documents (or similar governing instruments of any of its subsidiaries)Documents;
(h) 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 the Company, or enter into any joint ventures, strategic partnerships or alliancesalliances or other arrangements that provide for exclusivity of territory or otherwise restrict the Company's ability to compete or to offer or sell any products or services;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets assets, except (A) sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice andpractice, except for (B) the sale, lease or disposition (other than through licensing) of property or assets which that are not material, individually or in the aggregate, to the business of Company such party, and (C) a first or second priority lien on all of its subsidiariestangible assets (other than the Sorpresa! Channel and related programming assets and services, including, without limitation, websites, domain names, Affiliation Agreements, distribution agreements, rights in and to programs, brand names, Trademarks, Copyrights and other intellectual property rights, physical manifestations of intellectual property, including, without limitation, master tapes, digital video disks (DVDs) and other storage media, electronic and otherwise, and advertising, barter and other revenues (collectively, the "Sorpresa! Programming Assets")) to secure its Long-Term Debt;
(j) Incur or permit to exist any indebtedness for borrowed money in excess of $25,000 in the aggregate or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Companysecurities, 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 other than except that the Company may permit to exist Long-Term Debt in connection with the financing amount that exists on the date of ordinary course trade payables consistent with past practicethis Agreement; provided that the amount of Long-Term Debt shall not exceed $3,000,000 on the Closing Date;
(k) 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;
(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 practice practices or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports Unaudited Financial Statements 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 or any of its subsidiaries is a party or of which the Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practicepractices, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party Contract or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(on) Enter into or materially modify any contractsExcept as required by U.S. GAAP, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue revalue any of its assets or, except as required by GAAP, or make any change in accounting methods, principles or practices;
(qo) Incur Except in the ordinary course of business consistent with past practices, incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company requiring such party to pay in excess of $350,000 individually25,000 in any 12 month period;
(rp) Engage in any action that could reasonably be expected to cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(sq) Engage in Settle any action with litigation to which an Insider is a party or where the intent to directly or indirectly adversely impact any of consideration given by the transactions contemplated by this AgreementCompany is other than monetary;
(tr) Make or rescind any tax election Tax elections that, individually or in the aggregate, is could be reasonably likely to adversely affect in any material respect the tax Tax liability or tax Tax attributes of Company or any of its subsidiaries or such party, settle or compromise any material income tax liabilityliability 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;
(t) 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 with respect to the Company; provided that this shall not require the Company, in the operation of its business, to take any actions beyond the scope of its current operating practices after application of reasonable business judgment;
(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 the payment of salary and benefits in the ordinary course of business consistent with past practice and other than the payment of interest on Long-Term Debt or rent under the Facilities Lease; or
(ux) Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 4.1 (a) through (tw) above.
Appears in 1 contract
Samples: Merger Agreement (Juniper Partners Acquisition Corp.)
Conduct of Business by Company. 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 Effective TimeClosing, the Company and each of its subsidiaries shall, except to the extent that Parent the other party shall otherwise consent in writing, carry on its business, 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 regulationsregulations (except where noncompliance would not have a Material Adverse Effect), pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), 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, except in each case as set forth in Section 4.1 of the Company Schedule. In addition, except as expressly required or permitted by the terms of this Agreement and, except in each case as or set forth in Section Schedule 4.1 of the Company Schedulehereto, without the prior written consent of 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 Effective TimeClosing, the Company shall not do any of the following and shall not permit its subsidiaries to 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to applicable law, written agreements outstanding, or policies existing, existing on the date hereof and as previously or concurrently disclosed in writing or made available to Parentthe 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 entity or otherwise extend, amend or modify any material rights to the Company any Intellectual Property, Property 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 license to any person or entity on an exclusive basis or sell any Company Intellectual PropertyProperty of the Company;
(d) DeclareExcept as provided in Section 1.15, 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;
(e) PurchaseExcept as provided in Section 1.15, purchase, redeem or otherwise acquire, directly or indirectly, any shares of its capital stock of Company or its subsidiariesstock, except including repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee or consultant pursuant to stock option or purchase agreements in effect on the date hereof;
(f) IssueExcept as provided in Section 1.15, issue, deliver, sell, authorize, pledge or otherwise encumber encumber, or propose 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 (x) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregate;
(g) Cause, permit or propose any amendments to the Company Amend its Charter Documents (or similar governing instruments of any of its subsidiaries)Documents;
(h) 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 the Company, or enter into any joint ventures, strategic partnerships or alliancesalliances or other arrangements that provide for exclusivity of territory or otherwise restrict the Company’s ability to compete or to offer or sell any products or services;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets assets, except (A) sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice andpractice, except for (B) the sale, lease or disposition (other than through licensing) of property or assets which that are not material, individually or in the aggregate, to the business of Company such party, and (C) a first or second priority lien on all of its subsidiariestangible assets (other than the Sorpresa! Channel and related programming assets and services, including, without limitation, websites, domain names, Affiliation Agreements, distribution agreements, rights in and to programs, brand names, Trademarks, Copyrights and other intellectual property rights, physical manifestations of intellectual property, including, without limitation, master tapes, digital video disks (DVDs) and other storage media, electronic and otherwise, and advertising, barter and other revenues (collectively, the ‘‘Sorpresa! Programming Assets’’)) to secure its Long-Term Debt;
(j) Incur or permit to exist any indebtedness for borrowed money in excess of $25,000 in the aggregate or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Companysecurities, 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 other than except that the Company may permit to exist Long-Term Debt in connection with the financing amount that exists on the date of ordinary course trade payables consistent with past practicethis Agreement; provided that the amount of Long-Term Debt shall not exceed $3,000,000 on the Closing Date;
(k) 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;
(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 practice practices or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports Unaudited Financial Statements 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 or any of its subsidiaries is a party or of which the Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practicepractices, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party Contract or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(on) Enter into or materially modify any contractsExcept as required by U.S. GAAP, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue revalue any of its assets or, except as required by GAAP, or make any change in accounting methods, principles or practices;
(qo) Incur Except in the ordinary course of business consistent with past practices, incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company requiring such party to pay in excess of $350,000 individually25,000 in any 12 month period;
(rp) Engage in any action that could reasonably be expected to cause the Merger to fail to qualify as a "‘‘reorganization" ’’ under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(sq) Engage in Settle any action with litigation to which an Insider is a party or where the intent to directly or indirectly adversely impact any of consideration given by the transactions contemplated by this AgreementCompany is other than monetary;
(tr) Make or rescind any tax election Tax elections that, individually or in the aggregate, is could be reasonably likely to adversely affect in any material respect the tax Tax liability or tax Tax attributes of Company or any of its subsidiaries or such party, settle or compromise any material income tax liabilityliability 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;
(t) 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 with respect to the Company; provided that this shall not require the Company, in the operation of its business, to take any actions beyond the scope of its current operating practices after application of reasonable business judgment;
(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 the payment of salary and benefits in the ordinary course of business consistent with past practice and other than the payment of interest on Long-Term Debt or rent under the Facilities Lease; or
(ux) Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 4.1 (a) through (tw) above.
Appears in 1 contract
Samples: Merger Agreement (Juniper Partners Acquisition Corp.)
Conduct of Business by Company. During Subject to Section 4.3, 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 Effective Time, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise request or consent in writingwriting (which consent or refusal to grant consent shall not be unreasonably withheld or delayed), carry on its business, businesses in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts Liabilities and taxes Taxes when due and pay or perform other material obligations when due, (subject to good faith disputes over such debtsLiabilities or Taxes), taxes, and obligationspay or perform other obligations when due, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees employees, and (iii) preserve its relationships with customers, suppliers, distributors, consultants, licensors, licensees, licensees and others with which it has significant business dealings, except in each case as set forth in Section 4.1 of the Company Schedule. In addition, the Company shall promptly notify Parent of any material event involving its businesses or operations occurring outside the ordinary course of business. In addition, without the prior written consent of Parent (which consent or refusal to grant consent shall not be unreasonably withheld or delayed), except as expressly permitted or required by the terms of this Agreement andAgreement, except in each case as set forth provided in Section 4.1 of the Company Schedule, without or in accordance with the prior written consent terms of ParentSection 4.2 hereof with respect to the ISAC Sale (as defined in Section 4.2 hereof), 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or 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 Authorize cash payments in exchange for any options granted under any of such plans except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleemployee, consultant, director, or other stock plans;
(b) Grant any severance or termination pay (whether in cash, stock, equity securities, or property) to any officer or key employee except pursuant to written agreements outstanding, or policies existing, outstanding on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance plan, or amend or modify or alter in any material respect any severance plan, agreement or arrangement existing on the date hereof (including without limitation any retention, change of control or similar agreement), or grant any equity-based compensation, whether payable in cash or stock (except pursuant to written agreements outstanding on the date hereof);
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual PropertyProperty (other than in the ordinary course of business and consistent with past practice), or enter into grants to transfer or license to any person future patent rightsrights to the Company Intellectual Property other than non-exclusive licenses granted to end-users and non-exclusive distribution, reseller and similar commercial agreements entered into in the ordinary course of business and consistent with past practice; provided that in no event shall the Company (i) license, or enter into a distribution, reseller or similar arrangement, on an exclusive basis, or sell, any Company Intellectual Property; or (ii) enter into any Contract (v) providing for any site licenses other than in the ordinary course of business and consistent with past practice, (w) containing pricing or discounting terms or provisions other than in the ordinary course of business consistent with past practicespractice, provided that (x) requiring the Company to use its "best efforts" other than in no event shall the ordinary course of business and consistent with past practice, (y) limiting the right of the Company license to engage in any person line of business or entity on an exclusive basis to compete with any person, or sell any Company Intellectual Property(z) not otherwise in compliance with Section 4.1(d) hereof;
(d) Enter into any Contract (i) requiring the Company to purchase a minimum amount of products or services with aggregate commitments over the life of all such Contracts in excess of $50,000 individually or $200,000 in the aggregate on a monthly basis, or (ii) requiring the Company to provide a minimum amount of products or services with aggregate commitments over the life of such Contract in excess of $200,000;
(e) 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;
(ef) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, except repurchases of unvested shares at or below 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 hereofof this Agreement, provided that no such repurchase shall be permitted in the event the per share repurchase price is greater than the Merger Consideration;
(fg) Issue, deliver, sell, authorize, authorize or designate (including by certificate of designation) or pledge or otherwise encumber encumber, or propose any of the foregoing with respect to, to any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance issuance, delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options Company Stock Options outstanding as of the date of this Agreement Agreement, or granted pursuant to clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (ysubject to Section 1.6(i) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregatehereof;
(gh) Cause, permit or propose submit to a vote of the Company's stockholders any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(hi) 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 or enter into any joint ventures, strategic partnerships ventures or similar alliances;
(ij) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice andpractice, and except for the sale, lease lease, licensing, encumbering or disposition (other than through licensinglicensing unless permitted by Section 4.1(c)) of property or assets which not in excess of $50,000 individually or $200,000 in the aggregate, provided such property or assets are not material, individually or in the aggregate, to the business businesses of the Company and its subsidiaries;
(jk) Incur Grant any loans to employees, officers, directors (other than for reasonable business expenses or in connection with cashless exercises of options with respect to such third parties and which are compliant with applicable Legal Requirements) or other third parties, incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practice;
(kl) Adopt Except as required by applicable law, this Agreement or Contracts in effect on the date hereof, adopt or amend any employee benefit plan, policy Company Employee Plan 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")agreement, pay any special bonus or special remuneration to any director or employeeemployee (cash, equity or otherwise), or materially increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants;
(im) 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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports or incurred since the date of such financial statements, or (ii) waive Waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any the confidentiality or similar agreement nondisclosure provisions of any Contract to which the Company or any of its subsidiaries is a party or of which the Company or any of its subsidiaries is a beneficiary;
(mn) Make Enter into (unless otherwise permitted by this Section 4.1), modify or amend (unless such amendment, if it were a new Contract, would be otherwise permitted by this Section 4.1), or terminate any individual or series Contract of related payments outside of the ordinary course of business (other than payments a nature required to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth be listed as a Company Contract in Section 4.1 2.19 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party Schedule or waive, delay the exercise of, release or assign any material rights or claims thereunder, in each case, outside the ordinary course of business;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue any of its assets or, except Except as required by GAAP, revalue any of its assets (including without limitation writing down the value of inventory or writing off notes or accounts receivable other than in the ordinary course of business consistent with past practice) or make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(tp) Make any tax Tax election or accounting method change (except as required by GAAP) that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax Tax liability or tax Tax attributes of the Company or any of its subsidiaries or subsidiaries, settle or compromise any material income tax liability; orTax liability or consent to any extension or waiver of any limitation period with respect to Taxes;
(q) Other than taking any action permitted by Section 5.4(c) hereof, engage in any action with the intent to, directly or indirectly, adversely impact or materially delay the consummation of the Transactions;
(i) Hire any employee (except that in the event an employee is terminated pursuant to clause (ii) hereof or voluntarily terminates (including by death or disability) his or her employment, a replacement may be engaged as a contractor or temporary "at-will" employee to temporarily fill such terminated employee's position, provided (x) any consideration payable for services rendered by such replacement is of a kind and amount permitted by this Section 4.1, and (y) any such agreement with any such replacement shall be terminable, at the sole option of Parent, without penalty at the Effective Time), or (ii) terminate any employee (except for termination for cause and subject to Section 5.10 hereof);
(s) Make any individual or series of related payments outside of the ordinary course of business (including payments to legal, accounting or other professional service advisors) in excess of $150,000 in the aggregate, except in connection with this Agreement or the ISAC Sale;
(t) Commence any litigation (whether or not commenced prior to the date of this Agreement) (other than any litigation to enforce any of its rights under the Agreement);
(u) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a4.1(a) through (tSection 4.1(t) above.
Appears in 1 contract
Conduct of Business by Company. During Except as required or permitted by the terms of this Agreement, as set forth in Section 4.1 of the Company Disclosure Schedule or approved by Parent in writing, 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 Effective Time, each of Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes Taxes when due and (subject to good faith disputes over such debts or Taxes), pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to to: (ia) preserve intact its present business organization, ; (iib) keep available the services of its present officers and employees employees; and (iiic) preserve its relationships with customers, suppliers, distributors, licensors, licensees, licensees and others with which it has significant business dealings; provided, however, that in the event Company shall be required to take or refrain from taking any action pursuant to this Section 4.1 that would cause any representation or warranty of Company set forth in this Agreement to be or become inaccurate, Company shall so notify Parent in writing, and as soon as practicable, and in no event more than three (3) business days, after Parent's receipt of such notice Parent shall advise Company in writing as to whether Company should (x) comply with this Section 4.1, in which event such action or inaction shall not be deemed to constitute a breach of, or inaccuracy in, such representations or warranties, or (y) cause such representation or warranty to remain accurate, in which such action or inaction shall not be deemed to constitute a breach of this Section 4.1). In addition, except in each case as required or permitted by the terms of this Agreement, as set forth in Section 4.1 of the Company Schedule. In addition, except as expressly permitted Disclosure Schedule or approved by the terms of this Agreement and, except Parent in each case as set forth in Section 4.1 of the Company Schedule, without the prior written consent of Parentwriting, 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:following (it being understood and agreed that any action taken or omitted to be taken by Company after the execution and delivery of this Agreement that is either permitted by the terms of this Section 4.1 or approved by Parent in writing pursuant to this Section 4.1 shall not be deemed to constitute a breach of, or inaccuracy in, any of the representations or warranties of Company set forth in this Agreement):
(a) Waive any stock repurchase rights, accelerateaccelerate (other than in accordance with written agreements outstanding on the date hereof and disclosed on Section 2.3 or 2.11(g) of the Company Disclosure Schedule), amend or change the period of exercisability of options or restricted stockany Company Stock Option, or reprice options granted under any employee, consultant, director or other stock plans Company Stock Option or authorize cash payments in exchange for any options granted under Company Stock Option, or allow any of such plans except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described new enrollments in the Company ScheduleESPP or allow any participant in the ESPP to increase his or her participation rate in the ESPP;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or written policies existing, on the date hereof and included in the Company Disclosure Schedule, or as previously disclosed in writing or made available to Parent, required by applicable law or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement, custom, policy or arrangement existing on the date hereof, or grant any equity-based compensation, whether payable in cash or stock, except for grants of Company Stock Options to purchase not more than 150,000 Company Shares in the aggregate under a Company Option Plan to new hires in the ordinary course consistent with past practice, which Company Stock Options shall not accelerate as a result of the occurrence of any of the transactions contemplated by this Agreement (whether alone or upon the occurrence or nonoccurrence of any additional or subsequent events);
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, or enter into grants any agreements or make other commitments or arrangements to grant, transfer or license to any person future patent rights, other than non-exclusive licenses granted to end users in the ordinary course of business consistent with past practices; provided that in no event shall Company: (i) license on an exclusive basis or sell any Company Intellectual Property; or (ii) enter into any agreement (A) containing pricing or discounting terms or provisions other than in the ordinary course of business consistent with past practices, provided that (B) granting any site license, or (C) limiting the right of Company to engage in no event shall Company license any line of business or to compete with any person or entity on an exclusive basis or sell any Company Intellectual Propertyperson;
(d) Enter into, renew or modify any Contracts relating to the distribution, sale, license or marketing by third parties of Company Products;
(e) 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;
(ef) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiariessubsidiaries or any options, warrants, calls or rights to acquire any such shares, or permit the transfer of any Company Shares by Precise Software Solutions, Inc. to any other subsidiary of the Company, except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee Employee pursuant to stock option or purchase agreements in effect on the date hereof (or any such agreements entered into in the ordinary course consistent with past practice with Employees hired after the date hereof);
(fg) Issue, deliver, sell, authorize, pledge or otherwise encumber (or propose any of the foregoing with respect to, ) any shares of capital stock or any securities convertible into or exercisable or exchangeable for shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of such capital stock, or enter into other agreements or commitments Contracts of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance issuance, delivery and/or and sale of of: (i) shares of Company Common Stock Shares pursuant to the exercise of stock options options, warrants and other agreements set forth in Section 2.3 of the Company Disclosure Schedule, in each case outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and Agreement; (ii) shares of Company Common Stock Shares issuable to participants in the ESPP consistent with the terms thereof thereof; and (yiii) the granting grants of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options Company Stock Options to purchase 135,000 shares not more than 150,000 Company Shares in the aggregateaggregate under a Company Option Plan to new hires in the ordinary course consistent with past practice, which Company Stock Options shall not accelerate as a result of the occurrence of any of the transactions contemplated by this Agreement (whether alone or upon the occurrence or nonoccurrence of any additional or subsequent events);
(gh) Cause, permit or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(hi) 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 person or division thereof, or otherwise acquire or agree to acquire all or substantially all of the assets of any assets or of the foregoing, enter into any joint ventures, strategic partnerships or alliancesalliances or form or agree to form any subsidiaries;
(ij) Sell, lease, license, encumber encumber, convey, assign, sublicense or otherwise dispose of or transfer any properties or assets except or any interest therein other than: (i) sales of inventory or non-exclusive and licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for practice; and (ii) the sale, lease or disposition (other than through licensinglicensing permitted by clause (c)) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiariessubsidiaries taken as a whole in the ordinary course of business consistent with past practice; or grant or otherwise create or consent to the creation of any Lien affecting any owned or leased real property or any part thereof;
(jk) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practice;
(kl) Adopt or amend any employee benefit planEmployment Agreement or Company Employee Plan, policy except as may be required by law or arrangement, any employee stock purchase or employee stock option plan, this Agreement; or enter into any employment contract 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"," except as may be required by Legal Requirements, and who are not officers of Company), ; agree to pay 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 consultantsconsultants except, in each case, as may be required by law or by any existing employee benefit plan, policy, arrangement, program or Contract disclosed on Section 2.11 of the Company Disclosure Schedule, or break with past customs or unwritten policies of Company with respect to benefits not required by law with respect to its employees, including by way of example only and without limitation, payment of severance pay in Israel under circumstances in which it is not legally required;
(i) Pay, discharge, settle or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), ) or settle any 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 practice or in accordance with their terms, or liabilities recognized or disclosed terms in the most recent consolidated financial statements (or the notes thereto) existence as of Company included in the Company SEC Reports or incurred since the date of such financial statementshereof, 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 Contract to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modifyModify, amend or terminate any material contract Contract set forth or agreement required to which be set forth in Section 2.17 or 2.18 of the Company or any subsidiary thereof is a party Disclosure Schedule or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue any of its assets or, except Except as required by GAAP, revalue any of its assets (including, without limitation, writing down the value of capitalized inventory or writing off notes or accounts receivable) or make any change in accounting methods, principles or practices;
(p) Hire any employee with an annual compensation level in excess of $150,000;
(q) Incur Other than (i) fees and expenses payable to Goldman Sachs pursuant to the engagement letter referred to in Section 0.00 xnx (xx) fees and expenses payable to legal, accounting and other professional service advisors as disclosed in Section 4.1(q) of the Company Disclosure Schedule, make any individual or enter into any agreement, contract or commitment series of related payments outside of the ordinary course of business calling for (including payments by Company to legal, accounting or other professional service advisors) in excess of $350,000 individually1,500,000 in the aggregate;
(r) Engage in Enter into any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) Contract or series of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of related Contracts requiring Company or any of its subsidiaries to pay in excess of $500,000 over the term of such Contract or series of Contracts;
(s) Make any Tax election inconsistent with past practice, agree to pay, settle or compromise any material income tax liabilityTax liability or consent to any extension or waiver of any limitation period with respect to Taxes, or request, negotiate or agree to any Tax rulings; or
(ut) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a4.1(a) through (ts) above.
Appears in 1 contract
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in 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 regulationsregulations (except where noncompliance would not have a Material Adverse Effect), pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), 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, except in each case as set forth in Section 4.1 of the Company Schedule. In addition, except as expressly permitted by the terms of this Agreement and, except in each case as set forth in Section 4.1 of the Company ScheduleAgreement, without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(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 Parent, 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 entity or otherwise extend, amend or modify any material rights to the Company Intellectual Property, 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 Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;; 43 of 74
(d) 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;
(e) PurchaseExcept as set forth in Section 4.1(e) of the Company Schedule, purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiariesCompany, 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 encumber, or propose 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 (xi) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options therefor outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (ii) shares the granting of stock options (and the issuance of Company Common Stock issuable to participants upon exercise thereof), in the ESPP ordinary course of business and consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan past practices, in an amount not to exceed options to purchase 135,000 (and the issuance of Company Common Stock upon exercise thereof) 300,000 shares in the aggregate;
aggregate (g) Cause, permit or propose any amendments to provided that the Company Charter Documents (or similar governing instruments vesting of any of its subsidiariesthese options shall not accelerate upon the Closing);
(h) 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 or enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practice;
(k) 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;
(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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability; or
(u) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a) through (t) above.
Appears in 1 contract
Samples: Merger Agreement (Mail Com Inc)
Conduct of Business by Company. 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 Effective Closing Time, the Company and each of its subsidiaries shall, except to the extent that Parent Subsidiaries shall otherwise consent in writing, carry on its business, business in the usual, regular and 31 ordinary course in substantially the same manner as heretofore conducted and in material compliance with all applicable laws and regulations, pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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, licensees and others with which it has significant business dealings. In addition, except in each case as set forth in Section 4.1 of the Company Schedulewill promptly notify the Buyer of any material event involving its business or operations occurring outside the ordinary course of business. In addition, except as expressly permitted by the terms of this Agreement and, except in each case as set forth disclosed in Section 4.1 5.1 of the Company ScheduleDisclosure Letter, without the prior written consent of Parentthe Buyer, 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 Effective Closing Time, the Company shall not do any of the following and shall not permit its subsidiaries Subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability or vesting 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay or benefits, or payments or benefits triggered by a change of control or acquisition (including the Offer), to any officer or employee Employee except to persons who are Employees of the Company as of the date hereof pursuant to written agreements outstanding, or written policies existing, on the date hereof and as previously disclosed in writing on Section 3.11 of the Company Disclosure Letter (PROVIDED, HOWEVER, that the Company shall not grant, or made available offer to Parentgrant, any such severance or termination payments or benefits, or payments or benefits triggered upon a change of control or acquisition (including the Offer), to any person who is hired or offered employment with the Company on or after the date hereof), 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, or take any other action that would trigger the payment of any severance payments or other benefits pursuant to any agreement;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights, other than non-exclusive licenses granted to resellers and end-users in the ordinary course of business consistent with past practices, provided that in no event shall Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
(d) 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, except for dividends or other distributions paid to the Company by any of its wholly-owned Subsidiaries;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, 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 hereofSubsidiaries;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to, to any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, or grant any equity-based compensation whether payable in cash or stock, other than (x) the issuance delivery and/or sale of (ix) shares of Company Common Stock Shares pursuant to the exercise of stock options options, warrants and convertible preferred stock outstanding as of the date of this Agreement or granted pursuant to clause Agreement, and (y) hereof, and (ii) shares of Company Common Stock Shares issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregatethereof;
(g) Cause, permit or propose any amendments to the Company Charter Documents Company's Articles of Association (or similar governing instruments of any of its subsidiariesSubsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material 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 all or substantially all of the assets of any assets of the foregoing, or purchase any equity interest in any of the foregoing or enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales or leases of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice andpractice, and except for the sale, lease or disposition (other than through licensinglicensing unless permitted by Section 5.1(c)) of property or assets which are not material, individually or in the aggregate, to the business of the Company and its subsidiariesSubsidiaries, taken as a whole;
(j) Materially modify, amend or terminate any existing lease, license or contract affecting the use, possession or operation of any material properties or material assets; grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment or charge which would materially and adversely affect the Company's use, or the value of, any material owned property or leased property; convey, assign, sublease, license or otherwise transfer all or any portion of any material real property or any interest or rights therein; commit any waste or nuisance on any such property; or make any material changes in the construction or condition of any such property;
(k) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Companythe Company or any of its Subsidiaries, 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 other than in connection with the financing of ordinary course trade payables working capital consistent with past practice;
(kl) 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, employee other than consistent with past practice; or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultantsconsultants except, in each case, as may be required by law or for normally scheduled increases in the ordinary course;
(m) (i) Paypay, discharge, settle or satisfy any material litigation (whether or not commenced prior to the date of this Agreement) or any material 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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company SEC Reports or incurred since the date of such financial statementsstatements in the ordinary course of business consistent with past practices, 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 provisions of any agreement to which the Company or any of its subsidiaries Subsidiaries is a party or of which the Company or any of its subsidiaries Subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party Contract or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contractsExcept as required by U.S. GAAP, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue revalue any of its assets or, except as required by GAAP, or make any change in accounting methods, principles or practices;
(qp) Incur Make any payment or series of related payments outside the ordinary course of business, or enter into any agreement, contract Contract or commitment series of related Contracts outside of the ordinary course of business calling for payments by requiring the Company or any of its Subsidiaries to pay, in excess of $350,000 individually250,000 in the aggregate;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(tq) Make any tax Tax election or accounting method change inconsistent with past practice that, individually or in the aggregate, is would be reasonably likely to adversely affect in any material respect the tax Tax liability or tax Tax attributes of the Company or any of its subsidiaries or Subsidiaries, taken as a whole, settle or compromise any material income tax Tax liability;
(r) Hire any employee; or
(us) Agree in writing or otherwise to take any of the actions described in Section 4.1 5.1 (a) through (tr) above.
Appears in 1 contract
Samples: Offer Agreement (Hewlett Packard Co)
Conduct of Business by Company. 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 Effective Time, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts Liabilities and taxes Taxes when due and pay or perform other material obligations when due, (subject to good faith disputes over such debtsLiabilities or Taxes), taxespay or perform other obligations when due, and obligationstake such actions as set forth in Section 4.1(a) of the Company Schedule, and use its commercially all reasonable efforts, consistent with past practices (except as set forth in Schedule 4.1)and policies, and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees employees, and (iii) preserve its relationships with customers, suppliers, distributors, consultants, licensors, licensees, licensees and others with which it has significant business dealings, except in each case as set forth in Section 4.1 of the Company Schedule. In addition, except as expressly permitted by the terms of this Agreement and, except in each case as set forth in Section 4.1 of the Company Scheduleshall promptly notify Parent of any event that would have a Material Adverse Effect on the Company. In addition, without the prior written consent of Parent, except as permitted or required by this Agreement, 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 Effective Time, Company shall not do any of the following not, and shall not permit its subsidiaries to to, do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, 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 Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregate;
(g) Cause, permit or propose submit to a vote of the Company's stockholders any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(hb) 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 or enter into any joint ventures, strategic partnerships or similar alliances, or create or acquire any subsidiary, or change the form of ownership or percentage interest of the Company in any of its subsidiaries;
(c) Issue, deliver, sell, authorize or designate (including by certificate of designation) or pledge or otherwise encumber, or propose any of the foregoing with respect to any shares of capital stock of the Company or its subsidiaries or any securities convertible into shares of capital stock of the Company or its subsidiaries, or subscriptions, rights, warrants or options to acquire any shares of capital stock of the Company or its subsidiaries or any securities convertible into shares of capital stock of the Company or its subsidiaries, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Company Stock Options or Company Warrants outstanding as of the date of this Agreement which are either vested on the date hereof or vest after the date hereof in accordance with their terms on the date hereof, in each case as disclosed on Section 2.3 of the Company Schedule;
(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, securities or property) in respect of any capital stock of the Company or its subsidiaries or split, combine or reclassify any capital stock of the Company or its subsidiaries or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock of the Company or its subsidiaries;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries or any other securities of the Company or its subsidiaries or any options, warrants, calls or rights to acquire any such shares or other securities, except repurchases of unvested shares at or below 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 of this Agreement, provided that no such repurchase shall be permitted in the event the per share repurchase price is greater than the Merger Consideration;
(f) Waive any stock repurchase rights (other than as permitted by Section 4.1(e)), accelerate, amend or 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;
(i) SellExcept pursuant to written agreements outstanding on the date hereof and as disclosed on Section 2.11 of the Company Schedule, leasegrant any equity-based compensation, licensewhether payable in cash, encumber securities or otherwise dispose property, or grant or pay any severance or termination pay or any bonus or other special remuneration (whether in cash, securities or property) or any increase thereof to any director, officer, consultant or employee, (ii) 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 (including without limitation any retention, change of control or similar agreement), or (iii) enter into any properties agreement the benefits of which are contingent or assets except sales the terms of inventory which are materially altered upon the occurrence of a transaction involving the Company of the nature contemplated hereby;
(h) Grant any loans or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition advances (other than through licensingcustomary travel or expense advances in compliance with the Company's policies) of property to employees, officers, directors or assets which are not materialother third parties, individually make any investments in or in the aggregatecapital contributions to any person, to the business of Company and its subsidiaries;
(j) Incur incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practice;
(ki) Adopt (i) Increase the compensation or benefits payable or to become payable to officers, directors, consultants, or employees (other than pursuant to existing agreements disclosed on Section 2.11 of the Company Schedule), (ii) enter into any new or amend any employee benefit planexisting Company Employee Plan, policy Employment Agreement, indemnification, collective bargaining, or arrangementsimilar agreement, except as required by applicable law, (iii) hire any employee stock purchase or employee stock option planconsultant (including any temporary employee, independent contractor, consultant 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"intern), pay (iv) terminate any special bonus employee (including any temporary employee), (v) change the position, title or special remuneration to principal office location of any director or employee, or increase the salaries (vi) take any action that would allow any employee to claim a constructive termination or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultantstermination for good reason;
(ij) PayExcept as permitted by Section 6.3(g), pay, discharge, settle or satisfy any claimsLiabilities, 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 practice or in accordance with their terms, or liabilities terms of Liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company SEC Reports or incurred since the date Interim Balance Sheet Date in the ordinary course of such financial statements, or business consistent with past practices;
(iik) waive Waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any the confidentiality or similar agreement nondisclosure provisions of any material Contract to which the Company or any of its subsidiaries is a party or of which the Company or any of its subsidiaries is a beneficiary;
(ml) Make any individual (A) Enter into, renew, or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting modify or other professional service advisors not amend in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or respect any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreements, or obligations Contract relating to the distribution, sale, license or marketing by third parties of Company's the products or services of the Company or its subsidiaries (including Company Products or other Company Intellectual Property) or products or services licensed by the Company on an exclusive basis;
or its subsidiaries (pincluding any IP Licenses), (B) Revalue any of its assets orsell, except as required by GAAPlease, make any change in accounting methodslicense, principles transfer or practices;
(q) Incur otherwise dispose of, or enter into any agreementotherwise extend, contract amend or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect modify in any material respect the tax liability respect, any rights to, Company Products or tax attributes of other Company or any of its subsidiaries or settle or compromise any material income tax liability; or
(u) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a) through (t) above.Intellectual Property,
Appears in 1 contract
Conduct of Business by Company. 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 Effective Time, Company shall, and shall cause each of its subsidiaries shallto, except as set forth in Section 4.1 of the Company Schedule or to the extent that Parent shall otherwise consent in writing, (i) carry on its business, in the usualordinary course, regular and ordinary course in substantially the same manner as heretofore conducted and in material compliance with all applicable laws and regulations, (ii) pay its debts and taxes when due and pay or perform other material obligations Taxes when due, subject to good faith disputes over such debtsdebts or Taxes, taxes(iii) pay or perform other material obligations when due, and obligations, and (iv) use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (iA) preserve 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 business dealings. In addition, except in each case as set forth in Section 4.1 of the Company Schedule. In addition, except as expressly permitted by Schedule or to the terms of this Agreement and, except extent that Parent shall otherwise consent in each case as set forth in Section 4.1 of the Company Schedule, without the prior written consent of Parentwriting, 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of Company options or restricted stock, or reprice Company options granted under any employee, consultant, director or other stock plans Company Option Plans or authorize cash payments in exchange for any Company options granted under any of such plans except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay (cash, equity or otherwise) to any officer or employee Employee, except pursuant to written agreements outstanding, or policies existing, on the date hereof and as that have been previously disclosed in writing or made available to ParentParent in the Company Schedule, or adopt any new severance or termination plan, program or arrangement;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual PropertyProperty that are material to the business of Company as currently conducted, or enter into grants to transfer or license to any person future patent rights, in each case other than in the ordinary course of business consistent with past practices, ; provided that in no event shall Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 hereofhereof or issued in compliance with Section 4.1(f);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance issuance, delivery and/or sale of (i) shares of Company Common Stock pursuant to (i) the exercise of stock options Company Options, Company Warrants or other Company securities outstanding as of the date of this Agreement or granted pursuant to clause Agreement, (yii) hereofthe Company ESPP, and (iiiii) grants of Company Options to purchase no more than an aggregate of 1,000,000 shares of Company Common Stock issuable to participants new hires in the ESPP ordinary course of business consistent with past practices in amounts consistent with the limitations set forth in Section 4.1(f) of the Company Schedule and the vesting of which Company Options do not accelerate by the occurrence of any of the transactions contemplated by this Agreement (either alone or in combination with any subsequent event or events) and which Company Options have a vesting schedule and other terms thereof of exercisability no more favorable than Company’s standard vesting schedule and (y) the granting terms of non-discretionary stock options to non-employee directors under the Director Plan exercisability contained in an amount not to exceed options to purchase 135,000 shares in the aggregateCompany’s standard form of option agreement, respectively;
(g) Cause, permit or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(h) 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 or enter into any joint ventures, ventures or strategic partnerships or alliancespartnerships;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except (a) sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for or (b) the sale, lease or disposition (other than through licensing) of property properties or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practice;
(k) Adopt Adopt, amend or amend terminate any employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, Company Employee Plan or enter into any employment contract or collective bargaining agreement Company Employee Plan (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"”); provided, that such letters or letter agreements shall not provide for the extension, obligation or promise to pay any severance, whether in cash, equity or otherwise, or accelerate any equity compensation awards, including, without limitation, Company Options), pay any special bonus or special remuneration (cash, equity or otherwise) to any director or employeeemployee (other than payments to current non-officer employees in accordance with past practice), or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultantsconsultants (other than increases for current non-officer employees in accordance with past practice);
(il) Enter into any material Company Contracts relating to the distribution, sale, license or marketing by third parties of Company’s products or products licensed by Company, other than in the ordinary course of business consistent with past practice;
(m) 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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports or incurred since the date of such financial statementspractice, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of to which Company or any of its subsidiaries is a beneficiary;
(mn) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of $250,000 in the estimates thereof set forth in Section 4.1 of the Company Schedule)aggregate;
(no) Except in the ordinary course of business consistent with past practice, modifyModify, amend or terminate any material contract or agreement Contract to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to other than in the distribution, sale, license or marketing by third parties ordinary course of Company's products or products licensed by Company on an exclusive basisbusiness consistent with past practices;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually;
(r) Engage in Intentionally take any action that could reasonably be expected to cause the Merger to fail to qualify as a "“reorganization" ” under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV, or fail to take any action reasonably necessary to cause the Merger to so qualify;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(tr) Make any tax Tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax Tax liability or tax Tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax Tax liability;
(i) Make any loan or advance to any person (except a subsidiary of Company) other than in the ordinary course of business consistent with past practice, but in no event in the amount (to persons other than subsidiaries) of more than $100,000 in the aggregate; provided, that in no event shall Company or any of Company’s subsidiaries make any loan, or change the terms of any existing loans which loan or change would be in violation of Section 402 of the Xxxxxxxx-Xxxxx Act or (ii) make any capital contribution to, or investment in, any person (except in a wholly owned subsidiary of Company) other than investments in publicly traded securities which constitute cash equivalents in connection with Company’s cash management program in the ordinary course of business consistent with past practices;
(t) Release or waive any material rights for claims, or modify or amend in any manner materially adverse to Company, or terminate any confidentiality or standstill agreements to which Company or any of its subsidiaries is a party;
(u) Adopt or amend any stockholder rights plan;
(v) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business in excess of $250,000 individually or $2,000,000 in the aggregate;
(w) Hire any employee in any of the functions set forth in Section 4.1(w) of the Company Schedule; or
(ux) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a4.1(a) through (tw) above.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Netscreen Technologies Inc)
Conduct of Business by Company. 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 Effective Appointment Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writingwriting and except as provided in Part 5.01 of Parent Disclosure Letter, carry on its business, business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes Taxes when due and subject to good faith disputes over such debts or Taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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, licensees and others with which it has business dealings. In addition, except in each case as set forth in Section 4.1 during that period Company will promptly notify Parent of any material event involving its business or operations consistent with the Company Scheduleagreements contained herein. In addition, except as expressly permitted by the terms of this Agreement, and except as contemplated by this Agreement and, except or provided in each case as set forth in Section 4.1 Part 5.01 of the Company ScheduleDisclosure Letter, without the prior written consent of Parent, 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 Effective Appointment Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstandingin effect, or policies existing, on the date hereof (or as required by applicable law) and as previously disclosed in writing or made available to Parent, Parent or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, 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 Company license to any person or entity on an exclusive basis or sell any material Company Intellectual Property;
(d) 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 of Company or split, combine or reclassify any capital stock of Company or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stockstock of Company;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance issuance, delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as Company Options, (ii) shares of the date of this Agreement or granted Company Common Stock pursuant to clause the exercise of Company warrants, (y) hereof, and (iiiii) shares of Company Common Stock issuable to participants in the ESPP Company ESPP, and (iv) shares of Company Common Stock issuable to participants in Company's 401(k) Plan, in each case, consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregatethereof;
(g) Cause, permit or propose any amendments to the Company Charter Documents its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion portio n 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 Company or enter into any material joint ventures, strategic partnerships relationships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiariesCompany;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 foregoing, other than in connection with the financing of ordinary course trade payables of business, consistent with past practice;
(k) Adopt Except as required to comply with any Legal Requirement, adopt or amend any employee benefit plan, policy plan 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")agreement, 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;
(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) consultants other than the payment, discharge, settlement or satisfaction, with respect to employees and consultants (other than officers) in the ordinary course of business business, consistent with past practice practice, or change in any material respect any management policies or procedures that are material to the business of Company;
(l) Make any material capital expenditures, except in accordance with their termsthe current Company annual budget and plan, or liabilities recognized or as previously disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiaryParent;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modifyModify, amend or terminate any material contract or agreement Company Contract to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(on) Enter into any licensing or materially modify any contracts, agreements, or obligations relating other agreement with regard to the distributionacquisition, saledistribution or licensing of any material Intellectual Property other than licenses, license distribution or marketing by third parties other similar agreements entered into in the ordinary course of Company's products or products licensed by Company on an exclusive basisbusiness consistent with past practice;
(po) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(p) Materially change the trading fees Company charges its customers;
(q) Incur or enter into Take any agreement, contract or commitment outside action that would materially delay the consummation of the ordinary course of business calling for payments by Company in excess of $350,000 individuallytransactions contemplated hereby;
(r) Engage in any action that could cause the Merger to fail to qualify an Impermissible Activity, as a "reorganization" under specified in Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability3.23; or
(us) Agree in writing or otherwise to take any of the actions described in Section 4.1 5.01 (a) through (tr) above.
Appears in 1 contract
Samples: Merger Agreement (E Trade Group Inc)
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, business in the usual, regular and ordinary course course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulationsLegal Requirements, pay its debts (other than unsecured trade debt which it will pay consistent with past practice) and taxes Taxes when due and subject to good faith disputes over such debts or Taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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 business dealings. In addition, Company will promptly notify Parent of any material event involving its business, operations or financial condition. In addition, without limiting the generality of the foregoing, except in each case as expressly contemplated by this Agreement, or except as set forth in Section Part 4.1 of the Company Schedule. In addition, except as expressly permitted by the terms of this Agreement and, except in each case as set forth in Section 4.1 of the Company Schedule, Disclosure Letter without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstandingin effect, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights, other than non-exclusive licenses in the ordinary course of business and consistent with past practices, provided that in no event shall Company license to any person or entity on an exclusive basis or sell any Company Intellectual Propertypractice;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereofCompany Options, and (ii) shares of Company Common Stock issuable to participants in the Company ESPP consistent with the terms thereof and (yiii) shares of Company Common Stock issuable to Parent (or a designee of Parent) pursuant to the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregateStock Option Agreement;
(g) Cause, permit or propose any amendments to the Company Charter Documents its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) 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 Company and its subsidiaries or enter into any material joint ventures, strategic partnerships relationships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of CompanyCompany or any of its subsidiaries, enter into any "keep well" or other agreement Contract to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practicepractice or (ii) pursuant to existing credit facilities in the ordinary course of business;
(k) Adopt or amend (other than any amendment required by law or regulation) any employee benefit plan, policy plan 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, make any loan or provide any advance 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;
(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) consultants other than the payment, discharge, settlement or satisfaction, in the ordinary course of business business, consistent with past practice or in accordance with their termspractice, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify change in any manner, terminate, release material respect any person from management policies or fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiaryprocedures;
(ml) Make any individual or series of related payments material capital expenditures outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess outside of the estimates thereof set forth in Section 4.1 of the Company Schedule)budget previously provided to Parent;
(nm) Except in the ordinary course of business consistent with past practice, Materially modify, amend or terminate any Company Contract or other material contract or agreement Contract to which Company or any subsidiary thereof is a party (including any Key Customer Contracts, any Material Network Contract, any material billing, collection or clearing house Contract, or any Contract related to access to any material third party databases or data collections) or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(n) Enter into any Contract with regard to the acquisition or licensing of any material Intellectual Property (as defined in Section 2.9) other than licenses, distribution Contracts, or other similar Contracts entered into in the ordinary course of business consistent with past practice;
(o) Enter into (A) any Contract that would be a Material Network Contract, (B) any Contract related to any material billing and collection or materially modify any contracts, agreementsclearing house services, or obligations relating (C) any Contract related to access to any material third party database or data collection, except in any such case in the distribution, sale, license or marketing by third parties ordinary course of Company's products or products licensed by Company on an exclusive basisbusiness consistent with past practice;
(p) Revalue Materially revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement, including with respect to the Company Rights Agreement or any Takeover Statute;
(tr) Make Take any tax election that, individually action that would cause any representation or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes warranty of Company to become untrue or any of its subsidiaries or settle or compromise any material income tax liabilityinaccurate; or
(us) Agree in writing or otherwise commit or negotiate to take any of the actions described in Section 4.1 (a4.1(a) through (tr) above.
Appears in 1 contract
Samples: Merger Agreement (Verisign Inc/Ca)
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except (i) as set forth in Section 4.1 of the Company Schedule, (ii) in connection with specific actions that Company is explicitly required to take pursuant to this Agreement or (iii) to the extent that Parent shall otherwise consent in writingwriting (which consent shall not be unreasonably delayed), carry on its business, in the usual, regular and ordinary course course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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 business dealings. In addition, except (i) in each case connection with specific actions that Company is explicitly required to take pursuant to this Agreement, (ii) as set forth in Section 4.1 of the Company Schedule. In addition, except as expressly permitted by Schedule or (iii) to the terms of this Agreement and, except extent that Parent shall otherwise consent in each case as set forth in Section 4.1 of the Company Schedule, without the prior written writing (which consent of Parentshall not be unreasonably 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay (cash, equity or otherwise) to any officer or employee employee, except (x) pursuant to written agreements outstanding, or policies existing, on the date hereof and (y) as previously disclosed in writing or made available to ParentParent in the Company Schedule, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual PropertyProperty that are material to the business of Company as currently conducted, or enter into grants to transfer or license to any person future patent rights, rights other than in the ordinary course of business consistent with past practices, provided that in no event shall Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance issuance, delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options options, in the ordinary course of business and consistent with past practices, to non-employee directors under the Director Plan newly hired employees in an amount not to exceed options to purchase 135,000 100,000 shares in the aggregate;
(g) Cause, permit or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(h) 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 or enter into any joint ventures, strategic partnerships or alliancesalliances in any case for any amount in excess of $250,000;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice andpractice, except for the sale, lease or -25- 30 disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practice;
(k) 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 (cash, equity or otherwise) to any director or employeeemployee (other than payments to non-officer employees in accordance with past practice), or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultantsconsultants (other than increases for non-officer employees or consultants in accordance with past practice);
(i) Paypay, 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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than including payments to financial, legal, accounting or other professional service advisors, other than reasonable payments to such professional service advisors not in connection with the Merger and the transactions contemplated thereby) in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule)$200,000;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter Except in the ordinary course of business consistent with past practice, enter into or materially modify any material contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basisCompany;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 250,000 individually;
(r) Engage in Intentionally take any action that could reasonably be expected to cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV, or fail to take any action reasonably necessary to cause the Merger to so qualify;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability; or;
(t) Make any loan, advance or capital contribution to or investment in any person (other than a subsidiary of Company) other than in the ordinary course of business consistent with past practice, but in no event in the amount (to persons other than subsidiaries) of more than $100,000 in the aggregate, and other than investments in cash equivalents made in the ordinary course of business consistent with past practice;
(u) Modify or amend in any manner that is adverse to Company, or terminate, any confidentiality agreement entered into by Company or any subsidiary in the ordinary course of business, or release or waive any material rights for claims, or modify or amend in any manner adverse to Company, any confidentiality, standstill or similar agreements to which Company or any of its subsidiaries is a party;
(v) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(w) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a4.1(a) through (tv) above.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Proxim Inc /De/)
Conduct of Business by Company. 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 Effective Time, the Company and each of its subsidiaries shall, (i) except to the extent that Parent shall otherwise consent in writing, carry on its business, in the usual, regular and ordinary course course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (iA) preserve 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, except and (ii) notify Parent in each case as set forth writing (or by electronic mail) in Section 4.1 the event that any employee of the Company Scheduleor any of its subsidiaries is terminated or resigns from the Company or such subsidiary. In addition, except as expressly permitted by the terms of this Agreement andAgreement, and except as provided in each case as set forth in Section SECTION 4.1 of the Company Schedule, without the prior written consent of 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 Effective Time, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant grant (whether cash or otherwise) any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, 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 transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, 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 license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
(d) Declaredeclare, 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;
(e) Purchasepurchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, 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) Issueissue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereofAgreement, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (iii) shares of Company Common Stock issuable upon conversion of the Series B Preferred Stock and (y) the granting of non-discretionary stock options to non-employee directors under (and the Director Plan issuance of Common Stock upon exercise thereof), in the ordinary course of business and consistent with past practices, in an amount not to exceed options to purchase 135,000 (and the issuance of Company Common Stock upon exercise thereof) 10,000 shares in the aggregate;
(g) Causecause, permit or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire 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 or enter into any joint ventures, strategic partnerships or alliances;
(i) Sellsell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice andpractice, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of the Company and its subsidiariessubsidiaries and except for those assets set forth in SECTION 4.1(i) of the Company Schedule;
(j) Incur incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practice;
(k) Adopt 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 (whether cash or otherwise) any special bonus or special remuneration to any director or employeeemployee (other than any bonus or continuing salary payments which such directors and employees are entitled to receive as of the date hereof), or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants;
(i) Paypay, 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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company SEC Reports 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 or any of its subsidiaries is a party or of which the Company or any of its subsidiaries is a beneficiary; provided, however, that Parent's consent to take any such action shall not be unreasonably withheld;
(m) Make make any individual or series of related payments (other than payments of the type described in (a) through (l) above and not prohibited by (a) through (l)) outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule)$25,000; provided, however, that Parent's consent to take any such action shall not be unreasonably withheld;
(n) Except except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder; provided, however, that Parent's consent to take any such action shall not be unreasonably withheld;
(o) Enter into enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company on an exclusive basisother than renewals of existing nonexclusive contracts, agreements or obligations; provided, however, that Parent's consent to take any such action shall not be unreasonably withheld;
(p) Revalue any of its assets or, except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(q) Incur incur or enter into any (i) purchase or sales order, agreement, contract or commitment outside involving payments in the case of the ordinary course of business calling for payments by Company any single order, agreement, contract or commitment in excess of $350,000 individually250,000 in the aggregate, or (ii) agreement, contract or commitment (other than a purchase or sales order, agreement, contract or commitment) involving payments in the case of any single agreement, contract or commitment in excess of $100,000 in the aggregate; provided, however, that Parent's consent to take any such action shall not be unreasonably withheld;
(r) Engage engage in any action that could reasonably be expected to cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article ARTICLE IV;
(s) Engage in settle any litigation; provided, however, that Parent's consent to take any such action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreementshall not be unreasonably withheld;
(t) Make make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax Tax liability or tax Tax attributes of the Company or any of its subsidiaries or settle or compromise any material income tax Tax liability, or consent to any extension or waiver of any limitation period with respect to Taxes; or
(u) Agree agree in writing or otherwise to take any of the actions described in Section 4.1 (aSECTION 4.1(a) through SECTION 4.1(t) hereof, inclusive; PROVIDED, HOWEVER that notwithstanding the foregoing, Parent shall be deemed to have consented to a request to take any action set forth in SECTION 4.1(a) through SECTION 4.1(u) hereof, inclusive, if (tA) abovethe Company shall have delivered a written request to take such action to at least one (1) of the persons set forth in SECTION 4.1 of the Parent Schedule (at the facsimile numbers set forth thereon or the e-mail addresses set forth thereon), (B) a representative of the Company shall have made a verbal request to take such action by contacting (including by recorded voice message) each of the persons set forth in SECTION 4.1 of the Parent Schedule (at the telephone numbers set forth therein), and (C) Parent shall not have responded to the Company's request within seventy-two (72) hours of the initial written and telephonic request to take such action (or forty-eight (48) hours with respect to any request to take any action set forth in SECTION 4.1(q) hereof).
Appears in 1 contract
Samples: Agreement and Plan of Merger and Reorganization (Centennial Technologies Inc)
Conduct of Business by Company. 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 Effective Time, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writingwriting (which shall not be unreasonably withheld, delayed or conditioned), use reasonable best efforts to (i) carry on its business, business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulationsmaterial Legal Requirements, (ii) except as may otherwise be set forth on Section 4.1 of the Company Disclosure Letter, pay its debts Liabilities and taxes Taxes when due and (subject to good faith disputes over such Liabilities or Taxes), (iii) pay or perform other material obligations when due, due (subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, consistent with past practices (except as set forth in Schedule 4.1payments or performance), and policies to (iiv) assure that each of its material Contracts entered into after the date of this Agreement will not require the procurement of any consent, waiver or novation or provide for any material change in the obligations of any party in connection with, or terminate as a result of the consummation of, the Merger, (ii) maintain each of its leased premises in accordance with the terms of the applicable lease in all material respects, (iii) preserve intact its present business organization, (iiiv) keep available the services of its present officers and employees key Employees, and (iiiv) preserve its existing relationships with customers, suppliers, distributors, consultants, licensors, licensees, licensees and others with which it has business dealings, except in each case as set forth in Section 4.1 of dealings that are significant to the Company ScheduleCompany's business. In addition, except as expressly permitted by the terms of this Agreement and, except in each case as set forth in Section 4.1 of the Company Scheduleshall promptly notify Parent of any event involving its or its subsidiaries' businesses or operations occurring outside the ordinary course of business which could reasonably be expected to result in a Material Adverse Effect on the Company. In addition, without the prior written consent of ParentParent (which consent shall not be unreasonably withheld or delayed), except as contemplated or required by this Agreement and except as provided in Section 4.1 of the Company Disclosure Letter, 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 Effective Time, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
: (a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability or vesting of options any Company Stock Options or restricted stock, or reprice options other rights granted under any employee, consultant, director Company Stock Plan or other stock plans or authorize cash payments in exchange for any options granted under any of such plans except pursuant to plans and agreements existing as the vesting of the date hereof the relevant terms of which are described in the securities purchased or purchasable under such Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, 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 Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregate;
(g) Cause, permit or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(h) 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 or enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls Options or other rights to acquire any debt securities of Company, enter into any "keep well" or other agreement to maintain any financial statement condition the vesting schedule or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables consistent with past practice;
(k) 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 repurchase rights applicable 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 consultantsUnvested Shares;
(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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability; or
(u) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a) through (t) above.
Appears in 1 contract
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in the usualordinary course, regular and ordinary course in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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, Company will promptly notify in writing Parent of any material adverse event involving its business or operations. In addition, except in each case as set forth permitted by the terms of this Agreement, and except as provided in Section 4.1 of the Company Schedule. In addition, except Schedule and as expressly permitted contemplated by the terms of this Agreement and, except in each case as set forth in Section 4.1 5.8(d) of the Company Parent Schedule, without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed contained in writing or made available to Parentthe Company Schedule, 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 entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights, other than except in connection with customer contracts consistent with past practice in the ordinary course of business consistent with past practices, provided that in no event shall Company license to any person or entity on an exclusive basis or sell any Company Intellectual Propertybusiness;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options options, convertible securities or warrants outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants hereafter issued in the ESPP consistent accordance with the terms thereof this Agreement and (y) the granting issuance of non-discretionary shares of capital stock options pursuant to non-employee directors under the Director Plan acquisitions described in an amount not to exceed options to purchase 135,000 shares in Section 4.1(h) of the aggregateCompany Schedule;
(g) Cause, permit or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire Except as set forth in Section 4.1(h) of the Company Schedule, 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 or enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except (i) sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice andpractice, except for (ii) the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries, (iii) the sale of goods or licenses of Intellectual Property in the ordinary course of business and in a manner consistent with past practice (x) involving annual revenues or receipts of less than or equal to $500,000, or involving annual expenditures or liabilities of less than or equal to $250,000 and (y) having a term of less than or equal to twelve months, or (iv) dispositions of other immaterial assets in the ordinary course of business and in a manner consistent with past practice;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practicepractice and other than the replacement of the Company's current line of credit for $25 million with a similar line of credit having more favorable terms to the Company and any drawdowns thereunder;
(k) 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;
(i) Paypay, 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) in excess of $750,000 individually or $1,500,000 in the aggregate other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports 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 or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments or make or commit to financialmake capital expenditures beyond those contained in the Company's capital expenditure budget in effect on the date hereof, legal, accounting or other professional service advisors not in excess a copy of the estimates thereof set forth in Section 4.1 of the Company Schedule)which has been provided to Parent;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract Contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunderagreement;
(o) Enter into or materially modify renew any contracts, agreements, or obligations relating to containing any non-competition or exclusivity restrictions on the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue any of its assets or, except as required by GAAP, or make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside requiring Company or any of its subsidiaries to pay in excess of an aggregate of $500,000 other than in the ordinary course of business calling for payments by Company in excess of $350,000 individuallythe Company's business;
(r) Engage in any action that could reasonably be expected to cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage Hire employees other than in any action the ordinary course of business consistent with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreementpast practice;
(t) Make any tax Tax election or accounting method change that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability; orliability or consent to any extension or waiver of any limitation period with respect to Taxes;
(u) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a) through (t) above.
Appears in 1 contract
Samples: Merger Agreement (Appnet Inc /De/)
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, business in all material respects in the usual, regular and ordinary course course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, due subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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 business dealings. In addition, except in each case as set forth in Section 4.1 Company will promptly notify Parent of the Company Scheduleany material event involving its business or operations. In addition, except as expressly permitted by the terms of this Agreement andAgreement, and except as provided in each case as set forth in Section Part 4.1 of the Company ScheduleLetter, without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or repurchase of restricted stockstock (including Company 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstandingin effect, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights, other than non-exclusive licenses in the ordinary course of business and consistent with past practices, provided that in no event shall Company license to any person or entity on an exclusive basis or sell any Company Intellectual Propertypractice;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into into, or exercisable 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 convertible, exercisable or exchangeable securities, other than (xi) grants of Company Options to newly hired employees, consistent with Company's past practices regarding such grants, not to exceed Company Options in respect of 100,000 shares of Company Common Stock in the aggregate, and (ii) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options Company Options or Company Warrants outstanding as of the date of this Agreement or July 9, 1999 and Company Options granted pursuant to the preceding clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregatei);
(g) Cause, permit or propose any amendments to the Company Charter Documents its Articles of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) 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 Company or enter into any material joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiariesCompany;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practiceforegoing;
(k) Adopt or amend any employee benefit plan, policy plan or arrangement, any employee stock purchase or employee stock option plan; enter into, amend, terminate or enter into waive any rights under any employment contract agreement 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;
(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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability; or
(u) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a) through (t) above.with
Appears in 1 contract
Samples: Merger Agreement (At Home Corp)
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in 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 regulationsregulations (except where noncompliance would not have a Material Adverse Effect), pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), 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, except in each case as set forth in Section 4.1 of the Company Schedule. In addition, except as expressly permitted by the terms of this Agreement and, except in each case as set forth in Section 4.1 of the Company ScheduleAgreement, without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(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 Parent, 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 entity or otherwise extend, amend or modify any material rights to the Company Intellectual Property, 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 Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
(d) 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;
(e) PurchaseExcept as set forth in Section 4.1(e) of the Company Schedule, purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiariesCompany, 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 encumber, or propose 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 (xi) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options therefor outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (ii) shares the granting of stock options (and the issuance of Company Common Stock issuable to participants upon exercise thereof), in the ESPP ordinary course of business and consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan past practices, in an amount not to exceed options to purchase 135,000 (and the issuance of Company Common Stock upon exercise thereof) 300,000 shares in the aggregate;
aggregate (g) Cause, permit or propose any amendments to provided that the Company Charter Documents (or similar governing instruments vesting of any of its subsidiariesthese options shall not accelerate upon the Closing);
(h) 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 or enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practice;
(k) 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;
(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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability; or
(u) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a) through (t) above.
Appears in 1 contract
Samples: Merger Agreement (Mail Com Inc)
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, business in the usual, regular and ordinary course course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulationsLegal Requirements, pay its debts and taxes Taxes when due and subject to good faith disputes over such debts or Taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, Company will promptly notify Parent of any material event involving its business, operations or financial condition. In addition, without limiting the generality of the foregoing, except as expressly contemplated by this Agreement or provided in each case as set forth in Section Part 4.1 of the Company Schedule. In addition, except as expressly permitted by the terms of this Agreement and, except in each case as set forth in Section 4.1 of the Company ScheduleDisclosure Letter, without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstandingin effect, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rightsIP Rights, other than non-exclusive licenses in the ordinary course of business and consistent with past practices, provided that in no event shall Company license to any person or entity on an exclusive basis or sell any Company Intellectual Propertypractice;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiariesCompany, 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 propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregateOptions;
(g) Cause, permit or propose any amendments to the Company Charter Documents (its Articles of Incorporation, Bylaws or similar governing instruments of any of its subsidiaries)other charter documents;
(h) 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 Company or enter into any joint ventures, strategic partnerships relationships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company, other than the sale of accounts receivable to the Xxxxxxxx Group (Delaware), Inc. under the Sale of Accounts Factoring and Security Agreement made as of February 26, 2003 between the Company and its subsidiariesthe Xxxxxxxx Group (Delaware), Inc. to fund the working capital needs of Company;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, enter into any "“keep well" ” or other agreement Contract to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with obtaining advances from shareholders of the financing Company to fund the working capital needs of ordinary course trade payables consistent with past practiceCompany;
(k) Adopt or amend any employee benefit plan, policy plan 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")agreement, pay any special bonus or special remuneration to any director or employee, make any loan or provide any advance 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;
(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) consultants other than the payment, discharge, settlement or satisfaction, in the ordinary course of business business, consistent with past practice or in accordance with their termspractice, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify change in any manner, terminate, release material respect any person from management policies or fail to enforce procedures;
(l) Make any confidentiality or similar agreement to which Company or any capital expenditures in excess of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary$10,000;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, Materially modify, amend or terminate any Company Contract or other material contract or agreement Contract to which Company or any subsidiary thereof is a party (including any Key Customer Contracts) or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(on) Enter into or materially modify any contracts, agreements, or obligations relating Contract with regard to the distribution, sale, acquisition or licensing of any Intellectual Property Rights (as defined in Section 2.9) other than non-exclusive object code license or marketing by third parties of Company's products or products licensed by Company on an exclusive basissoftware generally available to the public at a price per copy license fee of less than $500;
(po) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(sp) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement, including with respect to any Takeover Statute;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability; or
(uq) Agree in writing or otherwise commit or negotiate to take any of the actions described in Section 4.1 (a4.1(a) through (tp) above.
Appears in 1 contract
Samples: Merger Agreement (Mediabin Inc)
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in the usual, regular and ordinary course course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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 business dealings, except in each case as set forth in Section 4.1 of the Company Schedule. In addition, except as expressly permitted by the terms of this Agreement and, except in each case as set forth in Section 4.1 of the Company ScheduleAgreement, without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights, rights other than in the ordinary course of business consistent with past practices, provided that in no event shall Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options or warrants outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under new hires in the Director Plan ordinary course of business and consistent with past practice, after consulting with Parent, in an amount not to exceed options to purchase 135,000 200,000 shares in the aggregateaggregate (none of which options (other than those granted to new hires employed by the Company on the data hereof) shall provide for acceleration based upon the transactions contemplated hereby);
(g) Cause, permit or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(h) 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 (other than non-material acquisitions in the ordinary course of business) or enter into any joint ventures, strategic partnerships or alliances, except as disclosed in Section 4.1 of the Company Schedule;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or nonand the grant of end-exclusive user licenses of Company intellectual property in the ordinary course of business consistent with past practice andpractice, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practice;
(k) 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 (except for increases in the ordinary course of business for non-officer employees) or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants; provided that the Company shall terminate the ESPP in accordance with its terms;
(i) Paypay, 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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than including payments to financial, legal, accounting or other professional service advisors not advisors) in excess of the estimates thereof set forth $250,000, except as disclosed in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basisCompany;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for requiring payments to or by Company or a subsidiary in excess of $350,000 250,000 individually;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, Code whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability; or
(u) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a) through (t) above.
Appears in 1 contract
Samples: Merger Agreement (Mih LTD)
Conduct of Business by Company. 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 Effective Time, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writingwriting (which consent shall not be unreasonably withheld), carry on its business, business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulationsLegal Requirements, pay its debts Liabilities (including the costs and taxes expenses associated with this Agreement and the Transactions) and Taxes when due and pay or perform other material obligations when due, (subject to good faith disputes over such debtsLiabilities or Taxes), taxespay or perform its other obligations when due, maintain insurance in amounts and obligationsagainst risks and losses consistent with insurance maintained as by the Company and its subsidiaries as of the date of this Agreement, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees employees, and (iii) preserve its relationships with customers, suppliers, distributors, consultants, licensors, licensees, licensees and others with which it has significant business dealings, except in each case as set forth in Section 4.1 of the Company Schedule. In addition, except the Company shall promptly notify Parent of any material event involving its business or operations occurring outside the ordinary course of business, including but not limited to, prompt written notice of a potential or proposed Special IP Transaction (as expressly permitted defined below) or any negotiation by the terms of this Agreement and, except in each case as set forth in Section 4.1 of the Company Schedulerelating thereto. In addition, without the prior written consent of Parent, except as specifically permitted or required by this Agreement and except as provided in SECTION 4.1 of the Company Schedule, 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 Effective Time, Company shall not do any of the following not, and shall not permit its subsidiaries to to, do any of the following:
(a) Waive Cause, permit or submit to a vote of the Company's stockholders any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(b) Issue, deliver, sell, authorize or designate (including by certificate of designation) or pledge or otherwise encumber, or propose any of the foregoing with respect to any shares of capital stock repurchase of the Company or its subsidiaries or any securities convertible into shares of capital stock of the Company or its subsidiaries, or subscriptions, rights, accelerate, amend warrants or change options to acquire any shares of capital stock of the period Company or its subsidiaries or any securities convertible into shares of exercisability capital stock of options the Company or restricted stockits subsidiaries, or reprice options granted under enter into other agreements or commitments of any employeecharacter obligating it to issue any such shares or convertible securities, consultantother than the issuance, director or other stock plans or authorize cash payments in exchange for any options granted under any delivery and/or sale of such plans except shares of Company Common Stock pursuant to plans and agreements existing the exercise of Company Stock Options outstanding as of the date hereof the relevant terms of this Agreement which are described either vested on the date hereof or vest after the date hereof in accordance with their terms on the date hereof, in each case as disclosed on the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, 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 Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
(d) 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 of the Company or its subsidiaries or split, combine or reclassify any capital stock of the Company or its subsidiaries or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stockstock of the Company or its subsidiaries;
(ed) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiariessubsidiaries or any other securities of the Company or its subsidiaries or any options, warrants, calls or rights to acquire any such shares or other securities, except repurchases of unvested shares at or below 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 hereofof this Agreement, PROVIDED that no such repurchase shall be permitted in the event the per share repurchase price is greater than the Merger Consideration;
(e) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of any Equity Award, reprice any Company Stock Option, or authorize cash payments in exchange for any Equity Award;
(f) IssueGrant or pay any severance or termination pay or any bonus or other special remuneration (whether in cash, deliversecurities or property) or any increase thereof to any director, sellofficer, authorize, pledge consultant or otherwise encumber or propose any employee except pursuant to written agreements outstanding on the date hereof disclosed on SECTION 2.11(B) of the foregoing with respect toCompany Schedule, adopt any shares of capital stock or any securities convertible into shares of capital stocknew severance plan, or subscriptionsamend or modify or alter in any manner any severance plan, rightsagreement or arrangement existing on the date hereof (including without limitation any retention, warrants change of control or options to acquire similar agreement), grant any shares of capital stock equity-based compensation, whether payable in cash, securities or any securities convertible into shares of capital stockproperty, or enter into other agreements any agreement the benefits of which are contingent or commitments the terms of any character obligating it to issue any such shares or convertible securities, other than (x) which are materially altered upon the issuance delivery and/or sale occurrence of (i) shares of a transaction involving the Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregatenature contemplated hereby;
(g) CauseGrant any loans or advances to employees, permit officers, directors or propose other third parties, make any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest investments in or a portion of the assets ofcapital contributions to any person, 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 or enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries;
(j) Incur incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practice;
(ki) Adopt Increase the compensation or benefits payable or to become payable to officers, directors, consultants, or employees (other than as disclosed on SECTION 2.11(B) of the Company Schedule), (ii) enter into any new or amend any employee benefit planexisting Company Employee Plan, policy or arrangementEmployment Agreement, any employee stock purchase or employee stock option planindemnification, collective bargaining, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into similar agreement, except in the ordinary course of business consistent (provided doing so does not materially increase the cost associated with past practice with employees who are terminable "such plan or agreement) and except as required by applicable Legal Requirements, (iv) hire any employee at will")or above the level of manager or for a total annual compensation (including bonus opportunity) of equal to or more than $50,000, pay (v) hire any special employee below the level of manager and for a total annual compensation (including bonus or special remuneration to any director or employeeopportunity) of less than $50,000, other than in the ordinary course of business, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnificationvi) of its directors, officers, employees or consultantsterminate any employee (except termination for cause);
(i) PayEnter into, discharge, settle amend in any material respect or satisfy terminate (other than any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwisetermination as the result of the expiration of the term of any agreement), or litigation waive or assign any material right under any (whether i) Company Contract (or not commenced prior any Contract that would be a Company Contract if it were to exist as of the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports or incurred since the date of such financial statements), or (ii) waive any Contract with an affiliate of the Company;
(j) Make or commit to make any capital expenditures in excess of $100,000 individually or $500,000 in the aggregate;
(k) 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 any ownership interest in any of the foregoing, or otherwise acquire or agree to enter into any joint ventures, strategic partnerships or similar alliances;
(l) Waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any the confidentiality or similar agreement nondisclosure provisions of any Contract to which the Company or any of its subsidiaries is a party or of which the Company or any of its subsidiaries is a beneficiary;
(m) Make Sell, lease, license, encumber or otherwise dispose of any individual properties or series assets except (i) sales of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except inventory in the ordinary course of business consistent with past practice, modify(ii) dispositions of obsolete and unsaleable inventory or equipment, and (iii) transactions permitted by SECTION 4.1(N);
(n) Other than in the ordinary course of business consistent with past practice, sell, lease, license, transfer or otherwise dispose of, or otherwise extend, amend or terminate modify in any material contract respect, any rights to, Company Products or other Company Intellectual Property, or otherwise extend, amend or modify or forfeit or allow to lapse any right thereto (for the avoidance of doubt, any grant of a material right in, entering into a Contract pertaining to royalty or license fee terms with the party identified on SECTION 4.1(N) of the Company Schedule regarding, or disclosure of Company source code or other material Company Intellectual Property to such other party, whether or not in connection with such other party's exercise of its license option under that certain agreement to which set forth on SECTION 4.1(N) of the Company or any subsidiary thereof is Schedule (a party or waive"SPECIAL IP TRANSACTION"), delay the exercise of, release or assign any material rights or claims thereundershall be deemed a breach of this SECTION 4.1(N));
(o) Enter into Issue or materially modify agree to issue any contractsrefunds, agreementscredits, allowances or obligations relating other concessions with customers with respect to amounts collected by or owed to the distribution, sale, license Company or marketing by third parties any of Company's products its subsidiaries in excess of $50,000 individually or products licensed by Company on an exclusive basis$250,000 in the aggregate;
(p) Revalue Enter into any new line of its assets or, except business;
(q) Except as required by GAAP, revalue any of its assets (including without limitation writing down the value of inventory or writing off notes or accounts receivable other than in the ordinary course of business consistent with past practice) or make any change in accounting methods, principles or practices;
(qr) Incur Make any material Tax election, settle or compromise any material Tax liability or refund, file any amendment to a material Return, enter into any agreementclosing agreement or consent to any extension or waiver of any limitation period with respect to material Taxes;
(s) Take any action, contract or commitment outside fail to take any action, with the intention of causing any representation or warranty made by the Company contained in this Agreement to become untrue or inaccurate in any material respect;
(t) Commence or settle any pending or threatened litigation, proceeding or investigation (whether or not commenced prior to the date of this Agreement), other than (i) any litigation to enforce any of its rights under the Agreement, (ii) a settlement fully reimbursable from insurance (subject to any applicable deductible) or calling solely for a cash payment in an aggregate amount less than $100,000 and in any case including a full release of the Company and its subsidiaries, as applicable, or (iii) collection actions brought by the Company in the ordinary course of business calling for payments by Company to collect amounts not in excess of $350,000 individually;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability100,000; or
(u) Agree in writing or otherwise to take any of the actions described in Section 4.1 (aSECTION 4.1(A) through (t4.1(T) above.
Appears in 1 contract
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent PETREX shall otherwise consent in writing, carry on its business, in the usualordinary course, regular and ordinary course in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings, except in each case as set forth in Section 4.1 of the Company Schedule. In addition, except as expressly permitted by the terms of this Agreement and, and except in each case as set forth in Section Schedule 4.1 of the Company Schedule, without the prior written consent of ParentPETREX, 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of warrants or options or restricted stock, or reprice warrants or options granted under any employee, consultant, director or other stock plans or agreements or authorize cash payments in exchange for any options granted under any of such plans except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parentwriting, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights, Property other than in the ordinary course of business consistent with past practices, provided that in no event shall Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (xi) the issuance issuance, delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options and Company Warrants outstanding as of the date of this Agreement or granted pursuant to clause (y) hereofAgreement, and (ii) the issuance of up to 500,000 shares of Company Common Stock issuable common stock to participants in the ESPP consistent with the terms thereof and (y) the granting executive officers of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregateCompany;
(g) Cause, permit permit, or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(h) 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 (other than in the ordinary course of business consistent with past practice) or enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice andpractice, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practice;
(k) 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 as required by law or 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 consultantsconsultants other than annual review salary increases for non-officer employees in the ordinary course of business consistent with past practice;
(i) Pay, discharge, settle or satisfy any material 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) in which Company is a defendant other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included Company, incurred in the Company SEC Reports or incurred ordinary course of business consistent with past practice 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule)$10,000;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into any agreement, contract or materially modify any contracts, agreements, or obligations relating commitment which if in existence on the date hereof would be required to the distribution, sale, license or marketing by third parties of Company's products or products licensed by be listed in Company on an exclusive basisSchedule 2.17;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 10,000 individually;
(r) Engage in any action that could would reasonably be expected to cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax Tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax Tax liability or tax Tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax Tax liability;
(t) Enter into any collective bargaining agreements; or
(u) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a) through (t) above.
Appears in 1 contract
Samples: Merger Agreement (Petrex Corp)
Conduct of Business by Company. 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 Effective Time, each of Company and each of its subsidiaries Subsidiary shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in the usual, regular and ordinary course in all material respects, and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes Taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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 business dealings, except in each case as set forth in Section 4.1 of the Company Schedule. In addition, except as expressly permitted by the terms of this Agreement and, except in each case as set forth in Section 4.1 of the Company ScheduleAgreement, without the prior written consent of 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 Effective Time, Company shall not, and it shall cause Subsidiary not do any of the following and shall not permit its subsidiaries to to, do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, outstanding on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Intellectual Property of Company Intellectual Propertyor Subsidiary other than in the ordinary course of business consistent with past practice, or enter into grants to transfer or license to any person future patent rights, rights other than in the ordinary course of business consistent with past practices, provided that in no event shall Company or Subsidiary license to any person or entity on an exclusive basis or sell any Company of its Intellectual Property;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 hereofCompany;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregate;
(g) Cause, permit or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries)Documents;
(h) 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 or enter into any joint ventures, strategic partnerships agreement outside the ordinary course of Company's or alliancesSubsidiary's business consistent with past practice;
(i) Sell, lease, license, encumber or otherwise dispose of any of Company's or Subsidiary's properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property other than in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiariespractice;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of CompanyCompany or Subsidiary, 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 other than in connection with the financing of ordinary course trade payables consistent with past practiceforegoing;
(k) 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")agreement, 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;
(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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(ml) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule)$50,000;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(pm) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(qn) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 50,000 individually;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(to) Make any tax Tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax Tax liability or tax Tax attributes of Company or any of its subsidiaries Subsidiary or settle or compromise any material income tax Tax liability; or;
(up) Engage in any action that would cause the Merger to fail to qualify as a "reorganization" under Section 368 of the Code, whether or not otherwise permitted by this Article IV;
(q) Take any action that will extend the exercise period of any Subsidiary Stock Option (as defined in Section 5.7) or Company Stock Option (as defined in Section 5.8) or cause the vesting period of any Subsidiary Stock Option or Company Stock Option to accelerate under any circumstances, regardless of whether such circumstances are to occur before or after the Effective Time, or otherwise amend the terms of any Subsidiary Stock Option (except as provided in Section 5.7) or Company Stock Option.
(r) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a) through (tq) above.
Appears in 1 contract
Samples: Merger Agreement (MSC Software Corp)
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, business in the usual, regular and ordinary course course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes Taxes when due and subject to good faith disputes over such debts or Taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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 business dealings. In addition, except in each case as set forth in Section 4.1 during that period Company will promptly notify Parent of any material event involving its business or operations consistent with the Company Scheduleagreements contained herein. In addition, except as expressly permitted by the terms of this Agreement, and except as contemplated by this Agreement and, except or provided in each case as set forth in Section Schedule 4.1 of the Company ScheduleDisclosure Letter, -39- without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except (i) pursuant to written agreements outstandingin effect, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, (ii) in an amount not to exceed four months base pay of the terminated person or (iii) as consented to by Parent, whose consent shall not be unreasonably withheld or delayed, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the material Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights, other than non-exclusive licenses in the ordinary course of business and consistent with past practices, provided that in no event shall Company license to any person or entity on an exclusive basis or sell any Company Intellectual Propertypractice;
(d) DeclareExcept for the two-for-one stock dividend payable on Company Common Stock on March 10, 2000, 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 of Company or split, combine or reclassify any capital stock of Company or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stockstock of Company;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereofCompany Options, and (ii) shares of Company Common Stock issuable to participants in the ESPP Company ESPP, (iii) shares of Company Common Stock issuable to participants in the Company's 401(k) Plan, in the case of (i), (ii) and (iii), consistent with the terms thereof thereof, and (yiv) pursuant to grants of Company Options to newly hired employees, upon promotions of existing employees, or as part of Company's annual option grant program, in each case, in the granting ordinary course of non-discretionary stock options to non-employee directors under the Director Plan in an amount business, consistent with past practice, and not to exceed options to purchase 135,000 shares in the aggregateaggregate pursuant to this clause (iv), 500,000 shares of Company Common Stock;
(g) Cause, permit or propose any amendments to the Company Charter Documents its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) 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 Company or enter into any material joint ventures, strategic partnerships relationships or alliances; provided, that Company shall not be prohibited under this clause (h) from (i) making or agreeing to make debt or equity investments which do not exceed (A) the lesser of (x) 20% of the fully diluted ownership of the entity or (y) $10 million, individually, or (B) $100 million, in the aggregate, or (ii) making or agreeing to make acquisitions which do not (A) exceed $200 million per acquisition, (B) exceed $500 million in the aggregate (which valuations shall be determined upon the signing of agreements regarding such transactions), or (C) which could reasonably be expected to delay the Merger or the other transactions contemplated hereby; provided, further, that Company shall provide written notice to Parent prior to signing any agreement regarding any such acquisition;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiariesCompany;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than (i) in connection with the financing of ordinary course trade payables of business, consistent with past practicepractice or (ii) pursuant to existing credit facilities, in the ordinary course of business;
(k) Adopt Except as required to comply with any Legal Requirement, adopt or amend any employee benefit plan, policy plan 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 providing for compensation and other benefits generally commensurate with employees who are terminable "at will")similarly situated employees) or collective bargaining agreement, 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 consultantsconsultants other than in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures that are material to the business of Company; provided, that any unilateral amendment by SAIC of any employee benefit plan in which Company participates shall not be a violation of this Section 4.1(k);
(i1) Pay, discharge, settle or satisfy Make any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced material capital expenditures other than capital expenditures contained in the capital budget of Company approved by Company prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability; or
(u) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a) through (t) above.
Appears in 1 contract
Samples: Merger Agreement (Verisign Inc/Ca)
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries Subsidiaries shall, except as set forth in Section 5.1 of the Company Schedule, or except to the extent that Parent shall otherwise consent in writing, carry on its business, in the usualordinary course, regular and ordinary course consistent with past practice and in compliance with all applicable laws and regulationsLaws, pay its debts and taxes when due and pay or perform other its material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially all reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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, licensees and others with which it has significant business dealings, except in each case as set forth in Section 4.1 of the Company Schedule. In addition, except as expressly permitted by the terms of this Agreement and, except in each case as set forth in Section 4.1 5.1 of the Company Schedule, without the prior written consent of ParentParent (which consent 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries Subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, rights 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(bi) Grant any severance or termination pay to any officer or employee except (A) as required by applicable Law, (B) non-material payments, both individually and in the aggregate, to non-management employees (consistent with past practice) or (C) pursuant to written agreements outstanding, or policies existing, on the date hereof delivered to Parent and as previously disclosed in writing or made available to Parentset forth on the Company Schedule, or (ii) adopt any new severance plan or (iii) amend or 38 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 entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, 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 Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
(d) 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;
(ed) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiariesSubsidiaries, 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;
(fe) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance issuance, delivery and/or sale of (i) shares of Company Common Stock Shares pursuant to the exercise of stock options Company Stock Options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under Company Stock Options (and the Director Plan in an amount not to exceed options to purchase 135,000 shares issuance of Company Common Shares upon exercise thereof), in the aggregateordinary course of business and consistent with past practices, provided that no such grants shall be made to officers or directors of the Company;
(gf) Cause, permit or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiariesSubsidiaries);
(g) Reorganize, amalgamate or merge Company or any Subsidiary with any other Person (other than pursuant to this Agreement);
(h) Acquire or agree to acquire by merging merging, amalgamating, reorganizing or consolidating with, or by purchasing any equity interest in 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 or enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales (other than the sale or purchase of inventory goods or non-exclusive licenses of Company intellectual property services in the ordinary course of business consistent with past practice andbusiness), except for the sale, lease or disposition (other than through licensing) of property or assets which that are not material, individually or in the aggregate, to the business of Company and its subsidiariesSubsidiaries;
(j) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a non-exclusive license entered into in the ordinary course of business;
(k) Make any material loan, advance or capital contribution to, or investment in, any other Person, or purchase any equity interest in, or any securities of, any Person, other than (i) by Company or any of its Subsidiaries to or in Company or any of its Subsidiaries or (ii) in the ordinary course of business consistent with past practice;
(l) Incur any material indebtedness for borrowed money or guarantee any such indebtedness of another personPerson, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables of business, consistent with past practice;
(km) Adopt Except as required by Law or the terms of any existing Employee Plan or other agreement, adopt, amend or enter into any employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or enter into any employment contract material 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")agreement, pay any special bonus or special remuneration to any director director, officer, employee or employeeconsultant, or materially increase the salaries or compensation wage rates (except for wage increases in the ordinary course of business and consist with past practices) or fringe benefits (including rights to severance severance, termination pay or indemnification) of its directors, officers, employees or consultantsconsultants or make any loan or provide any other financial assistance to such persons;
(in) 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 in excess of $200,000 (in any one case) or satisfaction, $500,000 in the ordinary course of business consistent with past practice aggregate or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports or incurred since the date of such financial statements, or (ii) knowingly 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 or any of its subsidiaries Subsidiaries is a party or of which Company or any of its subsidiaries Subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(no) Except in the ordinary course of business business, consistent with past practicepractices, modify, amend or terminate any material contract Contract or agreement to which Company or any subsidiary Subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue Except as required by US GAAP, revalue any of its assets or, except as required by GAAP, or make any change in accounting methods, principles or practices;
(q) Incur Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy or enter into any agreement, contract or commitment outside (iii) in such cases where Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the ordinary course business of business calling for payments by Company in excess or any of $350,000 individually;its Subsidiaries, provided that Company consults with Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, any Subsidiary of Parent, or any of their affiliates, nor shall Company be required to consult with Parent with respect thereto); 40
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election or any tax accounting method change that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax Tax liability or tax Tax attributes of Company or any of its subsidiaries or Subsidiaries, settle or compromise any material income tax Tax liability, or consent to any extension or waiver of any limitation period with respect to Taxes;
(s) Release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, "standstill" or similar agreement to which Company or any of its Subsidiaries is a party or under which Company or any of its Subsidiaries has any rights, and will use all reasonable efforts to enforce or cause to be enforced each such agreement at the request of Parent. Company will also request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Company Acquisition or equity or debt investment in Company to return all confidential information heretofore furnished to such Person by or on behalf of Company or any of its Subsidiaries;
(t) Purchase or renew any of the Insurance Policies except in compliance with the provisions of Section 6.9 hereof; or
(u) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a5.1(a) through (t) aboveabove or any action that would cause or would be reasonably likely to cause, any of the conditions to the Agreement set forth in Sections 7.1 or 7.3 not to be satisfied.
Appears in 1 contract
Samples: Combination Agreement (Divine Inc)
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in the usual, regular and ordinary course in all material respects, and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes Taxes when due and subject to good faith disputes over such debts or Taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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 business dealings, except in each case as set forth in Section 4.1 of the Company Schedule. In addition, except as provided by the proviso below or as otherwise expressly permitted by the terms of this Agreement and, except in each case as set forth in Section 4.1 of the Company ScheduleAgreement, without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, outstanding on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Company's Intellectual PropertyProperty other than in the ordinary course of business consistent with past practice, or enter into grants to transfer or license to any person future patent rights, Intellectual Property rights other than in the ordinary course of business consistent with past practices, provided that in no event shall Company license to any person or entity on an exclusive basis basis, sell, abandon, fail to renew, allow to lapse or sell otherwise forfeit any Company of its Intellectual Property;
(d) 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 (other than as contemplated in Section 5.12), 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 hereofCompany;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance issuance, delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options Company Stock Options or Warrants outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregateAgreement;
(g) Cause, permit or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries)Documents;
(h) 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 or enter outside the ordinary course of Company's business consistent with past practice into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, option, encumber or otherwise dispose of any of Company's material properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property other than in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiariespractice;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practiceforegoing;
(k) 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")agreement, pay any special bonus or special remuneration to any director or employeeemployee (other than payments contemplated in Section 5.11), or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants;
(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) consultants other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice practices;
(l) Extend or in accordance with their termsmodify the terms of, or liabilities recognized discount or disclosed in the most recent consolidated financial statements (or the notes thereto) factor, any accounts receivable of Company included in the Company SEC Reports 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiaryCompany;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule)$250,000;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(qo) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 250,000 individually;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(tp) Make any tax Tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax Tax liability or tax Tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax Tax liability;
(q) Engage in any action that would cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code except as provided in Section 1.11; or
(ur) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a) through (tq) above.
Appears in 1 contract
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, business in the usual, regular and ordinary course course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes Taxes when due and subject to good faith disputes over such debts or Taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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 business dealings. In addition, except in each case as set forth in Section 4.1 during that period Company will promptly notify Parent of any material event involving its business or operations consistent with the Company Scheduleagreements contained herein. In addition, except as expressly permitted by the terms of this Agreement, and except as contemplated by this Agreement and, except or provided in each case as set forth in Section Schedule 4.1 of the Company ScheduleDisclosure Letter, without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except (i) pursuant to written agreements outstandingin effect, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, (ii) in an amount not to exceed four months base pay of the terminated person or (iii) as consented to by Parent, whose consent shall not be unreasonably withheld or delayed, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the material Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights, other than non-exclusive licenses in the ordinary course of business and consistent with past practices, provided that in no event shall Company license to any person or entity on an exclusive basis or sell any Company Intellectual Propertypractice;
(d) DeclareExcept for the two-for-one stock dividend payable on Company Common Stock on March 10, 2000, 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 of Company or split, combine or reclassify any capital stock of Company or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stockstock of Company;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereofCompany Options, and (ii) shares of Company Common Stock issuable to participants in the ESPP Company ESPP, (iii) shares of Company Common Stock issuable to participants in the Company's 401(k) Plan, in the case of (i), (ii) and (iii), consistent with the terms thereof thereof, and (yiv) pursuant to grants of Company Options to newly hired employees, upon promotions of existing employees, or as part of Company's annual option grant program, in each case, in the granting ordinary course of non-discretionary stock options to non-employee directors under the Director Plan in an amount business, consistent with past practice, and not to exceed options to purchase 135,000 shares in the aggregateaggregate pursuant to this clause (iv), 500,000 shares of Company Common Stock;
(g) Cause, permit or propose any amendments to the Company Charter Documents its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) 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 Company or enter into any material joint ventures, strategic partnerships relationships or alliances; provided, that Company shall not be prohibited under this clause (h) from (i) making or agreeing to make debt or equity investments which do not exceed (A) the lesser of (x) 20% of the fully diluted ownership of the entity or (y) $10 million, individually, or (B) $100 million, in the aggregate, or (ii) making or agreeing to make acquisitions which do not (A) exceed $200 million per acquisition, (B) exceed $500 million in the aggregate (which valuations shall be determined upon the signing of agreements regarding such transactions), or (C) which could reasonably be expected to delay the Merger or the other transactions contemplated hereby; provided, further, that Company shall provide written notice to Parent prior to signing any agreement regarding any such acquisition;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiariesCompany;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than (i) in connection with the financing of ordinary course trade payables of business, consistent with past practicepractice or (ii) pursuant to existing credit facilities, in the ordinary course of business;
(k) Adopt Except as required to comply with any Legal Requirement, adopt or amend any employee benefit plan, policy plan 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 providing for compensation and other benefits generally commensurate with employees who are terminable "at will")similarly situated employees) or collective bargaining agreement, 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 consultantsconsultants other than in the ordinary course of business, consistent with past practice, or change in any material respect any management policies or procedures that are material to the business of Company; provided, that any unilateral amendment by SAIC of any employee benefit plan in which Company participates shall not be a violation of this Section 4.1(k);
(i1) Pay, discharge, settle or satisfy Make any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced material capital expenditures other than capital expenditures contained in the capital budget of Company approved by Company prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability; or
(u) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a) through (t) above.
Appears in 1 contract
Samples: Merger Agreement (Verisign Inc/Ca)
Conduct of Business by Company. 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 Effective Closing Time, the Company and each of its subsidiaries shall, except to the extent that Parent Subsidiaries shall otherwise consent in writing, carry on its business, business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and in material compliance with all applicable laws and regulations, pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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, licensees and others with which it has significant business dealings. In addition, except in each case as set forth in Section 4.1 of the Company Schedulewill promptly notify the Buyer of any material event involving its business or operations occurring outside the ordinary course of business. In addition, except as expressly permitted by the terms of this Agreement and, except in each case as set forth disclosed in Section 4.1 5.1 of the Company ScheduleDisclosure Letter, without the prior written consent of Parentthe Buyer, 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 Effective Closing Time, the Company shall not do any of the following and shall not permit its subsidiaries Subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability or vesting 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay or benefits, or payments or benefits triggered by a change of control or acquisition (including the Offer), to any officer or employee Employee except to persons who are Employees of the Company as of the date hereof pursuant to written agreements outstanding, or written policies existing, on the date hereof and as previously disclosed in writing on Section 3.11 of the Company Disclosure Letter (PROVIDED, HOWEVER, that the Company shall not grant, or made available offer to Parentgrant, any such severance or termination payments or benefits, or payments or benefits triggered upon a change of control or acquisition (including the Offer), to any person who is hired or offered employment with the Company on or after the date hereof), 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, or take any other action that would trigger the payment of any severance payments or other benefits pursuant to any agreement;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights, other than non-exclusive licenses granted to resellers and end-users in the ordinary course of business consistent with past practices, provided that in no event shall Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
(d) 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, except for dividends or other distributions paid to the Company by any of its wholly-owned Subsidiaries;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, 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 hereofSubsidiaries;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to, to any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, or grant any equity-based compensation whether payable in cash or stock, other than (x) the issuance delivery and/or sale of (ix) shares of Company Common Stock Shares pursuant to the exercise of stock options options, warrants and convertible preferred stock outstanding as of the date of this Agreement or granted pursuant to clause Agreement, and (y) hereof, and (ii) shares of Company Common Stock Shares issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregatethereof;
(g) Cause, permit or propose any amendments to the Company Charter Documents Company's Articles of Association (or similar governing instruments of any of its subsidiariesSubsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material 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 all or substantially all of the assets of any assets of the foregoing, or purchase any equity interest in any of the foregoing or enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales or leases of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice andpractice, and except for the sale, lease or disposition (other than through licensinglicensing unless permitted by Section 5.1(c)) of property or assets which are not material, individually or in the aggregate, to the business of the Company and its subsidiariesSubsidiaries, taken as a whole;
(j) Materially modify, amend or terminate any existing lease, license or contract affecting the use, possession or operation of any material properties or material assets; grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment or charge which would materially and adversely affect the Company's use, or the value of, any material owned property or leased property; convey, assign, sublease, license or otherwise transfer all or any portion of any material real property or any interest or rights therein; commit any waste or nuisance on any such property; or make any material changes in the construction or condition of any such property;
(k) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Companythe Company or any of its Subsidiaries, 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 other than in connection with the financing of ordinary course trade payables working capital consistent with past practice;
(kl) 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, employee other than consistent with past practice; or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultantsconsultants except, in each case, as may be required by law or for normally scheduled increases in the ordinary course;
(m) (i) Paypay, discharge, settle or satisfy any material litigation (whether or not commenced prior to the date of this Agreement) or any material 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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company SEC Reports or incurred since the date of such financial statementsstatements in the ordinary course of business consistent with past practices, 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 provisions of any agreement to which the Company or any of its subsidiaries Subsidiaries is a party or of which the Company or any of its subsidiaries Subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party Contract or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contractsExcept as required by U.S. GAAP, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue revalue any of its assets or, except as required by GAAP, or make any change in accounting methods, principles or practices;
(qp) Incur Make any payment or series of related payments outside the ordinary course of business, or enter into any agreement, contract Contract or commitment series of related Contracts outside of the ordinary course of business calling for payments by requiring the Company or any of its Subsidiaries to pay, in excess of $350,000 individually250,000 in the aggregate;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(tq) Make any tax Tax election or accounting method change inconsistent with past practice that, individually or in the aggregate, is would be reasonably likely to adversely affect in any material respect the tax Tax liability or tax Tax attributes of the Company or any of its subsidiaries or Subsidiaries, taken as a whole, settle or compromise any material income tax Tax liability;
(r) Hire any employee; or
(us) Agree in writing or otherwise to take any of the actions described in Section 4.1 5.1 (a) through (tr) above.
Appears in 1 contract
Samples: Offer Agreement (Hewlett Packard Co)
Conduct of Business by Company. 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 Effective Time, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writingwriting (which consent shall not be unreasonably withheld), carry on its business, business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulationsLegal Requirements, pay its debts Liabilities (including the costs and taxes expenses associated with this Agreement and the Transactions) and Taxes when due and pay or perform other material obligations when due, (subject to good faith disputes over such debtsLiabilities or Taxes), taxespay or perform its other obligations when due, maintain insurance in amounts and obligationsagainst risks and losses consistent with insurance maintained as by the Company and its subsidiaries as of the date of this Agreement, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees employees, and (iii) preserve its relationships with customers, suppliers, distributors, consultants, licensors, licensees, licensees and others with which it has significant business dealings, except in each case as set forth in Section 4.1 of the Company Schedule. In addition, except the Company shall promptly notify Parent of any material event involving its business or operations occurring outside the ordinary course of business, including but not limited to, prompt written notice of a potential or proposed Special IP Transaction (as expressly permitted defined below) or any negotiation by the terms of this Agreement and, except in each case as set forth in Section 4.1 of the Company Schedulerelating thereto. In addition, without the prior written consent of Parent, except as specifically permitted or required by this Agreement and except as provided in Section 4.1 of the Company Schedule, 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 Effective Time, Company shall not do any of the following not, and shall not permit its subsidiaries to to, do any of the following:
(a) Waive Cause, permit or submit to a vote of the Company’s stockholders any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(b) Issue, deliver, sell, authorize or designate (including by certificate of designation) or pledge or otherwise encumber, or propose any of the foregoing with respect to any shares of capital stock repurchase of the Company or its subsidiaries or any securities convertible into shares of capital stock of the Company or its subsidiaries, or subscriptions, rights, accelerate, amend warrants or change options to acquire any shares of capital stock of the period Company or its subsidiaries or any securities convertible into shares of exercisability capital stock of options the Company or restricted stockits subsidiaries, or reprice options granted under enter into other agreements or commitments of any employeecharacter obligating it to issue any such shares or convertible securities, consultantother than the issuance, director or other stock plans or authorize cash payments in exchange for any options granted under any delivery and/or sale of such plans except shares of Company Common Stock pursuant to plans and agreements existing the exercise of Company Stock Options outstanding as of the date hereof the relevant terms of this Agreement which are described either vested on the date hereof or vest after the date hereof in accordance with their terms on the date hereof, in each case as disclosed on the Company Schedule;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, 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 Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
(d) 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 of the Company or its subsidiaries or split, combine or reclassify any capital stock of the Company or its subsidiaries or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stockstock of the Company or its subsidiaries;
(ed) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiariessubsidiaries or any other securities of the Company or its subsidiaries or any options, warrants, calls or rights to acquire any such shares or other securities, except repurchases of unvested shares at or below 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 hereofof this Agreement, provided that no such repurchase shall be permitted in the event the per share repurchase price is greater than the Merger Consideration;
(e) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of any Equity Award, reprice any Company Stock Option, or authorize cash payments in exchange for any Equity Award;
(f) IssueGrant or pay any severance or termination pay or any bonus or other special remuneration (whether in cash, deliversecurities or property) or any increase thereof to any director, sellofficer, authorizeconsultant or employee except pursuant to written agreements outstanding on the date hereof disclosed on Section 2.11(b) of the Company Schedule, pledge adopt any new severance plan, or otherwise encumber amend or propose modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof (including without limitation any retention, change of control or similar agreement), grant any equity-based compensation, whether payable in cash, securities or property, or enter into any agreement the benefits of which are contingent or the terms of which are materially altered upon the occurrence of a transaction involving the Company of the nature contemplated hereby;
(g) Grant any loans or advances to employees, officers, directors or other third parties, make any investments in or capital contributions to any person, incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company, 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 other than in connection with respect tothe financing of ordinary course trade payables consistent with past practice;
(i) Increase the compensation or benefits payable or to become payable to officers, any shares of capital stock or any securities convertible into shares of capital stockdirectors, consultants, or subscriptionsemployees (other than as disclosed on Section 2.11(b) of the Company Schedule), rights(ii) enter into any new or amend any existing Company Employee Plan, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stockEmployment Agreement, indemnification, collective bargaining, or enter into other agreements similar agreement, except in the ordinary course of business (provided doing so does not materially increase the cost associated with such plan or commitments agreement) and except as required by applicable Legal Requirements, (iv) hire any employee at or above the level of manager or for a total annual compensation (including bonus opportunity) of equal to or more than $50,000, (v) hire any character obligating it to issue any such shares or convertible securitiesemployee below the level of manager and for a total annual compensation (including bonus opportunity) of less than $50,000, other than in the ordinary course of business, or (xvi) the issuance delivery and/or sale of terminate any employee (except termination for cause);
(i) shares Enter into, amend in any material respect or terminate (other than any termination as the result of the expiration of the term of any agreement), or waive or assign any material right under any (i) Company Common Stock pursuant Contract (or any Contract that would be a Company Contract if it were to the exercise of stock options outstanding exist as of the date of this Agreement Agreement), or granted pursuant to clause (y) hereof, and (ii) shares any Contract with an affiliate of Company Common Stock issuable the Company;
(j) Make or commit to participants make any capital expenditures in the ESPP consistent with the terms thereof and (y) the granting excess of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares $100,000 individually or $500,000 in the aggregate;
(g) Cause, permit or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(hk) 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 thereofthereof or any ownership interest in any of the foregoing, or otherwise acquire or agree to acquire any assets or enter into any joint ventures, strategic partnerships or similar alliances;
(il) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practice;
(k) 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;
(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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports or incurred since the date of such financial statements, or (ii) waive Waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any the confidentiality or similar agreement nondisclosure provisions of any Contract to which the Company or any of its subsidiaries is a party or of which the Company or any of its subsidiaries is a beneficiary;
(m) Make Sell, lease, license, encumber or otherwise dispose of any individual properties or series assets except (i) sales of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except inventory in the ordinary course of business consistent with past practice, modify(ii) dispositions of obsolete and unsaleable inventory or equipment, and (iii) transactions permitted by Section 4.1(n);
(n) Other than in the ordinary course of business consistent with past practice, sell, lease, license, transfer or otherwise dispose of, or otherwise extend, amend or terminate modify in any material contract respect, any rights to, Company Products or other Company Intellectual Property, or otherwise extend, amend or modify or forfeit or allow to lapse any right thereto (for the avoidance of doubt, any grant of a material right in, entering into a Contract pertaining to royalty or license fee terms with the party identified on Section 4.1(n) of the Company Schedule regarding, or disclosure of Company source code or other material Company Intellectual Property to such other party, whether or not in connection with such other party’s exercise of its license option under that certain agreement to which set forth on Section 4.1(n) of the Company or any subsidiary thereof is Schedule (a party or waive“Special IP Transaction”), delay the exercise of, release or assign any material rights or claims thereundershall be deemed a breach of this Section 4.1(n));
(o) Enter into Issue or materially modify agree to issue any contractsrefunds, agreementscredits, allowances or obligations relating other concessions with customers with respect to amounts collected by or owed to the distribution, sale, license Company or marketing by third parties any of Company's products its subsidiaries in excess of $50,000 individually or products licensed by Company on an exclusive basis$250,000 in the aggregate;
(p) Revalue Enter into any new line of its assets or, except business;
(q) Except as required by GAAP, revalue any of its assets (including without limitation writing down the value of inventory or writing off notes or accounts receivable other than in the ordinary course of business consistent with past practice) or make any change in accounting methods, principles or practices;
(qr) Incur Make any material Tax election, settle or compromise any material Tax liability or refund, file any amendment to a material Return, enter into any agreementclosing agreement or consent to any extension or waiver of any limitation period with respect to material Taxes;
(s) Take any action, contract or commitment outside fail to take any action, with the intention of causing any representation or warranty made by the Company contained in this Agreement to become untrue or inaccurate in any material respect;
(t) Commence or settle any pending or threatened litigation, proceeding or investigation (whether or not commenced prior to the date of this Agreement), other than (i) any litigation to enforce any of its rights under the Agreement, (ii) a settlement fully reimbursable from insurance (subject to any applicable deductible) or calling solely for a cash payment in an aggregate amount less than $100,000 and in any case including a full release of the Company and its subsidiaries, as applicable, or (iii) collection actions brought by the Company in the ordinary course of business calling for payments by Company to collect amounts not in excess of $350,000 individually;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability100,000; or
(u) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a4.1(a) through (t4.1(t) above.
Appears in 1 contract
Conduct of Business by Company. 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 Effective TimeAppointment Date, Company and each of its subsidiaries shall, except as permitted by this Agreement, as set forth in Section 5.1 of the Company Schedule or to the extent that Parent shall otherwise consent in writingwriting (which consent shall not be unreasonably delayed or withheld), carry on its business, business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and in compliance with all applicable laws Laws and regulations, pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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, licensees and others with which it has significant business dealings, except in each case as set forth in Section 4.1 of the Company Schedule. In addition, except as expressly permitted by the terms of this Agreement and, and except in each case as set forth provided in Section 4.1 5.1 of the Company Schedule, without the prior written consent of ParentParent (which consent shall not be unreasonably delayed or 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 Effective TimeAppointment Date, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stockstock (except as specified in Secti on 6.8(d) hereof), 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, 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 entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, 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 Company license to any person or entity on an exclusive basis or sell any Company Intellectual PropertyProperty (other than in connection with the abandonment of immaterial Company Intellectual Property after the provision of at least five business days' written notice to Parent);
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 (or any such agreements entered into in the ordinary course consistent with past practice by Company with employees hired after the date hereof);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to, to any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereofAgreement, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under (and the Director Plan issuance of Common Stock upon exercise thereof), in the ordinary course of business and consistent with past practices, in an amount not to exceed options to purchase 135,000 (and the issuance of Company Common Stock upon exercise thereof) 150,000 shares in the aggregate;.
(g) Cause, permit or propose any amendments to the Company Charter Documents Company's Certificate of Incorporation or Bylaws (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material 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 or enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice andpractice, except for the sale, lease or disposition (other than through licensinglicensing permitted by clause (c)) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries; modify or amend in any material respect or terminate any existing lease, license or contract affecting the use, possession or operation of any such properties or assets; grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment or charge affecting any owned property or leased property or any part thereof; convey, assign, sublease, license or otherwise transfer all or any portion of any owned property or leased property or any interest or rights therein; or make any material changes in the construction or condition of any such property;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another personperson (other than (i) in the ordinary course of business consistent with past practice in an amount not to exceed $500,000 and (ii) performance guarantees, letters of credit and similar arrangements entered into with respect to the commercial contracts in the ordinary course of business consistent with past practice), issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables working capital consistent with past practice;
(k) 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 consultantsconsultants (other than the payment of bonuses and salary increases and the issuance of retention options (in compliance with Section 5.1(f)(y)), in each case in the ordinary course of business consistent with past practice) except, in each case, as may be required by law;
(i) Paypay, discharge, settle or satisfy any material litigation (whether or not commenced prior to the date of this Agreement) or any material 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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports or incurred since the date of such financial statements, or (ii) waive the any material 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 or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(on) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue any of its assets or, except Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(qo) Incur or enter into any agreement, contract or commitment outside requiring Company or any of the ordinary course of business calling for payments by Company its subsidiaries to pay in excess of $350,000 individually500,000;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(tp) Make any tax Tax election or accounting method change inconsistent with past practice that, individually or in the aggregate, is would be reasonably likely to adversely affect in any material respect the tax Tax liability or tax Tax attributes of Company or any of its subsidiaries or subsidiaries, settle or compromise any material income tax Tax liability; or, or consent to any extension or waiver of any limitation period with respect to Taxes;
(uq) Agree in writing or otherwise to take any of the actions described in Section 4.1 5.1 (a) through (tp) above.
Appears in 1 contract
Samples: Merger Agreement (Objective Systems Integrators Inc)
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, business in the usual, regular and ordinary course course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulationsLegal Requirements, pay its debts and taxes Taxes when due and subject to good faith disputes over such debts or Taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially all reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) carry on and preserve its business at the level such business is presently conducted, (ii) keep intact its present business organization, (iiiii) keep available the services of its present officers and employees and (iiiiv) preserve maintain its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, Company will promptly notify Parent of any material event involving its business, operations or financial condition. In addition, without limiting the generality of the foregoing, except in each case as expressly contemplated by this Agreement or as set forth in Section Part 4.1 of the Company Schedule. In additionDisclosure Letter, except and provided that notwithstanding the foregoing, Company may use, provided that the condition in Section 6.3(o) is satisfied, the cash savings attributable to any Company Severance Reduction for a distribution to holders of Company capital stock or a reduction in the principal amount of any Company Debt, as expressly permitted determined by the terms Board of this Agreement and, except in each case as set forth in Section 4.1 Directors of the Company Schedule, without the prior written consent of ParentCompany, 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 Effective Time, without the prior written consent of Parent, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stockCompany Options, or reprice options granted under any employee, consultant, director or other stock plans Company Options or authorize cash payments in exchange for any options granted under Company Options or grant any of such plans except pursuant stock appreciation right, phantom stock award, stock-related award or performance award (in each case payable in shares) to plans and agreements existing as of the date hereof the relevant terms of which are described in the any person (including any Company Scheduleemployee);
(b) Grant any severance or termination pay to any officer employee, director or employee consultant of Company except pursuant to written agreements outstandingin effect, or policies existing, on the date hereof and as previously disclosed in writing to Parent (for the avoidance of doubt, nothing in this Agreement shall prohibit or made available restrict the payment of the Company Severance Payments at or prior to Parentthe Effective Time), or adopt any new severance planplan or enter into any employment, severance, termination or indemnification agreement with any person or enter into any collective bargaining agreement;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights, other than non-exclusive licenses in the ordinary course of business and consistent with past practices, provided that in no event shall Company license to any person or entity on an exclusive basis or sell any Company Intellectual Propertypractice;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiariesCompany, 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 propose any of the foregoing with respect to, any shares of capital stock or Voting Debt or any securities convertible into shares of capital stockstock or Voting Debt, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance issuance, delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereofCompany Options, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregatethereof;
(g) Cause, permit or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries)Documents;
(h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a material 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 Company or enter into any joint ventures, strategic partnerships relationships or alliances;
(i) SellOther than in the conduct of its business in the ordinary course consistent with past practice after good faith prior consultation with Parent, sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company Company, other than non-exclusive software licenses for less than $5,000 in the ordinary course of business and its subsidiariesconsistent with past practice;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, enter into any "“keep well" ” or other agreement Contract to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice or (ii) pursuant to existing credit facilities in the ordinary course of business and consistent with past practice;
(k) Adopt Make any increase in or commitment to increase any Company Employee Plan (including any severance plan), adopt or amend or make any employee benefit plancommitment to adopt or amend (other than any amendment required by law or regulation) any Company Employee Plan or make any contribution, policy other than regularly scheduled contributions, to any Company Employee Plan or arrangementmake any material oral or written representation or commitment with respect to any material aspect of any Company Employee Plan that is not materially in accordance with the existing written terms and provision of such Company Employee Plan;
(l) Increase in any manner the amount of compensation (including equity compensation, any employee stock purchase whether payable in cash or otherwise) or employee stock option planbenefits of (including rights to indemnification), pay any bonus (including any cash performance award) to any employee, director or consultant of Company other than in the ordinary course of business, consistent with past practice or enter into any employment contract agreement with any Company employee the benefits of which are (in whole or collective bargaining agreement in part) contingent or the terms of which are materially altered in favor of the Company employee upon the occurrence of a transaction involving Company of the nature contemplated hereby;
(m) Change in any material respect any management policies or procedures;
(n) Make any material capital expenditures outside of the ordinary course of business in excess of $25,000 individually or $50,000 in the aggregate, except for an amount not to exceed $50,000 to be paid for the Company’s recently installed telephone system;
(o) Materially modify, amend or terminate any Company Contract (including any Key Customer Contract), except for the termination of the Company Options, or waive, release or assign any material rights or claims thereunder without the prior written consent of Parent which shall not be unreasonably withheld;
(p) Enter into any Contract with regard to the acquisition or licensing of any Intellectual Property (as defined in Section 2.9) other than offer letters and letter agreements licenses, distribution Contracts, or other similar Contracts entered into in the ordinary course of business consistent with past practice practice;
(q) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(r) Engage in any action with employees who are terminable "at will")the intent to adversely impact any of the transactions contemplated by this Agreement, pay any special bonus or special remuneration including with respect to any director Takeover Statute;
(s) Make any (i) loans or employeeadvances, other than extensions of credit to customers, distributors, OEMs and resellers in the ordinary course of business consistent with past practice or employee advances for travel, entertainment and relocation expenses made in the ordinary course of business consistent with past practices provided such employee loans are in compliance with applicable law, or increase the salaries (ii) capital contributions to, or wage rates investments in, any other person;
(t) Make or fringe benefits (including rights change any Tax election or adopt or change any accounting method, enter into any closing agreement, settle or compromise any claim or assessment in respect of material Taxes or consent to severance any extension or indemnification) waiver of its directors, officers, employees any limitation period with respect to any claim or consultantsassessment for material Taxes;
(i) Pay, discharge, settle or satisfy any claimsclaims (including any Tax claim), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfactionsatisfaction for money, of claims, liabilities, obligations or litigation (A) in the ordinary course of business consistent with past practice or in accordance with their terms, of claims not in excess of $25,000 individually or liabilities recognized or disclosed $50,000 in the most recent consolidated financial statements aggregate or (or B) to the notes thereto) of Company included in extent subject to reserves on the Company SEC Reports or incurred since Financials existing as of the date of such financial statementshereof in accordance with GAAP, 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 or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(mv) Make Grant any individual or series of related payments outside of the ordinary course of business (other than payments exclusive rights with respect to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule)any Intellectual Property;
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(ow) Enter into or materially modify renew any contracts, agreementsContracts containing, or obligations relating to otherwise subject the distributionSurviving Corporation or Parent to, saleany non-competition, license exclusivity or marketing by third parties other material restrictions on Company or the Surviving Corporation or Parent, or any of Company's products or products licensed by Company on an exclusive basistheir respective businesses, following the Closing;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually;
(rx) Engage in any action that could would reasonably be expected to cause the Merger to fail to qualify as a "“reorganization" ” under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(sy) Engage in Hire or offer to hire any action new employee or enter into any employment, severance, termination or indemnification agreement with the intent to directly any person or indirectly adversely impact enter into any of the transactions contemplated by this Agreementcollective bargaining agreement;
(tz) Make Terminate any tax election thatTransition Employee, individually Retained Employee or Key Officer, or encourage any Transition Employee, Retained Employee or Key Officer to resign from Company;
(aa) Enter into any Contract requiring Company to pay in the aggregateexcess of an aggregate of $50,000;
(bb) Discount, is reasonably likely to adversely affect reduce or otherwise modify in any material respect manner any Company Debt (other than pursuant to the tax liability or tax attributes second paragraph of Company or any of its subsidiaries or settle or compromise any material income tax liabilitythis Section 4.1); or
(ucc) Agree in writing or otherwise commit to take any of the actions described in Section 4.1 (aSections 4.1(a) through (tbb) above.
Appears in 1 contract
Samples: Merger Agreement (Tangram Enterprise Solutions Inc)
Conduct of Business by Company. 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 Effective TimeClosing, Company and each of its subsidiaries shallthe Company, except to the extent that Parent the other party shall otherwise consent in writing, carry on its business, 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, pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), 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 business dealings, except in each case as set forth in Section 4.1 of the Company Schedule. In addition, except as expressly required or permitted by the terms of this Agreement and, except in each case as set forth in Section 4.1 of the Company ScheduleAgreement, without the prior written consent of Parentthe other 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 Effective TimeClosing, the Company shall not do any of the following and shall not permit its subsidiaries to 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to applicable law, written agreements outstanding, or policies existing, existing on the date hereof and as previously or concurrently disclosed in writing or made available to Parentthe 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 entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, 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 Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
(d) 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;
(ed) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiariesCompany, 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;
(fe) Issue, deliver, sell, authorize, pledge or otherwise encumber encumber, or propose 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 ;
(xf) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregateAmend its Charter Documents;
(g) Cause, permit or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(h) 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 or enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practiceforegoing;
(kh) 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;
(i) PayExcept as disclosed in Schedule 6.1(i) hereto, 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 practice practices or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(nj) Except in the ordinary course of business consistent with past practiceas required by U.S. GAAP, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue revalue any of its assets or, except as required by GAAP, or make any change in accounting methods, principles or practices;
(qk) Incur Except as set forth in Schedule 6.1(k) hereto, incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company requiring such party to pay in excess of $350,000 individually100,000 in any 12 month period;
(rl) Engage in Form, establish or acquire any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liabilitySubsidiary; or
(um) Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 4.1 6.1 (a) through (tl) above.
Appears in 1 contract
Conduct of Business by Company. 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 Effective Time, the Company and each of its subsidiaries shall, (i) except to the extent that Parent shall otherwise consent in writing, carry on its business, in the usual, regular and ordinary course course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (iA) preserve 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, except and (ii) notify Parent in each case as set forth writing (or by electronic mail) in Section 4.1 the event that any employee of the Company Scheduleor any of its subsidiaries is terminated or resigns from the Company or such subsidiary. In addition, except as expressly permitted by the terms of this Agreement andAgreement, and except in each case as set forth provided in Section 4.1 of the Company Schedule, without the prior written consent of 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 Effective Time, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant grant (whether cash or otherwise) any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, 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 transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, 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 license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
(d) Declaredeclare, 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;
(e) Purchasepurchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or its subsidiaries, 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) Issueissue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereofAgreement, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (iii) shares of Company Common Stock issuable upon conversion of the Series B Preferred Stock and (y) the granting of non-discretionary stock options to non-employee directors under (and the Director Plan issuance of Common Stock upon exercise thereof), in the ordinary course of business and consistent with past practices, in an amount not to exceed options to purchase 135,000 (and the issuance of Company Common Stock upon exercise thereof) 10,000 shares in the aggregate;
(g) Causecause, permit or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire 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 or enter into any joint ventures, strategic partnerships or alliances;
(i) Sellsell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice andpractice, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of the Company and its subsidiariessubsidiaries and except for those assets set forth in Section 4.1(i) of the Company Schedule;
(j) Incur incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practice;
(k) Adopt 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 (whether cash or otherwise) any special bonus or special remuneration to any director or employeeemployee (other than any bonus or continuing salary payments which such directors and employees are entitled to receive as of the date hereof), or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants;
(i) Paypay, 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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company SEC Reports 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 or any of its subsidiaries is a party or of which the Company or any of its subsidiaries is a beneficiary; provided, however, that Parent's consent to take any such action shall not be unreasonably withheld;
(m) Make make any individual or series of related payments (other than payments of the type described in (a) through (l) above and not prohibited by (a) through (l)) outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule)$25,000; provided, however, that Parent's consent to take any such action shall not be unreasonably withheld;
(n) Except except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which the Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder; provided, however, that Parent's consent to take any such action shall not be unreasonably withheld;
(o) Enter into enter into, renew or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company on an exclusive basisother than renewals of existing nonexclusive contracts, agreements or obligations; provided, however, that Parent's consent to take any such action shall not be unreasonably withheld;
(p) Revalue any of its assets or, except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(q) Incur incur or enter into any (i) purchase or sales order, agreement, contract or commitment outside involving payments in the case of the ordinary course of business calling for payments by Company any single order, agreement, contract or commitment in excess of $350,000 individually250,000 in the aggregate, or (ii) agreement, contract or commitment (other than a purchase or sales order, agreement, contract or commitment) involving payments in the case of any single agreement, contract or commitment in excess of $100,000 in the aggregate; provided, however, that Parent's consent to take any such action shall not be unreasonably withheld;
(r) Engage engage in any action that could reasonably be expected to cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in settle any litigation; provided, however, that Parent's consent to take any such action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreementshall not be unreasonably withheld;
(t) Make make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax Tax liability or tax Tax attributes of the Company or any of its subsidiaries or settle or compromise any material income tax Tax liability, or consent to any extension or waiver of any limitation period with respect to Taxes; or
(u) Agree agree in writing or otherwise to take any of the actions described in Section 4.1 (a4.1(a) through Section 4.1(t) hereof, inclusive; provided, however that notwithstanding the foregoing, Parent shall be deemed to have consented to a request to take any action set forth in Section 4.1(a) through Section 4.1(u) hereof, inclusive, if (tA) abovethe Company shall have delivered a written request to take such action to at least one (1) of the persons set forth in Section 4.1 of the Parent Schedule (at the facsimile numbers set forth thereon or the e-mail addresses set forth thereon), (B) a representative of the Company shall have made a verbal request to take such action by contacting (including by recorded voice message) each of the persons set forth in Section 4.1 of the Parent Schedule (at the telephone numbers set forth therein), and (C) Parent shall not have responded to the Company's request within seventy-two (72) hours of the initial written and telephonic request to take such action (or forty-eight (48) hours with respect to any request to take any action set forth in Section 4.1(q) hereof).
Appears in 1 contract
Samples: Merger Agreement (Solectron Corp)
Conduct of Business by Company. 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 Effective Appointment Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writingwriting and except as provided in Part 5.1 of Parent Disclosure Letter, carry on its business, business in the usual, regular and ordinary course and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes Taxes when due and subject to good faith disputes over such debts or Taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, consistent with past practices (except as set forth in Schedule 4.1), and policies efforts to (i) preserve 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, licensees and others with which it has business dealings. In addition, except in each case as set forth in Section 4.1 during that period Company will promptly notify Parent of any material event involving its business or operations consistent with the Company Scheduleagreements contained herein. In addition, except as expressly permitted by the terms of this Agreement, and except as contemplated by this Agreement and, except or provided in each case as set forth in Section 4.1 Schedule 5.1 of the Company ScheduleDisclosure Letter, without the prior written consent of Parent, 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 Effective Appointment Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
: (a) Waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, 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 Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregate;
(g) Cause, permit or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(h) 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 or enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practice;
(k) 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;
(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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability; or
(u) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a) through (t) above.
Appears in 1 contract
Samples: Merger Agreement (Ondisplay Inc)
Conduct of Business by Company. During Except as required or permitted by the terms of this Agreement, as set forth in Section 4.1 of the Company Disclosure Schedule or approved by Parent in writing, 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 Effective Time, each of Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes Taxes when due and (subject to good faith disputes over such debts or Taxes), pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to to: (ia) preserve intact its present business organization, ; (iib) keep available the services of its present officers and employees employees; and (iiic) preserve its relationships with customers, suppliers, distributors, licensors, licensees, licensees and others with which it has significant business dealings; provided, however, that in the event Company shall be required to take or refrain from taking any action pursuant to this Section 4.1 that would cause any representation or warranty of Company set forth in this Agreement to be or become inaccurate, Company shall so notify Parent in writing, and as soon as practicable, and in no event more than three (3) business days, after Parent's receipt of such notice Parent shall advise Company in writing as to whether Company should (x) comply with this Section 4.1, in which event such action or inaction shall not be deemed to constitute a breach of, or inaccuracy in, such representations or warranties, or (y) cause such representation or warranty to remain accurate, in which such action or inaction shall not be deemed to constitute a breach of this Section 4.1). In addition, except in each case as required or permitted by the terms of this Agreement, as set forth in Section 4.1 of the Company Schedule. In addition, except as expressly permitted Disclosure Schedule or approved by the terms of this Agreement and, except Parent in each case as set forth in Section 4.1 of the Company Schedule, without the prior written consent of Parentwriting, 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:following (it being understood and agreed that any action taken or omitted to be taken by Company after the execution and delivery of this Agreement that is either permitted by the terms of this Section 4.1 or approved by Parent in writing pursuant to this Section 4.1 shall not be deemed to constitute a breach of, or inaccuracy in, any of the representations or warranties of Company set forth in this Agreement):
(a) Waive any stock repurchase rights, accelerateaccelerate (other than in accordance with written agreements outstanding on the date hereof and disclosed on Section 2.3 or 2.11(g) of the Company Disclosure Schedule), amend or change the period of exercisability of options or restricted stockany Company Stock Option, or reprice options granted under any employee, consultant, director or other stock plans Company Stock Option or authorize cash payments in exchange for any options granted under Company Stock Option, or allow any of such plans except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described new enrollments in the Company ScheduleESPP or allow any participant in the ESPP to increase his or her participation rate in the ESPP;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or written policies existing, on the date hereof and included in the Company Disclosure Schedule, or as previously disclosed in writing or made available to Parent, required by applicable law or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement, custom, policy or arrangement existing on the date hereof, or grant any equity-based compensation, whether payable in cash or stock, except for grants of Company Stock Options to purchase not more than 150,000 Company Shares in the aggregate under a Company Option Plan to new hires in the ordinary course consistent with past practice, which Company Stock Options shall not accelerate as a result of the occurrence of any of the transactions contemplated by this Agreement (whether alone or upon the occurrence or nonoccurrence of any additional or subsequent events);
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, or enter into grants any agreements or make other commitments or arrangements to grant, transfer or license to any person future patent rights, other than non-exclusive licenses granted to end users in the ordinary course of business consistent with past practices; provided that in no event shall Company: (i) license on an exclusive basis or sell any Company Intellectual Property; or (ii) enter into any agreement (A) containing pricing or discounting terms or provisions other than in the ordinary course of business consistent with past practices, provided that (B) granting any site license, or (C) limiting the right of Company to engage in no event shall Company license any line of business or to compete with any person or entity on an exclusive basis or sell any Company Intellectual Propertyperson;
(d) Enter into, renew or modify any Contracts relating to the distribution, sale, license or marketing by third parties of Company Products;
(e) 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;
(ef) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiariessubsidiaries or any options, warrants, calls or rights to acquire any such shares, or permit the transfer of any Company Shares by Precise Software Solutions, Inc. to any other subsidiary of the Company, except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee Employee pursuant to stock option or purchase agreements in effect on the date hereof (or any such agreements entered into in the ordinary course consistent with past practice with Employees hired after the date hereof);
(fg) Issue, deliver, sell, authorize, pledge or otherwise encumber (or propose any of the foregoing with respect to, ) any shares of capital stock or any securities convertible into or exercisable or exchangeable for shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of such capital stock or any securities convertible into shares of such capital stock, or enter into other agreements or commitments Contracts of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance issuance, delivery and/or and sale of of: (i) shares of Company Common Stock Shares pursuant to the exercise of stock options options, warrants and other agreements set forth in Section 2.3 of the Company Disclosure Schedule, in each case outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and Agreement; (ii) shares of Company Common Stock Shares issuable to participants in the ESPP consistent with the terms thereof thereof; and (yiii) the granting grants of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options Company Stock Options to purchase 135,000 shares not more than 150,000 Company Shares in the aggregateaggregate under a Company Option Plan to new hires in the ordinary course consistent with past practice, which Company Stock Options shall not accelerate as a result of the occurrence of any of the transactions contemplated by this Agreement (whether alone or upon the occurrence or nonoccurrence of any additional or subsequent events);
(gh) Cause, permit or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(hi) 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 person or division thereof, or otherwise acquire or agree to acquire all or substantially all of the assets of any assets or of the foregoing, enter into any joint ventures, strategic partnerships or alliancesalliances or form or agree to form any subsidiaries;
(ij) Sell, lease, license, encumber encumber, convey, assign, sublicense or otherwise dispose of or transfer any properties or assets except or any interest therein other than: (i) sales of inventory or non-exclusive and licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for practice; and (ii) the sale, lease or disposition (other than through licensinglicensing permitted by clause (c)) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiariessubsidiaries taken as a whole in the ordinary course of business consistent with past practice; or grant or otherwise create or consent to the creation of any Lien affecting any owned or leased real property or any part thereof;
(jk) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practice;
(kl) Adopt or amend any employee benefit planEmployment Agreement or Company Employee Plan, policy except as may be required by law or arrangement, any employee stock purchase or employee stock option plan, this Agreement; or enter into any employment contract 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"," except as may be required by Legal Requirements, and who are not officers of Company), ; agree to pay 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 consultantsconsultants except, in each case, as may be required by law or by any existing employee benefit plan, policy, arrangement, program or Contract disclosed on Section 2.11 of the Company Disclosure Schedule, or break with past customs or unwritten policies of Company with respect to benefits not required by law with respect to its employees, including by way of example only and without limitation, payment of severance pay in Israel under circumstances in which it is not legally required;
(i) Pay, discharge, settle or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), ) or settle any 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 practice or in accordance with their terms, or liabilities recognized or disclosed terms in the most recent consolidated financial statements (or the notes thereto) existence as of Company included in the Company SEC Reports or incurred since the date of such financial statementshereof, 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 Contract to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modifyModify, amend or terminate any material contract Contract set forth or agreement required to which be set forth in Section 2.17 or 2.18 of the Company or any subsidiary thereof is a party Disclosure Schedule or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue any of its assets or, except Except as required by GAAP, revalue any of its assets (including, without limitation, writing down the value of capitalized inventory or writing off notes or accounts receivable) or make any change in accounting methods, principles or practices;
(p) Hire any employee with an annual compensation level in excess of $150,000;
(q) Incur Other than (i) fees and expenses payable to Goldman Sachs pursuant to the engagement letter referred to in Sectiox 0.00 axx (xi) fees and expenses payable to legal, accounting and other professional service advisors as disclosed in Section 4.1(q) of the Company Disclosure Schedule, make any individual or enter into any agreement, contract or commitment series of related payments outside of the ordinary course of business calling for (including payments by Company to legal, accounting or other professional service advisors) in excess of $350,000 individually1,500,000 in the aggregate;
(r) Engage in Enter into any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) Contract or series of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of related Contracts requiring Company or any of its subsidiaries to pay in excess of $500,000 over the term of such Contract or series of Contracts;
(s) Make any Tax election inconsistent with past practice, agree to pay, settle or compromise any material income tax liabilityTax liability or consent to any extension or waiver of any limitation period with respect to Taxes, or request, negotiate or agree to any Tax rulings; or
(ut) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a4.1(a) through (ts) above.
Appears in 1 contract
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, in all material respects, in the usual, regular and ordinary course course, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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 business dealings. In addition, except in each case as set forth in Section 4.1 Company will promptly notify Parent of the Company Scheduleany material event involving its business or operations. In addition, except as expressly permitted by the terms of this Agreement andAgreement, and except as provided in each case as set forth in Section 4.1 Article 4 of the Company ScheduleSchedules, without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights, other than non-exclusive licenses in the ordinary course of business and consistent with past practices, provided that in no event shall Company license to any person or entity on an exclusive basis or sell any Company Intellectual Propertypractice;
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, except repurchases issued shared at fair market value in connection with employees exercised of options pursuant to the Company's Stock Option Plan 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 propose any of the foregoing with respect toof, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options therefor outstanding as of the date of this Agreement or granted pursuant to clause (y) hereofAgreement, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregatethereof;
(g) Cause, permit or propose any amendments to the Company Charter Documents its Certificate of Incorporation, Bylaws or other charter documents (or similar governing instruments of any of its subsidiaries);
(h) 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 Company or enter into any material joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiariesCompany, except sales of inventory in the ordinary course of business consistent with past practice;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than (i) in connection with the financing of ordinary course trade payables consistent with past practicepractice or (ii) pursuant to existing credit facilities in the ordinary course of business;
(k) Adopt or amend any employee benefit plan, policy plan 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;
(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) consultants other than the payment, discharge, settlement or satisfaction, in the ordinary course of business business, consistent with past practice or in accordance with their termspractice, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify change in any manner, terminate, release material respect any person from management policies or fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiaryprocedures;
(ml) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule)$250,000;
(nm) Except except in the ordinary course of business consistent with past practicebusiness, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(on) Enter enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basisother than in the ordinary course of business consistent with past practice;
(po) Revalue materially revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(qp) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually;
(r) Engage in Take any action that could cause would be reasonably likely to interfere with Parent's ability to account for the Merger to fail to qualify as a "reorganization" under Section 368(a) pooling of the Code, interests whether or not otherwise permitted by the provisions of this Article IV;
(sq) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability; or
(ur) Agree in writing or otherwise to take any of the actions described in Section 4.1 Article 4 (a) through (tq) above.
Appears in 1 contract
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, business in the usual, regular and ordinary course course, in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and regulations, pay its debts and taxes Taxes when due and subject to good faith disputes over such debts or Taxes, pay or perform other material obligations when due, subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve 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 business dealings. In addition, except in each case as set forth in Section 4.1 during that period Company will promptly notify Parent of any material event involving its business or operations consistent with the Company Scheduleagreements contained herein. In addition, except as expressly permitted by the terms of this Agreement, and except as contemplated by this Agreement and, except or provided in each case as set forth in Section Part 4.1 of the Company ScheduleDisclosure Letter, without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock, or reprice re-price (by amendment or substitution) 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described other than options vesting in the Company Scheduleconnection with an employee terminated in an isolated instance;
(b) Grant any severance or termination pay to any officer or employee except (i) pursuant to written agreements outstandingin effect, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, (ii) in an amount not to exceed three months base pay of the terminated person or pursuant to terms and provisions that are substantially similar to such plans adopted by Parent or (iii) as consented to by Parent, whose consent shall not be unreasonably withheld or delayed, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the any Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights, other than non-exclusive licenses granted in the ordinary course of business and consistent with past practicespractice or, provided if granted on terms different from past practice or outside the ordinary course, are granted on terms and in a manner that in no event shall Company license are generally favorable to any person or entity on an exclusive basis or sell any Company Intellectual Propertythe Company;
(d) 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 of Company or split, combine or reclassify any capital stock of Company or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 hereofCompany;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to, any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregate;
(g) Cause, permit or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(h) 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 or enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables consistent with past practice;
(k) 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;
(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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports 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 fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(t) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability; or
(u) Agree in writing or otherwise to take any of the actions described in Section 4.1 (a) through (t) above.
Appears in 1 contract
Conduct of Business by Company. During the period from the date of this the Original Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, the Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, (i) carry on its business, business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulationsmaterial Legal Requirements, (ii) pay its debts Liabilities and taxes Taxes when due and (subject to good faith disputes over such Liabilities or Taxes), (iii) pay or perform other material obligations when due, due (subject to good faith disputes over such debtspayments or performance), taxes(iv) use its reasonable efforts to assure that each of its material Contracts entered into after the date of this Agreement will not require the procurement of any consent, waiver or novation or provide for any material change in the obligations of any party in connection with, or terminate as a result of the consummation of, the Merger, (v) notify and give Cloudtech the opportunity to participate in the defense or settlement of any litigation to which the Company may become a party, and obligations, and (vi) use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (iA) preserve intact its present business organization, (iiB) keep available the services of its present officers and employees Employees, and (iiiC) preserve its relationships with customers, suppliers, distributors, consultants, licensors, licensees, licensees and others with which it has business dealings, except in each case as set forth in Section 4.1 of the Company Schedule. In addition, except as expressly permitted by the terms of this Agreement and, except in each case as set forth in Section 4.1 of the Company Schedule, without the prior written consent of ParentCloudtech, 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 Effective Time, the Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive Enter into any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company ScheduleContract;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, 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 Company license to any person or entity on an exclusive basis or sell any Company Intellectual Property;
(d) 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;
(ec) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 hereofCompany;
(fd) IssueGrant “below market options” as contemplated by Section 409A of the Code), issue, deliver, sell, authorizepurchase, authorize or designate (including by certificate of designation) or pledge or otherwise encumber encumber, or propose any of the foregoing with respect to, to any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof and (y) the granting of non-discretionary stock options to non-employee directors under the Director Plan in an amount not to exceed options to purchase 135,000 shares in the aggregate;
(ge) Cause, permit or propose submit to a vote of the Company’s stockholders any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries)Documents;
(hf) 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 or enter into any joint ventures, strategic partnerships or similar alliances;
(ig) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries;
(j) Incur Guarantee any indebtedness for borrowed money or guarantee any such the indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company, enter into any "“keep well" ” or other agreement to maintain any financial statement condition condition, forgive or discharge in whole or in part any outstanding loans for borrowed money, modify any loan for borrowed money previously granted, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company against fluctuations in commodities prices or exchange rates, or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables consistent with past practiceforegoing;
(kh) Adopt Add any new members to the Board;
(i) Except as required by GAAP or amend SEC rules and regulations, revalue any employee benefit plan, policy of its assets (including writing down the value of inventory or arrangement, any employee stock purchase writing off notes or employee stock option plan, or enter into any employment contract or collective bargaining agreement (accounts receivable 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")practice) or make any change in accounting methods, pay any special bonus principles 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 consultantspractices;
(ij) PayMake or change any material Tax election or Tax accounting method that is reasonably likely to adversely affect in any material respect the Tax attributes or Tax liabilities of the Company, dischargeenter into any Tax sharing or similar agreement, settle or satisfy compromise any claimsmaterial Tax liability or consent to any extension or waiver of any limitation period with respect to Taxes;
(k) Other than taking any action permitted by, liabilities engage in any action with intent to, directly or obligations indirectly, adversely impact or materially delay the consummation of the Transactions;
(absolutel) Hire any officers, accruedconsultants, asserted independent contractors 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 practice or in accordance with their terms, or liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports or incurred since the date of such financial statements, or employees (ii) waive or enter into, or amend or extend the benefits term of, agree to modify in any manner, terminate, release employment or consulting agreement with any person from or fail to enforce any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiaryEmployee;
(m) Make Except for payments arising directly out of the Transactions, make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);business,
(n) Except in the ordinary course of business consistent with past practiceAdopt, modifyimplement or amend any stockholder rights plan, amend “poison pill” anti-takeover plan or terminate any material contract other similar plan, device or agreement arrangement that is applicable to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business calling for payments by Company in excess of $350,000 individually;
(r) Engage in any action that could cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, whether or not otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(to) Make Take any tax election that, individually action that is intended or would reasonably be expected to result in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of Company or any of its subsidiaries or settle or compromise any material income tax liability; or
(u) Agree in writing or otherwise to take any of the conditions to the Merger set forth in ARTICLE VI not being satisfied, other than the termination of this Agreement pursuant to ARTICLE VII, or actions described in Section 4.1 (a) through (t) aboveto enforce its rights under this Agreement.
Appears in 1 contract
Conduct of Business by Company. 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 Effective Time, Company and each of its subsidiaries shall, except to the extent that Parent shall otherwise consent in writing, carry on its business, business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and in substantial compliance with all applicable laws and regulations, pay its debts and taxes when due and subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, due subject to good faith disputes over such debts, taxes, and obligations, and use its commercially reasonable efforts, efforts consistent with past practices (except as set forth in Schedule 4.1), and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees employees, and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, licensees and others with which it has significant business dealings. In addition, except in each case as set forth in Section 4.1 Company will promptly notify Parent of any material event involving its business or operations occurring outside the Company Scheduleordinary course of business. In addition, except as expressly permitted by the terms of this Agreement and, except in each case as set forth in Section 4.1 of the Company ScheduleAgreement, without the prior written consent of 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 Effective Time, Company shall not do any of the following and shall not permit its subsidiaries to do any of the following:
(a) Waive Except as required by law or pursuant to the terms of a Plan in effect as of the date hereof, waive any stock repurchase rights, accelerate, amend or 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 except pursuant to plans and agreements existing as of the date hereof the relevant terms of which are described in the Company Scheduleplans;
(b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or practices or policies existing, on the date hereof (or as required by applicable law) and as previously disclosed in writing or made available to Parent, 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 Other than in the ordinary course of business consistent with past practices, transfer or license to any person or entity or otherwise extend, amend or modify in any material respect any rights to the Company Intellectual Property, 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 Company license to any person or entity on an exclusive -------- basis or sell any Company Intellectual PropertyProperty (other than in connection with the abandonment of immaterial Company Intellectual Property after at least five (5) business days' written notice to Parent);
(d) 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;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, 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 (or any such agreements entered into in the ordinary course consistent with past practice by Company with employees hired after the date hereof);
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to, to any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance issuance, delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options or warrants outstanding as of the date of this Agreement or granted pursuant to clause (y) hereofAgreement, and (ii) shares of Company Common Stock issuable to participants in the ESPP consistent with the terms thereof thereof, and (y) the granting of non-discretionary stock options to non-employee directors under new employees in the Director Plan ordinary course of business in such amounts and in all other respects and consistent with past practices and in an amount not to exceed options to purchase 135,000 shares 150,000 in the aggregateaggregate with similar vesting terms;
(g) Cause, permit or propose submit to a vote of Company's stockholders any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);
(h) 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 or enter into any joint ventures, ventures or strategic partnerships or alliancespartnerships;
(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory or non-exclusive licenses of Company intellectual property in the ordinary course of business consistent with past practice andpractice, except for the sale, lease lease, licensing, encumbering or disposition (other than through licensinglicensing permitted by clause (c)) of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries;
(j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, 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 other than in connection with the financing of ordinary course trade payables of business consistent with past practice;
(k) Adopt Other than the increase in the number of shares of Company Common Stock available for grant pursuant to the Company's 2000 Nonstatutory Stock Option Plan by 1,000,000, adopt or amend any employee benefit plan, policy Plan 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"practice), ; pay any special bonus or special remuneration to any director or employee; or, or other than annual salary increases for employees and officers (but not directors) in the ordinary course of business consistent with past practices, increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants;consultants except, in each case, as may be required by law; or increase the cash compensation of the persons listed on Schedule 4.01(k) hereto by more than 8% of the total base salary paid to such persons in the aggregate in calendar year 2000; provided that any such increase is approved by the Board of Directors of the Company and would not adversely affect the ability of Parent to account for the merger as a "pooling of interests."
(l) (i) Paypay, discharge, settle or satisfy any litigation (whether or not commenced prior to the date of this Agreement) or any material 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 practice or in accordance with their terms, or of liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports or incurred since the date of such financial statementsstatements or disclosed in Section 2.08 or 2.09 of the Company Schedule, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any the confidentiality or similar nondisclosure provisions of any agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the ordinary course of business (other than payments to financial, legal, accounting or other professional service advisors not in excess of the estimates thereof set forth in Section 4.1 of the Company Schedule);
(n) Except in the ordinary course of business consistent with past practice, materially modify, amend or terminate any material contract Contract disclosed in Section 2.17(g) or agreement to which 2.18 of the Company or any subsidiary thereof is a party Schedule or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(on) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company's products or products licensed by Company on an exclusive basis;
(p) Revalue any of its assets or, except Except as required by GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;
(qo) Incur or enter into any agreement, contract or commitment outside requiring Company or any of the ordinary course of business calling for payments by Company its subsidiaries to pay in excess of $350,000 individually750,000;
(rp) Engage in any action that could would reasonably be expected to (i) cause the Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code, Code or (ii) interfere with Parent's ability to account for the Merger as a "pooling of interests," whether or not (in each case) otherwise permitted by the provisions of this Article IV;
(s) Engage in any action with the intent to directly or indirectly adversely impact any of the transactions contemplated by this Agreement;
(tq) Make any tax Tax election or accounting method change (except as required by GAAP) inconsistent with past practice that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax Tax liability or tax Tax attributes of Company or any of its subsidiaries or subsidiaries, settle or compromise any material income tax liabilityTax liability or consent to any extension or waiver of any limitation period with respect to Taxes; or
(ur) Agree in writing or otherwise to take any of the actions described in Section 4.1 4.01 (a) through (tq) above.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Microchip Technology Inc)
