Conduct of Business by Parent Pending the Closing. The Parent agrees that, between the date of this Agreement and the Effective Time, except as set forth in Section 5.1(b) of the Parent Disclosure Memorandum or as specifically permitted by any other provision of this Agreement, unless the Company shall otherwise agree in writing, the Parent will, and will cause its Subsidiaries to, will conduct its operations only in the ordinary and usual course of business consistent with past practice. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1(b) of the Parent Disclosure Memorandum or as specifically permitted by any other provision of this Agreement, the Parent shall not, and shall not permits any of its Subsidiaries to (unless required by applicable Law), between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following without the prior written consent of the Company: (i) amend or otherwise change the Parent Certificate or Parent Bylaws; (ii) (A) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of any shares of capital stock of, or other Equity Interests in, the Parent of any class, or securities convertible or exchangeable or exercisable for any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by contract right), of the Parent, other than the issuance of Parent Common Stock upon the exercise of Parent Options outstanding as of the date hereof in accordance with their terms, the issuance of Parent Common Stock upon the exercise of Parent Warrants outstanding as of the date hereof in accordance with their terms or the issuance of Parent Options in accordance with the ordinary course of the Parent’s business, or (B) sell, pledge, dispose of, transfer, lease, license, guarantee or encumber, or authorize the sale, pledge, disposition, transfer, lease, license, guarantee or encumbrance of, any material property or assets (including Parent Material Intellectual Property) of the Parent, except pursuant to existing Contracts or commitments or the sale or purchase of goods or services in the ordinary course of business consistent with past practice, or enter into any commitment or transaction outside the ordinary course of business consistent with past practice; (iii) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or enter into any agreement with respect to the voting of its capital stock; (iv) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, other Equity Interests or other securities; (v) (A) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest in any person or any division thereof or any assets, other than acquisitions of inventory or other assets in the ordinary course of business consistent with past practice, (B) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, except for indebtedness for borrowed money incurred by the Parent or any of its Subsidiaries in the ordinary course of business consistent with past practice pursuant to the terms of a Parent Material Contract, (C) terminate, cancel or request any material change in, or agree to any material change in, any Company Material Contract other than as arising in the ordinary course of business, or (D) enter into or amend any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 5.1(b)(v); (vi) except as may be required by contractual commitments or corporate policies with respect to employee severance or termination pay in existence on the date of this Agreement as disclosed in Section 4.11(b) of the Parent Disclosure Memorandum: or in the ordinary course of business consistent with past practice: (A) materially increase the compensation or benefits payable or to become payable to its directors, officers or employees; (B) grant any rights to severance or termination pay to, or amend or enter into any new Parent Benefit Plan, except to the extent required by applicable Law; or (C) amend or waive any performance or vesting criteria or accelerate the vesting, exercisability or funding under any Parent Benefit Plan (except to the extent required by the terms of any such Parent Benefit Plan as of the date of this Agreement); (vii) (A) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, contingent or otherwise), except in the ordinary course of business consistent with past practice and in accordance with their terms, (B) accelerate or delay collection of any material notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business consistent with past practice, or (C) delay or accelerate payment of any material account payable in advance of its due date or the date such liability would have been paid in the ordinary course of business consistent with past practice; (viii) make any material change in accounting policies or procedures, other than in the ordinary course of business consistent with past practice or except as required by GAAP or by a Governmental Entity; (ix) waive, release, assign, settle or compromise any material claims, or any material litigation or arbitration; (x) make any material Tax election, settle or compromise any material liability for Taxes, amend any material Tax Return or file any refund for any material amount of Taxes; provided, that the Parent shall promptly provide to the Company a copy of any such amended Tax Return or filing for any refund; (xi) modify, amend or terminate, or waive, release or assign any material rights or claims with respect to any confidentiality or standstill agreement to which the Parent is a party; (xii) knowingly act in a manner intended or reasonably expected to materially delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VI not being satisfied, except as otherwise permitted by this Agreement or required by applicable Law or any judicial or regulatory authority; or (xiii) authorize or enter into any agreement or otherwise make any commitment to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Ecost Com Inc), Merger Agreement (Pfsweb Inc)
Conduct of Business by Parent Pending the Closing. The Parent agrees that, between the date Agreement Date and continuing until the earlier of the termination of this Agreement and pursuant to its terms or the Effective Time, except as set forth in Section 5.1(b) 5.1 of the Parent Disclosure Memorandum Schedule or as specifically permitted by any other provision of this Agreement, unless authorized and previously approved in writing by the Company shall otherwise agree in writingCompany, the Parent will, and will cause each of its Subsidiaries to, will to conduct its operations only in the ordinary and usual course of business consistent with past practice, and to use commercially reasonable efforts to preserve intact its current business organization, keep available the services of its current key employees and officers and maintain its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other persons having business relationships with Parent or its Subsidiaries. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1(b) 5.1 of the Parent Disclosure Memorandum Schedule or as specifically permitted by any other provision of this Agreement, the Parent shall not, and shall not permits any of its Subsidiaries to (unless required by applicable Law), and shall not permit any of its Subsidiaries to, between the date Agreement Date and continuing until the earlier of the termination of this Agreement and pursuant to its terms or the Effective Time, directly or indirectly, do, or agree to do, any of the following without the prior written consent of unless authorized and previously approved in writing by the Company:
(ia) amend or otherwise change the Parent Certificate its certificate of incorporation or Parent Bylawsby-laws or equivalent organizational documents;
(iib) (A) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of any shares of capital stock of, or other Equity Interests in, the Parent or any of its Subsidiaries of any class, or securities convertible or exchangeable or exercisable for any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by contract right), of the ParentParent or any of its Subsidiaries, other than the (i) issuance of Parent Common Stock upon the exercise of Parent Options outstanding as of the date hereof in accordance with their terms, the issuance of Parent Common Stock upon the exercise of or Parent Warrants outstanding as of the date hereof in accordance with their terms or (ii) the issuance grant of Parent Options options at the Closing to such persons, on such terms and in accordance with the ordinary course such amounts as set forth in Section 5.1(b)(A)(ii) of the Parent’s businessParent Disclosure Schedule, or (B) sell, pledge, dispose of, transfer, lease, license, guarantee or encumber, or authorize the sale, pledge, disposition, transfer, lease, license, guarantee or encumbrance of, any material property or assets (including of Parent Material Intellectual Property) or any of the Parentits Subsidiaries, except pursuant to existing Contracts or commitments or the sale or purchase of goods or services in the ordinary course of business consistent with past practice, or enter into any commitment or transaction outside the ordinary course of business consistent with past practice;
(iiic) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock (other than dividends paid by a wholly-owned Subsidiary of Parent to Parent or to any other wholly-owned Subsidiary of Parent) or enter into any agreement with respect to the voting of its capital stock;
(ivd) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, other Equity Interests or other securitiessecurities (other than in connection with the termination of an employee pursuant to existing repurchase rights);
(ve) (A) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest in any person or any division thereof or any assets, other than acquisitions of inventory or other assets in the ordinary course of business consistent with past practice, (B) other than the Parent Notes, incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, except for indebtedness person (other than a wholly-owned Subsidiary of Parent) for borrowed money incurred by the Parent or any of its Subsidiaries (other than ordinary course trade accounts payable, which shall not be material in the ordinary course of business consistent with past practice pursuant to the terms of a Parent Material Contractaggregate), (C) terminate, cancel or request any material change in, or agree to any material change in, any Company Parent Material Contract other than as arising in the ordinary course of businessContract, or (D) enter into or amend any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 5.1(b)(v)5.1(e) other than a new lease agreement for the Parent’s principal executive office and facilities;
(vif) except as may be required by contractual commitments or corporate policies with respect to employee severance or termination pay in existence on the date of this Agreement as disclosed in Section 4.11(b) of the Parent Disclosure Memorandum: or in the ordinary course of business consistent with past practice: (A) materially increase the compensation or benefits payable or to become payable to its directors, officers or employees; (B) grant or modify any rights to severance change-in-control or termination pay to, or amend or enter into any new employment or severance agreement with, any director, officer or other employee of Parent Benefit Planor any of its Subsidiaries (other than as contemplated in this Agreement), or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee, except to the extent required by applicable Law; or (C) take any affirmative action to amend or waive any performance or vesting criteria or criteria, accelerate the vesting, exercisability or funding or exercise any discretion under any Parent Benefit Plan (except to the extent required by the terms of any such Parent Benefit Plan as of the date of this Agreement)Plan;
(viig) (A) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, contingent or otherwise), except in the ordinary course of business consistent with past practice and in accordance with their terms, (B) accelerate or delay collection of any material notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business consistent with past practice, or (C) delay or accelerate payment of any material account payable in advance of its due date or the date such liability would have been paid in the ordinary course of business consistent with past practice;
(viiih) make any material change in accounting policies or procedures, other than in the ordinary course of business consistent with past practice or except as required by GAAP or by a Governmental Entity;
(ixi) waive, release, assign, settle or compromise any material claims, or any material litigation or arbitration;
(xj) change its method of accounting, make any material Tax tax election, settle or compromise any material liability for Taxes, amend any material Tax Return or file any refund for any material amount of Taxes; provided, that the Parent shall promptly provide to the Company a copy of any such amended Tax Return or filing for any refund;
(xik) take, or agree to take, any action that would reasonably be expected to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code or fail to take any action that would reasonably be expected to be necessary to cause the Merger to so qualify;
(l) modify, amend or terminate, or waive, release or assign any material rights or claims with respect to any confidentiality or standstill agreement to which the Parent is a party;
(xiim) knowingly act in a manner take any action that is intended or would reasonably be expected to materially delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VI not being satisfied, except as otherwise permitted by this Agreement or required by applicable Law or any judicial or regulatory authority; or
(xiiin) authorize or enter into any agreement or otherwise make any commitment to do any of the foregoing. Parent shall fully and promptly inform the Company of all discussions, negotiations or activities related to the license, sale, or potential license or sale, of any asset of Parent or its Subsidiaries, and shall promptly provide the Company copies of any written materials (including materials in electronic form or otherwise) received from any third party in connection with any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (RespireRx Pharmaceuticals Inc.), Merger Agreement (Cortex Pharmaceuticals Inc/De/)
Conduct of Business by Parent Pending the Closing. The Parent agrees that, between the date of this Agreement and the Effective Time, except Except as set forth in Section 5.1(b) of the Parent Disclosure Memorandum or as specifically permitted by any other provision of this Agreement, unless the Company shall otherwise agree in writing, the Parent will, and will cause its Subsidiaries to, will conduct its operations only in the ordinary and usual course of business consistent with past practice. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1(b) of the Parent Disclosure Memorandum or as specifically permitted by any other provision of this Agreement, the Parent shall not, and shall not permits any of its Subsidiaries to (unless required by applicable Law), and shall not permit any of its Subsidiaries to, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following without the prior written consent of the Company:
(i) amend or otherwise change its certificate of incorporation or bylaws in a manner that adversely affects the rights of holders of Parent Common Stock (including holders of the Parent Certificate or Parent BylawsCommon Stock issuable in the Merger);
(ii) declare, set aside, make or pay any dividend or other distribution (Awhether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock, other than quarterly dividends consistent with past practice and dividends paid by a wholly-owned Subsidiary of Parent to Parent or to any other wholly-owned Subsidiary of Parent;
(iii) redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, other Equity Interests or other securities at a price above the then prevailing fair market value of such capital stock, Equity Interests or other securities;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, transfer or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of encumber any shares of capital stock of, or other Equity Interests in, the Parent or any of its Subsidiaries of any class, or securities convertible or exchangeable or exercisable for any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by contract right), of the Parent, other than the issuance of Parent Common Stock upon the exercise of Parent Options outstanding (A) as of may be required by any Contracts in existence on the date hereof in accordance with their termshereof, the issuance of Parent Common Stock upon the exercise of Parent Warrants outstanding as of the date hereof in accordance with their terms or the issuance of Parent Options in accordance with the ordinary course of the Parent’s business, or (B) sell, pledge, dispose of, transfer, lease, license, guarantee or encumber, or authorize the sale, pledge, disposition, transfer, lease, license, guarantee or encumbrance of, any material property or assets (including Parent Material Intellectual Property) of the Parent, except pursuant to existing Contracts or commitments or the sale or purchase of goods or services in the ordinary course of business consistent with past practice, or enter into any commitment or transaction outside the ordinary course of business consistent with past practice;
(iii) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or enter into any agreement with respect to the voting of its capital stock;
(iv) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, other Equity Interests or other securities;
(v) (A) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest in any person or any division thereof or any assets, other than acquisitions of inventory or other assets in the ordinary course of business consistent with past practice, (BC) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible forin arm’s length transactions, the obligations terms of any person, except for indebtedness for borrowed money incurred which have been approved by the Parent or any of its Subsidiaries in Board and are believed by the ordinary course of business consistent with past practice pursuant Parent Board to the terms of a Parent Material Contract, (C) terminate, cancel or request any material change in, or agree to any material change in, any Company Material Contract other than as arising in the ordinary course of businessreflect fair value, or (D) enter into or amend any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 5.1(b)(v);
(vi) except as may be required by contractual commitments or corporate policies with respect to employee severance or termination pay in existence on upon the date exercise of this Agreement as disclosed in Section 4.11(b) of the Parent Disclosure Memorandum: or in the ordinary course of business consistent with past practice: (A) materially increase the compensation or benefits payable or to become payable to its directors, officers or employees; (B) grant any rights to severance or termination pay to, or amend or enter into any new Options and Parent Benefit Plan, except to the extent required by applicable Law; or (C) amend or waive any performance or vesting criteria or accelerate the vesting, exercisability or funding under any Parent Benefit Plan (except to the extent required by the terms of any such Parent Benefit Plan Warrants outstanding as of the date of this Agreement);
(vii) (A) pay, discharge hereof or satisfy any material claims, liabilities or obligations (absolute, accrued, contingent or otherwise), except in the ordinary course of business consistent with past practice and in accordance with their terms, (B) accelerate or delay collection of any material notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business consistent with past practice, or (C) delay or accelerate payment of any material account payable in advance of its due date or the date such liability would have been paid hereafter granted in the ordinary course of business consistent with past practice;
(viiiv) make merge or consolidate Parent or Merger Sub with any material change other person or acquire any business (except in accounting policies or procedures, other than in the ordinary course of business consistent with past practice or except either case as required by GAAP or by a Governmental Entity;
(ix) waive, release, assign, settle or compromise any material claims, or any material litigation or arbitration;
(x) make any material Tax election, settle or compromise any material liability for Taxes, amend any material Tax Return or file any refund for any material amount of Taxes; provided, that the Parent shall promptly provide to the Company a copy of any such amended Tax Return or filing for any refund;
(xi) modify, amend or terminate, or waive, release or assign any material rights or claims with respect to any confidentiality or standstill agreement to which the Parent is a party;
(xii) knowingly act in a manner intended or would not reasonably be expected to materially delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VI not being satisfied), except as otherwise permitted by this Agreement or required by applicable Law liquidate or any judicial dissolve Parent or regulatory authorityMerger Sub; or
(xiiivi) authorize or enter into any agreement or otherwise make any commitment to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Paradyne Networks Inc), Merger Agreement (Zhone Technologies Inc)
Conduct of Business by Parent Pending the Closing. The Parent agrees that, between the date of this Agreement and the earlier of the Effective TimeTime or the termination of this Agreement, except as set forth in Section 5.1(b) 7.1 of the Parent Confidential Disclosure Memorandum Schedule or as specifically required or permitted by any other provision of this AgreementAgreement or required by Law, unless the Company shall otherwise agree consent thereto in writingwriting (which consent shall not be unreasonably withheld or delayed and shall be deemed to have been given by the Company if it does not refuse its consent within three (3) Business Days of its receipt of a request therefore from Parent), the Parent willshall, and will shall cause each of its Subsidiaries to, will conduct its operations only in the ordinary and usual course of business consistent with past practicepractice and, to the extent consistent therewith, shall use its reasonable best efforts to (y) preserve its and each of its Subsidiaries’ business organization and its rights, authorizations, franchises and other authorizations issued by Governmental Entities intact and (z) preserve the goodwill of the customers of Parent and each of its Subsidiaries with whom business relationships exist. Without limiting the foregoing, By way of amplification and as an extension thereofnot limitation, except as set forth in Section 5.1(b) 7.1 of the Parent Confidential Disclosure Memorandum Schedule or as specifically required or permitted by any other provision of this Agreement, the Parent shall not, and shall not permits any of its Subsidiaries to (unless Agreement or required by applicable Law), between the date of this Agreement and the earlier of the Effective TimeTime or the termination of this Agreement, Parent shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, do, or agree to do, any of the following without the prior written consent of the Company:Company (which consent shall not be unreasonably withheld or delayed and which shall be deemed to have been given by the Company if it does not refuse its consent within three (3) Business Days of its receipt of a request therefor from Parent):
(ia) amend or otherwise change its Articles of Incorporation or Bylaws or equivalent organizational documents in a manner which adversely affects the rights, preferences or privileges of Parent Certificate or Parent BylawsCommon Stock;
(ii) (Ab) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of any shares of capital stock or rights of, or other Equity Interests in, the Parent or any of its Subsidiaries of any class, or securities convertible or exchangeable or exercisable for any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by contract right), of the ParentParent or any of its Subsidiaries, other than (x) the issuance of Parent Common Stock upon the exercise or conversion of Parent Options outstanding as options, warrants or other rights to acquire any capital stock of the date hereof company (“Parent Options”) in accordance with their terms, (y) the issuance granting of options to purchase shares of Parent Common Stock upon the exercise of Parent Warrants outstanding as of the date hereof in accordance with their terms or the issuance of Parent Options in accordance with the ordinary course of the Parent’s businessbusiness consistent with past practice, or (Bz) as contemplated by Section 6.12 hereof;
(c) sell, pledge, dispose of, transfer, lease, license, guarantee or encumber, or authorize the sale, pledge, disposition, transfer, lease, license, guarantee or encumbrance of, any material property or assets (including Parent Material Intellectual Property) of Parent or deposits of the ParentParent Bank, except pursuant to existing Contracts or commitments listed on Section 7.1(c) of the Parent Disclosure Schedule or the sale or purchase of goods or services in the ordinary course pledge of business consistent with past practice, or enter into any commitment or transaction outside the ordinary course of business consistent with past practice;
(iii) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or enter into any agreement with respect to the voting of its capital stock;
(iv) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, other Equity Interests or other securities;
(v) (A) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest in any person or any division thereof or any assets, other than acquisitions of inventory or other assets in the ordinary course of business consistent with past practice, (B) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, except for indebtedness for borrowed money incurred by the Parent or any of its Subsidiaries in the ordinary course of business consistent with past practice pursuant to the terms of a Parent Material Contract, (C) terminate, cancel or request any material change in, or agree to any material change in, any Company Material Contract other than as arising in the ordinary course of business, or (D) enter into or amend any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 5.1(b)(v);
(vi) except as may be required by contractual commitments or corporate policies with respect to employee severance or termination pay in existence on the date of this Agreement as disclosed in Section 4.11(b) of the Parent Disclosure Memorandum: or in the ordinary course of business consistent with past practice: (A) materially increase the compensation or benefits payable or to become payable to its directors, officers or employees; (B) grant any rights to severance or termination pay to, or amend or enter into any new Parent Benefit Plan, except to the extent required by applicable Law; or (C) amend or waive any performance or vesting criteria or accelerate the vesting, exercisability or funding under any Parent Benefit Plan (except to the extent required by the terms of any such Parent Benefit Plan as of the date of this Agreement);
(vii) (A) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, contingent or otherwise), except in the ordinary course of business consistent with past practice and in accordance a transaction that together with their termsall other transactions will not have, (B) accelerate individually or delay collection of any material notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business consistent with past practiceaggregate, or (C) delay or accelerate payment of any material account payable in advance of its due date or the date such liability would have been paid in the ordinary course of business consistent with past practicea Material Adverse Effect;
(viiid) make any material change in accounting policies or procedures, other than in the ordinary course of business consistent with past practice or except as required by GAAP or by a Governmental Entity;
(ix) waive, release, assign, settle or compromise any material claims, or any material litigation or arbitration;
(x) make any material Tax election, settle or compromise any material liability for Taxes, amend any material Tax Return or file any refund for any material amount of Taxes; provided, that the Parent shall promptly provide to the Company a copy of any such amended Tax Return or filing for any refund;
(xi) modify, amend or terminate, or waive, release or assign any material rights or claims with respect to any confidentiality or standstill agreement to which the Parent is a party;
(xii) knowingly act in a manner intended or reasonably expected to materially delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VI not being satisfied, except as otherwise permitted by this Agreement or required by applicable Law or any judicial or regulatory authority; or
(xiiie) authorize or enter into any agreement or otherwise make any commitment to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Placer Sierra Bancshares), Merger Agreement (Southwest Community Bancorp)
Conduct of Business by Parent Pending the Closing. The Between the date of this Agreement and the earlier of the Effective Time and the termination of this Agreement in accordance with Article 7, except (1) for any Permitted Action, (2) as required by Law or Order, (3) for any action taken to comply with any COVID-19 Measures, (4) as otherwise expressly contemplated by any other provision of this Agreement, or (5) with the prior written consent of the Company (not to be unreasonably withheld, conditioned or delayed), Parent agrees thatwill, and will cause each of its Subsidiaries (i) to conduct its operations in all material respects in the ordinary course of business, and (ii) to use commercially reasonable efforts to keep available the services of the current officers, employees and consultants of Parent and each of its Subsidiaries and to preserve the goodwill and current relationships of Parent and each of its Subsidiaries with customers, suppliers and other Persons with which Parent or any of its Subsidiaries has significant business relations. Without limiting the foregoing, except (w) for any Permitted Action, (x) as required by Law or Order, (y) for any action taken to comply with any COVID-19 Measures or (z) as otherwise expressly contemplated by any other provision of this Agreement, Parent shall not, and shall not permit any of its Subsidiaries to, between the date of this Agreement and the Effective Time, except as set forth in Section 5.1(b) earlier of the Parent Disclosure Memorandum or as specifically permitted by any other provision of this Agreement, unless Effective Time and the Company shall otherwise agree in writing, the Parent will, and will cause its Subsidiaries to, will conduct its operations only in the ordinary and usual course of business consistent with past practice. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1(b) of the Parent Disclosure Memorandum or as specifically permitted by any other provision of this Agreement, the Parent shall not, and shall not permits any of its Subsidiaries to (unless required by applicable Law), between the date termination of this Agreement and the Effective Timein accordance with Article 7, directly or indirectly, do, or agree to do, take any of the following actions without the prior written consent of the Company:Company (not to be unreasonably withheld, conditioned or delayed):
(ia) amend or otherwise change the certificate of incorporation and bylaws or any other organizational documents of Parent Certificate or Parent Bylawsany of its Subsidiaries;
(iib) (A) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of any shares of capital stock of, except for dividends or other Equity Interests in, the distributions paid by a wholly owned Subsidiary of Parent to Parent or another wholly owned Subsidiary of any class, or securities convertible or exchangeable or exercisable for any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by contract right), of the Parent, other than the issuance of Parent Common Stock upon the exercise of Parent Options outstanding as of the date hereof in accordance with their terms, the issuance of Parent Common Stock upon the exercise of Parent Warrants outstanding as of the date hereof in accordance with their terms or the issuance of Parent Options in accordance with the ordinary course of the Parent’s business, or (B) sell, pledge, dispose of, transfer, lease, license, guarantee or encumber, or authorize the sale, pledge, disposition, transfer, lease, license, guarantee or encumbrance of, any material property or assets (including Parent Material Intellectual Property) of the Parent, except pursuant to existing Contracts or commitments or the sale or purchase of goods or services in the ordinary course of business consistent with past practice, or enter into any commitment or transaction outside the ordinary course of business consistent with past practice;
(iii) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or enter into any agreement with respect to the voting of its capital stock;
(iv) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, other Equity Interests or other securities;
(v) (A) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest in any person or any division thereof or any assets, other than acquisitions of inventory or other assets in the ordinary course of business consistent with past practice, (B) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, except for indebtedness for borrowed money incurred by the Parent or any of its Subsidiaries in the ordinary course of business consistent with past practice pursuant to the terms of a Parent Material Contract, (C) terminate, cancel or request any material change in, or agree to any material change in, any Company Material Contract other than as arising in the ordinary course of business, or (D) enter into or amend any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 5.1(b)(v);
(vi) except as may be required by contractual commitments or corporate policies with respect to employee severance or termination pay in existence on the date of this Agreement as disclosed in Section 4.11(b) of the Parent Disclosure Memorandum: or in the ordinary course of business consistent with past practice: (A) materially increase the compensation or benefits payable or to become payable to its directors, officers or employees; (B) grant any rights to severance or termination pay to, or amend or enter into any new Parent Benefit Plan, except to the extent required by applicable Law; or (C) amend or waive any performance or vesting criteria or accelerate the vesting, exercisability or funding under any Parent Benefit Plan (except to the extent required by the terms of any such Parent Benefit Plan as of the date of this Agreement);
(vii) (A) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, contingent or otherwise), except in the ordinary course of business consistent with past practice and in accordance with their terms, (B) accelerate or delay collection of any material notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business consistent with past practice, or (C) delay or accelerate payment of any material account payable in advance of its due date or the date such liability would have been paid in the ordinary course of business consistent with past practice;
(viii) make any material change in accounting policies or procedures, other than in the ordinary course of business consistent with past practice or except as required by GAAP or by a Governmental Entity;
(ix) waive, release, assign, settle or compromise any material claims, or any material litigation or arbitration;
(x) make any material Tax election, settle or compromise any material liability for Taxes, amend any material Tax Return or file any refund for any material amount of Taxes; provided, that the Parent shall promptly provide to the Company a copy of any such amended Tax Return or filing for any refund;
(xi) modify, amend or terminate, or waive, release or assign any material rights or claims with respect to any confidentiality or standstill agreement to which the Parent is a party;
(xii) knowingly act in a manner intended or reasonably expected to materially delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VI not being satisfied, except as otherwise permitted by this Agreement or required by applicable Law or any judicial or regulatory authorityInterests; or
(xiiic) authorize or enter into any agreement Contract or otherwise make any commitment to do any of the foregoing. Except as otherwise expressly provided herein, nothing contained in this Agreement is intended to give the Company, directly or indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, Parent shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
Appears in 2 contracts
Samples: Merger Agreement (Maxlinear Inc), Merger Agreement (Maxlinear Inc)
Conduct of Business by Parent Pending the Closing. The Except for matters set forth in Section 5.02 of the Parent agrees thatDisclosure Letter or otherwise expressly permitted by this Agreement (or as required by applicable Law or the regulations or requirements of any stock exchange or regulatory organization applicable to Parent), between from the date of this Agreement and to the Effective Time, except as set forth in Section 5.1(b) of the Parent Disclosure Memorandum or as specifically permitted by any other provision of this Agreement, unless the Company shall otherwise agree in writing, the Parent willshall, and will shall cause each of its Subsidiaries to, will (i) conduct its operations only business in the ordinary and usual course of business consistent with past practicepractice and (ii) use commercially reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers, key employees and key independent contractors, and preserve the goodwill and business relationships with customers, suppliers, licensors, licensees and others having business relationships with them. Without In addition, and without limiting the generality of the foregoing, and as an extension thereof, except as for matters set forth in Section 5.1(b) 5.02 of the Parent Disclosure Memorandum Letter or as specifically otherwise expressly permitted by any other provision of this Agreement, from the date of this Agreement to the Effective Time, Parent shall not, and shall not permits any of its Subsidiaries to (unless required by applicable LawLaw or the regulations or requirements of any stock exchange or regulatory organization applicable to Parent), between the date and shall not permit any of this Agreement and the Effective Timeits Subsidiaries to, directly or indirectly, do, or agree to do, do any of the following without the prior written consent of the Company, which consent shall not be unreasonably withheld or delayed:
(a) (i) amend or otherwise change the Parent Certificate propose to amend Parent’s certificate of incorporation or Parent Bylaws;
bylaws or similar governing documents, or materially amend or propose to materially amend any of Parent’s Subsidiaries’ certificate of incorporation or bylaws or similar governing documents, (ii) (A) issuesplit, sell, pledge, dispose of, grant, transfer, encumber, combine or reclassify their outstanding capital stock or issue or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance issuance of any shares of capital stock other security in respect or, in lieu of, or other Equity Interests inin substitution for, the Parent of any class, or securities convertible or exchangeable or exercisable for any shares of such its capital stock or other Equity Interestsstock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by contract right), of the Parent, other than the issuance of Parent Common Stock upon the exercise of Parent Options outstanding as of the date hereof in accordance with their terms, the issuance of Parent Common Stock upon the exercise of Parent Warrants outstanding as of the date hereof in accordance with their terms or the issuance of Parent Options in accordance with the ordinary course of the Parent’s business, or (B) sell, pledge, dispose of, transfer, lease, license, guarantee or encumber, or authorize the sale, pledge, disposition, transfer, lease, license, guarantee or encumbrance of, any material property or assets (including Parent Material Intellectual Property) of the Parent, except pursuant to existing Contracts or commitments or the sale or purchase of goods or services in the ordinary course of business consistent with past practice, or enter into any commitment or transaction outside the ordinary course of business consistent with past practice;
(iii) declare, set aside, make aside or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect otherwise, except for the payment of dividends or distributions to Parent or any of its capital stock Subsidiaries by a Subsidiary of Parent, (iv) merge or consolidate with any Person (other than a merger among wholly-owned Subsidiaries of Parent or a merger between Parent and its wholly-owned Subsidiaries), or (v) enter into any agreement with respect to the voting of its capital stockstock or other securities held by Parent or any of its Subsidiaries;
(b) issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any shares of, or any options, warrants or rights of any kind to acquire any shares of, their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that (i) Parent may issue shares of Parent Common Stock upon exercise of Parent Stock Options outstanding on the date hereof or hereafter granted in accordance with the provisions of subclause (ii) or (iii) of this clause (b) or (B) in accordance with the terms of the Parent Rights Agreement as in effect on the date hereof, (ii) Parent may grant Parent Stock Options to purchase up to an aggregate of 75,000 shares of Parent Common Stock and 75,000 shares of restricted stock in accordance with the terms of the Parent Stock Plans consistent with past practice and with an exercise price per share of Parent Common Stock no less than the fair market value of a share of Parent Common Stock on the date of grant, (iii) in connection with Parent’s annual year-end equity awards consistent with past practice, Parent may grant Parent Stock Options and restricted stock in accordance with the terms of the Parent Stock Plans consistent with past practice and, in respect of Parent Stock Options, with an exercise price per share of Parent Common Stock no less than the fair market value of a share of Parent Common Stock on the date of grant, (iv) reclassifyParent may grant Parent Stock Options pursuant to existing contractual relationships as set forth in Section 5.02(b) of the Parent Disclosure Letter, combine(v) Parent may issue one or more series of securities of Parent in connection with a Financing consistent with the terms and conditions of this Agreement, splitthe primary use of proceeds of which is to pay the Cash Merger Consideration, subdivide and (vi) transactions exclusively among Parent and its Subsidiaries shall be permitted;
(c) except for transactions exclusively among Parent and its Subsidiaries, (i) issue any debt securities, incur, guarantee or otherwise become contingently liable with respect to any indebtedness for borrowed money, or enter into any arrangement having the economic effect of any of the foregoing (other than (A) in connection with accounts payable in the ordinary course of business, (B) borrowings under the existing credit facilities of Parent or any of its Subsidiaries, and (C) the issuance of one or more series of securities of Parent or the incurrence of indebtedness by Parent in connection with a Financing consistent with the terms and conditions of this Agreement, the primary use of proceeds of which is to pay the Cash Merger Consideration), (ii) make any loans, advances or capital contributions to, or investments in, any Person, other than loans, advances, capital contributions or investments that are not, in the aggregate, in excess of $25,000,000, (iii) redeem, purchase, acquire or offer to purchase or otherwise acquireacquire any shares of its capital stock or any options, directly warrants or indirectly, rights to acquire any of its capital stockstock or any security convertible into or exchangeable for its capital stock other than in connection with the exercise of outstanding Parent Stock Options pursuant to the terms of the Parent Stock Plans and the relevant written agreements evidencing the grant of Parent Stock Options, other Equity Interests (iv) make any material acquisition of any assets or other securities;
businesses (v) (A) acquire (including, without limitation, including by merger, consolidation, or acquisition of stock or assets, in-bound license transactions or otherwise) other than acquisitions the fair market value of the total consideration (including license, royalty or other fees) for which does not exceed, in the aggregate, $25,000,000 (provided that any interest in such acquisition does not materially and adversely affect the ability of Parent and the Company to obtain applicable approvals under the Antitrust Laws); or (v) sell, pledge, assign, dispose of, transfer, lease, securitize or materially encumber any person businesses or any division thereof assets (other than Parent Owned Intellectual Property or any assetsParent Licensed Intellectual Property) that are material to Parent and its Subsidiaries, taken as a whole, other than acquisitions (A) sales of inventory or and other assets in the ordinary course of business, (B) sales or dispositions of assets in one or a series of transactions having an aggregate value of $25,000,000 or less, and (C) divestitures pursuant to Section 5.11;
(d) (i) sell, pledge, assign, dispose of, transfer, securitize, lease or materially encumber any material Parent Owned Intellectual Property or material Parent Licensed Intellectual Property (except in connection with any Contract or arrangement related to obtaining Financing that is consistent with the terms and conditions of this Agreement, the primary use of proceeds of which is to pay the Cash Merger Consideration), or (ii) except in the ordinary course of business, as reasonably prudent to the conduct of the business or as provided for in Parent Material Contracts in effect as of the date hereof, (A) exclusively license, abandon or fail to maintain any material Parent Owned Intellectual Property or material Parent Licensed Intellectual Property, (B) grant, extend, amend (except as required in the diligent prosecution of the material Parent Owned Intellectual Property), waive or modify any rights in or to any material Parent Owned Intellectual Property or material Parent Licensed Intellectual Property, (C) fail to diligently prosecute Parent’s and its Subsidiaries’ material patent applications, or (D) fail to exercise a right of renewal or extension under any Parent Material License;
(e) (i) enter into any Contract or arrangement that materially limits or otherwise materially restricts Parent or any of its Subsidiaries or any of their respective affiliates or any successor thereto from engaging or competing in any line of business or in any geographic area, or (ii) make any capital expenditure or expenditures, including leases and in-bound licenses (other than capital expenditures that are not, in the aggregate, in excess of $10,000,000 and (B) capital expenditures for unbudgeted repairs and maintenance in the ordinary course of business consistent with past practice, );
(Bf) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, except for indebtedness for borrowed money incurred by the Parent or any of its Subsidiaries in the ordinary course of business consistent with past practice pursuant to the terms of a Parent Material Contract, (C) terminate, cancel or request any material change in, or agree to any material change in, any Company Material Contract other than as arising in the ordinary course of business, make any material Tax election or (D) settle or compromise any material Tax liability or refund, or change any annual Tax accounting period or material method of Tax accounting, file any material amendment to a Tax Return, enter into any closing agreement relating to any material Tax, surrender any right to claim a material Tax refund, or amend consent to any contractextension or waiver of the statute of limitations period applicable to any material Tax claim or assessment, agreementin each case, commitment or arrangement that, if fully performed, would not be permitted under this Section 5.1(b)(v)other than as required by Law;
(vig) except take, or agree to take, any action that would prevent the Merger from qualifying as may be required by contractual commitments or corporate policies a reorganization with respect to employee severance or termination pay in existence on the date meaning of this Agreement as disclosed in Section 4.11(b368(a) of the Parent Disclosure Memorandum: or in the ordinary course of business consistent with past practice: (A) materially increase the compensation or benefits payable or to become payable to its directors, officers or employees; (B) grant any rights to severance or termination pay to, or amend or enter into any new Parent Benefit Plan, except to the extent required by applicable Law; or (C) amend or waive any performance or vesting criteria or accelerate the vesting, exercisability or funding under any Parent Benefit Plan (except to the extent required by the terms of any such Parent Benefit Plan as of the date of this Agreement)Code;
(vii) (A) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, contingent or otherwise), except in the ordinary course of business consistent with past practice and in accordance with their terms, (B) accelerate or delay collection of any material notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business consistent with past practice, or (C) delay or accelerate payment of any material account payable in advance of its due date or the date such liability would have been paid in the ordinary course of business consistent with past practice;
(viii) make any material change in accounting policies or procedures, other than in the ordinary course of business consistent with past practice or except as required by GAAP or by a Governmental Entity;
(ixh) waive, release, assign, settle or compromise any material claims, or any material litigation or arbitration, except in the ordinary course of business;
(x) make any material Tax election, settle or compromise any material liability for Taxes, amend any material Tax Return or file any refund for any material amount of Taxes; provided, that the Parent shall promptly provide to the Company a copy of any such amended Tax Return or filing for any refund;
(xii) modify, amend or terminate, or waive, release or assign any material rights or claims with respect to any confidentiality or standstill agreement to which the Parent is a partyparty and which relates to a business combination or other similar extraordinary transaction;
(xiij) knowingly act in a manner take any action to render inapplicable, or to exempt any third Person from, (i) the provisions of Section 203 of the DGCL, or (ii) any other state takeover or similar Law or state Law that purports to limit or restrict business combinations or the ability to acquire or vote shares;
(k) take any action that is intended or would reasonably be expected to materially delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VI not being satisfied, except as otherwise permitted by this Agreement or required by applicable Law or any judicial or regulatory authority; or
(xiiil) agree, authorize or enter into any agreement or otherwise make any commitment to do take any of the foregoingforegoing actions.
Appears in 1 contract
Samples: Merger Agreement (Inamed Corp)
Conduct of Business by Parent Pending the Closing. The Except for matters set forth in Section 6.02 of the Parent agrees thatDisclosure Letter or otherwise expressly permitted or contemplated by this Agreement (or as required by applicable Law or the regulations or requirements of any stock exchange or regulatory organization applicable to Parent), between from the date of this Agreement and to the Effective Time, except as set forth in Section 5.1(b) of the Parent Disclosure Memorandum or as specifically permitted by any other provision of this Agreement, unless the Company shall otherwise agree in writing, the Parent willshall, and will shall cause each of its Subsidiaries to, will conduct its operations only business in the ordinary and usual course of business consistent with past practice. Without In addition, and without limiting the generality of the foregoing, and as an extension thereof, except as for matters set forth in Section 5.1(b) 6.02 of the Parent Disclosure Memorandum Letter or as specifically otherwise expressly permitted by any other provision of this Agreement, from the date of this Agreement to the Effective Time, Parent shall not, and shall not permits any of its Subsidiaries to (unless required by applicable LawLaw or the regulations or requirements of any stock exchange or regulatory organization applicable to Parent), between the date and shall not permit any of this Agreement and the Effective Timeits Subsidiaries to, directly or indirectly, do, or agree to do, do any of the following without the prior written consent of the Company, which consent shall not be unreasonably withheld or delayed:
(a) (i) amend or otherwise change the Parent Certificate propose to amend Parent's certificate of incorporation or Parent Bylaws;
bylaws or similar governing documents, (ii) declare, set aside or pay any dividend or distribution payable in cash or otherwise (other than (A) issuestock dividends or distributions for which an appropriate adjustment is effected pursuant to Section 1.01(g) or 3.01(e), sell, pledge, dispose of, grant, transfer, encumber(B) quarterly cash dividends paid to stockholders of Parent in amounts consistent with past practice and (C) the payment of dividends or distributions to Parent or any of its Subsidiaries by a Subsidiary of Parent), or authorize the issuance(iii) redeem, salepurchase, pledge, disposition, grant, transfer, acquire or encumbrance of offer to purchase or acquire any shares of its capital stock of, or other Equity Interests in, the Parent of any class, or securities convertible or exchangeable or exercisable for any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by contract right), of the Parent, other than the issuance of Parent Common Stock upon the exercise of Parent Options outstanding as of the date hereof in accordance with their terms, the issuance of Parent Common Stock upon the exercise of Parent Warrants outstanding as of the date hereof in accordance with their terms or the issuance of Parent Options in accordance with the ordinary course of the Parent’s business, or (B) sell, pledge, dispose of, transfer, lease, license, guarantee or encumber, or authorize the sale, pledge, disposition, transfer, lease, license, guarantee or encumbrance of, any material property or assets (including Parent Material Intellectual Property) of the Parent, except pursuant to existing Contracts or commitments or the sale or purchase of goods or services in the ordinary course of business consistent with past practice, or enter into any commitment or transaction outside the ordinary course of business consistent with past practice;
(iii) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or enter any security convertible into any agreement with respect to the voting of its capital stock;
(iv) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of exchangeable for its capital stock, or (iv) merge or consolidate with any Person or acquire any material business of any Person (other Equity Interests or other securities;
(v) (A) acquire (including, without limitation, by than a merger, consolidation, consolidation or acquisition among wholly-owned Subsidiaries of stock the Company or assets) any interest a merger consolidation or acquisition involving solely the Company and its wholly-owned Subsidiaries), in any person or any division thereof or any assets, other than acquisitions of inventory or other assets in the ordinary course of business consistent with past practice, (B) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, except for indebtedness for borrowed money incurred by the Parent or any of its Subsidiaries in the ordinary course of business consistent with past practice pursuant to the terms of a Parent Material Contract, (C) terminate, cancel or request any material change in, or agree to any material change in, any Company Material Contract other than as arising in the ordinary course of business, or (D) enter into or amend any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 5.1(b)(v);
(vi) except as may be required by contractual commitments or corporate policies each case with respect to employee severance or termination pay in existence on the date of this Agreement as disclosed in Section 4.11(b) of the Parent Disclosure Memorandum: or in the ordinary course of business consistent with past practice: clause (A) materially increase the compensation or benefits payable or to become payable to its directors, officers or employees; (B) grant any rights to severance or termination pay to, or amend or enter into any new Parent Benefit Plan, except to the extent required by applicable Law; or (C) amend or waive any performance or vesting criteria or accelerate the vesting, exercisability or funding under any Parent Benefit Plan (except to the extent required by the terms of any such Parent Benefit Plan as of the date of this Agreement);
(vii) (A) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, contingent or otherwiseiv), except in the ordinary course of business consistent with past practice and in accordance with their terms, (B) accelerate or delay collection of any material notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same if such action would have been collected in the ordinary course of business consistent with past practice, or (C) delay or accelerate payment of any material account payable in advance of its due date or the date such liability would have been paid in the ordinary course of business consistent with past practice;
(viii) make any material change in accounting policies or procedures, other than in the ordinary course of business consistent with past practice or except as required by GAAP or by a Governmental Entity;
(ix) waive, release, assign, settle or compromise any material claims, or any material litigation or arbitration;
(x) make any material Tax election, settle or compromise any material liability for Taxes, amend any material Tax Return or file any refund for any material amount of Taxes; provided, that the Parent shall promptly provide be reasonably likely to the Company a copy of any such amended Tax Return or filing for any refund;
(xi) modify, amend or terminate, or waive, release or assign any material rights or claims with respect to any confidentiality or standstill agreement to which the Parent is a party;
(xii) knowingly act in a manner intended or reasonably expected to materially delay the consummation of the Merger Offer;
(b) take any action or omit to take any action that is intended or would reasonably be expected to result in any of the conditions to the Merger Offer set forth in Annex A or the conditions to the Merger in Article VI VII not being satisfied, except as otherwise permitted by this Agreement or required by applicable Law or ;
(c) take any judicial or regulatory authorityaction that would result in a failure to maintain the trading of the Parent Stock on the NYSE; or
(xiiid) agree, authorize or enter into any agreement or otherwise make any commitment to do take any of the foregoing actions. Notwithstanding the foregoing, Parent shall be entitled to (a) repurchase, retire or refinance outstanding indebtedness or debt securities and (b) enter into negotiations, discussions and Contracts relating to, and may consummate, acquisitions of other Persons (regardless of whether accomplished through a merger, stock purchase, asset purchase, recapitalization or other transaction, and regardless of the method or source of financing for such acquisition), so long as (i) the fair market value of the total consideration (including license, royalty or other fees) does not exceed $500,000,000 individually, (ii) Parent does not issue in excess of 20% of the then outstanding Parent Stock as consideration in any such transaction and (iii) the negotiation or consummation of any such acquisition is not reasonably likely to materially delay or prevent the completion of the Offer or the Merger.
Appears in 1 contract
Samples: Merger Agreement (Inamed Corp)
Conduct of Business by Parent Pending the Closing. The Parent agrees that, between the date Agreement Date and continuing until the earlier of the termination of this Agreement and pursuant to its terms or the Effective Time, except as set forth in Section 5.1(b) 6.1 of the Parent Disclosure Memorandum Schedule or as specifically permitted by any other provision of this Agreement, unless authorized and previously approved in writing by the Company shall otherwise agree in writingmajority of the members of the Operating Committee, the Parent will, and will cause each of its Subsidiaries to, will to conduct its operations only in the ordinary and usual course of business consistent with past practice. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1(b) 6.1 of the Parent Disclosure Memorandum Schedule or as specifically permitted by any other provision of this Agreement, the Parent shall not, and shall not permits any of its Subsidiaries to (unless required by applicable Law), and shall not permit any of its Subsidiaries to, between the date Agreement Date and continuing until the earlier of the termination of this Agreement and pursuant to its terms or the Effective Time, directly or indirectly, do, or agree to do, any of the following without unless authorized and previously approved in writing by the prior written consent majority of the Companymembers of the Operating Committee:
(ia) amend or otherwise change its certificate of incorporation or by-laws or equivalent organizational documents (except, as applicable, as contemplated by the Parent Certificate or Parent BylawsReverse Stock Split);
(iib) (A) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of any shares of capital stock of, or other Equity Interests in, the Parent or any of its Subsidiaries of any class, or securities convertible or exchangeable or exercisable for any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by contract right), of the ParentParent or any of its Subsidiaries, other than the (i) issuance of Parent Common Stock upon the exercise of Parent Options outstanding as of the date hereof in accordance with their termsterms or (ii) the grant of options at the Closing to such persons, the issuance of Parent Common Stock upon the exercise of Parent Warrants outstanding on such terms and in such amounts as set forth in Section 6.1(b)(A)(ii) of the date hereof in accordance with their terms or the issuance of Parent Options in accordance with the ordinary course of the Parent’s businessDisclosure Schedule, or (B) sell, pledge, dispose of, transfer, lease, license, guarantee or encumber, or authorize the sale, pledge, disposition, transfer, lease, license, guarantee or encumbrance of, any material property or assets (including Parent Material including, without limitation, Intellectual PropertyProperty and Intellectual Property related to Parent’s Zingo and Adlea programs) of the ParentParent or any of its Subsidiaries, except pursuant to existing Contracts or commitments or the sale or purchase of goods or services in the ordinary course of business consistent with past practice, or enter into any commitment or transaction outside the ordinary course of business consistent with past practicecommitments;
(iiic) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock (other than dividends paid by a wholly-owned Subsidiary of Parent to Parent or to any other wholly-owned Subsidiary of Parent) or enter into any agreement with respect to the voting of its capital stock;
(ivd) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, other Equity Interests or other securitiessecurities (other than pursuant to the Reverse Stock Split or in connection with the termination of an employee pursuant to existing repurchase rights);
(ve) (A) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest in any person or any division thereof or any assets, other than acquisitions of inventory or other assets in the ordinary course of business consistent with past practice, (B) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, except for indebtedness person (other than a wholly-owned Subsidiary of Parent) for borrowed money incurred by the Parent or any of its Subsidiaries (other than ordinary course trade accounts payable, which shall not be material in the ordinary course of business consistent with past practice pursuant to the terms of a Parent Material Contractaggregate), (C) terminate, cancel or request any material change in, or agree to any material change in, any Company Parent Material Contract other than as arising in the ordinary course of businessContract, or (D) enter into or amend any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 5.1(b)(v6.1(e);
(vif) except as may be required by contractual commitments or corporate policies with respect to employee severance or termination pay in existence on the date of this Agreement as disclosed in Section 4.11(b) of the Parent Disclosure Memorandum: or in the ordinary course of business consistent with past practice: (A) materially increase the compensation or benefits payable or to become payable to its directors, officers or employees; (B) grant or modify any rights to severance change-in-control or termination pay to, or amend or enter into any new employment or severance agreement with, any director, officer or other employee of Parent Benefit Planor any of its Subsidiaries, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee, except to the extent required by applicable Law; or (C) take any affirmative action to amend or waive any performance or vesting criteria or criteria, accelerate the vesting, exercisability or funding or exercise any discretion under any Parent Benefit Plan (except to the extent required by the terms of any such Parent Benefit Plan as of the date of this Agreement)Plan;
(viig) (A) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, contingent or otherwise), except in the ordinary course of business consistent with past practice and in accordance with their terms, provided that promptly following the Agreement Date, Parent shall agree upon a payment plan with respect to the subject matter of this Section 6.1(g) with the Operating Committee, (B) accelerate or delay collection of any material notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business consistent with past practice, or (C) delay or accelerate payment of any material account payable in advance of its due date or the date such liability would have been paid in the ordinary course of business consistent with past practice;
(viiih) make any material change in accounting policies or procedures, other than in the ordinary course of business consistent with past practice or except as required by GAAP or by a Governmental Entity;
(ixi) waive, release, assign, settle or compromise any material claims, or any material litigation or arbitration;
(xj) change its method of accounting, make any material Tax tax election, settle or compromise any material liability for Taxes, amend any material Tax Return or file any refund for any material amount of Taxes; provided, that the Parent shall promptly provide to the Company a copy of any such amended Tax Return or filing for any refund;
(xik) take, or agree to take, any action that would prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(l) modify, amend or terminate, or waive, release or assign any material rights or claims with respect to any confidentiality or standstill agreement to which the Parent is a party;
(xiim) knowingly act in a manner take any action that is intended or would reasonably be expected to materially delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VI VII not being satisfied, except as otherwise permitted by this Agreement or required by applicable Law or any judicial or regulatory authority; or
(xiiin) authorize or enter into any agreement or otherwise make any commitment to do any of the foregoing. Parent shall fully and promptly inform the Operating Committee of all discussions, negotiations or activities related to the license, sale, or potential license or sale, of any asset of Parent or its Subsidiaries, and shall promptly provide the Operating Committee copies of any written materials (including materials in electronic form or otherwise) received from any third party in connection with any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Anesiva, Inc.)
Conduct of Business by Parent Pending the Closing. The Parent agrees that, between the date of this Agreement and the Effective Time, except as set forth in Section 5.1(b) 5.1 of the Parent Disclosure Memorandum Schedule or as specifically permitted by any other provision of this Agreement, unless authorized and approved in writing by three-fourths of the Company shall otherwise agree in writingmembers of the Operating Committee, the Parent will, and will cause each of its Subsidiaries to, will to conduct its operations only in the ordinary and usual course of business consistent with past practice. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1(b) 5.1 of the Parent Disclosure Memorandum Schedule or as specifically permitted by any other provision of this Agreement, the Parent shall not, and shall not permits any of its Subsidiaries to (unless required by applicable Law), and shall not permit any of its Subsidiaries to, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following without the prior written consent unless authorized and approved in writing by three-fourths of the Companymembers of the Operating Committee:
(ia) amend or otherwise change its certificate of incorporation or by-laws or equivalent organizational documents (except, as applicable, as contemplated by the Parent Certificate or Parent BylawsReverse Stock Split);
(iib) (A) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of any shares of capital stock of, or other Equity Interests in, the Parent or any of its Subsidiaries of any class, or securities convertible or exchangeable or exercisable for any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by contract right), of the ParentParent or any of its Subsidiaries, other than (x) the issuance of Parent Common Stock upon the exercise of Parent Options outstanding as of the date hereof in accordance with their terms, terms and (y) the issuance grant of up to 100,000 Parent Common Stock upon the exercise of Parent Warrants outstanding as of the date hereof in accordance with their terms or the issuance of Parent Options in accordance with the ordinary course of the Parent’s businessOptions, or (B) sell, pledge, dispose of, transfer, lease, license, guarantee or encumber, or authorize the sale, pledge, disposition, transfer, lease, license, guarantee or encumbrance of, any material property or assets (including Parent Material Intellectual Property) of the ParentParent or any of its Subsidiaries, except pursuant to existing Contracts or commitments or the sale or purchase of goods or services in the ordinary course of business consistent with past practicecommitments, or enter into any commitment or transaction outside the ordinary course of business consistent with past practice;
(iiic) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock (other than dividends paid by a wholly-owned Subsidiary of Parent to Parent or to any other wholly-owned Subsidiary of Parent) or enter into any agreement with respect to the voting of its capital stock;
(ivd) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, other Equity Interests or other securitiessecurities (other than pursuant to the Reverse Stock Split or in connection with the termination of an employee pursuant to existing repurchase rights);
(ve) (A) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest in any person or any division thereof or any assets, other than acquisitions of inventory or other assets in the ordinary course of business consistent with past practice, (B) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, except for indebtedness person (other than a wholly-owned Subsidiary of Parent) for borrowed money incurred by the Parent or any of its Subsidiaries in the ordinary course of business consistent with past practice pursuant to the terms of a Parent Material Contractmoney, (C) terminate, cancel or request any material change in, or agree to any material change in, any Company Parent Material Contract other than as arising in the ordinary course of businessContract, or (D) enter into or amend any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 5.1(b)(v5.1(e);
(vif) except as may be required by contractual commitments or corporate policies with respect to employee severance or termination pay in existence on the date of this Agreement as disclosed in Section 4.11(b3.11(b) of the Parent Disclosure Memorandum: or in the ordinary course of business consistent with past practiceSchedule: (A) materially increase the compensation or benefits payable or to become payable to its directors, officers or employees; (B) grant any rights to severance or termination pay to, or amend or enter into any new employment or severance agreement with, any director, officer or other employee of Parent Benefit Planor any of its Subsidiaries, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee, except to the extent required by applicable Law; or (C) take any affirmative action to amend or waive any performance or vesting criteria or accelerate the vesting, exercisability or funding under any Parent Benefit Plan (except to the extent required by the terms of any such Parent Benefit Plan as of the date of this Agreement)Plan;
(viig) (A) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, contingent or otherwise), except in the ordinary course of business consistent with past practice and in accordance with their terms, (B) accelerate or delay collection of any material notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business consistent with past practice, or (C) delay or accelerate payment of any material account payable in advance of its due date or the date such liability would have been paid in the ordinary course of business consistent with past practice;
(viiih) make any material change in accounting policies or procedures, other than in the ordinary course of business consistent with past practice or except as required by GAAP or by a Governmental Entity;
(ixi) waive, release, assign, settle or compromise any material claims, or any material litigation or arbitration;
(xj) make any material Tax tax election, settle or compromise any material liability for Taxes, amend any material Tax Return or file any refund for any material amount of Taxes; provided, that the Parent shall promptly provide to the Company a copy of any such amended Tax Return or filing for any refund;
(xik) take, or agree to take, any action that would prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(l) modify, amend or terminate, or waive, release or assign any material rights or claims with respect to any confidentiality or standstill agreement to which the Parent is a party;
(xiim) knowingly act in a manner take any action that is intended or would reasonably be expected to materially delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VI not being satisfied, except as otherwise permitted by this Agreement or required by applicable Law or any judicial or regulatory authority; or
(xiiin) authorize or enter into any agreement or otherwise make any commitment to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Corgentech Inc)
Conduct of Business by Parent Pending the Closing. The Parent agrees that, between the date of this Agreement and the Effective Time, except as set forth in Section 5.1(b) 5.2 of the Parent Disclosure Memorandum Letter or as specifically permitted contemplated by any other provision of this Agreement, or unless the Company shall otherwise agree consent in writing, the Parent willshall, and will shall cause its Subsidiaries each Parent Subsidiary to, will use its commercially reasonable efforts to (x) maintain its existence in good standing under applicable Law, (y) subject to the restrictions set forth in this Section 5.2, conduct its operations only in the ordinary and usual course of business consistent with past practicepractice and (z) keep available the services of the current officers, key employees and key consultants of Parent and each Parent Subsidiary and to preserve the current relationships of Parent and the Parent Subsidiaries with their customers, suppliers and other persons with which Parent or any Parent Subsidiary has significant business relations, in each case as is reasonably necessary in order to preserve substantially intact its business organization. Without In addition, without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1(b) 5.2 of the Parent Disclosure Memorandum Letter or as specifically permitted contemplated by any other provision of this Agreement, the Parent shall not, not and shall not permits permit any of its Subsidiaries to (unless required by applicable LawLaw or the regulations or requirements of any stock exchange or regulatory organization applicable to Parent and its Subsidiaries), between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following without the prior written consent of the Company:
(ia) amend or otherwise change the Parent Certificate its certificate of incorporation or Parent Bylawsbylaws or equivalent organizational documents;
(ii) (Ab) issue, sell, pledge, dispose of, grant, transfer, encumber, transfer or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of encumber any shares of capital stock of, or other Equity Interests in, the Parent or any Parent Subsidiary of any class, or securities convertible or exchangeable or exercisable for any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, of Parent or any other ownership interest (includingParent Subsidiary, without limitation, any such interest represented by contract right), of the Parent, other than the issuance except that Parent may issue shares of Parent Common Stock pursuant to Parent’s Employee Stock Purchase Plan or upon the exercise of Parent Options outstanding as and may grant Parent Options in the ordinary course of the date hereof in accordance business consistent with their termspast practice;
(c) (i) sell, the issuance pledge, dispose of, transfer, lease, license or encumber (other than pursuant to Permitted Liens) any material property or assets (other than Parent Intellectual Property) of Parent Common Stock upon the exercise of or any Parent Warrants outstanding as of the date hereof in accordance with their terms Subsidiary, except (A) sales, pledges, dispositions, transfers, leases, licenses or the issuance of Parent Options encumbrances pursuant to and in accordance with the ordinary course terms of the Parent’s businessexisting Contracts, or (B) sales, pledges, dispositions, transfers, leases, licenses or encumbrances of property or assets by Parent or a Parent Subsidiary in the ordinary course of business; (ii) sell, pledge, dispose of, transfer, lease, license, guarantee abandon, fail to maintain or encumberencumber any Parent Intellectual Property, except sales, pledges, dispositions, transfers, leases, licenses, abandonments, failures to maintain or encumbrances in the ordinary course of business which will not materially impair the conduct of Parent’s business; (iii) enter into any Contract or series of related Contracts, or authorize the saleany amendment or series of related amendments of one or more Contracts, pledge, disposition, transfer, lease, license, guarantee or encumbrance of, any material property or assets (including Parent Material Intellectual Property) outside of the Parent, except pursuant to existing Contracts or commitments or the sale or purchase of goods or services in the ordinary course of business consistent with past practicepractice and involving aggregate receipts, payments or expenses (direct, contingent or otherwise) in excess of $500,000 in any fiscal quarter; or (iv) enter into any material commitment or transaction outside the ordinary course of business consistent with past practice;
(iiid) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its the capital stock of Parent or enter into any agreement with respect to the voting of its the capital stockstock of Parent;
(ive) (i) reclassify, combine, splitsplit or subdivide any of its capital stock or issue or authorize the issuance of any other securities in respect of, subdivide in lieu of, or in substitution for, shares of its capital stock, or (ii) redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, other Equity Interests or other securities;
(vf) (Ai) acquire incur any indebtedness for borrowed money (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest in any person or any division thereof or any assets, other than acquisitions of inventory or other assets debt incurred in the ordinary course of business consistent with past practice, (B) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, endorse or otherwise as an accommodation become responsible for, the obligations of any personperson (other than a wholly-owned Parent Subsidiary) for borrowed money, in each case except for indebtedness for borrowed money incurred by under Parent’s existing credit facilities or replacement credit facilities in an aggregate amount not larger than Parent’s existing credit facilities, (ii) terminate, cancel, or agree to any material and adverse change in, any Parent Material Contract, (iii) make or authorize any capital expenditure materially in excess of Parent’s budget as disclosed to the Company prior to the date hereof, (iv) make or authorize any material loan to any person (other than a Parent Subsidiary) outside the ordinary course of business and consistent with past practice or (v) enter into any agreement or arrangement that limits or otherwise restricts Parent or any of its Subsidiaries or any of their respective Affiliates or any successor thereto, or that could, after the Effective Time, limit or restrict the Surviving Corporation or any of its Affiliates or any successor thereto, from engaging or competing in the ordinary course any line of business consistent with past practice pursuant to the terms of a Parent Material Contract, (C) terminate, cancel or request in any material change in, or agree to any material change in, any Company Material Contract other than as arising in the ordinary course of business, or (D) enter into or amend any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 5.1(b)(v)geographic area;
(vig) except as may be required by contractual commitments or corporate policies with respect to employee severance or termination pay in existence on the date of this Agreement as disclosed in Section 4.11(b) 4.8 of the Parent Disclosure Memorandum: or in the ordinary course of business consistent with past practice: Letter, (Ai) materially increase the compensation or benefits payable or to become payable to its directors, officers or employees; employees (Bexcept for increases in accordance with past practices and methodologies in salaries or wages of officers and/or employees of Parent or any Parent Subsidiary), (ii) grant any rights to severance or termination pay to, or amend or enter into any new employment or severance agreement with, any director, officer or other employee of Parent Benefit Planor any Parent Subsidiary (other than with respect to newly appointed directors and newly hired employees in accordance with past practices of Parent or any Parent Subsidiary, provided that any such agreements shall not provide for the payment of any severance or termination pay as a result of the execution of this Agreement or the consummation of the transactions contemplated hereby), (iii) establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer, consultant or employee outside of the ordinary course of business consistent with past practice, except to the extent required by applicable Law; , (iv) close any facility or engage in any mass layoff that could implicate the WARN Act, or (Cv) take any affirmative action to amend or waive any performance or vesting criteria or accelerate the vesting, exercisability or funding under any Parent Benefit Plan (except to the extent required by the terms of any such or Parent Benefit Plan as of the date of this Agreement)Option;
(vii) (A) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, contingent or otherwise), except in the ordinary course of business consistent with past practice and in accordance with their terms, (B) accelerate or delay collection of any material notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business consistent with past practice, or (C) delay or accelerate payment of any material account payable in advance of its due date or the date such liability would have been paid in the ordinary course of business consistent with past practice;
(viiih) make any material change in accounting policies or procedures, other than in the ordinary course of business consistent with past practice or except as required by GAAP or by a Governmental Entity;
(ixi) waiveexcept in the ordinary course of business consistent with past practice, release, assign, make any material Tax election or settle or compromise any material claimsTax liability or refund, change any annual Tax accounting period or material method of Tax accounting, file any material litigation amendment to a Tax Return, enter into any closing agreement relating to any material Tax, surrender any right to claim a material Tax refund or arbitrationconsent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment;
(x) make any material Tax election, settle or compromise any material liability for Taxes, amend any material Tax Return or file any refund for any material amount of Taxes; provided, that the Parent shall promptly provide to the Company a copy of any such amended Tax Return or filing for any refund;
(xij) modify, amend or terminate, or waive, release or assign any material rights or claims with respect to any confidentiality or or, except as necessary in connection with the exercise of Parent’s rights under Section 6.4, standstill agreement to which the Parent is a partyparty and which relates to a business combination involving Parent;
(xiik) knowingly act write up, write down or write off the book value of any assets, individually or in the aggregate, for Parent and the Parent Subsidiaries taken as a manner intended whole, other than in the ordinary course of business or except as required by GAAP;
(l) except as necessary in connection with the exercise of Parent’s rights under Section 6.4, take any action to render inapplicable, or to exempt any third party from, any Takeover Law;
(m) acquire, or agree to acquire, from any person any assets (not including Intellectual Property), operations, business or securities or engage in, or agree to engage in, any merger, consolidation or other business combination with any person, except in connection with capital expenditures permitted hereunder and except for acquisitions of inventory and other assets (not including Intellectual Property) in the ordinary course of business or, which, individually or in the aggregate, would not be reasonably expected to materially result in the failure to satisfy, or material delay the consummation in satisfying any of the conditions to the Merger set forth in Article 7;
(n) take any action that is intended or would reasonably be expected to result in any of the conditions to the Merger set forth in Article VI 7 not being satisfied;
(o) acquire, or agree to acquire, from any person, any Intellectual Property, except as otherwise permitted by this Agreement or required by applicable Law or any judicial or regulatory authority; orin the ordinary course of business consistent with past practice (including in size and nature);
(xiiip) except as necessary in connection with the exercise of Parent’s rights under Section 6.4, amend or otherwise change the Parent Rights Agreement;
(q) without the Company’s prior written consent, which consent shall not be unreasonably withheld, enter into any confidentiality or similar obligations which could prohibit Parent from providing or disclosing any agreement, contract or other arrangement to the Company;
(r) authorize or enter into any agreement or otherwise make any commitment to do any of the foregoing; or
(s) cause or permit to expire without renewal, fail to renew or make any material modification to any material insurance policy to which Parent or any Parent Subsidiary is a party.
Appears in 1 contract
Conduct of Business by Parent Pending the Closing. The Parent agrees that, between the date Agreement Date and continuing until the earlier of the termination of this Agreement and pursuant to its terms or the Effective Time, except as set forth in Section 5.1(b) 5.1 of the Parent Disclosure Memorandum Schedule or as specifically permitted by any other provision of this Agreement, unless previously approved in writing by the Company shall otherwise agree in writingCompany, the Parent will, and will cause each of its Subsidiaries to, will to conduct its operations only in the ordinary and usual course of business consistent with past practice. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1(b) 5.1 of the Parent Disclosure Memorandum Schedule or as specifically permitted by any other provision of this Agreement, the Parent shall not, and shall not permits any of its Subsidiaries to (unless required by applicable Law), and shall not permit any of its Subsidiaries to, between the date Agreement Date and continuing until the earlier of the termination of this Agreement and pursuant to its terms or the Effective Time, directly or indirectly, do, or agree to do, any of the following without the prior written consent of unless previously approved in writing by the Company:
(ia) amend or otherwise change the Parent Certificate its certificate of incorporation or Parent Bylawsby-laws or equivalent organizational documents;
(ii) (A) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of any shares of capital stock of, or other Equity Interests in, the Parent of any class, or securities convertible or exchangeable or exercisable for any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by contract right), of the Parent, other than the issuance of Parent Common Stock upon the exercise of Parent Options outstanding as of the date hereof in accordance with their terms, the issuance of Parent Common Stock upon the exercise of Parent Warrants outstanding as of the date hereof in accordance with their terms or the issuance of Parent Options in accordance with the ordinary course of the Parent’s business, or (Bb) sell, pledge, dispose of, transfer, lease, license, guarantee or encumber, or authorize the sale, pledge, disposition, transfer, lease, license, guarantee or encumbrance of, any material property or assets (including Parent Material Intellectual Property) of the ParentParent or any of its Subsidiaries, except pursuant to existing Contracts or commitments or the sale or purchase of goods or services in the ordinary course of business consistent with past practicecommitments, or enter into any commitment or transaction outside the ordinary course of business consistent with past practice;
(iiic) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock (other than dividends paid by a wholly-owned Subsidiary of Parent to Parent or to any other wholly-owned Subsidiary of Parent) or enter into any agreement with respect to the voting of its capital stockstock or grant any Parent Options;
(ivd) issue, grant, sell, reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, other Equity Interests or other securitiessecurities (other than in connection with the termination of an employee pursuant to existing repurchase rights or the exercise any currently outstanding options or warrants);
(v) (Ae) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest in any person or any division thereof or any assets, other than acquisitions of inventory or other assets in the ordinary course of business consistent with past practice, (B) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, except for indebtedness for borrowed money incurred by the Parent or any of its Subsidiaries in the ordinary course of business consistent with past practice pursuant to the terms of a Parent Material Contract, (C) terminate, cancel or request any material change in, or agree to any material change in, any Company Material Contract other than as arising in the ordinary course of business, or (D) enter into or amend any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 5.1(b)(v);
(vif) except as may be required by contractual commitments or corporate policies with respect to employee severance or termination pay in existence on the date of this Agreement Date as disclosed in Section 4.11(b3.11(b) of the Parent Disclosure Memorandum: or in the ordinary course of business consistent with past practiceSchedule: (A) materially increase the compensation or benefits payable or to become payable to its directors, officers or employees; (B) grant or modify any rights to severance change-in-control or termination pay to, or amend or enter into any new employment or severance agreement with, any director, officer or other employee of Parent Benefit Planor any of its Subsidiaries, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee, except to the extent required by applicable Law; or (C) take any affirmative action to amend or waive any performance or vesting criteria or criteria, accelerate the vesting, exercisability or funding or exercise any discretion under any Parent Benefit Plan (except to the extent required by the terms of any such Parent Benefit Plan as of the date of this Agreement)Plan;
(viig) (A) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, contingent or otherwise), except in the ordinary course of business consistent with past practice and in accordance with their termspractice, (B) accelerate or delay collection of any material notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business consistent with past practice, or (C) delay or accelerate payment of any material account payable in advance of its due date or the date such liability would have been paid in the ordinary course of business consistent with past practice;
(viiih) make any material change in accounting policies or procedures, other than in the ordinary course of business consistent with past practice or except as required by GAAP or by a Governmental Entity;
(ixi) waive, release, assign, settle or compromise any material claims, or any material litigation or arbitration;
(xj) change its method of accounting, make any material Tax tax election, settle or compromise any material liability for Taxes, amend any material Tax Return or file any refund for any a material amount of Taxes; provided, that the Parent shall promptly provide to the Company a copy of any such amended Tax Return or filing for any refund;
(xik) take, or agree to take, any action that would prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(l) modify, amend or terminate, or waive, release or assign any material rights or claims with respect to any confidentiality or standstill agreement to which the Parent is a party;
(xiim) knowingly act in a manner take any action that is intended or would reasonably be expected to materially delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VI not being satisfiedsatisfied except to the extent contemplated by, except as otherwise permitted by and in accordance with, Section 5.5 of this Agreement or required by applicable Law or any judicial or regulatory authorityAgreement; or
(xiiin) authorize or enter into any agreement or otherwise make any commitment to do any of the foregoing. Notwithstanding the foregoing, Parent shall be able to issue and sell additional shares of Parent Common Stock as well as pay costs and fees associated with raising equity prior to Closing in order to comply with the requirements of Section 6.3(e) of this Agreement.
Appears in 1 contract
Conduct of Business by Parent Pending the Closing. The Parent agrees that, between Prior to the date of this Agreement and the Effective Time, except as set forth in Section 5.1(b) of the Parent Disclosure Memorandum or as specifically permitted by any other provision of this AgreementClosing Date, unless the Company shall otherwise agree in writing, the writing or as otherwise contemplated by this Agreement:
(a) The Parent will, and will cause its Subsidiaries to, will conduct its operations Legacy Business (defined below) shall be conducted only in the ordinary and usual course course;
(b) Parent shall not (i) directly or indirectly redeem, purchase or otherwise acquire or agree to redeem, purchase or otherwise acquire any shares of business consistent its capital stock; (ii) amend its charter or Bylaws other than to effectuate the transactions contemplated hereby; or (iii) split, combine or reclassify its capital stock or declare, set aside or pay any dividend payable in cash, stock or property or make any distribution with past practice. Without limiting the foregoing, and respect to such stock;
(c) Except as an extension thereof, except as set forth in Section 5.1(b) of the Parent Disclosure Memorandum or as specifically permitted contemplated by any other provision of this Agreement, the Parent shall not, and shall not permits any of its Subsidiaries to (unless required by applicable Law), between the date of this Agreement and the Effective Time, directly or indirectly, do, i) issue or agree to do, issue any of the following without the prior written consent of the Company:
(i) amend or otherwise change the Parent Certificate or Parent Bylaws;
(ii) (A) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of any additional shares of capital stock of, or other Equity Interests in, the Parent of any class, or securities convertible or exchangeable or exercisable for any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such of, its capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by contract right), of the Parent, other than to effectuate the issuance of Parent Common Stock upon the exercise of Parent Options outstanding as of the date hereof in accordance with their terms, the issuance of Parent Common Stock upon the exercise of Parent Warrants outstanding as of the date hereof in accordance with their terms transactions contemplated or the issuance of Parent Options in accordance with the ordinary course of the Parent’s business, or (B) sell, pledge, dispose of, transfer, lease, license, guarantee or encumber, or authorize the sale, pledge, disposition, transfer, lease, license, guarantee or encumbrance of, any material property or assets (including Parent Material Intellectual Property) of the Parent, except permitted pursuant to existing Contracts this Agreement; (ii) acquire or commitments or the sale or purchase dispose of goods or services any assets other than in the ordinary course of business consistent (except for the disposition contemplated in connection with past practice, the subject matter of Section 7.2(a) hereof); (iii) incur additional Indebtedness or any other liabilities or enter into any commitment or other transaction outside the ordinary course of business consistent with past practice;
(iii) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or enter into any agreement with respect to the voting of its capital stock;
(iv) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, other Equity Interests or other securities;
(v) (A) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest in any person or any division thereof or any assets, other than acquisitions of inventory or other assets in the ordinary course of business consistent with past practice, (B) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, except for indebtedness for borrowed money incurred by the Parent or any of its Subsidiaries in the ordinary course of business consistent with past practice pursuant to the terms of a Parent Material Contract, (C) terminate, cancel or request any material change in, or agree to any material change in, any Company Material Contract other than as arising in the ordinary course of business, or ; (Div) enter into or amend any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 5.1(b)(v);
(vi) except as may be required by contractual commitments or corporate policies with respect to employee severance or termination pay in existence on the date of this Agreement as disclosed in Section 4.11(b) any of the Parent Disclosure Memorandum: foregoing or in the ordinary course of business consistent with past practice: (Av) materially increase the compensation enter into any contract, agreement, commitment or benefits payable or arrangement to become payable to its directorsdissolve, officers or employees; (B) grant any rights to severance or termination pay tomerge, or amend consolidate or enter into any new other material business contract or enter into any negotiations in connection therewith;
(d) Parent Benefit Planwill not, except to nor will it authorize any director or authorize or permit any officer or employee or any attorney, accountant or other representative retained by them to, make, solicit, encourage any inquiries with respect to, or engage in any negotiations concerning, any Acquisition Proposal (defined below). Parent will promptly advise the extent required by applicable Law; or (C) amend or waive any performance or vesting criteria or accelerate the vesting, exercisability or funding under any Parent Benefit Plan (except to the extent required by the terms Company orally and in writing of any such inquiries or proposals (or requests for information) and the substance thereof. “Acquisition Proposal” shall mean any proposal for a merger or other business combination involving Parent Benefit Plan as of the date of this Agreement);
(vii) (A) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, contingent or otherwise), except in the ordinary course of business consistent with past practice and in accordance with their terms, (B) accelerate or delay collection of any material notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business consistent with past practice, or (C) delay or accelerate payment of any material account payable in advance of its due date Affiliates or for the date such liability would have been paid acquisition of a substantial equity interest in the ordinary course Parent or any of business consistent with past practice;
(viii) make any material change in accounting policies or procedures, other than in the ordinary course of business consistent with past practice or except as required by GAAP or by a Governmental Entity;
(ix) waive, release, assign, settle or compromise any material claims, its Affiliates or any material litigation or arbitration;
(x) make any material Tax election, settle or compromise any material liability for Taxes, amend any material Tax Return or file any refund for any material amount of Taxes; provided, that the Parent shall promptly provide to the Company a copy assets of any such amended Tax Return of them other than as contemplated by this Agreement. Parent will immediately cease and cause to be terminated any existing activities, discussions or filing for negotiations with any refund;
(xi) modify, amend or terminate, or waive, release or assign any material rights or claims Person conducted heretofore with respect to any confidentiality or standstill agreement to which the Parent is a party;
(xii) knowingly act in a manner intended or reasonably expected to materially delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VI not being satisfied, except as otherwise permitted by this Agreement or required by applicable Law or any judicial or regulatory authority; or
(xiii) authorize or enter into any agreement or otherwise make any commitment to do any of the foregoing.; and
Appears in 1 contract
Conduct of Business by Parent Pending the Closing. The Parent agrees that, between during the date of this Agreement and the Effective TimeInterim Period, except as set forth in Section 5.1(b) 5.2 of the Parent Disclosure Memorandum Letter or as specifically permitted or required by any other provision of this Agreement, unless the Company shall otherwise agree in writing, the Parent will, and will cause each of its Subsidiaries to, will (a) conduct its operations only in the ordinary and usual course of business consistent with past practice. Without limiting practice and (b) use commercially reasonable efforts to keep available the foregoing, and as an extension thereof, except as set forth in Section 5.1(b) services of the current officers and Key Employees of Parent Disclosure Memorandum and to preserve the current relationships of Parent and each of its Subsidiaries with such of the customers, suppliers and other persons with which Parent or any of its Subsidiaries has significant business relations as is reasonably necessary to preserve substantially intact its business organization. Except as specifically permitted or required by any other provision of this Agreement, the Parent shall not, and shall not permits any of its Subsidiaries to (unless required by applicable LawLaw or any NASDAQ regulations applicable to the Parent), between the date of this the Initial Merger Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following following, without the prior written consent of the Company:
(ia) amend or otherwise change the Parent Certificate its certificate of incorporation or Parent Bylawsby-laws or equivalent organizational documents;
(iib) (Ai) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of any shares of capital stock of, or other Equity Interests Capital Securities in, the Parent or any of its Subsidiaries (whether by merger, consolidation or otherwise) of any class, or securities convertible or exchangeable or exercisable for any shares of such capital stock or other Equity InterestsCapital Securities, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests Capital Securities or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by contract right), of the ParentParent or any of its Subsidiaries, other than the issuance of additional (A) options granted to non-executive employees pursuant to any equity incentive plan of Parent, or any other plan, agreement, or arrangement of Parent in existence on the date of the Initial Merger Agreement (the "Parent Stock Option Plans") in a manner consistent with past practice, (B) warrants to purchase shares of Parent Common Stock contemplated by agreements existing as of the date of the Initial Merger Agreement, and (C) shares of Parent Common Stock issuable upon the exercise of options to purchase Parent Options Common Stock and/or warrants to purchase shares of capital stock of Parent outstanding as of the date hereof of the Initial Merger Agreement in accordance with their terms, the issuance of Parent Common Stock upon the exercise of Parent Warrants outstanding (ii) except as set forth in Section 5.2 of the date hereof Parent Disclosure Letter accelerate, amend or change the period of exercisability of options or other equity incentive awards granted under any Parent Stock Plan or authorize cash payments in accordance with their terms exchange for any options or the issuance of other equity incentive award granted under any Parent Options in accordance with the ordinary course of the Parent’s business, Stock Plan; or (Biii) sell, pledge, dispose of, transfer, lease, license, guarantee or encumber, or authorize the sale, pledge, disposition, transfer, lease, license, guarantee or encumbrance of, any material property or assets (including Parent Material Intellectual Property) of the ParentParent or any of its Subsidiaries, including through merger, consolidation or otherwise, with a value in excess of $100,000, except pursuant to existing Contracts contracts or commitments or the sale or purchase of goods or services in the ordinary course of business consistent with past practice, or enter into any commitment or transaction outside the ordinary course of business consistent with past practice;.
(iiic) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock (other than (i) dividends paid by a wholly owned Subsidiary of the Parent to the Parent or to any other wholly owned Subsidiary of the Parent, (ii) issuance of additional warrants to purchase shares of Parent Common Stock contemplated by agreements existing as of the date of the Initial Merger Agreement or (iii) to effect a reverse stock split upon the determination of the Parent Board to do so) or enter into any agreement with respect to the voting of its capital stock;
(ivd) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, other Equity Interests Capital Securities or other securitiessecurities (other than to effect a reverse stock split upon the determination of the Parent Board to do so);
(v) (Ai) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest in any person or any division thereof or any assets, other than acquisitions of inventory or other assets in the ordinary course of business consistent with past practice, ; (Bii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any personperson (other than a wholly owned Subsidiary of Parent) for borrowed money, except for to the extent that the aggregate indebtedness for borrowed money incurred by of Parent and its Subsidiaries at any time outstanding does not exceed $26,500,000; (iii) refinance or otherwise replace the Existing Parent Indebtedness except in connection with the Parent Financing or any with the consent of its Subsidiaries in the ordinary course of business consistent with past practice pursuant to the terms of a Parent Material ContractCompany, which consent shall not be unreasonably withheld, (Civ) terminate, cancel or request any material change in, or agree to any material change in, any Company Material Contract contract that is reasonably necessary for the conduct of Parent's business as it is currently conducted other than as arising in the ordinary course of businessbusiness consistent with past practice; (v) make or authorize any capital expenditure in excess of the Parent 2005 Budget, other than capital expenditures that are not individually in excess of $60,000, or in the aggregate in excess of $200,000 per month, in the aggregate, for the Parent and its Subsidiaries taken as a whole; or (Dvi) with respect to clauses (i) and (ii) above, enter into or amend any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 5.1(b)(v)5.2.5;
(vif) except as may be required by contractual commitments or corporate policies with respect to employee severance or termination pay in existence on the date of this Agreement as disclosed in Section 4.11(b) 5.2 of the Parent Disclosure Memorandum: or in the ordinary course of business consistent with past practiceLetter: (Ai) materially increase the compensation or benefits payable or to become payable to its directors, officers officers, employees or employeesconsultants except in connection with annual adjustments consistent with past practices; (Bii) grant any rights to severance or termination pay to, or amend or enter into any new agreement to provide severance benefits with, any director, officer or other employee or consultant of the Parent Benefit Planor any of its Subsidiaries, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer, employee or consultant, except to the extent as required by applicable Law; or (Ciii) take any affirmative action to amend or waive any performance or vesting criteria or accelerate the vesting, exercisability or funding under any Parent Benefit Plan (except to the extent required by the terms of any such Parent Benefit Plan as of the date of this Agreement);Employee Plans.
(viig) (Ai) pre-pay any long-term debt in an amount not to exceed $100,000 in the aggregate for the Parent and its Subsidiaries taken as a whole, or pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, contingent or otherwise), except for borrowings under revolving credit lines existing as of the date of the Initial Merger Agreement in the ordinary course of business consistent with past practice and in accordance with their terms, (Bii) accelerate or delay collection of any material fail to collect notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business consistent with past practicepractice or enter into a factoring or discounting arrangement with a third party with respect to accounts receivable, or (Ciii) delay or accelerate payment of fail to pay any material account payable in advance of its due date or the date such liability would have been paid in the ordinary course of business consistent with past practicepractice or (iv) vary the Parent's inventory practices in any material respect from the Parent's past practices;
(viiih) make any material change in accounting policies or procedures, other than in the ordinary course of business consistent with past practice or except as required by GAAP or by a Governmental EntityAuthority;
(ixi) waive, release, assign, settle or compromise any material claims, or any material litigation or arbitration;
(xj) file any amended Tax Return, make any material Tax election, settle election or compromise enter into any material liability for agreement in respect of Taxes, amend including the settlement of any material Tax Return controversy, claim or file assessment, adopt or change of any accounting method in respect of Taxes, or surrender any right to claim a refund for any of Taxes if such action would have the effect of increasing by a material amount the present or future Tax liability of Taxes; provided, that the Parent shall promptly provide or any of its Subsidiaries, or would give rise to a Tax lien (other than statutory Liens for current Taxes not yet due) on any of the Company a copy of any such amended Tax Return Parent's or filing for any refundits Subsidiaries' assets;
(xik) take, or agree to take, any action that would prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(l) adopt or implement any stockholder rights plan;
(m) modify, amend or terminate, or waive, release or assign any material rights or claims with respect to any confidentiality or standstill agreement to which the Parent is a party;
(xiin) knowingly act write up, write down or write off the book value of any assets, individually or in the aggregate, for the Parent and its Subsidiaries taken as a manner whole, except for depreciation and amortization and any write-down of goodwill in accordance with GAAP consistently applied and any write-offs of inventory or accounts receivable that do not exceed $50,000 individually or $300,000 in the aggregate.
(o) take any action to exempt the Parent from (i) the provisions of Section 203 of the DGCL, or (ii) any other state takeover law or state law that purports to limit or restrict business combinations or the ability to acquire or vote shares any person or entity (other than the Company or any of Company's Subsidiaries) or any action taken thereby, which person, entity or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom;
(p) open or close, or enter into an agreement to open or close, any facility or office except as disclosed in Section 5.2 of the Parent Disclosure Letter;
(q) take any action that is intended or would reasonably be expected to materially delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VI 6 not being satisfied;
(r) fail to be in material compliance with the terms of instruments evidencing indebtedness incurred by the Parent, except as otherwise permitted other than any such failure that is waived by this Agreement the party to whom such indebtedness is owed within a reasonable time after the commencement of such material non-compliance and provided the Company with a copy of such waiver;
(s) allow any insurance policy relating to the Parent's business to lapse without obtaining replacement insurance coverage of comparable amount at similar cost;
(t) enter into any contract that contains any non-compete or required by applicable Law exclusivity provisions with respect to any customer, line of business or geographic area with respect to the Parent, any of its Subsidiaries or any judicial of the Parent's current or regulatory authorityfuture affiliates, or which restricts the conduct with respect to any customer, of any line of business by the Parent, any of its Subsidiaries or any of the Parent's current or future affiliates or any geographic area in which the Parent, any of its Subsidiaries or any of the Parent's current or future affiliates may conduct business, or which otherwise restricts operation of the Parent's business, in each case in any material respect, in each case other than non-compete agreements signed by employees incident to their employment by the Parent or any of its Subsidiaries;
(u) take any formal action or grant any consent or approval concerning any joint venture outside the ordinary course of business consistent with past practice; or
(xiiiv) authorize or enter into any agreement or otherwise make any commitment to do any of the foregoing.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Digital Generation Systems Inc)
Conduct of Business by Parent Pending the Closing. The Parent agrees that, between the date of this Agreement and the Effective Time, except as set forth in Section 5.1(b) 5.2 of the Parent Disclosure Memorandum Schedule or as specifically permitted by any other provision of this Agreement, unless the Company shall otherwise agree in writing, the Parent will, and will cause each of its Subsidiaries to, will conduct its operations only in the ordinary and usual course of business consistent with past practice. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1(b) 5.2 of the Parent Disclosure Memorandum Schedule or as specifically permitted by any other provision of this Agreement, the Parent shall not, and shall not permits any of its Subsidiaries to (unless required by applicable Law), and shall not permit any of its Subsidiaries to, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following without the prior written consent of the CompanyStockholder:
(i) amend or otherwise change the Parent Certificate or Parent Bylaws;
(iia) (Ai) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of any shares of capital stock of, or other Equity Interests in, the Parent or any of its Subsidiaries of any class, or securities convertible or exchangeable or exercisable for any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by contract right), of the ParentParent or any of its Subsidiaries, other than the issuance of Parent Common Stock upon the exercise of Parent Options outstanding as of the date hereof in accordance with their terms, the issuance of Parent Common Stock upon the exercise of Parent Warrants outstanding as of the date hereof in accordance with their terms or the issuance of Parent Options in accordance with the ordinary course of the Parent’s business, or (Bii) sell, pledge, dispose of, transfer, lease, license, guarantee or encumber, or authorize the sale, pledge, disposition, transfer, lease, license, guarantee or encumbrance of, any material property or assets (including Parent Material Intellectual Property) of the ParentParent or any of its Subsidiaries, except pursuant to existing Contracts or commitments or the sale or purchase of goods or services in the ordinary course of business consistent with past practice, or (iii) enter into any commitment or transaction outside the ordinary course of business consistent with past practice;
(iiib) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock (other than dividends paid by a wholly owned Subsidiary of Parent to Parent or to any other wholly owned Subsidiary of Parent) or enter into any agreement with respect to the voting of its capital stock;
(ivc) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, other Equity Interests or other securities;
(vd) (Ai) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest in any person or any division thereof or any assets, other than acquisitions of inventory or other assets in the ordinary course of business consistent with past practice, (Bii) incur any indebtedness for borrowed money Funded Debt or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any personperson (other than a wholly owned Subsidiary of Parent) for borrowed money, except for indebtedness for borrowed money incurred by the Parent or any of its Subsidiaries in the ordinary course of business consistent with past practice pursuant to the terms of a Parent Material Contractpractice, (Ciii) terminate, cancel or request any material change in, or agree to any material change in, any Company Parent Material Contract other than as arising in the ordinary course of businessContract, or (Div) enter into or amend any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 5.1(b)(v5.2(d);
(vie) except as may be required by contractual commitments or corporate policies with respect to employee severance or termination pay in existence on the date of this Agreement as disclosed in Section 4.11(b) of the Parent Disclosure Memorandum: or in the ordinary course of business consistent with past practiceSchedule: (Ai) materially increase the compensation or benefits payable or to become payable to its directors, officers or employees; (Bii) grant any rights to severance or termination pay to, or amend or enter into any new employment or severance agreement with, any director, officer or other employee of Parent Benefit Planor any of its Subsidiaries, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee, except to the extent required by applicable Law; or (Ciii) take any affirmative action to amend or waive any performance or vesting criteria or accelerate the vesting, exercisability or funding under any Parent Benefit Plan (except to the extent required by the terms of any such Parent Benefit Plan as of the date of this Agreement)Plan;
(viif) (Ai) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, contingent or otherwise), except in the ordinary course of business consistent with past practice and in accordance with their terms, (Bii) accelerate or delay collection of any material notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business consistent with past practice, or (Ciii) delay or accelerate payment of any material account payable in advance of its due date or the date such liability would have been paid in the ordinary course of business consistent with past practice;
(viiig) make any material change in accounting policies or procedures, other than in the ordinary course of business consistent with past practice or except as required by GAAP or by a Governmental Entity;
(ixh) waive, release, assign, settle or compromise any material claims, or any material litigation or arbitration;
(xi) except as required by applicable Law, make or change any material Tax election, settle or compromise any claim, notice, audit report or assessment in respect of material liability for Taxes, amend change any annual Tax accounting period; adopt or change any method of Tax accounting, file any amended material Tax Return, enter into any Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement relating to any material Tax, surrender any right to claim a material Tax refund, or consent to any extension or waiver of the statute of limitations period applicable to any material Tax Return claim or file any refund for any material amount of Taxes; provided, that the Parent shall promptly provide to the Company a copy of any such amended Tax Return or filing for any refundassessment;
(xij) modify, amend or terminate, or waive, release or assign any material rights or claims with respect to any confidentiality or standstill agreement to which the Parent is a party;
(xiik) knowingly act in a manner take any action that is intended or would reasonably be expected to materially delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VI not being satisfied, except as otherwise permitted by this Agreement or required by applicable Law or any judicial or regulatory authority; or
(xiiil) authorize or enter into any agreement or otherwise make any commitment to do any of the foregoing.
Appears in 1 contract
Conduct of Business by Parent Pending the Closing. The Parent agrees that, between During the period from the date of this Agreement and continuing until the Effective Timeearlier of the termination of this Agreement or the Closing, Parent covenants and agrees that, except as set forth in Section 5.1(b) 4.2 of the Parent Disclosure Memorandum Schedule or as specifically permitted by any other provision of this Agreement, unless the Company Shareholder shall otherwise agree in writing, Parent shall conduct its business, and cause the businesses of the Parent willSubsidiaries to be conducted, and will cause its Subsidiaries to, will conduct its operations only in the ordinary Ordinary Course of Business and usual course of business consistent with past practice. Without limiting , other than actions taken by Parent or the foregoing, and as an extension thereof, except as set forth Parent Subsidiaries in Section 5.1(b) contemplation of the Parent Disclosure Memorandum or as specifically permitted by any other provision of this Agreement, the Parent shall notStock Purchase and Sale, and shall not permits any of its Subsidiaries to (unless required by applicable Law), between the date of this Agreement and the Effective Time, directly or indirectly, indirectly do, or agree cause or allow any of the Parent Subsidiaries to do or propose to do, or propose to do, any of the following without the prior written consent of the CompanyCompany Shareholder:
(i) amend or otherwise change the Parent Parent’s Certificate of Incorporation or Parent Bylaws;
(ii) (A) issue, sell, pledge, dispose of, grant, transfer, of or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, disposition or encumbrance of of, any shares of capital stock of, or other Equity Interests in, the Parent of any class, or securities convertible or exchangeable or exercisable for any shares of such capital stock or other Equity Interests, or any options, warrants warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securitiesstock, or any other ownership interest (including, without limitation, any such interest represented by contract right), of the phantom interest) in Parent, other than Acquisition Sub or any of their Affiliates, except for the issuance of shares of Parent Common Stock issuable upon the exercise of Parent the Stock Options outstanding as and Warrants and other commitments listed in Section 3.2 of the date hereof in accordance with their terms, the issuance of Parent Common Stock upon the exercise of Parent Warrants outstanding as of the date hereof in accordance with their terms or the issuance of Parent Options in accordance with the ordinary course of the Parent’s business, or Disclosure Schedule;
(Biii) sell, pledge, dispose of, transfer, lease, license, guarantee lease to others or encumber, otherwise dispose of or authorize the sale, pledge, disposition, transfer, lease, license, guarantee or subject to any encumbrance of, any material property assets or properties owned by it or purchase, lease from others or otherwise acquire any material assets or properties (including Parent Material Intellectual Propertyexcept for (a) purchases or sales of the Parent, except pursuant to existing Contracts or commitments or the sale or purchase of goods or services assets in the ordinary course Ordinary Course of business Business and in a manner consistent with past practice, (b) dispositions of obsolete or enter into any commitment worthless assets, and (c) purchases or transaction outside the ordinary course sales of business consistent with past practiceimmaterial assets not in excess of $20,000);
(iiiiv) (a) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, stock or property or a any combination thereof) with in respect to of any of its capital stock, (b) split, combine or reclassify any of its capital stock or enter into issue or authorize or propose the issuance of any agreement with other securities in respect to the voting of, in lieu of or in substitution for shares of its capital stock;
, or (ivc) reclassifyamend the terms or change the period of exercisability of, combinepurchase, splitrepurchase, subdivide or redeem, purchase redeem or otherwise acquire, or permit any Person to purchase, repurchase, redeem or otherwise acquire, any of its securities, including shares of Parent Common Stock or any option, warrant or right, directly or indirectly, any to acquire shares of its capital stock, other Equity Interests or other securitiesParent Common Stock;
(v) (Aa) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest in any person or any division thereof or any assetscorporation, other than acquisitions of inventory partnership or other assets in the ordinary course of business consistent with past practice, organization or division thereof; (Bb) incur any indebtedness for borrowed money money, except for borrowings and reborrowing under its existing credit facilities or issue any debt securities or assume, guarantee or endorse, endorse or otherwise as an accommodation become responsible for, the obligations of any personPerson, or make any loans or advances, except for indebtedness for borrowed money incurred by the Parent or any of its Subsidiaries in the ordinary course Ordinary Course of business Business consistent with past practice pursuant to the terms practice; (c) authorize any capital expenditures or purchases of a Parent Material Contractfixed assets which are, (C) terminate, cancel or request any material change in, or agree to any material change in, any Company Material Contract other than as arising in the ordinary course aggregate, in excess of business, the amount set forth in Section 4.2 of the Parent Disclosure Schedule for Parent and its Subsidiaries taken as a whole; or (Dd) enter into or amend any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under to effect any of the matters prohibited by subparagraph (v) of this Section 5.1(b)(v)4.2;
(vi) except as may be required by contractual commitments make any change in the rate of compensation, commission, bonus or corporate policies with respect other remuneration payable, or pay or agree or promise to employee pay, conditionally or otherwise, any bonus, extra compensation, pension or severance or termination pay vacation pay, to any director, officer, employee, salesman or agent of Parent or its Subsidiaries except in existence on the date Ordinary Course of this Agreement as Business consistent with prior practice and pursuant to or in accordance with plans disclosed in Section 4.11(b) 3.14.2 of the Parent Disclosure Memorandum: or Schedule that were in the ordinary course of business consistent with past practice: (A) materially increase the compensation or benefits payable or to become payable to its directors, officers or employees; (B) grant any rights to severance or termination pay to, or amend or enter into any new Parent Benefit Plan, except to the extent required by applicable Law; or (C) amend or waive any performance or vesting criteria or accelerate the vesting, exercisability or funding under any Parent Benefit Plan (except to the extent required by the terms of any such Parent Benefit Plan effect as of the date of this Agreement)Agreement or make any increase in or commitment to increase any employee benefits, adopt or make any commitment to adopt any additional employee benefit plan or make any contribution, other than regularly scheduled contributions, to any Employee Benefit Plan;
(vii) take any action to change accounting practices, policies or procedures (Aincluding procedures with respect to revenue recognition, payments of accounts payable or collection of accounts receivable);
(viii) make any material tax election inconsistent with past practice or settle or compromise any material federal, state, local or foreign Tax liability or agree to an extension of a statute of limitations, except to the extent the amount of any such settlement has been reserved for in Parent Financial Statements;
(ix) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, contingent or otherwise), except other than the payment, discharge or satisfaction when due, in the ordinary course Ordinary Course of business Business and consistent with past practice and of liabilities reflected or reserved against in accordance with their termsParent Financial Statements or incurred after the Parent Balance Sheet Date, (B) accelerate or delay collection of any material notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course Ordinary Course of business consistent with past practice, or (C) delay or accelerate payment of any material account payable in advance of its due date or the date such liability would have been paid in the ordinary course of business Business and consistent with past practice;
(viiix) make enter into any material change in accounting policies transaction, contract or procedures, commitment other than in the ordinary course Ordinary Course of business consistent with past practice or except as required by GAAP or by a Governmental Entity;
(ix) waive, release, assign, settle or compromise any material claims, or any material litigation or arbitration;
(x) make any material Tax election, settle or compromise any material liability for Taxes, amend any material Tax Return or file any refund for any material amount of TaxesBusiness; provided, that the Parent shall promptly provide to the Company a copy of any such amended Tax Return or filing for any refund;or
(xi) modify, amend or terminatetake, or waiveagree in writing or otherwise to take, release or assign any material rights or claims with respect to any confidentiality or standstill agreement to which the Parent is a party;
(xii) knowingly act in a manner intended or reasonably expected to materially delay the consummation of the Merger or result in any of the conditions to the Merger set forth actions described in Article VI not being satisfiedsubparagraphs (i) through (x) of this Section 4.2, except as otherwise permitted by this Agreement or required by applicable Law or any judicial or regulatory authority; or
(xiii) authorize or enter into any agreement or otherwise action which would make any commitment to do any of the foregoingrepresentations or warranties of Parent contained in this Agreement untrue or incorrect or prevent Parent and Acquisition Sub from performing or cause Parent and Acquisition Sub not to perform its covenants and agreement in this Agreement.
Appears in 1 contract
Conduct of Business by Parent Pending the Closing. The Parent agrees that, between during the date of this Agreement and the Effective TimeInterim Period, except as set forth in Section 5.1(b) 5.2 of the Parent Disclosure Memorandum Diligence Letter or as specifically permitted or required by any other provision of this Agreement, unless the Company Target shall otherwise agree in writing, the Parent will, and will cause its Subsidiaries Merger Sub to, will conduct its operations only in the ordinary and usual course of business consistent with past practice, which shall include the raising of investment capital prior to the filing of the Registration Statement, and use commercially reasonable efforts to keep available the services of Parent’s and Merger Sub’s current key officers and employees and preserve their current relationships with such of those customers, suppliers and other Persons with whom Parent has significant business relationships as is reasonably necessary to preserve substantially intact the business organization and goodwill of Parent and Merger Sub. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1(b) 5.2 of the Parent Disclosure Memorandum Diligence Letter or as specifically permitted or required by any other provision of this Agreement, the Parent shall not, and shall not permits any of its Subsidiaries to (unless required by applicable LawLaw or any regulations of the NASD applicable to the Parent), between during the date of this Agreement and the Effective TimeInterim Period, directly or indirectly, do, or agree to do, any of the following without the prior written consent of the CompanyTarget:
(ia) amend or otherwise change the Parent Certificate or Parent BylawsGoverning Documents;
(b) adopt or implement any shareholder rights plan with respect to Parent or Merger Sub;
(c) change the composition or membership of the Parent Board, or remove from office (whether voluntary or involuntary) any officer of Parent or Merger Sub;
(d) (i) increase the compensation or benefits payable or to become payable to any director, officer, employee or consultant of Parent or Merger Sub, except for annual merit increases in the ordinary course of business consistent with past practice and increases resulting from the operation of compensation arrangements in effect prior to the date hereof; (ii) pay or accrue any bonus to any director, officer, employee or consultant of Parent or Merger Sub, except in accordance with past established practices therefor; (Aiii) grant any rights to severance or termination pay to, or enter into or amend any employment or severance agreement with, any director, officer or other employee or consultant of Parent or Merger Sub except to the extent such severance or termination pay is due before the Effective Time; or (iv) establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer, employee or consultant of Parent or Merger Sub, except as required by applicable Law.
(e) issue, sell, pledge, dispose of, grant, transfer, transfer or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfertransfer or encumbrance of, any Parent Capital Securities (whether by merger, consolidation or otherwise), or encumbrance of any shares of capital stock of, or other Equity Interests in, the Parent of any class, or securities convertible or exchangeable or exercisable for any shares of such capital stock or other Equity InterestsParent Capital Securities, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests Parent Capital Securities or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by contract right), of the Parent, other than the issuance of Parent Common Stock upon the exercise of Parent Options outstanding as of the date hereof in accordance with their terms, the issuance of Parent Common Stock upon the exercise of Parent Warrants outstanding as of the date hereof in accordance with their terms or the issuance of Parent Options except in accordance with the ordinary course contemplated transactions described in Section 5.2(e) of the Parent’s business, or Parent Diligence Letter;
(Bf) sell, pledge, dispose of, transfer, lease, license, guarantee exchange, grant, mortgage, pledge, guarantee, transfer, encumber or encumberotherwise dispose of, or agree to or authorize the sale, pledge, disposition, transfer, lease, license, guarantee exchange, grant, mortgage, pledge, guarantee, transfer, encumbrance or encumbrance disposition of, any material property of its assets or assets properties with a value in excess of $5,000 (including Parent Material Intellectual Property) of the Parentwhether by merger, consolidation or otherwise), except pursuant to existing Contracts for (i) dispositions of assets, goods, services or commitments or the sale or purchase of goods or services inventories in the ordinary course of business and consistent with past practice, ; (ii) the sale of unused or enter into any commitment obsolete equipment; or transaction outside the ordinary course of business consistent with past practice(iii) pursuant to existing contracts or commitments;
(iiig) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock Parent Capital Securities or enter into any agreement with respect to the voting of its capital stockany Parent Capital Securities;
(ivh) reclassify, combine, split, subdivide or (i) redeem, purchase or otherwise acquire, directly or indirectlyagree to redeem, purchase or otherwise acquire, any of its capital stockParent Capital Securities or any securities or obligations convertible into or exchangeable for any Parent Capital Securities, other Equity Interests or any options, warrants or conversion or other securitiesrights (including any stock appreciation rights, phantom stock or similar rights) to acquire any Parent Capital Securities or any such securities or obligations; (ii) adopt a plan with respect to or effect any liquidation, dissolution, restructuring, reorganization or recapitalization; or (iii) split, subdivide, combine or reclassify any shares of Parent Capital Securities or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of Parent Capital Securities;
(v) (Ai) acquire (including, without limitationor agree to acquire, by mergermerging or consolidating with, consolidationby purchasing an equity interest in or a portion of the assets or properties of, or acquisition of stock or assets) by any interest in other manner, any person business or any corporation, partnership, association or other business organization or division thereof thereof, or otherwise acquire or agree to acquire any assetsassets or properties of any other Person, including without limitation any rigs, compressors, pump jacks or other capital equipment regularly used in connection with any drilling operations (other than acquisitions the purchase of inventory assets or other assets properties that are not individually in excess of $5,000, or in the aggregate in excess of $20,000 per month, for the Parent and Merger Sub taken as a whole, from suppliers or vendors in the ordinary course of business and consistent with past practice, );
(Bj) (i) incur any indebtedness for borrowed money or purchase money indebtedness (including as a guarantor or surety), issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any personPerson (other than Merger Sub) for borrowed money, except for to the extent that the aggregate indebtedness for borrowed money incurred by the of Parent and Merger Sub at any time outstanding does not exceed $5,000; (ii) refinance or otherwise replace any of its Subsidiaries existing indebtedness, except with the consent of Target, which consent shall not be unreasonably withheld; (iii) make or incur any capital expenditure in excess of $5,000 individually, or in the aggregate in excess of $20,000 per month, for the Parent and Merger Sub taken as a whole, except in the ordinary course of business consistent with past practice; or (iv) make any loan or advance to any Parent Shareholder or any director, officer, employee or consultant of Parent or Merger Sub;
(k) (i) pre-pay any long-term debt in an amount exceeding $5,000 in the aggregate for Parent and Merger Sub taken as a whole, or pay, discharge or satisfy any Liabilities, except for borrowings under revolving credit lines existing as of the date hereof in the ordinary course of business consistent with past practice pursuant and in accordance with their terms; (ii) fail to collect notes or accounts receivable in the terms ordinary course of business consistent with past practice or enter into a Parent Material Contract, factoring or discounting arrangement with a third party with respect to accounts receivable; or (Ciii) fail to pay any account payable in the ordinary course of business consistent with past practice;
(l) terminate, cancel or request any material change in, or agree to any material change in, any Company Material Contract contract that is reasonably necessary for the conduct of Parent’s business as it is currently conducted other than as arising in the ordinary course of business, or (D) enter into or amend any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 5.1(b)(v);
(vi) except as may be required by contractual commitments or corporate policies with respect to employee severance or termination pay in existence on the date of this Agreement as disclosed in Section 4.11(b) of the Parent Disclosure Memorandum: or in the ordinary course of business consistent with past practice: (A) materially increase the compensation or benefits payable or to become payable to its directors, officers or employees; (B) grant any rights to severance or termination pay to, or amend or enter into any new Parent Benefit Plan, except to the extent required by applicable Law; or (C) amend or waive any performance or vesting criteria or accelerate the vesting, exercisability or funding under any Parent Benefit Plan (except to the extent required by the terms of any such Parent Benefit Plan as of the date of this Agreement);
(vii) (A) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, contingent or otherwise), except in the ordinary course of business consistent with past practice and in accordance with their terms, (B) accelerate or delay collection of any material notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business consistent with past practice, or (C) delay or accelerate payment of any material account payable in advance of its due date or the date such liability would have been paid in the ordinary course of business consistent with past practice;
(viiim) commit to participate in the drilling of any new well in a new prospect or elect to become a non-consenting party with respect to any operation or capital expenditure proposed by a third Person;
(n) enter into any Hydrocarbon sales, exchange, processing or transportation contract with respect to any of Parent’s assets or properties having a term in excess of one year that is not terminable without penalty upon notice of 30 days or less;
(o) file any amended Tax Return, make any Tax election or enter into any agreement in respect of Taxes, including without limitation the settlement of any Tax controversy, claim or assessment, or adopt or change any accounting method in respect of Taxes, or surrender any right to claim a refund of Taxes, if such action would have the effect of increasing by a material change amount the present or future Tax Liability of Parent, Merger Sub or the Surviving Corporation, or would give rise to a Tax lien (other than statutory Liens for current Taxes not yet due) on any of Parent’s, Merger Sub’s or the Surviving Corporation’s assets or properties;
(p) write up, write down or write off the book value of any assets, individually or in accounting policies the aggregate, of Parent and Merger Sub taken as a whole, except for depreciation and amortization and any write-down of goodwill in accordance with GAAP and any write-offs of inventory or proceduresaccounts receivable that do not exceed $5,000 individually or $20,000 in the aggregate.
(q) take any action to exempt Parent or Merger Sub from the provisions of any state takeover law or state law that purports to limit or restrict business combinations or the ability to acquire or vote shares of any Person (other than Target) or any action taken thereby, which Person or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom;
(r) open or close, or enter into an agreement to open or close, any facility or office;
(s) fail to be in material compliance with the terms of any instrument evidencing indebtedness incurred by Parent, other than any such failure that is waived in writing by the party to whom such indebtedness is owed within a reasonable time after the commencement of such material non-compliance, and provided Target receives a copy of such waiver within a reasonable time thereafter;
(t) enter into any agreement or arrangement outside the ordinary course of business consistent with past practice that contains any non-compete or except as required exclusivity provisions with respect to any customer, line of business or geographic area with respect to Parent, Merger Sub or any of Parent’s or the Surviving Corporation’s current or future Affiliates, or that limits or otherwise restricts Parent or Merger Sub prior to the Effective Time, or that would, at or after the Effective Time, limit or restrict Parent or the Surviving Corporation, from engaging in any business in the United States, or that restricts the conduct with respect to any customer of any line of business by GAAP Parent, Merger Sub or any of Parent’s or the Surviving Corporation’s current or future Affiliates, or any geographic area in which Parent, Merger Sub or any of Parent’s or the Surviving Corporation’s current or future Affiliates may conduct business, or that otherwise restricts the operation of Parent’s business, in each case other than non-compete agreements signed by a Governmental Entityemployees incident to their employment by Parent or Merger Sub;
(ixu) waive, release, assign, settle take any formal action or compromise grant any material claims, consent or approval concerning any material litigation or arbitrationjoint venture outside the ordinary course of business consistent with past practice;
(xv) make take, or agree to take, any material Tax election, settle or compromise any material liability for Taxes, amend any material Tax Return or file any refund for any material amount action that would prevent the Merger from qualifying as a tax-free reorganization within the meaning of Taxes; provided, that Section 368(a)(2)(E) of the Parent shall promptly provide to the Company a copy of any such amended Tax Return or filing for any refundCode;
(xiw) modify, amend or terminate, or waive, release or assign any material rights or claims with respect to, or grant any consent under, any existing standstill provision relating to a Parent Acquisition Proposal, or under any similar confidentiality or standstill agreement other agreement, or fail to which the Parent is a partyfully enforce any such agreement;
(xiix) knowingly act change any of its methods, principles or practices of accounting or internal controls in a manner intended or reasonably expected to materially delay the consummation effect as of the Merger date hereof, other than in the ordinary course of business consistent with past practice or result in any of the conditions to the Merger set forth in Article VI not being satisfied, except as otherwise permitted by this Agreement or required by applicable Law Law, GAAP or any judicial Governmental Authority;
(y) waive, release, assign, settle or regulatory authoritycompromise any material claims, or any material Litigation or arbitration, if such waiver, release, assignment, settlement or compromise would require any material payment by the Surviving Corporation at or after the Effective Time;
(z) take any action or fail to take any action that is intended or would reasonably be expected to result in a Parent Material Adverse Effect, the breach of a representation or warranty, a breach of a covenant or agreement, or a failure of a condition to Closing in this Agreement;
(aa) accelerate, amend or change the period of exercisability of options or other equity incentive awards granted under any Parent Stock Option Plan or authorize cash payments in exchange for any options or other equity incentive award granted under any Parent Stock Option Plan; or
(xiiibb) authorize or enter into any agreement or otherwise make any commitment to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (TBX Resources Inc)
Conduct of Business by Parent Pending the Closing. The Parent agrees that, between the date of this Agreement and the Effective Time, except as set forth in Section 5.1(b) 5.2 of the Parent Disclosure Memorandum Schedule or as specifically permitted by any other provision of this Agreement, unless the Company shall otherwise agree in writingwriting (which agreement shall not be unreasonably withheld, the conditioned or delayed), Parent will, and will cause its Subsidiaries each Parent Subsidiary to, will (A) conduct its operations only in all material respects in the ordinary and usual course of business consistent with past practicepractice and (B) use its reasonable best efforts to keep available the services of the current officers, key employees and consultants of Parent and each Parent Subsidiary and to preserve the current relationships of Parent and each Parent Subsidiary with such of the customers, suppliers and other persons with which Parent or any Parent Subsidiary has significant business relations as is reasonably necessary to preserve substantially intact its business organization. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1(b) 5.2 of the Parent Disclosure Memorandum Schedule or as specifically permitted by any other provision of this Agreement, the Parent shall not, and shall not permits any of its Subsidiaries to (unless required by applicable LawLaw or any stock exchange regulations applicable to Parent), and shall not permit any Parent Subsidiary to, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following following, without the prior written consent of the Company:Company (which consent shall not be unreasonably withheld, conditioned or delayed):
(i) Section 5.2.1 amend or otherwise change the Parent Certificate or Parent BylawsBylaws in a manner that adversely affects the rights of holders of Parent Common Stock;
(ii) Section 5.2.2 (A) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of any shares of capital stock of, or other Equity Interests in, the Parent or any Parent Subsidiary of any class, or securities convertible or exchangeable or exercisable for any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by contract right), of the ParentParent or any Parent Subsidiary, other than the issuance of Parent Common Stock upon the exercise of Parent Options pursuant to existing options, warrants, instruments or contracts outstanding as of the date hereof in accordance with their terms, or pursuant to the issuance ESPP, provided, however, that Parent may, in its discretion, issue up to 3,000,000 shares of Parent Common Stock upon Stock, without discount to the exercise of Parent Warrants outstanding as market price of the date hereof in accordance with their terms or the issuance of Parent Options in accordance with the ordinary course of the Parent’s businessCommon Stock, pursuant to that certain registration statement on Form S-3 (Registration No. 333-146728), or (B) ), sell, pledge, dispose of, transfer, lease, license, guarantee or encumber, or authorize the sale, pledge, disposition, transfer, lease, license, guarantee or encumbrance of, any material property or assets (including Parent Material Intellectual PropertyProperty Rights) of the ParentParent or any Parent Subsidiary, except pursuant to existing Contracts contracts or commitments or the sale or purchase of goods or services in the ordinary course of business consistent with past practice, or enter into any material commitment or transaction outside the ordinary course of business consistent with past practicepractice other than transactions between a wholly-owned Parent Subsidiary and Parent or another wholly-owned Parent Subsidiary;
(iii) Section 5.2.3 declare, set aside, make or pay any dividend or other distribution (whether distribution, payable in cash, stock, property or a combination thereof) otherwise, with respect to any of its capital stock or enter into any agreement with respect to the voting of its Parent’s capital stock;
(iv) Section 5.2.4 reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, other Equity Interests or other securities;
(v) (A) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest in any person or any division thereof or any assets, other than acquisitions of inventory or other assets in the ordinary course of business consistent with past practice, (B) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, except for indebtedness for borrowed money incurred by the Parent or any of its Subsidiaries in the ordinary course of business consistent with past practice pursuant to the terms of a Parent Material Contract, (C) terminate, cancel or request any material change in, or agree to any material change in, any Company Material Contract other than as arising in the ordinary course of business, or (D) enter into or amend any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 5.1(b)(v);
(vi) except as may be required by contractual commitments or corporate policies with respect to employee severance or termination pay in existence on the date of this Agreement as disclosed in Section 4.11(b) of the Parent Disclosure Memorandum: or in the ordinary course of business consistent with past practice: (A) materially increase the compensation or benefits payable or to become payable to its directors, officers or employees; (B) grant any rights to severance or termination pay to, or amend or enter into any new Parent Benefit Plan, except to the extent required by applicable Law; or (C) amend or waive any performance or vesting criteria or accelerate the vesting, exercisability or funding under any Parent Benefit Plan (except to the extent required by the terms of any such Parent Benefit Plan as of the date of this Agreement);
(vii) (A) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, contingent or otherwise), except in the ordinary course of business consistent with past practice and in accordance with their terms, (B) accelerate or delay collection of any material notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business consistent with past practice, or (C) delay or accelerate payment of any material account payable in advance of its due date or the date such liability would have been paid in the ordinary course of business consistent with past practice;
(viii) 5.2.5 make any material change in accounting policies or procedures, other than in the ordinary course of business consistent with past practice or except as required by GAAP or by a Governmental Entity;
(ix) Section 5.2.6 waive, release, assign, settle or compromise any material claims, or any material litigation or arbitration;
(x) make any material Tax election, settle or compromise any material liability for Taxes, amend any material Tax Return or file any refund for any material amount of Taxes; provided, that the Parent shall promptly provide to the Company a copy of any such amended Tax Return or filing for any refund;
(xi) modify, amend or terminate, or waive, release or assign any material rights or claims with respect to any confidentiality or standstill agreement to which the Parent is a party;
(xii) knowingly act in a manner intended or reasonably expected to materially delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VI not being satisfied, except as otherwise permitted by this Agreement or required by applicable Law or any judicial or regulatory authority; or
(xiii) authorize or enter into any agreement or otherwise make any commitment to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Enliven Marketing Technologies Corp)
