Conduct of Business by the Company Pending the Closing. The Company agrees that between the date hereof and the earlier of the Effective Time or the date, if any, on which this Agreement is validly terminated pursuant to Section 9.1, except as set forth in Section 6.1 of the Company Disclosure Letter, as specifically permitted or required by this Agreement, as required by applicable Law or as consented to in writing by Parent the Company (a) shall, and shall cause each Company Subsidiary to, conduct its business in all material respects in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (i) preserve intact its and their present business organizations, goodwill and ongoing businesses, (ii) keep available the services of its and their present officers and other key employees (other than where termination of such services is for cause) and (iii) preserve its and their present relationships with customers, suppliers, vendors, Governmental Entities, employees and other Persons with whom it and they have material business relations; and (b) shall not, and shall not permit any Company Subsidiary to, directly or indirectly: (i) amend, modify, waive, rescind or otherwise change the Company’s or any Company Subsidiary’s certificate of incorporation, bylaws or equivalent organizational documents; (ii) authorize, declare, set aside, make or pay any dividends on or make any distribution with respect to its outstanding shares of capital stock or other equity interests (whether in cash, assets, shares or other securities of the Company or any Company Subsidiary), except for dividends and distributions paid or made by a wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary in the ordinary course of business consistent with past practice; (iii) enter into any agreement and arrangement with respect to voting or registration, or file any registration statement with the SEC with respect to any, of its capital stock or other equity interests or any other securities; (iv) split, combine, subdivide, reduce or reclassify any of its capital stock or other equity interests, or redeem, purchase or otherwise acquire any of its capital stock or other equity interests (other than repurchases of Company Common Stock in satisfaction of applicable Tax withholdings or upon the payment of the exercise price upon the exercise or vesting of any Company Equity Award outstanding as of the date hereof and in accordance with the terms thereof), or issue or authorize the issuance of any of its capital stock or other equity interests or any other securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests or any rights, warrants or options to acquire any such shares of capital stock or other equity interests; (v) except in connection with the pledge of equity interests pursuant to the Company Credit Agreements, issue, deliver, grant, sell, pledge, dispose of or encumber, or authorize the issuance, delivery, grant, sale, pledge, disposition or encumbrance of, any shares in the capital stock, voting securities or other equity interest in the Company or any Company Subsidiary or any securities convertible into or exchangeable or exercisable for any such shares, voting securities or equity interest, or any rights, warrants or options to acquire any such shares, voting securities or equity interest or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units or take any action to cause to be exercisable or vested any otherwise unexercisable or unvested Company Equity Award under any existing Company Equity Plan, other than issuances of Company Common Stock in respect of the vesting or settlement of Company Equity Awards outstanding as of the date hereof, in all cases in accordance with their respective terms; (vi) except as required by applicable Law or any Company Benefit Plan or other Material Contract as in existence as of the date hereof and made available to Parent prior to the date hereof, (A) increase the compensation or benefits payable or to become payable to any of its directors, executive officers or employees, other than annual merit-based increases in base salary in the ordinary course of business consistent with past practice that do not exceed 3% of the aggregate annual cost of all employee annual base salaries and wage rates in effect as of the date hereof; (B) grant, pay or award, or commit to grant, pay or award, any severance, termination pay, change in control payments, bonuses, retention or incentive compensation to any of its current or former directors, executive officers or employees; (C) establish, adopt, enter into, amend or terminate any collective bargaining agreement or Company Benefit Plan, other than amendments to employee welfare benefit plans or collective bargaining agreements in the ordinary course of business that do not materially increase the annual cost or annual expense (relative to the 2020 annual cost or expense) of maintaining such employee welfare benefit plan or collective bargaining agreement; (D) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Company Benefit Plan (including any grantor trust or similar funding arrangement); (E) terminate the employment of any employee earning in excess of $85.000, other than for cause; or (F) hire any new employees with a base salary in excess of $85,000, other than replacing any such employees in the ordinary course of business consistent with past practice (it being understood that such replacement employee’s compensation and benefits shall be (I) limited to cash compensation only and (II) otherwise consistent in all material respects with the compensation and benefits of such replaced employee); (vii) acquire (including by merger, consolidation or acquisition of stock or assets or any other means) or authorize or announce an intention to so acquire, or enter into any agreements providing for (x) any acquisitions of, any equity interests in or all or a material portion of the assets of any Person or any business or division thereof, or otherwise engage in any mergers, consolidations or business combinations or (y) acquisitions of material assets, except for, or with respect to, in each case, (A) acquisitions of supplies or equipment in the ordinary course of business consistent with past practice, or (B) with respect to clause (y) only, capital expenditures permitted by Section 6.1(b)(xii); (viii) liquidate, dissolve, restructure, recapitalize or effect any other reorganization (including any restructuring, recapitalization, or reorganization between or among any of the Company and/or the Company Subsidiaries), or adopt any plan or resolution providing for any of the foregoing; (ix) make any loans, advances or capital contributions to, or investments in, any other Person, except for (A) loans, advances, or capital contributions solely among the Company and its wholly owned Company Subsidiaries or solely among the Company’s wholly owned Company Subsidiaries in the ordinary course of business consistent with past practice, in each case that do not involve the transfer of funds between the United States of America and another jurisdiction, (B) advances for reimbursable employee expenses in the ordinary course of business consistent with past practice and (C) extensions of credit to customers in the ordinary course of business consistent with past practice; (x) sell, lease, license, assign, abandon, permit to lapse, transfer, exchange, swap or otherwise dispose of, or subject to any Lien (other than Permitted Liens), any of its properties, rights or assets (including shares in the capital of the Company Subsidiaries), except (A) dispositions of obsolete, damaged, worn-out or surplus equipment or property no longer necessary in the conduct of the business or other immaterial equipment or property, in each case, in the ordinary course of business consistent with past practice, (B) leases or subleases of real property or interests therein not used for the conduct of the Company’s or the Company Subsidiaries’ business, as currently conducted, in each case in the ordinary course of business consistent with past practice, (C) non-exclusive licenses or other non-exclusive grants of rights in, to or under Company Intellectual Property Rights in the ordinary course of business consistent with past practice, (D) pursuant to the exercise of creditor rights under any Contract providing for outstanding Indebtedness (so long as the Company and its Subsidiaries have used reasonable best efforts to exhaust all other avenues of relief), and (E) pursuant to transactions solely between the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries in the ordinary course of business consistent with past practice; (xi) (A) enter into any Contract that would, if entered into prior to the date hereof, be a Material Contract, (B) materially modify, materially amend or extend any Material Contract, (C) terminate any Material Contract, (D) waive or release any material rights or claims under any Material Contract or (E) assign any material rights or claims under any Material Contract, other than (w) in the case of clauses (A) and (B), solely with respect to the types of Contracts described in clauses (viii) and (xiv) of the definition of Material Contract, in the ordinary course of business consistent with past practice, (x) in the case of clause (D), in the ordinary course of business consistent with past practices (so long as such waiver or release is not material to the Company and the Company Subsidiaries, taken as whole); provided, that any actions of a nature contemplated by and to the extent permitted by this Section 6.1(b) shall not require approval under this clause (xi) for any types of Contracts described in clause (xii) below,
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. The Company agrees that and the Members covenant and agree that, except with the prior written consent of Purchaser, between the date hereof of this Agreement and the earlier Closing Date, the Business shall be conducted only in, and the Company shall not take any action except in, the ordinary course of business consistent with past practice. During the Effective Time or period of time from the date, if any, on which date of this Agreement is validly terminated pursuant until Closing, the Company shall use its reasonable best efforts to Section 9.1preserve intact its business organization, to keep available the services of its current officers, employees and consultants, and to preserve its present relationships with customers, suppliers and other persons with which it has significant business relations. By way of amplification and not limitation, except as set forth in Section 6.1 of the Company Disclosure Letter, as specifically permitted or required contemplated by this Agreement, as required by applicable Law or as consented to in writing by Parent the Company and the Selling Parties shall not between the date of this Agreement and the Closing Date, directly or indirectly, do or propose or agree to do any of the following without the prior written consent of Purchaser: (a) shallamend or otherwise change its Articles of Organization, and shall cause each Bylaws or equivalent organizational documents; (b) issue or authorize the issuance of, any membership interests of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any membership interests or other ownership interest of the Company Subsidiary toor any of its subsidiaries; (c) declare, conduct set aside, make or pay any distribution, payable in cash, membership interest, property or otherwise, with respect to any of its membership interests (except for distributions, to the Selling Parties in amounts consistent with past practices of the Company); (d) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its membership interests; (e) acquire (including, without limitation, for cash, or shares of stock, property or services, by merger, consolidation or acquisition of stock or assets) any interest in any corporation, partnership or other business in all material respects organization or division thereof; (f) incur any additional Indebtedness or prepay any Indebtedness other than in the ordinary course of business consistent with past practice and use commercially reasonable efforts practices; (g) create Liens on any of its assets; (h) make (or commit to make) any capital expenditures in excess of Ten Thousand Dollars ($10,000) except in the ordinary course of business; (i) preserve intact its and their present business organizations, goodwill and ongoing businesses, (ii) keep available the services of its and their present officers and other key employees (other than where termination of such services is for cause) and (iii) preserve its and their present relationships with customers, suppliers, vendors, Governmental Entities, employees and other Persons with whom it and they have material business relations; and (b) shall not, and shall not permit any Company Subsidiary to, directly or indirectly:
(i) amend, modify, waive, rescind or otherwise change the Company’s or any Company Subsidiary’s certificate of incorporation, bylaws or equivalent organizational documents;
(ii) authorize, declare, set aside, make or pay any dividends on or make any distribution with respect loans or advances to its outstanding shares any person or entity or guarantee the indebtedness of capital stock any person or other equity interests (whether in cash, assets, shares or other securities of the Company or any Company Subsidiary)entity, except for dividends and distributions paid or made by a wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary in the ordinary course of business consistent with past practice;
; (iiij) enter into any agreement and arrangement with respect to voting sell or registration, or file any registration statement with the SEC with respect to any, of its capital stock or other equity interests or any other securities;
(iv) split, combine, subdivide, reduce or reclassify any of its capital stock or other equity interests, or redeem, purchase or otherwise acquire any of its capital stock or other equity interests (other than repurchases of Company Common Stock in satisfaction of applicable Tax withholdings or upon the payment of the exercise price upon the exercise or vesting of any Company Equity Award outstanding as of the date hereof and in accordance with the terms thereof), or issue or authorize the issuance dispose of any of its capital stock or other equity interests or any other securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests or any rights, warrants or options to acquire any such shares of capital stock or other equity interests;
(v) except in connection with the pledge of equity interests pursuant to the Company Credit Agreements, issue, deliver, grant, sell, pledge, dispose of or encumber, or authorize the issuance, delivery, grant, sale, pledge, disposition or encumbrance of, any shares in the capital stock, voting securities or other equity interest in the Company or any Company Subsidiary or any securities convertible into or exchangeable or exercisable for any such shares, voting securities or equity interest, or any rights, warrants or options to acquire any such shares, voting securities or equity interest or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units or take any action to cause to be exercisable or vested any otherwise unexercisable or unvested Company Equity Award under any existing Company Equity Planassets, other than issuances in the ordinary course of Company Common Stock business, consistent with past practice; (k) enter into, modify or terminate, any Contract, other than in respect the ordinary course of the vesting business consistent with past practice; (l) pay any bonus to or settlement of Company Equity Awards outstanding as of the date hereof, in all cases in accordance with their respective terms;
(vi) except as required by applicable Law or any Company Benefit Plan or other Material Contract as in existence as of the date hereof and made available to Parent prior to the date hereof, (A) increase the compensation or benefits payable or to become payable to any of its directors, executive officers or employees, other than annual merit-based increases in base salary independent contractors or consultants except in the ordinary course of business consistent with past practice that do not exceed 3% of the aggregate annual cost of all employee annual base salaries and wage rates in effect as of the date hereofbusiness; (Bm) grant, pay or award, or commit to grant, pay or award, any severance, termination pay, change in control paymentsdischarge or satisfy any existing claims, bonuses, retention liabilities or incentive compensation to any of its current or former directors, executive officers or employees; (C) establish, adopt, enter into, amend or terminate any collective bargaining agreement or Company Benefit Plan, obligations other than amendments to employee welfare benefit plans or collective bargaining agreements in the ordinary course of business that do not materially increase the annual cost or annual expense (relative to the 2020 annual cost or expense) of maintaining such employee welfare benefit plan or collective bargaining agreement; (D) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Company Benefit Plan (including any grantor trust or similar funding arrangement); (E) terminate the employment of any employee earning in excess of $85.000, other than for cause; or (F) hire any new employees with a base salary in excess of $85,000, other than replacing any such employees in the ordinary course of business consistent with past practice (it being understood that such replacement employee’s compensation and benefits shall be (I) limited to cash compensation only and (II) otherwise consistent in all material respects with the compensation and benefits of such replaced employee);
(vii) acquire (including by merger, consolidation or acquisition of stock or assets or any other means) or authorize or announce an intention to so acquire, or enter into any agreements providing for (x) any acquisitions of, any equity interests in or all or a material portion of the assets of any Person or any business or division thereof, or otherwise engage in any mergers, consolidations or business combinations or (y) acquisitions of material assets, except for, or with respect to, in each case, (A) acquisitions of supplies or equipment in the ordinary course of business consistent with past practice; (n) increase or decrease prices charged to its customers, except for previously announced price changes, or (B) with respect to clause (y) only, capital expenditures permitted by Section 6.1(b)(xii);
(viii) liquidate, dissolve, restructure, recapitalize or effect take any other reorganization action which might reasonably result in any increase in the loss of customers; or (including any restructuringo) agree, recapitalizationin writing or otherwise, to take or reorganization between or among authorize any of the Company and/or the Company Subsidiaries), foregoing actions or adopt any plan or resolution providing for any of the foregoing;
(ix) other action which would make any loansrepresentation or warranty in Article III untrue or incorrect. The Company shall give written notice to Purchaser promptly following the occurrence of any event which has had (or which is likely to have) an adverse effect upon its assets, advances or capital contributions to, or investments in, any other Person, except for (A) loans, advances, or capital contributions solely among the Company and its wholly owned Company Subsidiaries or solely among the Company’s wholly owned Company Subsidiaries in the ordinary course of business consistent with past practice, in each case that do not involve the transfer of funds between the United States of America and another jurisdiction, (B) advances for reimbursable employee expenses in the ordinary course of business consistent with past practice and (C) extensions of credit to customers in the ordinary course of business consistent with past practice;
(x) sell, lease, license, assign, abandon, permit to lapse, transfer, exchange, swap or otherwise dispose of, or subject to any Lien (other than Permitted Liens), any of its properties, rights or assets (including shares in the capital of the Company Subsidiaries), except (A) dispositions of obsolete, damaged, worn-out or surplus equipment or property no longer necessary in the conduct of the business or other immaterial equipment or property, in each case, in the ordinary course of business consistent with past practice, (B) leases or subleases of real property or interests therein not used for the conduct of the Company’s or the Company Subsidiaries’ business, as currently conductedoperations, in each case in the ordinary course of business consistent with past practiceprospects, properties or condition (C) non-exclusive licenses financial or other non-exclusive grants of rights in, to or under Company Intellectual Property Rights in the ordinary course of business consistent with past practice, (D) pursuant to the exercise of creditor rights under any Contract providing for outstanding Indebtedness (so long as the Company and its Subsidiaries have used reasonable best efforts to exhaust all other avenues of reliefotherwise), and (E) pursuant to transactions solely between the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries in the ordinary course of business consistent with past practice;
(xi) (A) enter into any Contract that would, if entered into prior to the date hereof, be a Material Contract, (B) materially modify, materially amend or extend any Material Contract, (C) terminate any Material Contract, (D) waive or release any material rights or claims under any Material Contract or (E) assign any material rights or claims under any Material Contract, other than (w) in the case of clauses (A) and (B), solely with respect to the types of Contracts described in clauses (viii) and (xiv) of the definition of Material Contract, in the ordinary course of business consistent with past practice, (x) in the case of clause (D), in the ordinary course of business consistent with past practices (so long as such waiver or release is not material to the Company and the Company Subsidiaries, taken as whole); provided, that any actions of a nature contemplated by and to the extent permitted by this Section 6.1(b) shall not require approval under this clause (xi) for any types of Contracts described in clause (xii) below,.
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. The Company agrees that between the date hereof and the earlier of the Effective Time or the date, if any, on which this Agreement is validly terminated pursuant to Section 9.1, except as set forth in Section 6.1 of the Company Disclosure Letter, as specifically permitted or required by this Agreement, as required by applicable Law or as consented to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company (a) shall, shall and shall cause each Company Subsidiary to, conduct its business in all material respects in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (i) preserve intact its and their present business organizations, goodwill and ongoing businesses, (ii) keep available the services of its and their present officers and other key employees (other than where termination of such services is for cause) and (iii) preserve its and their present relationships with customers, suppliers, vendors, licensors, licensees, Governmental Entities, employees and other Persons with whom it and they have material business relations; and (b) shall not, and shall not permit any Company Subsidiary to, directly or indirectly:
(i) amend, modify, waive, rescind or otherwise change the Company’s or any Company Subsidiary’s certificate of incorporation, bylaws or equivalent organizational documents;
(ii) authorize, declare, set aside, make or pay any dividends on or make any distribution with respect to its outstanding shares of capital stock or other equity interests (whether in cash, assets, shares or other securities of the Company or any Company Subsidiary), except for dividends and distributions paid or made by a wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary in the ordinary course of business consistent with past practice;
(iii) enter into any agreement and arrangement with respect to voting or registration, or file any registration statement with the SEC with respect to any, of its capital stock or other equity interests or securities;
(iii) take any other securitiesaction within the Company’s control to cause, or that would result in, the conversion of all of the Class B Common Stock into Class A Common Stock;
(iv) split, combine, subdivide, reduce or reclassify any of its capital stock or other equity interests, or redeem, purchase or otherwise acquire any of its capital stock or other equity interests (other than repurchases of Company Common Stock in satisfaction of applicable Tax withholdings or upon the payment of the exercise price upon the exercise or vesting of any Company Equity Award outstanding as of the date hereof and in accordance with the terms thereof)interests, or issue or authorize the issuance of any of its capital stock or other equity interests or any other securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests or any rightsinterests, warrants or options to acquire except for any such shares of capital stock or other equity intereststransaction involving only wholly owned Company Subsidiaries;
(v) except in connection with the pledge of equity interests pursuant to the Company Credit Agreements, issue, deliver, grant, sell, pledge, dispose of or encumber, or authorize the issuance, delivery, grant, sale, pledge, disposition or encumbrance of, any shares in the capital stock, voting securities or other equity interest in the Company or any Company Subsidiary or any securities convertible into or exchangeable or exercisable for any such shares, voting securities or equity interest, or any rights, warrants or options to acquire any such shares, voting securities or equity interest or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units or take any action to cause to be exercisable or vested any otherwise unexercisable or unvested Company Equity Award under any existing Company Equity PlanPlan (except as otherwise provided by the express terms of any Company Equity Award), other than (A) issuances of Company Common Stock in respect of any exercise of Company Options or the vesting or settlement of Company Equity Awards outstanding as of the date hereofAwards, in all cases in accordance with their respective terms, (B) the issuances of Company Common Stock pursuant to the terms of the Company ESPP in respect of the Current ESPP Offering Periods, (C) the grant of Company Equity Awards to employees below the level of vice president in the amounts and with terms consistent with past practice and consistent with the Company’s equity grant guidelines in effect as of the date hereof subject to the limitations set forth in Section 6.1(b)(v) of the Company Disclosure Letter; provided that awards granted pursuant to this clause (C) shall not include terms providing for accelerated vesting upon a change in control or upon a termination of employment or service or (D) transactions solely between the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries;
(vi) except as required by applicable Law or any Company Benefit Plan or other Material Contract as in existence as of the date hereof and made available to Parent prior to the date hereof, (A) increase the compensation or benefits payable or to become payable to any of its directors, executive officers or employees; (B) grant to any of its directors, other than annual merit-based increases executive officers or employees any increase in base salary in severance or termination pay, except for the ordinary course payment of business consistent with past practice that do not exceed 3% of severance pursuant to the aggregate annual cost of all employee annual base salaries and wage rates Company Severance Policy in effect as of the date hereofof this Agreement to employees terminated as permitted by this Section 6.1(b)(vi); (BC) grant, pay or award, or commit to grant, pay or award, any severance, termination pay, change in control payments, bonuses, retention or incentive compensation to any of its current or former directors, executive officers or employees, except as permitted under the provisions of Section 6.1(b)(v)(C) or as permitted by Section 6.1(b)(vi)(C) of the Company Disclosure Letter; (CD) establish, adopt, enter into, amend or terminate any collective bargaining agreement or Company Benefit Plan, other than except for (1) any amendments to employee welfare benefit plans or collective bargaining agreements a Company Benefit Plan in the ordinary course of business consistent with past practice that do not contravene the other covenants set forth in this Section 6.1(b)(vi) or materially increase the annual cost or annual expense (relative to the 2020 annual cost or expense) Company, in the aggregate, of maintaining such employee welfare benefit plan Company Benefit Plan or collective bargaining agreementthe benefits provided thereunder, except as permitted in this Section 6.1(b)(vi) or (2) entering into offer letters that provide for no severance except for severance benefits as may be required by applicable Law for employees and service providers providing services outside of the United States; (DE) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Company Benefit Plan (including any grantor trust or similar funding arrangement)Plan; (EF) terminate the employment of any employee earning in excess at the level of $85.000vice president or above, other than for cause; or (FG) hire any new employees with a base salary in excess at the level of $85,000, other than replacing vice president or above; or (H) provide any such employees in the ordinary course of business consistent with past practice (it being understood that such replacement employee’s compensation and benefits shall be (I) limited to cash compensation only and (II) otherwise consistent in all material respects with the compensation and benefits of such replaced employee)funding for any rabbi trust or similar arrangement;
(vii) acquire (including by merger, consolidation or acquisition of stock or assets or any other means) or authorize or announce an intention to so acquire, or enter into any agreements providing for (x) any acquisitions of, any equity interests in or all or a material portion of the assets of any Person or any business or division thereof, or otherwise engage in any mergers, consolidations or business combinations or (y) acquisitions of material assetscombinations, except for, for transactions solely between the Company and a wholly owned Company Subsidiary or with respect to, in each case, (A) solely between wholly owned Company Subsidiaries or acquisitions of supplies or equipment in the ordinary course of business consistent with past practice, or (B) with respect to clause (y) only, capital expenditures permitted by Section 6.1(b)(xii);
(viii) liquidateadopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolvedissolution, restructure, recapitalize or effect any other reorganization (including any restructuring, recapitalization, recapitalization or reorganization between or among any of the Company and/or the Company Subsidiaries), or adopt any plan or resolution providing for any of the foregoingother reorganization;
(ix) make any loans, advances or capital contributions to, or investments in, any other Person, except for (A) loans, advances, or capital contributions loans solely among the Company and its wholly owned Company Subsidiaries or solely among the Company’s wholly owned Company Subsidiaries in the ordinary course of business consistent with past practice, in each case that do not involve the transfer of funds between the United States of America and another jurisdiction, (B) or advances for reimbursable employee expenses in the ordinary course of business consistent with past practice and (C) extensions of credit to customers in the ordinary course of business consistent with past practice;
(x) sell, lease, license, assign, abandon, permit to lapse, transfer, exchange, swap or otherwise dispose of, or subject to any Lien (other than Permitted Liens), any of its material properties, rights or assets (including shares in the capital of the Company or the Company Subsidiaries), except (A) dispositions of obsolete, damaged, worn-out obsolete or surplus equipment or property no longer necessary in the conduct of the business or other immaterial equipment or property, in each caseworthless equipment, in the ordinary course of business consistent with past practice, (B) leases or subleases of real property or interests therein not used for the conduct of the Company’s or the Company Subsidiaries’ business, as currently conducted, in each case in the ordinary course of business consistent with past practice, (C) non-exclusive licenses or other non-exclusive grants of rights in, to or under Company Intellectual Property Rights or Company Products entered in the ordinary course of business consistent with past practice, practice with customers of the Company or the Company Subsidiaries and (DC) pursuant to the exercise of creditor rights under any Contract providing for outstanding Indebtedness (so long as transactions solely among the Company and its Subsidiaries have used reasonable best efforts to exhaust all other avenues of relief), and (E) pursuant to transactions solely between the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries in the ordinary course of business consistent with past practiceor solely among wholly owned Company Subsidiaries;
(xi) (A) enter into any Contract that would, if entered into prior to the date hereof, be a Material ContractContract of the types referred to in clauses (i), (ii), (iv), (v), (ix), (x), (xiv) or (xv) of Section 4.17(a) or (B) (1) materially modify, materially amend amend, extend or extend any Material Contract, (C) terminate any Material Contract, (D) waive or release any material rights or claims under any Material Contract or (E2) waive, release or assign any material rights or claims under any Material Contractthereunder, other than (w) in the case of clauses this clause (A2) and other than in the ordinary course of business consistent with past practice;
(B), solely with respect to the types of Contracts described in clauses (viiixii) and (xiv) of the definition of Material Contract, except in the ordinary course of business consistent with past practice, make any capital expenditure or expenditures, enter into agreements or arrangements providing for capital expenditure or expenditures or otherwise commit to do so;
(xxiii) in the case of clause commence (D), other than any collection action in the ordinary course of business consistent with past practices practice or any action to enforce the provisions hereof), waive, release, assign, compromise or settle any claim, litigation, investigation or proceeding (so long for the avoidance of doubt, including with respect to matters in which the Company or any Company Subsidiary is a plaintiff, or in which any of their officers or directors in their capacities as such are parties), other than the compromise or settlement of claims, litigations, investigations or proceedings that are not brought by Governmental Entities and that: (A) is for an amount (in excess of insurance proceeds) not to exceed, for any such compromise or settlement individually or in the aggregate, $2,000,000, (B) does not impose any injunctive relief on the Company and the Company Subsidiaries and does not involve the admission of wrongdoing by the Company, any Company Subsidiary or any of their respective officers or directors or otherwise establish a materially adverse precedent for similar settlements by Parent or any Parent Subsidiaries (including following the Effective Time the Company and the Company Subsidiaries) and (C) does not provide for the license of any material Company Intellectual Property;
(xiv) make any change in financial accounting policies, practices, principles or procedures or any of its methods of reporting income, deductions or other material items for financial accounting purposes, except as required by GAAP or applicable Law;
(xv) amend or modify any Privacy Statement of the Company or any Company Subsidiary;
(xvi) make or change any material Tax election, adopt or change any Tax accounting period or material method of Tax accounting, file any amended Tax Return if the filing of such amended Tax Return would result in a material increase in the Taxes payable by the Company or any Company Subsidiary, settle or compromise any material liability for Taxes or any Tax audit, claim or other proceeding relating to a material amount of Taxes, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local or non-U.S. Law), surrender any right to claim a material refund of Taxes, or, except in the ordinary course of business consistent with past practice, agree to an extension or waiver of the statute of limitations with respect to a material amount of Taxes;
(xvii) redeem, repurchase, prepay, defease, incur, assume, endorse, guarantee or release otherwise become liable for or modify in any material respects the terms of any Indebtedness or any derivative financial instruments or arrangements (including swaps, caps, floors, futures, forward contracts and option agreements), or issue or sell any debt securities or calls, options, warrants or other rights to acquire any debt securities (directly, contingently or otherwise), except for (A) any Indebtedness solely among the Company and its wholly owned Company Subsidiaries or solely among wholly owned Company Subsidiaries, (B) guarantees by the Company of Indebtedness of Company Subsidiaries or guarantees by Company Subsidiaries of Indebtedness of the Company or any other Company Subsidiary, which Indebtedness is not material incurred in compliance with this clause (xvii), and (C) Indebtedness in aggregate principal amount outstanding, and any derivative financial instruments or arrangements (including swaps, caps, floors, futures, forward contracts and option agreements) entered into in order to hedge bona fide currency or interest rate risks, for which the aggregate exposure (or aggregate value) to the Company and the Company SubsidiariesSubsidiaries is not reasonably expected to be in excess of an aggregate amount equal to $1,000,000;
(xviii) enter into any transactions or Contracts with any affiliates or other Person that would be required to be disclosed by the Company under Item 404 of Regulation S-K of the SEC;
(xix) cancel the Company’s insurance policies or fail to pay the premiums on the Company’s insurance policies such that such failure causes a cancellation of such policy, taken or fail to use commercially reasonable efforts to maintain in the ordinary course the Company’s insurance policies;
(xx) (A) enter into any lease or sublease of real property (whether as wholea lessor, sublessor, lessee or sublessee); provided, that (B) materially modify or amend or exercise any actions right to renew any Company Lease or other lease or sublease of a nature contemplated by and real property, or waive any term or condition thereof or grant any consents thereunder, (C) grant or otherwise create or consent to the extent permitted creation of any easement, covenant, restriction, assessment or charge affecting any real property leased by this the Company, or any interest therein or part thereof, (D) commit any waste or nuisance on any such property or (E) make any material changes in the construction or condition of any such property, in each case other than in the ordinary course of business consistent with past practice;
(xxi) convene any special meeting (or any adjournment or postponement thereof) of the Company Stockholders;
(xxii) terminate or modify or waive in any material respect any right under any Company Permit;
(xxiii) adopt or otherwise implement any stockholder rights plan, “poison-pill” or other comparable agreement;
(xxiv) subject to Section 6.1(b7.2, take or cause to be taken any action that would reasonably be expected to prevent the consummation of the Transactions on or before the Outside Date; or
(xxv) shall not require approval under this clause (xi) for agree or authorize, in writing or otherwise, to take any types of Contracts described in clause (xii) below,the foregoing actions.
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. The Company agrees that between the date hereof of this Agreement and the earlier of the Effective Time or the date, if any, on which this Agreement is validly terminated pursuant to Section 9.18.1, except (i) as set forth in Section 6.1 of the Company Disclosure LetterSchedule 5.1, (ii) as specifically permitted or required by pursuant to this Agreement, (iii) as may be required by applicable Law or (iv) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), the Company (a) shall, and shall cause each the Company Subsidiary Subsidiaries to, conduct its business businesses in all material respects in the ordinary course of business consistent with past practice and use commercially reasonable efforts to practice. Without limiting the generality of the foregoing, except (i1) preserve intact its and their present business organizations, goodwill and ongoing businessesas set forth in Schedule 5.1, (ii2) keep available as required pursuant to or expressly permitted by this Agreement, (3) as may be required by Law or (4) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), the services Company agrees that between the date of its this Agreement and their present officers and other key employees (other than where termination of such services the Effective Time or the date, if any, on which this Agreement is for cause) and (iii) preserve its and their present relationships with customersterminated pursuant to Section 8.1, suppliers, vendors, Governmental Entities, employees and other Persons with whom it and they have material business relations; and (b) the Company shall not, and shall not permit any Company Subsidiary to, directly or indirectly:
(ia) amend, modify, waive, rescind or otherwise change the Company’s or any Company Subsidiary’s amend its certificate of incorporation, incorporation or bylaws or equivalent organizational documents;
(iib) authorizesplit, declarecombine, set asidesubdivide, make reclassify or pay otherwise amend the terms of any dividends on or make any distribution with respect to its outstanding shares of capital stock or other equity interests securities of the Company;
(whether c) declare, set aside or pay any dividend or other distribution payable in cash, assets, shares stock or other securities property (or any combination thereof) with respect to the capital stock of the Company or the Company Subsidiaries;
(d) redeem, purchase or otherwise acquire, or offer to redeem, purchase or otherwise acquire, or encumber, directly or indirectly, any Equity Interests, except (i) from holders of Company Options in full or partial payment of any exercise price and any applicable Taxes payable by such holder upon exercise of the Company Options to the extent required or permitted under the terms of such Company Options or any Company SubsidiaryEquity Plan, (ii) from holders of Restricted Shares in full or partial payment of any applicable Taxes payable by such holder upon the lapse of restrictions on the Restricted Shares to the extent required or permitted under the terms of such Restricted Shares or any Company Equity Plan, or (iii) from former employees, directors and consultants as required by the agreements made available to Parent prior to the date hereof providing for the repurchase of shares at their original issue price in accordance with the terms thereof;
(e) issue, sell, pledge, deliver, transfer, dispose of or encumber any shares of, or securities convertible into or exchangeable for, or grant any Company Options or Restricted Shares under the Company Equity Plan or warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class, or grant to any Person any right the value of which is based on the value of Shares or other capital stock, other than (i) the issuance of Shares reserved for issuance on the date hereof pursuant to the exercise of the Company Options or vesting of Restricted Shares outstanding as of the date hereof, (ii) the grant of Company Options pursuant to previously existing contractual arrangements or policies of the Company (including, without limitation, automatic annual grants to directors and grants to newly hired employees or promoted employees), except and (iii) the issuance of shares upon the exercise of the Top-Up Option;
(f) acquire or make any offer or agreement to acquire (whether pursuant to merger, stock or asset purchase or otherwise) in one transaction or any series of related transactions any Equity Interests in any Person or any business or division of any Person or any assets of any Person (or business or division thereof), other than acquisitions for dividends consideration not exceeding $1,000,000 in the aggregate;
(g) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any of its material assets or Company IP, other than (i) non-exclusive licenses entered into in the ordinary course of business and distributions paid or made by a wholly owned Company Subsidiary not material to the Company or another wholly owned Company Subsidiary and (ii) factoring of accounts receivable in the ordinary course of business consistent with past practice;
(iiih) enter into any agreement and arrangement except with respect to voting or registration, or file any registration statement with loans between the SEC with respect to any, of its capital stock or other equity interests or any other securities;
(iv) split, combine, subdivide, reduce or reclassify any of its capital stock or other equity interests, or redeem, purchase or otherwise acquire any of its capital stock or other equity interests (other than repurchases of Company Common Stock in satisfaction of applicable Tax withholdings or upon the payment and/or wholly owned Subsidiaries of the exercise price upon Company, (i) incur or assume or modify the exercise or vesting terms of any Company Equity Award outstanding as of the date hereof and in accordance with the terms thereof), long-term or short-term Indebtedness or issue or authorize the issuance of any of its capital stock or other equity interests or any other securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests or any rights, warrants or options to acquire any such shares of capital stock or other equity interests;
(v) except in connection with the pledge of equity interests pursuant to the Company Credit Agreements, issue, deliver, grant, sell, pledge, dispose of or encumber, or authorize the issuance, delivery, grant, sale, pledge, disposition or encumbrance of, any shares in the capital stock, voting securities or other equity interest in the Company or any Company Subsidiary or any securities convertible into or exchangeable or exercisable for any such shares, voting securities or equity interest, or any rights, warrants or options to acquire any such shares, voting securities or equity interest or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units or take any action to cause to be exercisable or vested any otherwise unexercisable or unvested Company Equity Award under any existing Company Equity Plan, other than issuances of Company Common Stock in respect of the vesting or settlement of Company Equity Awards outstanding as of the date hereof, in all cases in accordance with their respective terms;
(vi) except as required by applicable Law or any Company Benefit Plan or other Material Contract as in existence as of the date hereof and made available to Parent prior to the date hereof, (A) increase the compensation or benefits payable or to become payable to any of its directors, executive officers or employees, other than annual merit-based increases in base salary in the ordinary course of business consistent with past practice that do not exceed 3% of the aggregate annual cost of all employee annual base salaries and wage rates in effect as of the date hereof; (B) grant, pay or award, or commit to grant, pay or award, any severance, termination pay, change in control payments, bonuses, retention or incentive compensation to any of its current or former directors, executive officers or employees; (C) establish, adopt, enter into, amend or terminate any collective bargaining agreement or Company Benefit Plan, other than amendments to employee welfare benefit plans or collective bargaining agreements in the ordinary course of business that do not materially increase the annual cost or annual expense (relative to the 2020 annual cost or expense) of maintaining such employee welfare benefit plan or collective bargaining agreement; (D) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Company Benefit Plan (including any grantor trust or similar funding arrangement); (E) terminate the employment of any employee earning in excess of $85.000, other than for cause; or (F) hire any new employees with a base salary in excess of $85,000, other than replacing any such employees in the ordinary course of business consistent with past practice (it being understood that such replacement employee’s compensation and benefits shall be (I) limited to cash compensation only and (II) otherwise consistent in all material respects with the compensation and benefits of such replaced employee);
(vii) acquire (including by merger, consolidation or acquisition of stock or assets or any other means) or authorize or announce an intention to so acquire, or enter into any agreements providing for (x) any acquisitions of, any equity interests in or all or a material portion of the assets of any Person or any business or division thereof, or otherwise engage in any mergers, consolidations or business combinations or (y) acquisitions of material assetsdebt securities, except for, or with respect to, in each case, (A) acquisitions of supplies or equipment for borrowings under the Company’s existing revolving credit facility in the ordinary course of business consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (Bwhether directly, contingently or otherwise) with respect to clause (y) only, capital expenditures permitted by Section 6.1(b)(xii);
(viii) liquidate, dissolve, restructure, recapitalize or effect for the material obligations of any other reorganization Person for borrowed money; (including any restructuring, recapitalization, or reorganization between or among any of the Company and/or the Company Subsidiaries), or adopt any plan or resolution providing for any of the foregoing;
(ixiii) make any loans, advances or capital contributions to, or investments in, any other Person, except for (A) loans, advances, or capital contributions solely among Person that is not an affiliate of the Company and its wholly owned Company Subsidiaries in a material amount; (iv) cancel any material Indebtedness or solely among the Company’s wholly owned Company Subsidiaries waive any claims or rights of substantial value; (v) pay, discharge or satisfy any liabilities or obligations, other than in the ordinary course of business consistent with business; or (vi) vary the Company’s payment, collection or inventory practices in any material respect from the Company’s past practice, practices;
(i) except as required by the terms of any Benefit Plan or applicable Law in each case that do not involve effect on the transfer of funds between the United States of America and another jurisdictiondate hereof, (Bi) advances for reimbursable employee expenses increase the compensation or other benefits payable or to become payable to employees, officers, consultants, independent contractors, directors or other service providers of the Company or any Company Subsidiary (collectively, “Covered Employees”), other than, with respect to employees who are not officers or directors of the Company, annual base salary increases in the ordinary course of business consistent with past practice made at the usual time for annual base salary increases and not in excess of 3% per individual, (Cii) extensions of credit to customers grant any Covered Employee any increase in the ordinary course of business consistent with past practice;
(x) sell, lease, license, assign, abandon, permit to lapse, transfer, exchange, swap severance or otherwise dispose of, or subject to any Lien termination pay (other than Permitted Liensseverance provided in accordance with Section 6.8(a)(iv) of the Company Disclosure Letter), (iii) enter into, become a party to, establish (other than establishing any broad-based health or welfare plan to replace a broad-based Company health or welfare plan that has terminated and at no material additional cost to the Company or any of its properties, rights or assets (including shares in the capital of the Company Subsidiaries), except amend (A) dispositions other than amendments that do not materially increase the cost to the Company or any of obsoleteits Subsidiaries of maintaining the applicable Benefit Plan), damagedcommence participation in, worn-out terminate or surplus equipment or property no longer necessary in commit itself to the conduct adoption of the business or other immaterial equipment or property, in each case, in the ordinary course of business consistent with past practiceany Benefit Plan, (Biv) leases establish, adopt or subleases enter into any collective bargaining agreement, (v) accelerate any rights or benefits, or make any material determinations, under any Benefit Plan (except as contemplated under this Agreement), (vi) hire or promote any employee with a base salary of real property $150,000 or interests therein more, (vii) discharge any employee with a base salary of $150,000 or more, or (viii) cause the funding of any rabbi trust or similar arrangement or take any action to fund; provided, however, that the foregoing clause (i) shall not used for the conduct of the Company’s or restrict the Company Subsidiaries’ business, as currently conductedor any Company Subsidiary from making available to newly hired or promoted employees (other than Covered Employees or employees with a base salary of $150,000 or more), in each case in the ordinary course of business and consistent with past practice, compensation and benefits (Cincluding benefits under any Benefit Plan);
(j) incur any capital expenditures or any obligations or liabilities in respect thereof in excess of $1,000,000 in the aggregate, except those contemplated in the capital expenditures budget for the Company made available to Parent prior to the date hereof;
(k) enter into, renew, modify or amend any agreement or arrangement that limits or otherwise restricts the Company or any Company Subsidiary, or upon completion of the Transactions, Parent or its Subsidiaries or any successor thereto, from engaging or competing in any line of business or from purchasing, manufacturing, producing, importing, exporting, offering for sale, selling or distributing any type of goods or services, in each case in any manner or in any geographic area material to the business or operations of Parent or the Company, except for the automatic renewal of any such agreement that involves annual expenditures of less than $500,000;
(l) change any of the accounting methods used by it, except for such changes required by GAAP, applicable Laws or any Government Entity;
(i) make (other than in the ordinary course of business), change or rescind any material Tax election; (ii) file any amended Tax Return with respect to any material Tax or change any annual Tax accounting period or adopt (other than in the ordinary course of business) or change any accounting method for Tax purposes; (iii) enter into any settlement or compromise of any material Tax liability, agree to any adjustment of any material Tax attribute, or surrender any right or claim to a material refund of Taxes; (iv) enter into any closing agreement relating to any material Tax liability or that could bind the Company or any of the Company Subsidiaries after the Closing Date; or (v) give or request any waiver or extension of a statute of limitation with respect to a material Tax Return;
(n) waive, release, assign, settle or compromise any material claim or material litigation, in each case made or pending against the Company or any Company Subsidiary, or any of their respective officers and directors in their capacities as such, other than waivers, releases, assignments, settlements or compromises that involve the payment of monetary damages not in excess of $250,000 in the aggregate, provide for a complete release of the Company and the Company Subsidiaries of all claims and do not involve the imposition of any material injunctive relief against, and do not provide for any admission of liability by, the Company or any Company Subsidiary;
(o) (i) enter into, renew, terminate, materially modify, waive any material provision of or assign any rights or claims under any agreement that is or would be a Company Material Contract or (ii) enter into, renew, terminate, materially modify, or waive any provision of or assign any rights or claims under any agreement that is or would be a Company Material Contract in a manner that would reasonably be expected to materially delay or prevent the consummation of the Merger or any of the Transactions, except for the automatic renewal of any such agreement that involves annual expenditures of less than $500,000;
(p) adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any Company Subsidiary (other than the Merger);
(q) fail to pay any required maintenance or similar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of any Owned Company IP, other than for non-exclusive licenses or other non-exclusive grants of rights in, to or under Company material Intellectual Property Rights in the ordinary course of business consistent with past practice, (D) pursuant to the exercise of creditor rights under any Contract providing for outstanding Indebtedness (so long as the Company and its Subsidiaries have used reasonable best efforts to exhaust all other avenues of relief), and (E) pursuant to transactions solely between the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries in the ordinary course of business consistent with past practice;; and
(xi) (Ar) enter into any Contract that wouldagreement, if entered into prior contract, commitment or arrangement to the date hereof, be a Material Contract, (B) materially modify, materially amend or extend do any Material Contract, (C) terminate any Material Contract, (D) waive or release any material rights or claims under any Material Contract or (E) assign any material rights or claims under any Material Contract, other than (w) in the case of clauses (A) and (B), solely with respect to the types of Contracts described in clauses (viii) and (xiv) of the definition foregoing, or authorize any of Material Contract, in the ordinary course of business consistent with past practice, (x) in the case of clause (D), in the ordinary course of business consistent with past practices (so long as such waiver or release is not material to the Company and the Company Subsidiaries, taken as whole); provided, that any actions of a nature contemplated by and to the extent permitted by this Section 6.1(b) shall not require approval under this clause (xi) for any types of Contracts described in clause (xii) below,foregoing.
Appears in 1 contract
Samples: Merger Agreement (Volcom Inc)
Conduct of Business by the Company Pending the Closing. The Company agrees that between the date hereof of this Agreement and the earlier of the Effective Time or the date, if any, on which this Agreement is validly terminated pursuant to Section 9.18.1, except (1) as set forth in Section 6.1 of the Company Disclosure Letter, (2) as specifically permitted or required by this AgreementAgreement or any document, agreement, certificate or instrument contemplated hereby, (3) as required by applicable Law or (4) upon written request by the Company, as consented to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company (ai) shall, shall and shall cause each Company Subsidiary to, conduct its business in all material respects in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (i) preserve intact its and their present business organizations, goodwill organizations and ongoing businesses, (ii) keep available the services of its and their present officers and other key employees (other than where termination of such services is for cause) and (iii) to preserve its and their present relationships with customers, suppliers, vendors, Governmental Entities, employees suppliers and other Persons with whom it and they have material business relations; provided that, no action that is specifically permitted by any of clauses (a) through (t) of this Section 6.1 shall be deemed a breach of this clause (i), and (bii) the Company shall not, and shall not permit any Company Subsidiary to, directly or indirectly:
(ia) amendsplit, modifycombine, waive, rescind reduce or otherwise change the Company’s or reclassify any Company Subsidiary’s certificate of incorporation, bylaws or equivalent organizational documents;
(ii) authorize, declare, set aside, make or pay any dividends on or make any distribution with respect to its outstanding shares of capital stock or other equity interests (whether in cash, assets, shares or other securities of the Company or any Company Subsidiary)stock, except for dividends and distributions paid or made any such transaction by a Company Subsidiary that is a wholly owned Company Subsidiary to the Company or another and which remains a wholly owned Company Subsidiary after consummation of such transaction;
(b) declare, accrue, set aside or pay any dividend or make any other distribution other than the distributions to the Holders contemplated by this Agreement;
(c) except (x) as required by applicable Law or any Company Benefit Plan as in effect on the date hereof or (y) in the ordinary course of business consistent with past practice;
, (i) grant to any directors, officers or Executive-Level Employees any increase in compensation or benefits, (ii) grant or increase to any of its directors, officers or Executive-Level Employees any severance, termination, change in control or retention pay, (iii) pay or award, or commit to pay or award, any cash bonuses or cash incentive compensation to any of its directors, officers or Executive-Level Employees (other than the payment of accrued and unpaid cash bonuses or other cash incentive compensation), (iv) enter into any employment, severance, retention or change in control agreement and arrangement with respect to voting or registration, or file any registration statement with the SEC with respect to any, of its capital stock or other equity interests or any other securities;
(iv) split, combine, subdivide, reduce or reclassify any of its capital stock directors, officers or other equity interests, or redeem, purchase or otherwise acquire any of its capital stock or other equity interests Executive-Level Employees (other than repurchases of offer letters that do not otherwise provide for severance, retention or change in control payments or benefits), (v) hire any Executive-Level Employee, (vi) establish, adopt, enter into, amend or terminate any Collective Bargaining Agreement or Company Common Stock Benefit Plan (or a plan or arrangement that would be a Company Benefit Plan if in satisfaction of applicable Tax withholdings or upon the payment of the exercise price upon the exercise or vesting of any Company Equity Award outstanding existence as of the date hereof and in accordance with hereof), (vii) take any action to accelerate any payment or benefit, or the funding of any payment or benefit, payable or to be provided to any of its directors, officers or Executive-Level Employees or (viii) grant, amend or modify the terms thereofof any equity or equity-based awards to any director, officer or Executive-Level Employee;
(d) terminate the employment of any Executive-Level Employee, other than due to such individual’s death, disability or for cause or non-performance of material duties (each, as determined by the Company or the applicable Company Subsidiary in its reasonable discretion in the ordinary course of business consistent with past practice);
(e) make any material change in financial accounting policies or practices, except in each case as required by GAAP or applicable Law;
(f) authorize or announce an intention to authorize, or enter into agreements providing for, any acquisitions of an equity interest in any Person or any business or division of any Person (including by means of an asset purchase), or issue any mergers, consolidations or authorize business combinations, except for (i) capital expenditures otherwise permitted by Section 6.1(o), (ii) transactions between the issuance Company and its wholly owned Subsidiaries or between the Company’s wholly owned Subsidiaries or (iii) the creation of any of its capital stock new wholly owned Subsidiaries organized to conduct or other equity interests or any other securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests or any rights, warrants or options to acquire any such shares of capital stock or other equity interestscontinue activities otherwise permitted by this Agreement;
(vg) except in connection with the pledge of equity interests pursuant to amend the Company Credit AgreementsGoverning Documents, and shall not permit any Company Subsidiary to adopt any amendments to its governing documents;
(h) issue, deliver, grant, sell, pledge, dispose of or encumber, or authorize the issuance, delivery, grant, sale, pledge, disposition or encumbrance of, any shares in the of its capital stock, voting securities or other equity interest in the Company or any Company Subsidiary or any securities convertible into or exchangeable or exercisable for any such shares, voting securities or equity interest, or any rights, warrants or options to acquire any such sharesshares in its capital stock, voting securities or equity interest or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units or take any action to cause to be exercisable or vested any otherwise unexercisable or unvested Company Equity Award under any existing Company Equity Planunits, in each case other than issuances the issuance of Company Common Stock in respect of upon (i) the vesting or settlement of Company RSU Awards pursuant to the Company Equity Awards Plan or (ii) the exercise of Company Warrants, in each case outstanding as of on the date hereof, in all cases in accordance with their respective termsof this Agreement;
(vii) except as required by applicable Law directly or indirectly, purchase, redeem or otherwise acquire any shares in its capital or any Company Benefit Plan rights, warrants or other Material Contract as in existence as of the date hereof and made available options to Parent prior to the date hereof, (A) increase the compensation or benefits payable or to become payable to any of its directors, executive officers or employees, other than annual merit-based increases in base salary in the ordinary course of business consistent with past practice that do not exceed 3% of the aggregate annual cost of all employee annual base salaries and wage rates in effect as of the date hereof; (B) grant, pay or award, or commit to grant, pay or award, any severance, termination pay, change in control payments, bonuses, retention or incentive compensation to any of its current or former directors, executive officers or employees; (C) establish, adopt, enter into, amend or terminate any collective bargaining agreement or Company Benefit Plan, other than amendments to employee welfare benefit plans or collective bargaining agreements in the ordinary course of business that do not materially increase the annual cost or annual expense (relative to the 2020 annual cost or expense) of maintaining such employee welfare benefit plan or collective bargaining agreement; (D) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Company Benefit Plan (including any grantor trust or similar funding arrangement); (E) terminate the employment of any employee earning in excess of $85.000, other than for cause; or (F) hire any new employees with a base salary in excess of $85,000, other than replacing acquire any such employees shares in the ordinary course of business consistent with past practice (it being understood that such replacement employee’s compensation and benefits shall be (I) limited to cash compensation only and (II) otherwise consistent in all material respects with the compensation and benefits of such replaced employee)its capital;
(viij) acquire redeem, repurchase, prepay (including by mergerother than prepayments of revolving loans), consolidation defease, incur, assume, endorse, guarantee or acquisition of stock otherwise become liable for or assets or modify in any other means) or authorize or announce an intention to so acquire, or enter into any agreements providing for (x) any acquisitions of, any equity interests in or all or a material portion of respects the assets terms of any Person or any business or division thereof, or otherwise engage in any mergers, consolidations or business combinations or (y) acquisitions of material assets, except for, or with respect to, in each case, (A) acquisitions of supplies or equipment in the ordinary course of business consistent with past practice, or (B) with respect to clause (y) only, capital expenditures permitted by Section 6.1(b)(xii);
(viii) liquidate, dissolve, restructure, recapitalize or effect any other reorganization (including any restructuring, recapitalization, or reorganization between or among any of the Company and/or the Company Subsidiaries), or adopt any plan or resolution providing for any of the foregoing;
(ix) make any loans, advances Indebtedness or capital contributions toleases or issue or sell any debt securities or calls, options, warrants or investments inother rights to acquire any debt securities (directly, any other Personcontingently or otherwise), except for (Ai) loans, advances, or capital contributions solely any Indebtedness for borrowed money among the Company and its wholly owned Subsidiaries or among wholly owned Company Subsidiaries, (ii) guarantees by the Company of Indebtedness for borrowed money of Company Subsidiaries or solely among the Company’s wholly owned guarantees by Company Subsidiaries in the ordinary course of business consistent with past practice, in each case that do not involve the transfer of funds between the United States of America and another jurisdiction, (B) advances Indebtedness for reimbursable employee expenses in the ordinary course of business consistent with past practice and (C) extensions of credit to customers in the ordinary course of business consistent with past practice;
(x) sell, lease, license, assign, abandon, permit to lapse, transfer, exchange, swap or otherwise dispose of, or subject to any Lien (other than Permitted Liens), any of its properties, rights or assets (including shares in the capital borrowed money of the Company Subsidiaries)or any Company Subsidiary, except (A) dispositions of obsolete, damaged, worn-out or surplus equipment or property no longer necessary which Indebtedness is incurred in the conduct of the business or other immaterial equipment or property, in each case, in the ordinary course of business consistent compliance with past practice, (B) leases or subleases of real property or interests therein not used for the conduct of the Company’s or the Company Subsidiaries’ business, as currently conducted, in each case in the ordinary course of business consistent with past practice, (C) non-exclusive licenses or other non-exclusive grants of rights in, to or under Company Intellectual Property Rights in the ordinary course of business consistent with past practice, (D) pursuant to the exercise of creditor rights under any Contract providing for outstanding Indebtedness (so long as the Company and its Subsidiaries have used reasonable best efforts to exhaust all other avenues of relief), and (E) pursuant to transactions solely between the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries in the ordinary course of business consistent with past practice;
(xi) (A) enter into any Contract that would, if entered into prior to the date hereof, be a Material Contract, (B) materially modify, materially amend or extend any Material Contract, (C) terminate any Material Contract, (D) waive or release any material rights or claims under any Material Contract or (E) assign any material rights or claims under any Material Contract, other than (w) in the case of clauses (A) and (B), solely with respect to the types of Contracts described in clauses (viii) and (xiv) of the definition of Material Contract, in the ordinary course of business consistent with past practice, (x) in the case of clause (D), in the ordinary course of business consistent with past practices (so long as such waiver or release is not material to the Company and the Company Subsidiaries, taken as whole); provided, that any actions of a nature contemplated by and to the extent permitted by this Section 6.1(b) shall not require approval under this clause (xi) for any types of Contracts described in clause (xii) belowj),
Appears in 1 contract
Samples: Merger Agreement (WillScot Corp)
Conduct of Business by the Company Pending the Closing. The Company agrees that that, between the date hereof of this Agreement and the earlier of the Effective Time or and the date, if any, on which termination of this Agreement is validly terminated pursuant to Section 9.1in accordance with Article 7, except as set forth in Section 6.1 5.1 of the Company Disclosure Letter, Schedule or as specifically permitted or required by this Agreement, as expressly required by applicable Law or as consented expressly contemplated by this Agreement or otherwise with the prior written consent of the Purchaser (not to in writing by Parent be unreasonably withheld, conditioned or delayed), the Company (a) shallwill, and shall will cause each Company Subsidiary to, (i) conduct its business in all material respects operations only in the ordinary course of business consistent with past practice (including, for the avoidance of doubt, by paying all Taxes and filing all Tax Returns required under applicable Law), (ii) use its commercially reasonable efforts to (i) preserve intact its and their present business organizations, goodwill and ongoing businesses, (ii) keep available the services of its and their present the current officers and other key employees (of the Company and each Company Subsidiary and preserve the goodwill and current relationships of the Company and each Company Subsidiary with customers, suppliers and other than where termination of such services is for cause) Persons with which the Company or any Company Subsidiary has business relations and (iii) use its commercially reasonable efforts to preserve substantially intact its present business organization. Without limiting the foregoing, and their present relationships as an extension thereof, except as set forth in Section 5.1 of the Company Disclosure Schedule or as expressly required by applicable Law (other than Section 5.1(s)) or as expressly contemplated by this Agreement (including with customersrespect to any Pre-Closing Restructuring Actions taken), suppliersor otherwise with the prior written consent of the Purchaser, vendors, Governmental Entities, employees and other Persons with whom it and they have material business relations; and (b) the Company shall not, and shall not permit any Company Subsidiary to, between the date of this Agreement and the earlier of the Effective Time and the termination of this Agreement in accordance with Article 7, directly or indirectly:
(ia) amend, modify, waive, rescind or otherwise change the Company’s or any Company Subsidiary’s its certificate of incorporation, bylaws or bylaws, equivalent organizational documents;
(iib) authorizeissue, declaresell, set asidepledge, make dispose of, grant, transfer or pay encumber any dividends on or make any distribution with respect to its outstanding shares of capital stock of, or other equity interests Equity Interests in, the Company or any Company Subsidiary, or any rights based on the value of any such Equity Interests, other than the issuance of Shares upon the exercise of Company Warrants, Company Options, under the ESPP, or the settlement of Company RSUs outstanding as of the date hereof in accordance with their current terms;
(whether c) sell, pledge, dispose of, transfer, encumber, assign, lease, license, sublicense, abandon, dedicate to the public, or permit to lapse (solely in cashthe case of material Company-Owned Intellectual Property or Company-Licensed Intellectual Property), assetsor fail to maintain in the ordinary course of business consistent with past practice (subject, shares in the case of tangible property, to ordinary wear and tear) any property or other securities assets (including Company-Owned Intellectual Property and Company-Licensed Intellectual Property) of the Company or any Company Subsidiary), except (i) pursuant to existing Contracts for dividends the sale or purchase of goods or services in the ordinary course of business, consistent with past practice, (ii) dispositions in the ordinary course of business, consistent with past practice, of equipment and distributions paid property no longer used in the operation of the business as currently conducted, or made by (iii) sales of inventory or other tangible property or assets having a wholly owned Company Subsidiary to fair market value less than $250,000 in the Company or another wholly owned Company Subsidiary aggregate, in each case in the ordinary course of business consistent with past practice;
(iiid) enter into declare, set aside, make or pay any agreement and arrangement dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to voting or registration, or file any registration statement with the SEC with respect to any, of its capital stock or other equity interests or any other securities;
(iv) split, combine, subdivide, reduce or reclassify any of its capital stock or other equity interestsEquity Interests (other than dividends paid by a wholly-owned Company Subsidiary to the Company or another wholly-owned Company Subsidiary) or enter into any agreement with respect to the voting or registration of its capital stock or other Equity Interests;
(e) reclassify, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire acquire, directly or indirectly, any of its capital stock stock, or other equity interests Equity Interests, except (other than repurchases i) the acquisition by the Company of Shares in connection with the surrender of Shares by holders of Company Common Stock Options in satisfaction of applicable Tax withholdings or upon the payment of order to pay the exercise price upon the exercise or vesting of any Company Equity Award outstanding as of the date hereof and Company Option in accordance with the terms thereof)of such Company Options as in effect on the date hereof, and (ii) the withholding or issue or authorize the issuance disposition of any of its capital stock or other equity interests or any other securities in Shares to satisfy withholding Tax obligations with respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests or any rights, warrants or options to acquire any such shares of capital stock or other equity interests;
(v) except in connection with the pledge of equity interests awards granted pursuant to the Company Credit Agreements, issue, deliver, grant, sell, pledge, dispose Equity Plans in accordance with the terms of such awards as in effect on the date hereof;
(f) merge or encumber, or authorize the issuance, delivery, grant, sale, pledge, disposition or encumbrance of, any shares in the capital stock, voting securities or other equity interest in consolidate the Company or any Company Subsidiary with any Person or any securities convertible into adopt a plan of complete or exchangeable partial liquidation or exercisable resolutions providing for any such sharesa complete or partial liquidation, voting securities dissolution, restructuring, recapitalization or equity interest, or any rights, warrants or options to acquire any such shares, voting securities or equity interest or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units or take any action to cause to be exercisable or vested any otherwise unexercisable or unvested Company Equity Award under any existing Company Equity Plan, other than issuances of Company Common Stock in respect reorganization of the vesting or settlement of Company Equity Awards outstanding as of the date hereof, in all cases in accordance with their respective terms;
(vi) except as required by applicable Law or any Company Benefit Plan or other Material Contract as in existence as of the date hereof and made available to Parent prior to the date hereof, Subsidiary (A) increase the compensation or benefits payable or to become payable to any of its directors, executive officers or employees, other than annual merit-based increases in base salary in this Agreement, the ordinary course of business consistent with past practice that do not exceed 3% of Merger and the aggregate annual cost of all employee annual base salaries and wage rates in effect as of the date hereof; (B) grant, pay or award, or commit to grant, pay or award, any severance, termination pay, change in control payments, bonuses, retention or incentive compensation to any of its current or former directors, executive officers or employees; (C) establish, adopt, enter into, amend or terminate any collective bargaining agreement or Company Benefit Plan, other than amendments to employee welfare benefit plans or collective bargaining agreements in the ordinary course of business that do not materially increase the annual cost or annual expense (relative to the 2020 annual cost or expense) of maintaining such employee welfare benefit plan or collective bargaining agreement; (D) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Company Benefit Plan (including any grantor trust or similar funding arrangement); (E) terminate the employment of any employee earning in excess of $85.000, other than for cause; or (F) hire any new employees with a base salary in excess of $85,000, other than replacing any such employees in the ordinary course of business consistent with past practice (it being understood that such replacement employee’s compensation and benefits shall be (I) limited to cash compensation only and (II) otherwise consistent in all material respects with the compensation and benefits of such replaced employeeactions contemplated by Section 5.11);
(viig) acquire (including by merger, consolidation or acquisition of stock or assets or any other means) or authorize or announce an intention to so acquire, or enter into any agreements providing for (xassets) any acquisitions of, any equity interests interest in or all or a material portion of the assets of any other Person or any business or division thereofEquity Interest therein, or otherwise engage in any mergers, consolidations or business combinations or (y) other than acquisitions of material assets, except for, or with respect to, in each case, (A) acquisitions of supplies or equipment goods and services in the ordinary course of business consistent with past practice, or (B) with respect practice and capital improvements permitted pursuant to clause (y) only, capital expenditures permitted by Section 6.1(b)(xii5.1(k);
(viiih) liquidateincur any indebtedness for borrowed money or issue any debt securities or assume, dissolve, restructure, recapitalize guarantee or effect any other reorganization (including any restructuring, recapitalizationendorse, or reorganization otherwise as an accommodation become responsible for (whether directly, contingently or otherwise) the obligations of any Person (other than with respect to indebtedness between or among any of the Company and/or the and a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries), or adopt any plan or resolution providing ) for any borrowed money in excess of $1,000,000 in the foregoingaggregate;
(ixi) make any loans, advances or capital contributions to, or investments in, any other PersonPerson (other than any wholly-owned Company Subsidiary), except for other than (A) loansroutine travel, advances, or capital contributions solely among the Company relocation and its wholly owned Company Subsidiaries or solely among the Company’s wholly owned Company Subsidiaries business advances in the ordinary course of business consistent with past practiceto employees of the Company or any Company Subsidiary, in each case that do not involve the transfer of funds between the United States of America and another jurisdiction, (B) advances for reimbursable employee expenses trade credit, in the ordinary course of business consistent with past practice and (C) extensions of credit to customers either case, made in the ordinary course of business consistent with past practice;
(xj) sell, lease, license, assign, abandon, permit to lapse, transfer, exchange, swap or otherwise dispose of, or subject to any Lien (other than Permitted Liens), any of its properties, rights or assets (including shares in the capital of the Company Subsidiaries), except (A) dispositions of obsolete, damaged, worn-out or surplus equipment or property no longer necessary in the conduct of the business or other immaterial equipment or property, in each case, in the ordinary course of business consistent with past practice, (Bi) leases terminate, cancel, renew or subleases agree to any material amendment of, change in or waiver under any Company Material Contract, (ii) enter into any Contract that, if existing on the date hereof, would be a Company Material Contract or (iii) amend any Contract in existence on the date hereof that, after giving effect to such amendment, would be a Company Material Contract;
(k) except in the ordinary course of real property business consistent with past practice, make or interests therein not used for authorize any capital expenditure in excess of $250,000 individually or $1,000,000 in the conduct aggregate;
(l) except as required by Law or to comply with any Company Benefit Plan as in effect on the date of this Agreement and disclosed in Section 3.12(a) of the Company’s Company Disclosure Schedule, (i) increase the compensation or the Company Subsidiaries’ businessbenefits of any Service Provider, as currently conducted, except for routine increases in each case base cash compensation to Service Providers (other than officers and directors) in the ordinary course of business consistent with past practice, (Cii) non-exclusive licenses pay to any Service Provider any compensation or benefit not provided for under any Company Benefit Plan, other non-exclusive grants than the payment of rights in, to or under Company Intellectual Property Rights base cash compensation in the ordinary course of business consistent with past practice, (Diii) pursuant grant any severance, change of control, retention, termination or similar compensation or benefits to any Service Provider, (iv) adopt, establish, enter into, amend, modify or terminate any Benefit Plan or Company Labor Agreement, (v) enter into any trust, annuity or insurance Contract or similar agreement or take any other action to fund or otherwise secure the exercise payment of creditor rights under any Contract providing for outstanding Indebtedness compensation or benefit, (so long as vi) amend or modify the terms of any Company Benefit Plan to accelerate the time of vesting or payment of any compensation or benefit, or (vii) hire any employee whose base compensation would exceed $150,000;
(i) forgive any loans to directors, officers, employees or any of their respective affiliates or (ii) enter into any transactions or Contracts with any affiliates or other Person that would be required to be disclosed by the Company under Item 404 of Regulation S-K of the SEC;
(n) (i) waive, release, pay, discharge or satisfy any liabilities or obligations (absolute, accrued, contingent or otherwise) in excess of $50,000 in any individual case, except (A) in the ordinary course of business consistent with past practice and its Subsidiaries in accordance with the terms thereof or (B) liabilities or obligations reserved against on the Balance Sheet (for amount not in excess of such reserves); (ii) accelerate or delay collection of notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have used reasonable best efforts to exhaust all other avenues of relief), and (E) pursuant to transactions solely between the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries been collected in the ordinary course of business consistent with past practice;
; or (xiiii) (A) enter into delay or accelerate in any Contract that would, if entered into prior to material respect payment of any account payable in advance of its due date or the date hereof, be a Material Contract, (B) materially modify, materially amend or extend any Material Contract, (C) terminate any Material Contract, (D) waive or release any material rights or claims under any Material Contract or (E) assign any material rights or claims under any Material Contract, other than (w) in the case of clauses (A) and (B), solely with respect to the types of Contracts described in clauses (viii) and (xiv) of the definition of Material Contract, such liability would have been paid in the ordinary course of business consistent with past practicepractice or vary its inventory practices in any material respect;
(o) make any change in accounting policies, practices, principles, methods or procedures, other than as required by GAAP or Regulation S-X promulgated under the Exchange Act or applicable rules and regulations of the SEC;
(xp) in the case of clause (D)compromise, settle or agree to settle any Proceeding other than compromises, settlements or agreements in the ordinary course of business consistent with past practices (so long as such waiver or release is practice that involve the payment of monetary damages not material to in excess of the amounts set forth on Section 5.1(p) of the Company Disclosure Schedule and does not (i) include any other obligation to be performed by, or limitation upon, the Company or the Company Subsidiaries, taken as wholethe Parent, the Purchaser or their affiliates that is material to the Company, the Parent, the Purchaser or their affiliates or (ii) result in any (A) imposition of equitable relief on, or the admission of wrongdoing by, the Company or any Company Subsidiary; or (B) actual or potential violation of any Criminal Law;
(q) make, change or rescind any material election in respect of Taxes (including, without limitation, an entity classification election under Treasury Regulations Section 301.7701-3); providedsettle or compromise any material claim, that notice, audit report, or assessment in respect of Taxes; amend any actions of a nature contemplated by and material Tax Return or claim for refund except to the extent permitted otherwise required by this Section 6.1(b) shall not require approval under this clause Law; request any ruling or enter into any advance pricing agreement or closing agreement with respect to Taxes; make any change (xi) for or file a request to make any types of Contracts described in clause (xii) below,such
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. The Company agrees that between the date hereof and the earlier of the Effective Time or the date, if any, on which this Agreement is validly terminated pursuant to Section 9.1in accordance with Article VIII, except as set forth in Section 6.1 5.1 of the Company Disclosure Letter, as specifically permitted or expressly required by this Agreement, as required by applicable Law or as consented otherwise with the prior written consent of Parent (such consent not to in writing by Parent be unreasonably withheld, conditioned or delayed), the Company (a) shallshall use commercially reasonable efforts to, and shall to cause each Company Subsidiary to, conduct its business in all material respects in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (i) preserve intact its and their present business organizations, goodwill and ongoing businesses, (ii) keep available the services of its and their present officers and other key employees (other than where termination of such services is for cause) and (iii) preserve its and their present relationships with customers, suppliers, vendors, licensors, licensees, Governmental Entities, employees and other Persons with whom it and they have material business relations; relations and (b) shall not, and shall not permit any Company Subsidiary to, directly or indirectly:
(i) amend, modify, waive, rescind or otherwise change the Company’s or any Company Subsidiary’s certificate of incorporation, bylaws or equivalent organizational documentsdocuments (whether by merger, consolidation, acquisition of stock or assets or otherwise);
(ii) authorize, declare, set aside, establish a record date, make or pay any dividends on or make any distribution with respect to its outstanding shares of capital stock or other equity interests (whether in cash, assets, shares shares, property or other securities or any combination thereof) of the Company or any Company Subsidiary), except for dividends and distributions paid or made by a wholly owned Company Subsidiary to the Company or another wholly wholly-owned Company Subsidiary in the ordinary course of business consistent with past practice;
(iii) Subsidiary, or enter into any agreement and arrangement with respect to voting or registration, or file any registration statement with the SEC with respect to any, of its capital stock or other equity interests or any other securities;
(iviii) split, combine, subdivide, reduce reduce, recapitalize or reclassify any of its capital stock or other equity interests, or redeem, purchase or otherwise acquire any of its capital stock or other equity interests (other than repurchases of Company Common Stock in satisfaction of applicable Tax withholdings or upon the payment of the exercise price upon the exercise or vesting of any Company Equity Award outstanding as of the date hereof and in accordance with the terms thereof)interests, or issue or authorize the issuance of any of its capital stock or other equity interests or any other securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests interests, except for the issuance of securities of any Company Subsidiary to the Company or any rights, warrants or options to acquire any such shares of capital stock or other equity interestswholly-owned Company Subsidiary;
(viv) except in connection with the pledge of equity interests pursuant to the Company Credit Agreements, issue, deliver, grant, sell, pledge, transfer, dispose of or encumber, or authorize the issuance, delivery, grant, sale, pledge, transfer, disposition or encumbrance of, any shares in the capital stock, voting securities or other equity interest in the Company or any Company Subsidiary or any securities convertible into or exchangeable or exercisable for any such shares, voting securities or equity interest, or any rights, warrants or options to acquire any such shares, voting securities or equity interest or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units or take any action to cause to be exercisable or vested any otherwise unexercisable or unvested Company Equity Award under any existing Company Equity PlanPlan (except as otherwise provided by the express terms of any Company Equity Award), other than (A) issuances of Company Common Stock in respect of options issued under the ESPP for the offering period commenced prior to the date of this Agreement or in respect of vesting or settlement of Company Equity Awards outstanding as of the date hereofAwards, in all cases in accordance with their respective termsterms or as permitted by this Agreement and (B) transactions solely between the Company and a wholly-owned Company Subsidiary or solely between wholly-owned Company Subsidiaries;
(viv) except as required by applicable Law or any Company Benefit Plan or other Material Contract as in existence as of the date hereof and made available to Parent prior to the date hereof, (A) increase the compensation or benefits payable or to become payable to any of its directors, executive officers or employees, other than annual merit-based increases in base salary in the ordinary course of business consistent with past practice that do not exceed 3% of the aggregate annual cost of all employee annual base salaries and wage rates in effect as of the date hereof; (B) grantgrant to any of its directors, executive officers or employees any retention, severance or termination pay or increase the entitlement to any such payments; (C) pay or award, or commit to grant, pay or award, any severance, termination pay, change in control payments, bonuses, retention or incentive compensation to any of its current directors or former directors, executive officers or employeesofficers; (CD) establish, adopt, enter into, amend or terminate any collective bargaining agreement or Company Benefit Plan, other than amendments to employee welfare benefit plans or collective bargaining agreements in the ordinary course of business that do not materially increase the annual cost or annual expense (relative to the 2020 annual cost or expense) of maintaining such employee welfare benefit plan or collective bargaining agreement; (DE) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Company Benefit Plan (including any grantor trust or similar funding arrangement)Plan; (EF) terminate the employment of any employee earning in excess at the level of $85.000vice president or above, other than for cause; or (FG) hire any new employees with a base salary in excess of $85,000directors, officers or employees; or (H) provide any funding for any rabbi trust or similar arrangement, other than replacing any such employees with respect to monthly fundings of the Company’s Nonqualified Deferred Compensation Plan in the ordinary course of business consistent accordance with past practice (it being understood that such replacement employee’s compensation and benefits shall be (I) limited to cash compensation only and (II) otherwise consistent in all material respects with the compensation and benefits of such replaced employee)practice;
(viivi) acquire (including by merger, consolidation or acquisition of stock or assets or any other means) or authorize or announce an intention to so acquire, or enter into any agreements providing for (x) any acquisitions of, directly or indirectly, any equity interests in or all or a material portion of the assets (including intangible assets) of any Person or any business business, division, securities, properties or division interests thereof, or otherwise engage in any mergers, consolidations or business combinations or (y) acquisitions of material assetscombinations, except for, or with respect to, in each case, for (A) transactions solely between the Company and a wholly-owned Company Subsidiary or solely between wholly-owned Company Subsidiaries or acquisitions of supplies or equipment in the ordinary course of business consistent with past practice, or practice and (B) acquisitions of Oil and Gas Interests or Oil and Gas Leases for an amount not in excess of $5,000,000 individually or $30,000,000 in the aggregate;
(vii) dispose of any of its Oil and Gas Interests or Oil and Gas Leases (other than sales of Hydrocarbons in the ordinary course of business consistent with respect past practice), whether voluntarily or by the failure to clause (y) onlyexercise a right or make a payment, capital expenditures permitted by Section 6.1(b)(xii)involving an amount in excess of $5,000,000 individually or $30,000,000 in the aggregate;
(viii) liquidateadopt any plan of merger, dissolveconsolidation, restructurereorganization, recapitalize liquidation or effect any other reorganization (including any restructuring, recapitalization, dissolution of the Company or reorganization between or among any of the Company and/or Subsidiaries, adopt resolutions providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization, file a petition in bankruptcy under any provisions of federal or state bankruptcy applicable Law on behalf of the Company Subsidiaries), or adopt any plan Company Subsidiaries or resolution providing for consent to the filing of any bankruptcy petition against the Company or any of the foregoingCompany Subsidiaries under applicable Law;
(ix) make any loans, advances or capital contributions to, or investments in, any other Person, except for (A) loans, advances, or capital contributions loans solely among the Company and its wholly wholly-owned Company Subsidiaries or solely among the Company’s wholly wholly-owned Company Subsidiaries in the ordinary course of business consistent with past practice, in each case that do not involve the transfer of funds between the United States of America and another jurisdiction, (B) or advances for reimbursable employee expenses in the ordinary course of business consistent with past practice and (C) extensions of credit to customers in the ordinary course of business consistent with past practice;
(x) sell, lease, license, assign, abandon, mortgage, permit to lapselapse or expire, transfer, pledge, surrender, encumber, divest, cancel, exchange, swap or otherwise dispose of, or subject to any Lien (other than Permitted Liens), ) any of its material properties, rights or assets (including any intangible assets and shares in the capital of the Company Subsidiariesor the Company Subsidiaries and Company IP), except (A) dispositions of obsolete, damaged, worn-out obsolete or surplus equipment or property no longer necessary in the conduct of the business or other immaterial equipment or property, in each caseworthless equipment, in the ordinary course of business consistent with past practice, (B) leases or subleases of real property or interests therein not used for the conduct of the Company’s or the Company Subsidiaries’ business, as currently conducted, in each case in the ordinary course of business consistent with past practice, (C) non-exclusive licenses or other non-exclusive grants of rights in, to or under Company Intellectual Property Rights IP entered in the ordinary course of business consistent with past practice, (D) pursuant to the exercise practice with customers of creditor rights under any Contract providing for outstanding Indebtedness (so long as the Company and its Subsidiaries have used reasonable best efforts to exhaust all other avenues of relief), and (E) pursuant to transactions solely between or the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries (C) sales of Hydrocarbons in the ordinary course of business consistent with past practicebusiness, and (D) for transactions solely among the Company and its wholly-owned Company Subsidiaries or solely among wholly-owned Company Subsidiaries;
(xi) (A) enter into any Contract that would, if entered into prior to the date hereof, be a Company Material Contract, (BB)(1) materially modify, materially amend amend, extend, accelerate, terminate, cancel, exercise or extend any Material Contract, (C) fail to exercise an expiring renewal option or terminate any Material Contract, (D) waive or release any material rights or claims under any Company Material Contract or (E2) waive, release or assign any material rights or claims under any Material Contractthereunder, other than (w) in the case of clauses this clause (A2) and (B), solely with respect to the types of Contracts described in clauses (viii) and (xiv) of the definition of Material Contract, other than in the ordinary course of business consistent with past practicepractice or (C) enter into any Contract for terminal, storage, transportation, processing or gathering services, or dedications or commitments relating to such services (xincluding any dedication of production or acreage or revenue, volumetric or capacity commitments), other than any such Contract that is terminable on sixty (60) days’ or less prior notice;
(xii) make any capital expenditure or expenditures, enter into agreements or arrangements providing for capital expenditure or expenditures or otherwise commit to do so, in excess of the budgeted amount of capital expenditures scheduled to be made in the case Company’s capital expenditure budget from the date hereof to June 30, 2019 set forth in Section 5.1(b)(xii) of clause the Company Disclosure Letter, except for capital expenditures to repair damages resulting from insured casualty events or capital expenditures required on an emergency basis or for the safety of individuals, assets or the environment;
(D)xiii) compromise or settle, or offer to compromise or settle any Proceeding (other than any collection action in the ordinary course of business consistent with past practices practice or any action to enforce the provisions hereof or any Proceeding relating to Tax matters, which shall be governed by clause (so long as xv)) other than any Proceeding that (A) is for an amount (in excess of insurance proceeds) not to exceed, for any such waiver compromise or release is settlement, $1,000,000 per Proceeding or $2,000,000 in the aggregate for all such Proceedings, (B) does not impose any injunctive or non-monetary relief on the Company and the Company Subsidiaries which, in either case, imposes material to restrictions on the business operations of the Company and the Company Subsidiaries, taken as whole)a whole and (C) does not provide for the license of any material Company IP in favor of a third party; provided, that the compromise or settlement, or offer to compromise or settle any actions Stockholder Litigation shall be subject to Section 6.9;
(xiv) make any change in financial accounting policies, practices, principles or procedures or any of its methods of reporting income, deductions or other material items for financial accounting purposes, except as required by GAAP or applicable Law;
(xv) make, change or rescind any material Tax election, adopt or change any Tax accounting period or material method of Tax accounting, file any income or other material Tax Return (other than in a manner that is not inconsistent with past practice), settle or compromise any material liability for Taxes or any Tax audit, claim or other Proceeding relating to a material amount of Taxes, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local or non-U.S. Law), surrender any right to claim a material refund of Taxes, or agree to an extension or waiver of the statute of limitations with respect to a material amount of Taxes without timely notifying Parent in writing;
(xvi) redeem, terminate early, unwind, repurchase, prepay, defease, create, suffer to exist, incur, enter into, assume, endorse, guarantee or otherwise become liable for or modify in any material respects the terms of any Indebtedness or any Derivative instruments or arrangements, or issue or sell any debt securities or calls, options, warrants or other rights to acquire any debt securities (directly, contingently or otherwise), except for
(A) any Indebtedness solely among the Company and its wholly-owned Company Subsidiaries or solely among wholly-owned Company Subsidiaries, and (B) any incremental borrowings under the Credit Agreement in the ordinary course of business consistent with past practice not to exceed $5,000,000;
(xvii) enter into any Contract or transaction with (including the making of any payment to) a Related Person (other than the Company or one of the Company Subsidiaries) or an Affiliate of a nature contemplated Related Person (other than the Company or one of the Company Subsidiaries), in each case of a type that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(xviii) enter into a new line of business or abandon or discontinue any existing line of business;
(xix) convene any special meeting (or any adjournment or postponement thereof) of the Company Stockholders;
(xx) adopt or otherwise implement any stockholder rights plan, “poison pill” or other comparable agreement;
(xxi) fail to timely file any report required to be filed by the Company or any Company Subsidiary with the SEC or any other Governmental Entity;
(xxii) enter into any Derivative instrument or position with, or amend or extend any Derivative instrument or position to have, a term in excess of three (3) months;
(xxiii) enter into any Contract with any oilfield services company or other independent contractors that could not be terminated without payment in excess of $1,000,000;
(xxiv) enter into any Contract that limits in any material respect the freedom of the Company, any Company Subsidiary or any of their respective Affiliates (including Parent and its Affiliates after the Effective Time) to compete or engage in any line of business or geographic region or with any Person or sell, supply or distribute any product or service or that otherwise has the effect of restricting the Company, the Company Subsidiaries or their Affiliates (including Parent and its Affiliates after the Effective Time) from the development, marketing or distribution of products and services, in each case, in any geographic area;
(xxv) enter into any Contract providing for the purchase or sale, transportation, or processing of Hydrocarbons that has a remaining term of greater than ninety (90) days and does not allow the Company or such Company Subsidiary to terminate it without penalty on ninety (90) days’ notice or less;
(xxvi) enter into any material Contract providing for the sale by the Company or any of the Company Subsidiaries of Hydrocarbons that contains a “take-or-pay” clause or any similar material prepayment or forward sale arrangement or obligation (excluding “gas balancing” arrangements associated with customary joint operating agreements) to deliver Hydrocarbons at some future time without then or thereafter receiving full payment therefor;
(xxvii) enter into any material Contract that provides for a call or option on production, or acreage dedication to a gathering, transportation or other arrangement downstream of the wellhead; and
(xxviii) agree or authorize, in writing or otherwise, to take any of the foregoing actions. Notwithstanding anything to the extent permitted by contrary in this Section 6.1(b5.1, the Parties acknowledge and agree that nothing contained in this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control or direct the Company’s operations (including for purposes of the HSR Act) shall not require approval under this clause (xi) for any types prior to the consummation of Contracts described in clause (xii) below,the Merger.
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. The Company agrees that between the date hereof of this Agreement and the earlier of the First Effective Time or the date, if any, on which this Agreement is validly terminated pursuant to Section 9.18.1, except (a) as set forth in Section 6.1 5.1 of the Company Disclosure Letter, (b) as specifically permitted or required by this Agreement, (c) as required by applicable Law or (d) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), the Company (ai) shall, shall and shall cause each Company Subsidiary to, conduct its business in all material respects in the ordinary course of business consistent with past practice and use commercially practice, including by using reasonable best efforts to (i) preserve intact its and their present business organizations, goodwill organizations and ongoing businesses, (ii) keep available the services of its and their present officers and other key employees (other than where termination of such services is for cause) and (iii) to preserve its and their present relationships with customers, suppliers, vendors, Governmental Entities, employees suppliers and other Persons with whom it and they have material business relations; provided, however, that no action that is specifically permitted by any of clauses (a) through (p) of Section 5.1(ii) shall be deemed a breach of this clause (i) and (bii) agrees that between the date of this Agreement and the First Effective Time or the date, if any, on which this Agreement is terminated pursuant to Section 8.1, the Company shall not, and shall not permit any Company Subsidiary to, directly or indirectly:
(ia) amend, modify, waive, rescind or otherwise change the Company’s or any Company Subsidiary’s certificate of incorporation, bylaws or equivalent organizational documents;
(ii) authorize, declare, set aside, make authorize or pay any dividends on or make any distribution with respect to its outstanding shares of capital stock or other equity interests (whether in cash, assets, shares or other securities of the Company or any Company Subsidiary), except for dividends and distributions paid or made on a pro rata basis by a Company Subsidiary in the ordinary course of business consistent with past practice or by a wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary in the ordinary course of business consistent with past practiceSubsidiary;
(iii) enter into any agreement and arrangement with respect to voting or registration, or file any registration statement with the SEC with respect to any, of its capital stock or other equity interests or any other securities;
(ivb) split, combine, subdivide, reduce or reclassify any of its capital stock or other equity interests, or redeem, purchase or otherwise acquire any of its capital stock or other equity interests (other than repurchases of Company Common Stock in satisfaction of applicable Tax withholdings or upon the payment of the exercise price upon the exercise or vesting of any Company Equity Award outstanding as of the date hereof and in accordance with the terms thereof)stock, or issue or authorize the issuance of any of its capital stock or other equity interests or any other securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests or any rightsstock, warrants or options to acquire except for any such shares transaction by a wholly owned Company Subsidiary which remains a wholly owned Company Subsidiary after consummation of capital stock or other equity interestssuch transaction;
(c) except as required by applicable Law or any Company Benefit Plan in existence as of the date hereof, (i) increase the compensation or benefits payable or to become payable to any of its directors, officers, employees or individual independent contractors other than increases in annual base salaries and target incentive compensation at times and in amounts in the ordinary course of business consistent with the annual salary review and incentive payout schedule in effect as of the date hereof, (ii) grant to any of its directors, officers, employees or individual independent contractors any increase in severance or termination pay, (iii) pay or award, or commit to pay or award, any bonuses or incentive compensation, (iv) enter into any employment, severance, or retention agreement (excluding offer letters that provide for no severance or change in control benefits, other than severance or change in control benefits provided to similarly situated employees under Company Benefit Plans in the ordinary course of business consistent with past practice) with any of its directors, officers, employees or individual independent contractors, (v) establish, adopt, enter into, amend or terminate any collective bargaining agreement or Company Benefit Plan except any amendments in connection the ordinary course of business consistent with past practice that do not contravene the pledge of equity interests pursuant other covenants set forth in this clause (c) or materially increase the cost to the Company, in the aggregate, of maintaining such Company Credit AgreementsBenefit Plan, (vi) take any action to accelerate any payment or benefit, or the funding of any payment or benefit, payable or to become payable to any of its directors, officers, employees or individual independent contractors, (vii) terminate the employment of any member of the Company Executive Team, other than for cause, or (viii) hire any employee or individual independent contractor having total annual compensation in excess of $300,000;
(d) make any change in financial accounting policies or procedures or any of its methods of reporting income, deductions or other material items for financial accounting purposes, except as required by GAAP, applicable Law or SEC policy;
(e) authorize or announce an intention to authorize, or enter into agreements providing for, any acquisitions of an equity interest in or a substantial portion of the assets of any Person or any business or division thereof, or any mergers, consolidations or business combinations, except for (i) such transactions with a price that does not exceed $10,000,000 individually or $30,000,000 in the aggregate or (ii) transactions between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries;
(f) amend the Company Governing Documents, and shall not permit any Significant Subsidiary of the Company or other material Company Subsidiary to adopt any amendments to its governing documents;
(g) issue, deliver, grant, sell, pledge, dispose of or encumber, or authorize the issuance, delivery, grant, sale, pledge, disposition or encumbrance of, any shares in the its capital stock, voting securities or other equity interest in the Company or any Company Subsidiary or any securities convertible into or exchangeable or exercisable for any such shares, voting securities or equity interest, or any rights, warrants or options to acquire any such sharesshares in its capital stock, voting securities or equity interest or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units or take any action to cause to be exercisable or vested any otherwise unexercisable or unvested Company Equity Award under any existing Company Equity PlanPlan (except as otherwise provided by the express terms of any Company Equity Award outstanding on the date hereof), other than (i) issuances of Company Common Stock Shares in respect of any exercise of Company Stock Options or the vesting or settlement of Company Equity Awards outstanding as of on the date hereof, in all cases hereof and in accordance with their respective termspresent terms or (ii) transactions between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries;
(vih) except as required by applicable Law directly or indirectly, purchase, redeem or otherwise acquire any shares in its capital or any Company Benefit Plan rights, warrants or other Material Contract as in existence as of the date hereof and made available options to Parent prior to the date hereof, (A) increase the compensation or benefits payable or to become payable to any of its directors, executive officers or employees, other than annual merit-based increases in base salary in the ordinary course of business consistent with past practice that do not exceed 3% of the aggregate annual cost of all employee annual base salaries and wage rates in effect as of the date hereof; (B) grant, pay or award, or commit to grant, pay or award, any severance, termination pay, change in control payments, bonuses, retention or incentive compensation to any of its current or former directors, executive officers or employees; (C) establish, adopt, enter into, amend or terminate any collective bargaining agreement or Company Benefit Plan, other than amendments to employee welfare benefit plans or collective bargaining agreements in the ordinary course of business that do not materially increase the annual cost or annual expense (relative to the 2020 annual cost or expense) of maintaining such employee welfare benefit plan or collective bargaining agreement; (D) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Company Benefit Plan (including any grantor trust or similar funding arrangement); (E) terminate the employment of any employee earning in excess of $85.000, other than for cause; or (F) hire any new employees with a base salary in excess of $85,000, other than replacing acquire any such employees shares in the ordinary course of business consistent with past practice (it being understood that such replacement employee’s compensation and benefits shall be (I) limited to cash compensation only and (II) otherwise consistent in all material respects with the compensation and benefits of such replaced employee);
(vii) acquire (including by merger, consolidation or acquisition of stock or assets or any other means) or authorize or announce an intention to so acquire, or enter into any agreements providing for (x) any acquisitions of, any equity interests in or all or a material portion of the assets of any Person or any business or division thereof, or otherwise engage in any mergers, consolidations or business combinations or (y) acquisitions of material assets, except for, or with respect to, in each case, (A) acquisitions of supplies or equipment in the ordinary course of business consistent with past practice, or (B) with respect to clause (y) only, capital expenditures permitted by Section 6.1(b)(xii);
(viii) liquidate, dissolve, restructure, recapitalize or effect any other reorganization (including any restructuring, recapitalization, or reorganization between or among any of the Company and/or the Company Subsidiaries), or adopt any plan or resolution providing for any of the foregoing;
(ix) make any loans, advances or capital contributions to, or investments in, any other Personits capital, except for (Ai) acquisitions of Company Shares tendered by holders of Company Equity Awards in order to satisfy obligations to pay the exercise price and/or Tax withholding obligations with respect thereto, (ii) the acquisition by the Company of Company Equity Awards in connection with the forfeiture of such awards and (iii) transactions between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries;
(i) redeem, repurchase, prepay (other than prepayments of revolving loans), advancesdefease, incur, assume, endorse, guarantee or capital contributions solely otherwise become liable for or modify in any material respects the terms of any Indebtedness for borrowed money or issue or sell any debt securities or calls, options, warrants or other rights to acquire any debt securities (directly, contingently or otherwise), except for (i) any Indebtedness for borrowed money among the Company and its wholly owned Company Subsidiaries or solely among the Company’s wholly owned Company Subsidiaries, (ii) Indebtedness for borrowed money incurred to replace, renew, extend, refinance or refund any existing Indebtedness for borrowed money of the Company or any of the Company Subsidiaries maturing on or prior to the six (6) month anniversary of the date of such refinancing, (iii) guarantees by the Company of Indebtedness for borrowed money of Company Subsidiaries or guarantees by Company Subsidiaries of Indebtedness for borrowed money of the Company or any Company Subsidiary, which Indebtedness is incurred in compliance with this clause (i), (iv) Indebtedness for borrowed money incurred pursuant to agreements entered into by the Company or any Company Subsidiary in effect prior to the execution of this Agreement and set forth in Section 5.1(i) of the Company Disclosure Letter; provided that any such Indebtedness shall be drawn solely in the ordinary course of business consistent in connection with past practicethe Company’s anticipated 2014-2015 capital expenditures described on Section 5.1(n) of the Company Disclosure Letter, and in each case that do an aggregate amount not involve the transfer of funds between the United States of America and another jurisdictionto exceed $50 million, (Bv) advances for reimbursable employee expenses in transactions at the ordinary course stated maturity of business consistent with past practice such Indebtedness and required amortization or mandatory prepayments and (Cvi) extensions Indebtedness for borrowed money not to exceed $10 million in aggregate principal amount outstanding at any time incurred by the Company or any of the Company Subsidiaries other than in accordance with clauses (i) through (v), inclusive; provided that nothing contained herein shall prohibit the Company and the Company Subsidiaries from making guarantees or obtaining letters of credit to customers or surety bonds for the benefit of commercial counterparties in the ordinary course of business consistent with past practice;
(xj) make any loans to any other Person, except for loans among the Company and its wholly owned Company Subsidiaries or among the Company’s wholly owned Company Subsidiaries;
(k) sell, lease, license, assign, abandon, permit to lapse, transfer, exchange, swap or otherwise dispose of, or subject to any Lien (other than Company Permitted Liens), any of its properties, rights material properties or assets (including shares in the capital of its or the Company Subsidiaries), except (i) pursuant to existing agreements in effect prior to the execution of this Agreement, (ii) in the case of Liens, as required in connection with any Indebtedness permitted to be incurred pursuant to Section 5.1(ii)(i), (iii) sales of inventory, or dispositions of obsolete or worthless equipment, in the ordinary course of business, (iv) licenses of non-material Intellectual Property (A) dispositions of obsolete, damaged, worn-out or surplus equipment or property no longer necessary in the conduct ordinary course of business or (B) in connection with a compromise or settlement of any material claim, litigation, investigation or proceeding permitted by Section 5.1(ii)(l), (v) such transactions with neither a fair market value of the business assets or other immaterial equipment properties nor an aggregate purchase price that exceeds $30,000,000 in the aggregate and (vi) for transactions among the Company and its wholly owned Company Subsidiaries or propertyamong wholly owned Company Subsidiaries;
(l) compromise or settle any material claim, litigation, investigation or proceeding, in each casecase made or pending by or against the Company or any of the Company Subsidiaries (for the avoidance of doubt, including any compromise or settlement with respect to matters in which any of them is a plaintiff), or any of their officers and directors in their capacities as such, other than the compromise or settlement of claims, litigation, investigations or proceedings that: (i) is for an amount (in excess of insurance proceeds) not to exceed, for any such compromise or settlement individually or in the aggregate, $15,000,000, (ii) does not impose any injunctive relief on the Company and the Company Subsidiaries and (iii) does not provide for the license of any material Intellectual Property;
(m) make or change any material Tax election, change any Tax accounting period for purposes of a material Tax or material method of Tax accounting, file any material amended Tax Return, settle or compromise any audit or proceeding relating to a material amount of Taxes, except in the ordinary course of business agree to an extension or waiver of the statute of limitations with respect to a material amount of Taxes, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local, or non-U.S. Law) with respect to any material Tax, surrender any right to claim a material Tax refund, take any action that would require the filing of a “gain recognition agreement” (within the meaning of the Treasury Regulations promulgated under Section 367 of the Code) to avoid current recognition of a material amount of income or gain for U.S. federal income tax purposes, or enter into any transfer or license of property with an Affiliate that would reasonably be expected (without taking into account any action or transaction entered into by Parent or any of its Subsidiaries (including, after the First Effective Time, the Company or any of its Subsidiaries)) to give rise to a material amount of “inversion gain” within the meaning of Section 7874 of the Code to Parent or any of its Subsidiaries after the First Effective Time;
(n) except in the ordinary course of business consistent with the past practice, or in accordance with the Company’s anticipated 2014-2015 capital expenditures described on Section 5.1(n) of the Company Disclosure Letter, make any new capital expenditure or expenditures, or commit to do so;
(o) except in the ordinary course of business consistent with past practicepractice or in connection with any transaction to the extent specifically permitted by any other subclause of this Section 5.1(ii), (B) leases or subleases of real property or interests therein not used for the conduct of the Company’s or the Company Subsidiaries’ business, as currently conducted, in each case in the ordinary course of business consistent with past practice, (C) non-exclusive licenses or other non-exclusive grants of rights in, to or under Company Intellectual Property Rights in the ordinary course of business consistent with past practice, (D) pursuant to the exercise of creditor rights under any Contract providing for outstanding Indebtedness (so long as the Company and its Subsidiaries have used reasonable best efforts to exhaust all other avenues of relief), and (E) pursuant to transactions solely between the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries in the ordinary course of business consistent with past practice;
(xi) (Ai) enter into any Contract that would, if entered into prior to the date hereof, be a Company Material Contract, or (Bii) materially modify, materially amend or extend any Material Contract, (C) terminate any Material Contract, (D) waive or release any material rights or claims under any Company Material Contract or (E) waive, release or assign any material rights or claims under thereunder; or
(p) agree, in writing or otherwise, to take any Material Contract, other than (w) in the case of clauses (A) and (B), solely with respect to the types of Contracts described in clauses (viii) and (xiv) of the definition of Material Contract, in the ordinary course of business consistent with past practice, (x) in the case of clause (D), in the ordinary course of business consistent with past practices (so long as such waiver or release is not material to the Company and the Company Subsidiaries, taken as whole); provided, that any actions of a nature contemplated by and to the extent permitted by this Section 6.1(b) shall not require approval under this clause (xi) for any types of Contracts described in clause (xii) below,foregoing actions.
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. The Company agrees that that, between the date hereof of this Agreement and the earlier of the Effective Time or and the date, if any, on which termination of this Agreement is validly terminated pursuant to Section 9.1in accordance with Article 7, except as set forth in Section 6.1 5.1 of the Company Disclosure Letter, as specifically permitted or required by this AgreementSchedule, as required by applicable Law or as consented contemplated or permitted by this Agreement (including the remainder of this Section 5.1), or otherwise with the prior written consent of Parent (not to in writing by Parent be unreasonably withheld, conditioned or delayed), the Company (a) shallwill, and shall will cause each Company Subsidiary to, (i) conduct its business in all material respects operations only in the ordinary course of business consistent with past practice and (ii) use its commercially reasonable efforts to (i) preserve substantially intact its business organization and their present business organizations, goodwill and ongoing businesses, (ii) keep available the services of its and their present officers and other key employees (other than where termination of such services is for cause) and (iii) to preserve its and their present relationships with customers, suppliers, vendors, Governmental Entities, employees and other Persons with whom it and they have material business relations; . Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 of the Company Disclosure Schedule, as required by applicable Law or as contemplated or permitted by this Agreement, or otherwise with the prior written consent of Parent (b) not to be unreasonably withheld, conditioned or delayed), the Company shall not, and shall not permit any Company Subsidiary to, directly or indirectlybetween the date of this Agreement and the earlier of the Effective Time and the termination of this Agreement in accordance with Article 7:
(ia) amend, modify, waive, rescind or otherwise change the Company’s Company Charter or Company Bylaws or, in the case of Company Subsidiaries, their certificates of incorporation, bylaws, or equivalent organizational or governing documents in a manner that is material to the business of such Company Subsidiary;
(b) issue, sell, pledge, dispose of, grant, transfer or 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 Company or any Company Subsidiary’s certificate , or any rights based on the value of incorporationany such Equity Interests (except for transactions between the Company and any direct or indirect wholly owned Company Subsidiary or between direct or indirect wholly owned Company Subsidiaries), bylaws other than (i) grants of Company RSU Awards covering up to 50,000 Shares in the aggregate in connection with new hires and promotions in the ordinary course of business, (ii) the issuance of Shares upon the exercise of Company Options or equivalent organizational documentsthe vesting of Company RSU Awards outstanding as of the date hereof or otherwise permitted to be granted hereunder in accordance with their terms, (iii) the adoption of a stockholder rights agreement and the issuance of rights to purchase Equity Interests of the Company pursuant to such stockholder rights agreement and the issuance of Equity Interests pursuant to the exercise of such rights, so long as such stockholder rights agreement is not applicable to the Merger and (iv) pledges of securities in connection with the incurrence or refinancing of indebtedness permitted under Section 5.1(h);
(c) directly or indirectly sell, lease, license, sublicense, transfer, sell and leaseback, exchange, swap, abandon, mortgage or otherwise encumber or subject to any Lien (other than any Permitted Lien) or otherwise dispose in whole or in part of any of its properties, assets or rights (other than Company Intellectual Property, which shall be governed by Section 5.1(o), and other than any such disposals of inventory or excess or obsolete assets, rights or properties in the ordinary course of business) or any interest therein except properties, assets or rights that have a fair market value of less than $1,500,000 individually or $7,500,000 in the aggregate (except, in each case, for (i) transactions between the Company and any direct or indirect wholly owned Company Subsidiary or between direct or indirect wholly owned Company Subsidiaries and (ii) pursuant to the Company’s existing receivables purchase facilities, European receivables factoring programs or any refinancing thereof permitted by Section 5.1(h));
(d) authorize, declare, set aside, make or pay any dividends on dividend or make any other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its outstanding shares of capital stock or other equity interests Equity Interests or enter into any agreement with respect to the voting of its capital stock (whether in cash, assets, shares or other securities of the Company or any Company Subsidiary), except for than dividends and distributions paid or made by a direct or indirect wholly owned Company Subsidiary to the Company or another direct or indirect wholly owned Company Subsidiary or the dividend of rights to purchase Equity Interests of the Company pursuant to a stockholder rights agreement permitted to be adopted under Section 5.1(b)); provided, that the Company may continue to authorize, declare and pay regular quarterly cash dividends on Shares (and, with respect to Company RSU Awards, dividend equivalents) in the ordinary course of business consistent an amount not to exceed $0.36 per Share for each quarterly dividend, with usual record and payment dates for such dividends in accordance with past dividend practice;
(iiie) enter into any agreement and arrangement with respect to voting or registration, or file any registration statement with the SEC with respect to any, of its capital stock or other equity interests or any other securities;
(iv) splitreclassify, combine, subdividesplit, reduce subdivide or reclassify any of its capital stock or other equity interestsamend the terms of, or redeem, purchase or otherwise acquire acquire, directly or indirectly, any of its the Company’s capital stock stock, or other equity interests Equity Interests, except (other than repurchases i) the acquisition by the Company of Shares in connection with the surrender of Shares by holders of Company Common Stock in satisfaction of applicable Tax withholdings or upon the payment of Options to be able to pay the exercise price upon the exercise or vesting of any Company Equity Award outstanding as of the date hereof and Company Option in accordance with the terms thereof)of such Company Options as in effect on the date hereof, (ii) the withholding or issue disposition of Shares to satisfy withholding Tax obligations with respect to awards granted pursuant to the Benefit Plans in accordance with the terms of such awards as in effect on the date hereof, (iii) upon the forfeiture of outstanding Company Options or authorize Company RSU Awards pursuant to their terms upon the issuance termination of the employment of the holder thereof or otherwise or (iv) the redemption of any of its capital stock or other equity interests or any other securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests or any rights, warrants or options Equity Interests pursuant to acquire any such shares of capital stock or other equity interestsa stockholder rights agreement permitted to be adopted under Section 5.1(b);
(vf) except in connection with the pledge of equity interests pursuant to the Company Credit Agreements, issue, deliver, grant, sell, pledge, dispose of merge or encumber, or authorize the issuance, delivery, grant, sale, pledge, disposition or encumbrance of, any shares in the capital stock, voting securities or other equity interest in consolidate the Company or any Company Subsidiary with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any securities convertible into Company Subsidiary, other than transactions between the Company and any direct or exchangeable indirect wholly owned Company Subsidiary or exercisable between direct or indirect wholly owned Company Subsidiaries;
(g) acquire (including by merger, consolidation, or acquisition of stock or assets) any Person, except with respect to such acquisitions in the ordinary course with a purchase price (including assumed indebtedness for borrowed money) not exceeding $5,000,000 individually or $10,000,000 in the aggregate and except for transactions between the Company and any such shares, voting direct or indirect wholly owned Company Subsidiary or between direct or indirect wholly owned Company Subsidiaries;
(h) incur any indebtedness for borrowed money or issue any debt securities or equity interestassume or guarantee the obligations of any Person (other than the Company and any direct or indirect wholly owned Company Subsidiary), except (i) in connection with refinancings of existing indebtedness that will mature prior to the expected Closing Date, (ii) for borrowings in the ordinary course of business under the Company’s existing credit facilities and receivables purchase facilities (or under refinancings of existing credit facilities and receivables purchase facilities that will mature prior to the expected Closing Date) and for transactions between the Company and any rightsdirect or indirect wholly owned Company Subsidiary or between direct or indirect wholly owned Company Subsidiaries, warrants (iii) indebtedness for borrowed money that is prepayable at any time without penalty or options premium, in an amount not to acquire any such sharesexceed $10,000,000 in the aggregate, voting securities or equity interest or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units or take any action to cause to be exercisable or vested any otherwise unexercisable or unvested Company Equity Award (iv) short-term borrowings (exclusive of those under any existing credit facilities, existing receivables purchase facilities, existing European receivables factoring programs or refinancings of such receivables purchase facilities or receivables factoring programs) in an aggregate principal amount not to exceed $5,000,000 outstanding at any time for working capital purposes in the ordinary course of business or (v) letters of credit and similar instruments issued in the ordinary course of the Company’s business, including the pledging of cash or other security as may be required by the issuer;
(i) make any material loans, advances or capital contributions to any other Person, except for (i) loans among the Company Equity Planand its direct or indirect wholly owned Company Subsidiaries or among the Company’s direct or indirect wholly owned Company Subsidiaries and (ii) operating leases and extensions of credit terms to customers in each case in the ordinary course of business;
(j) make any new capital expenditure or expenditures, or commit to do so, other than issuances of Company Common Stock capital expenditures (i) contemplated by the Company’s 2016 budget (the “2016 Budget”) set forth in respect Section 5.1(j) of the vesting or settlement Company Disclosure Schedule, (ii) in any calendar quarter of Company Equity Awards outstanding as 2017, not in excess in the aggregate of one quarter of the date hereof, aggregate amount contemplated by the 2016 Budget or (iii) capital expenditures of less than $1,500,000 individually or $7,500,000 in all cases in accordance with their respective termsthe aggregate;
(vik) except as required by applicable Law or in the ordinary course of business, (i) enter into any Company Benefit Plan or other Material Contract as in existence as of the date hereof and made available to Parent that would, if entered into prior to the date hereof, be a Company Material Contract, or (Aii) materially modify or amend in a manner materially adverse to the Company, cancel or terminate or waive, release or assign any material rights or claims with respect to, any Company Material Contract (unless in the case of each of clauses (i) and (ii), such action is permitted under paragraph (b), (c), (g), (h), (i), (j), (l), (n), (o), (p) or (q) of this Section 5.1);
(l) other than to comply with any Benefit Plan as in effect on the date of this Agreement, (i) except as permitted by Section 5.6(f), increase the compensation or benefits payable of any employee of the Company or to become payable to any of its directors, executive officers or employees, other than annual merit-based Company Subsidiary except for routine increases in the base salaries (not in excess of 3% on an aggregate basis of all employees’ salaries for 2016) of employees with an annual base salary of less than $250,000 (or the equivalent of such amount) in the ordinary course of business consistent with past practice that do not exceed 3% or in connection with promotions in the ordinary course business consistent with past practice; (ii) grant any rights to severance or termination pay to, or enter into any employment or severance agreement with, any employee of the aggregate annual cost of all employee Company or any Company Subsidiary other than employees with an annual base salaries and wage rates in effect as salary of less than $250,000 (or the date hereof; equivalent of such amount), (B) grant, pay or award, or commit to grant, pay or award, any severance, termination pay, change in control payments, bonuses, retention or incentive compensation to any of its current or former directors, executive officers or employees; (Ciii) establish, adopt, enter into, amend or terminate any collective bargaining or any other labor-related agreements or arrangements with any labor union, labor organization, works council or group of employees, or bonus, profit sharing, thrift, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan or agreement for the benefit of any employee of the Company or any Company Benefit PlanSubsidiary, other than (A) amendments to employee Benefit Plans that are health and welfare benefit plans and (B) entries into or collective bargaining amendments of employment agreements or offer letters with employees with an annual base salary of less than $250,000 (or the equivalent of such amount), in each case, in the ordinary course of business consistent with past practice and in a manner that do does not contravene the other covenants set forth in this Section 5.1(l) or materially increase the annual cost or annual expense (relative to the 2020 annual cost or expense) Company of maintaining such employee welfare benefit plan Benefit Plan or collective bargaining agreementthe benefits provided thereunder; or (Div) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Company Benefit Plan Plan;
(including m) make any grantor trust material change in financial accounting policies, practices, principles, methods or similar funding arrangement); (E) terminate the employment of any employee earning in excess of $85.000procedures, other than for cause; as required by GAAP or Regulation S-X promulgated under the Exchange Act or other applicable rules and regulations of the SEC or applicable Law;
(Fn) hire other than in the ordinary course of business, waive, release, assign, settle or compromise any new employees claims, liabilities or obligations arising out of, related to or in connection with a base salary litigation (other than litigation arising in excess of $85,000connection with this Agreement or the transactions contemplated hereby) or other Proceedings, other than replacing settlements of, or compromises for, any such employees litigation or other Proceedings (A) funded, subject to payment of a deductible, by insurance coverage maintained by the Company and the Company Subsidiaries or (B) for less than $5,000,000 (after taking into account insurance coverage maintained by the Company or the Company Subsidiaries) in the aggregate beyond the amounts reserved on the Company Financial Statements;
(o) (i) sell, assign, transfer, encumber or license (other than non-exclusive licenses granted in the ordinary course of business consistent with past practice or in connection with a compromise or settlement of any material claim, litigation, investigation or proceeding to the extent permitted under Section 5.1(n)), or (it being understood that such replacement employee’s compensation and benefits shall be (Iii) limited other than in the ordinary course of business, permit to cash compensation only and (II) lapse, abandon or otherwise consistent dispose of, in all each case to any third company, any material respects with Intellectual Property owned by the compensation and benefits of such replaced employee)Company or any Company Subsidiary;
(viip) acquire (including by merger, consolidation or acquisition of stock or assets or any other means) or authorize or announce an intention to so acquire, or enter into any agreements providing for (x) any acquisitions of, any equity interests in or all or a material portion of the assets of any Person or any business or division thereof, or otherwise engage in any mergers, consolidations or business combinations or (y) acquisitions of material assets, except for, or with respect to, in each case, (A) acquisitions of supplies or equipment than in the ordinary course of business (i) amend any material Tax Return, (ii) settle or compromise any material Tax liability for an amount materially in excess of the amount accrued or reserved with respect thereto on the Company Balance Sheet (or in a more recent Company consolidated balance sheet included in the Company SEC Documents), (iii) make, change or revoke any material Tax election except to the extent consistent with past practice, practice or (Biv) with respect to clause (y) only, capital expenditures permitted by Section 6.1(b)(xii);change any material method of Tax accounting; or
(viiiq) liquidate, dissolve, restructure, recapitalize or effect any other reorganization (including any restructuring, recapitalization, or reorganization between or among any of the Company and/or the Company Subsidiaries), or adopt any plan or resolution providing for agree to do any of the foregoing;
(ix) make any loans, advances or capital contributions to, or investments in, any other Person, except for (A) loans, advances, or capital contributions solely among the Company and its wholly owned Company Subsidiaries or solely among the Company’s wholly owned Company Subsidiaries in the ordinary course of business consistent with past practice, in each case that do not involve the transfer of funds between the United States of America and another jurisdiction, (B) advances for reimbursable employee expenses in the ordinary course of business consistent with past practice and (C) extensions of credit to customers in the ordinary course of business consistent with past practice;
(x) sell, lease, license, assign, abandon, permit to lapse, transfer, exchange, swap or otherwise dispose of, or subject to any Lien (other than Permitted Liens), any of its properties, rights or assets (including shares in the capital of the Company Subsidiaries), except (A) dispositions of obsolete, damaged, worn-out or surplus equipment or property no longer necessary in the conduct of the business or other immaterial equipment or property, in each case, in the ordinary course of business consistent with past practice, (B) leases or subleases of real property or interests therein not used for the conduct of the Company’s or the Company Subsidiaries’ business, as currently conducted, in each case in the ordinary course of business consistent with past practice, (C) non-exclusive licenses or other non-exclusive grants of rights in, to or under Company Intellectual Property Rights in the ordinary course of business consistent with past practice, (D) pursuant to the exercise of creditor rights under any Contract providing for outstanding Indebtedness (so long as the Company and its Subsidiaries have used reasonable best efforts to exhaust all other avenues of relief), and (E) pursuant to transactions solely between the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries in the ordinary course of business consistent with past practice;
(xi) (A) enter into any Contract that would, if entered into prior to the date hereof, be a Material Contract, (B) materially modify, materially amend or extend any Material Contract, (C) terminate any Material Contract, (D) waive or release any material rights or claims under any Material Contract or (E) assign any material rights or claims under any Material Contract, other than (w) in the case of clauses (A) and (B), solely with respect to the types of Contracts described in clauses (viii) and (xiv) of the definition of Material Contract, in the ordinary course of business consistent with past practice, (x) in the case of clause (D), in the ordinary course of business consistent with past practices (so long as such waiver or release is not material to the Company and the Company Subsidiaries, taken as whole); provided, that any actions of a nature contemplated by and to the extent permitted by this Section 6.1(b) shall not require approval under this clause (xi) for any types of Contracts described in clause (xii) below,.
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. The Company agrees that that, between the date hereof Agreement Date and continuing until the earlier of the Effective Time termination of this Agreement pursuant to its terms or the date, if any, on which this Agreement is validly terminated pursuant to Section 9.1Effective Time, except as set forth in Section 6.1 5.2 of the Company Disclosure Letter, Schedule or as specifically permitted or required by any other provision of this Agreement, unless previously approved in writing by Parent, the Company 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 5.2 of the Company Disclosure Schedule or as specifically permitted by any other provision of this Agreement, the Company shall not (unless required by applicable Law Law), between the Agreement Date and continuing until the earlier of the termination of this Agreement pursuant to its terms or as consented the Effective Time, directly or indirectly, do, or agree to do, any of the following unless previously approved in writing by Parent the Company Parent:
(a) shallamend or otherwise change its certificate of incorporation or by-laws or equivalent organizational documents;
(b) sell, and shall cause each 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 Intellectual Property) of the Company Subsidiary toor any of its Subsidiaries, conduct except pursuant to existing Contracts or commitments or the sale or purchase of goods of the licensing of its business in all material respects products in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (i) preserve intact its and their present practice, or enter into any commitment or transaction outside the ordinary course of business organizations, goodwill and ongoing businesses, (ii) keep available the services of its and their present officers and other key employees (other than where termination of such services is for cause) and (iii) preserve its and their present relationships consistent with customers, suppliers, vendors, Governmental Entities, employees and other Persons with whom it and they have material business relations; and (b) shall not, and shall not permit any Company Subsidiary to, directly or indirectly:
(i) amend, modify, waive, rescind or otherwise change the Company’s or any Company Subsidiary’s certificate of incorporation, bylaws or equivalent organizational documentspast practice;
(iic) authorize, declare, set aside, make or pay any dividends on dividend or make any other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its outstanding shares of capital stock or (other equity interests (whether in cash, assets, shares or other securities than dividends paid by a wholly-owned Subsidiary of the Company or any Company Subsidiary), except for dividends and distributions paid or made by a wholly owned Company Subsidiary to the Company or another wholly to any other wholly-owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock or grant any Company Subsidiary Options;
(d) 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 securities (other than in connection with the termination of an employee pursuant to existing repurchase rights or the exercise any currently outstanding options or warrants);
(e) 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 assets in the ordinary course of business consistent with past practice;
(iiif) enter into any agreement and arrangement except as may be required by contractual commitments or corporate policies with respect to voting severance or registration, or file any registration statement with termination pay in existence on the SEC with respect to any, of its capital stock or other equity interests or any other securities;
(ivAgreement Date as disclosed in Section 4.11(b) split, combine, subdivide, reduce or reclassify any of its capital stock or other equity interests, or redeem, purchase or otherwise acquire any of its capital stock or other equity interests (other than repurchases of Company Common Stock in satisfaction of applicable Tax withholdings or upon the payment of the exercise price upon the exercise or vesting of any Company Equity Award outstanding as of the date hereof and in accordance with the terms thereof), or issue or authorize the issuance of any of its capital stock or other equity interests or any other securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests or any rights, warrants or options to acquire any such shares of capital stock or other equity interests;
(v) except in connection with the pledge of equity interests pursuant to the Company Credit Agreements, issue, deliver, grant, sell, pledge, dispose of or encumber, or authorize the issuance, delivery, grant, sale, pledge, disposition or encumbrance of, any shares in the capital stock, voting securities or other equity interest in the Company or any Company Subsidiary or any securities convertible into or exchangeable or exercisable for any such shares, voting securities or equity interest, or any rights, warrants or options to acquire any such shares, voting securities or equity interest or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units or take any action to cause to be exercisable or vested any otherwise unexercisable or unvested Company Equity Award under any existing Company Equity Plan, other than issuances of Company Common Stock in respect of the vesting or settlement of Company Equity Awards outstanding as of the date hereof, in all cases in accordance with their respective terms;
(vi) except as required by applicable Law or any Company Benefit Plan or other Material Contract as in existence as of the date hereof and made available to Parent prior to the date hereof, Disclosure Schedule: (A) 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 enter into any employment or severance agreement with, any director, officer or other employee of the Company or any of its directorsSubsidiaries, executive officers or employeesestablish, 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 than annual merit-based increases in base salary 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, accelerate vesting, exercisability or funding or exercise any discretion under any Company Benefit Plan;
(g) (A) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, contingent or otherwise), except in the ordinary course of business consistent with past practice that do not exceed 3% of the aggregate annual cost of all employee annual base salaries and wage rates in effect as of the date hereof; accordance with their terms, (B) grant, pay accelerate or award, delay collection of notes or commit to grant, pay accounts receivable in advance of or award, any severance, termination pay, change in control payments, bonuses, retention beyond their regular due dates or incentive compensation to any of its current or former directors, executive officers or employees; (C) establish, adopt, enter into, amend or terminate any collective bargaining agreement or Company Benefit Plan, other than amendments to employee welfare benefit plans or collective bargaining agreements in the ordinary course of business that do not materially increase dates when the annual cost or annual expense (relative to the 2020 annual cost or expense) of maintaining such employee welfare benefit plan or collective bargaining agreement; (D) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Company Benefit Plan (including any grantor trust or similar funding arrangement); (E) terminate the employment of any employee earning in excess of $85.000, other than for cause; or (F) hire any new employees with a base salary in excess of $85,000, other than replacing any such employees in the ordinary course of business consistent with past practice (it being understood that such replacement employee’s compensation and benefits shall be (I) limited to cash compensation only and (II) otherwise consistent in all material respects with the compensation and benefits of such replaced employee);
(vii) acquire (including by merger, consolidation or acquisition of stock or assets or any other means) or authorize or announce an intention to so acquire, or enter into any agreements providing for (x) any acquisitions of, any equity interests in or all or a material portion of the assets of any Person or any business or division thereof, or otherwise engage in any mergers, consolidations or business combinations or (y) acquisitions of material assets, except for, or with respect to, in each case, (A) acquisitions of supplies or equipment same would have been collected in the ordinary course of business consistent with past practice, or (B) with respect to clause (y) only, capital expenditures permitted by Section 6.1(b)(xii);
(viii) liquidate, dissolve, restructure, recapitalize or effect any other reorganization (including any restructuring, recapitalization, or reorganization between or among any of the Company and/or the Company Subsidiaries), or adopt any plan or resolution providing for any of the foregoing;
(ix) make any loans, advances or capital contributions to, or investments in, any other Person, except for (A) loans, advances, or capital contributions solely among the Company and its wholly owned Company Subsidiaries or solely among the Company’s wholly owned Company Subsidiaries in the ordinary course of business consistent with past practice, in each case that do not involve the transfer of funds between the United States of America and another jurisdiction, (B) advances for reimbursable employee expenses in the ordinary course of business consistent with past practice and (C) extensions delay or accelerate payment of credit to customers any 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;
(xh) sellmake any change in accounting policies or procedures, leaseexcept as required by GAAP or by a Governmental Entity and except to the extent required to comply with Section 5.17 of this Agreement;
(i) waive, licenserelease, assign, abandon, permit to lapse, transfer, exchange, swap settle or otherwise dispose ofcompromise any material claims, or subject to any Lien (other than Permitted Liens), any of its properties, rights material litigation or assets (including shares in the capital of the Company Subsidiaries), except (A) dispositions of obsolete, damaged, worn-out or surplus equipment or property no longer necessary in the conduct of the business or other immaterial equipment or property, in each case, in the ordinary course of business consistent with past practice, (B) leases or subleases of real property or interests therein not used for the conduct of the Company’s or the Company Subsidiaries’ business, as currently conducted, in each case in the ordinary course of business consistent with past practice, (C) non-exclusive licenses or other non-exclusive grants of rights in, to or under Company Intellectual Property Rights in the ordinary course of business consistent with past practice, (D) pursuant to the exercise of creditor rights under any Contract providing for outstanding Indebtedness (so long as the Company and its Subsidiaries have used reasonable best efforts to exhaust all other avenues of relief), and (E) pursuant to transactions solely between the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries in the ordinary course of business consistent with past practicearbitration;
(xij) change its method of accounting, make any material tax election, settle or compromise any material liability for Taxes, amend any material Tax Return or file any refund for a material amount of Taxes;
(Ak) enter into take, or agree to take, any Contract action that would, if entered into prior to would prevent the date hereof, be Merger from qualifying as a Material Contract, reorganization within the meaning of Section 368(a) of the Code;
(Bl) materially modify, materially amend or extend any Material Contractterminate, (C) terminate any Material Contractor waive, (D) waive release or release any material rights or claims under any Material Contract or (E) assign any material rights or claims under any Material Contract, other than (w) in the case of clauses (A) and (B), solely with respect to any confidentiality or standstill agreement to which the types of Contracts described Company is a party;
(m) take any action that is intended or would reasonably be expected to result in clauses (viii) and (xiv) any of the definition of Material Contract, in the ordinary course of business consistent with past practice, (x) in the case of clause (D), in the ordinary course of business consistent with past practices (so long as such waiver or release is not material conditions to the Company and the Company Subsidiaries, taken as whole); provided, that any actions of a nature contemplated by and Merger set forth in Article VI not being satisfied except to the extent permitted by contemplated by, and in accordance with, Section 5.5 of this Section 6.1(bAgreement; or
(n) shall not require approval under this clause (xi) for authorize or enter into any types agreement or otherwise make any commitment to do any of Contracts described in clause (xii) below,the foregoing.
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. The Company covenants and agrees that between that, from and after the date hereof and of this Agreement until the earlier of the Effective Time or and the date, if any, on which this Agreement is validly terminated pursuant to Section 9.18.1, except (w) as set forth in Section 6.1 5.1 of the Company Disclosure Letter, (x) as specifically permitted or required otherwise expressly contemplated by this Agreement, (y) as required by applicable Law or as consented to in writing by Order or (z) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), the Company (a) shallwill, and shall will cause each Company Subsidiary to, (a) conduct its business operations, in all material respects respects, in the ordinary course of business and (b) use commercially reasonable efforts to preserve intact the business organizations, including keeping available the services of employees and other service providers, of and the current relationships of the Company and each Company Subsidiary with customers, suppliers and other Persons with whom the Company or any Company Subsidiary has material business relations. Except (1) as set forth in Section 5.1 of the Company Disclosure Letter corresponding to the applicable subsection of this Section 5.1, (2) as otherwise expressly contemplated by this Agreement, (3) as required by applicable Law or Order or (4) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), the Company will not, and will cause each Company Subsidiary not to, from and after the date of this Agreement until the earlier of the Effective Time and the date, if any, on which this Agreement is terminated pursuant to Section 8.1, take any of the following actions, directly or indirectly:
(a) amend or modify the Company Charter Documents or equivalent organizational documents of any Company Subsidiary;
(b) issue, deliver, sell, pledge, dispose of, grant, transfer, subject to any Lien (other than Permitted Liens) or otherwise encumber any Company Shares or other equity interests in the Company or any Company Subsidiary of any class, or securities convertible into, or exchangeable or exercisable for, any such Company Shares or other equity interests, or any options, warrants or other rights to acquire any such Company Shares or other equity interests of the Company or any Company Subsidiary, other than (i) the issuance of shares upon the exercise or settlement, as applicable, of Company Equity Awards or (ii) issuances of Company Shares in connection with the exercise of rights under the Company ESPP in the ordinary course of business;
(c) sell, assign, transfer, grant any security interest in, lease, license, transfer, exchange, subject to any Lien (other than Permitted Liens), swap, abandon, allow to lapse, disclaim, dedicate to the public, fail to prosecute or maintain in full force and effect, or otherwise dispose of, any property or assets of the Company or any Company Subsidiary, except for (i) the sale, abandonments or other dispositions of inventory, goods and other property in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (i) preserve intact its and their present business organizations, goodwill and ongoing businessespractice, (ii) keep available the services sales or dispositions of its and their present officers and other key employees (other than where termination of such services is for cause) obsolete or worn-out assets and (iii) preserve its and their present relationships with customers, suppliers, vendors, Governmental Entities, employees and other Persons with whom it and they have material business relations; and (b) shall not, and shall not permit any Company Subsidiary to, directly or indirectly:
(i) amend, modify, waive, rescind or otherwise change non-exclusive licenses of Intellectual Property in the Company’s or any Company Subsidiary’s certificate ordinary course of incorporation, bylaws or equivalent organizational documentsbusiness;
(iid) authorize, fail to take or maintain commercially reasonable measures to protect the confidentiality and value of any Trade Secrets or other non-public Company Owned Intellectual Property;
(e) declare, set aside, make or pay any dividends on dividend or make any other distribution (whether payable in cash, stock, property or a combination thereof) with respect to its outstanding shares of capital stock any Company Shares or other equity interests (whether in cash, assets, shares or other securities of the Company or any Company Subsidiary)interests, except for dividends and or other distributions paid or made by a wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary;
(f) (i) reclassify, combine, split, subdivide or amend the terms of any Company Shares or other equity interests or (ii) redeem, purchase or otherwise acquire, directly or indirectly, any Company Shares or other equity interests, except, with respect to this clause (ii), (x) with respect to any wholly owned Company Subsidiary, (y) in connection with the forfeiture or expiration of outstanding Company Equity Awards and (z) with respect to the withholding of Company Shares to satisfy Tax obligations with respect to the exercise, vesting or settlement, as applicable, of Company Equity Awards;
(g) merge or consolidate the Company or any Company Subsidiary with any Person or adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial liquidation, dissolution, restructuring, merger, consolidation, recapitalization or other reorganization of the Company or any Company Subsidiary, other than transactions solely between or among direct or indirect wholly owned Company Subsidiaries;
(h) acquire (including by merger, consolidation, or acquisition of stock or assets), directly or indirectly, any Person, any equity interest in such Person or assets, other than (x) acquisitions by the Company from any wholly owned Company Subsidiary or among any wholly owned Company Subsidiaries, (y) the purchase of inventory, equipment, raw material or supplies in the ordinary course of business or (z) non-exclusive inbound licenses of Intellectual Property in the ordinary course of business (provided, however, that nothing in this Section 5.1(h) shall prohibit capital expenditures set forth on the capital expenditure budget as of the date of this Agreement and Made Available by the Company);
(i) create or incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee, endorse, or otherwise become liable or responsible for (whether directly, contingently or otherwise) the obligations of any Person (other than a wholly owned Company Subsidiary) for borrowed money, except for (x) any indebtedness among the Company and its wholly owned Company Subsidiaries or among wholly owned Company Subsidiaries in the ordinary course of business, or (y) any hedging obligations of the Company or any Company Subsidiary in the ordinary course of business consistent with past practicebusiness;
(iiij) enter into make any agreement and arrangement with respect to voting or registrationcapital expenditure, or file any registration statement with the SEC with respect to any, of its capital stock or other equity interests or any other securities;
(iv) split, combine, subdivide, reduce or reclassify any of its capital stock or other equity interests, or redeem, purchase or otherwise acquire any of its capital stock or other equity interests (other than repurchases of Company Common Stock in satisfaction of applicable Tax withholdings or upon the payment of capital expenditures set forth on the exercise price upon the exercise or vesting of any Company Equity Award outstanding capital expenditure budget as of the date hereof of this Agreement and in accordance with Made Available by the terms thereof), or issue or authorize the issuance of any of its capital stock or other equity interests or any other securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests or any rights, warrants or options to acquire any such shares of capital stock or other equity interestsCompany;
(vk) except in connection with the pledge of equity interests make any loans, advances (other than for ordinary course business expenses or pursuant to the Company Credit Agreements, issue, deliver, grant, sell, pledge, dispose of Company’s Charter Documents or encumberexisting indemnification obligations) or capital contributions to, or authorize the issuance, delivery, grant, sale, pledge, disposition or encumbrance ofinvestments in, any shares in other Person (other than transactions between or among the capital stockCompany and wholly owned Company Subsidiaries);
(l) (i) waive, voting securities release, terminate, amend, cancel, or other equity interest in assign any material right or material claim of the Company or any Company Subsidiary or any securities convertible into or exchangeable or exercisable for any such shares, voting securities or equity interest, or any rights, warrants or options to acquire any such shares, voting securities or equity interest or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units or take any action to cause to be exercisable or vested any otherwise unexercisable or unvested Company Equity Award under any Company Material Contract, including granting any material refund, credit, rebate or allowance to a customer party to a Company Material Contract that is not otherwise provided for in the terms of such Company Material Contract existing Company Equity Plan, other than issuances of Company Common Stock in respect of the vesting or settlement of Company Equity Awards outstanding as of the date hereofhereof or (ii) renew, enter into or amend any Contract that, if existing on or prior to the date of this Agreement, would be a Company Material Contract, in all cases each case, other than in accordance with their respective termsthe ordinary course of business;
(vim) except as required by applicable Law the terms of any Company Plan:
(i) grant, provide, amend or increase any bonus, equity or equity-based compensation, retention or change in control bonus payments or benefits or similar rights to any current or former employee, officer, individual consultant, individual independent contractor or non-employee director of the Company or any Company Benefit Plan Subsidiary;
(ii) grant, provide, amend or other Material Contract as in existence as increase any severance payments or severance benefits to any current or former employee, officer, individual consultant, individual independent contractor or non-employee director of the date hereof and made available to Parent prior to the date hereof, Company or any Company Subsidiary;
(Aiii) grant any increase in the compensation or benefits payable or to become payable to any of its directors, executive officers or employees, other than annual merit-based increases in base salary in the ordinary course of business consistent with past practice that do not exceed 3% of the aggregate annual cost of all employee annual base salaries and wage rates in effect as of the date hereof; (B) grant, pay or award, or commit to grant, pay or award, any severance, termination pay, change in control payments, bonuses, retention or incentive compensation to any of its current or former directorsemployee, executive officers officer, individual consultant, individual independent contractor or employees; non-employee director of the Company or any Company Subsidiary;
(Civ) negotiate, establish, adopt, enter into, modify, amend or terminate any collective bargaining agreement or other Contract with any labor organization, union or employee representative organization relating to any employee of the Company Benefit Planor any Company Subsidiary;
(v) establish, adopt, enter into, modify or amend any Company Plan (or any arrangement that would be a Company Plan if in effect on the date hereof), other than de minimis administrative amendments to employee welfare benefit plans or collective bargaining agreements in the ordinary course of business that do not materially increase (x) have the annual cost effect of enhancing any compensation or annual expense benefits thereunder or (relative y) otherwise result in increased costs to the 2020 annual cost Company;
(vi) accelerate the vesting or expense) payment date of maintaining such employee welfare benefit plan or collective bargaining agreement; (D) take any action to amend or waive any performance or vesting criteria Company Equity Awards or accelerate vestingany material payment or benefit, exercisability or the funding under any Company Benefit Plan (including any grantor trust or similar funding arrangement); (E) terminate the employment of any employee earning in excess of $85.000payment or benefit, other than for cause; payable or (F) hire any new employees with to become payable under a base salary in excess of $85,000, other than replacing any such employees in the ordinary course of business consistent with past practice (it being understood that such replacement employee’s compensation and benefits shall be (I) limited to cash compensation only and (II) otherwise consistent in all material respects with the compensation and benefits of such replaced employee)Company Plan;
(vii) acquire implement any employee layoffs in violation of WARN or announce, implement or effect any facility closing, lay-off, early retirement programs, severance programs or reductions in force affecting employees of the Company or any Company Subsidiary;
(viii) waive, release, limit, or condition any restrictive covenant obligation of any current or former employee, officer, individual consultant, individual independent contractor or non-employee director of the Company or any Company Subsidiary; or
(ix) hire, engage or terminate the employment or services, change the title, office or position, or materially alter the responsibilities of any director, officer, employee, contractor or consultant of the Company or any Company Subsidiary (except for terminations for cause);
(n) make any material change in the Company’s accounting policies, practices, principles, methods or procedures, other than as required by Law, GAAP or by a Governmental Authority;
(o) compromise (including forgiving any amount owed to the Company or a Company Subsidiary), waive, settle or agree to settle any Action, other than (i) the settlement of Actions that require payments by merger, consolidation or acquisition of stock or assets the Company or any other meansCompany Subsidiary (net of insurance proceeds) in an amount not to exceed $100,000 individually or authorize or announce an intention to so acquire$500,000 in the aggregate, or enter into any agreements providing (ii) the settlement of Actions disclosed, reflected or reserved against in the Company Balance Sheet for an amount not in excess of the amount so disclosed, reflected or reserved and, in each case of clauses (i) and (ii), that do not involve (x) any acquisitions of, any equity interests in the imposition of material restrictions on the business or all or a material portion operations of the assets of any Person Company or any business or division thereof, or otherwise engage in any mergers, consolidations or business combinations or of the Company Subsidiaries and (y) acquisitions any criminal liability, any admission of material assetswrongdoing, liability, fault or wrongful conduct by the Company or the Company Subsidiaries;
(i) make (except for, or with respect to, in each case, (A) acquisitions of supplies or equipment for elections made in the ordinary course of business consistent with past practice, ) or change any material Tax election; (Bii) change any Tax accounting period with respect to clause a material Tax or material method of Tax accounting; (yiii) only, capital expenditures permitted by Section 6.1(b)(xii);
settle any material Tax liability; (viiiiv) liquidate, dissolve, restructure, recapitalize settle or effect compromise any other reorganization liability with respect to material Taxes or audit or assessment related to material Taxes or file or surrender any claim for a refund of material Taxes (including any restructuring, recapitalization, or reorganization between or among any of such refund to the Company and/or the Company Subsidiaries), or adopt any plan or resolution providing for any of the foregoing;
(ix) make any loans, advances or capital contributions to, or investments in, any other Person, except for (A) loans, advances, or capital contributions solely among the Company and its wholly owned Company Subsidiaries or solely among the Company’s wholly owned Company Subsidiaries in the ordinary course of business consistent with past practice, in each case that do not involve the transfer of funds between the United States of America and another jurisdiction, (B) advances for reimbursable employee expenses in the ordinary course of business consistent with past practice and (C) extensions of credit extent it is used to customers in the ordinary course of business consistent with past practice;
(x) sell, lease, license, assign, abandon, permit to lapse, transfer, exchange, swap offset or otherwise dispose of, or subject to reduce material Tax liability); (v) file any Lien amended material Tax Return (other than Permitted Liens), any of its properties, rights or assets (including shares in the capital of Tax Return which filing would reasonably be expected to be beneficial to the Company Subsidiariesor any Company Subsidiary), ; or (vi) except (A) dispositions of obsolete, damaged, worn-out or surplus equipment or property no longer necessary in the conduct of the business or other immaterial equipment or property, in each case, in the ordinary course of business consistent with past practice, (A) consent to any extension or waiver of the statute of limitations applicable to any claim or assessment with respect to a material amount of Taxes or (B) leases enter into any Tax allocation agreement, Tax sharing agreement or subleases of real property or interests therein not used for the conduct of the Company’s or the Company Subsidiaries’ business, as currently conducted, in each case Tax indemnity agreement (other than (x) agreements entered into in the ordinary course of business consistent with past practicebusiness, the primary purpose of which is unrelated to Tax, and (Cy) non-exclusive licenses any agreement between or other non-exclusive grants among any of rights inthe Company and the Company Subsidiaries);
(q) sell, dispose of, transfer, assign, encumber, pledge, abandon, dedicate to the public, fail to maintain, or under allow to lapse, in whole or in part, any Company Owned Intellectual Property Rights (other than those assignments to customers entered into in the ordinary course of business consistent business);
(r) grant to any third party any license, or enter into any release, immunity or covenant not to sue with past practice, respect to any Company Owned Intellectual Property (D) pursuant to other than the exercise grant of creditor rights under any Contract providing for outstanding Indebtedness (so long as the Company and its Subsidiaries have used reasonable best efforts to exhaust all other avenues of relief), and (E) pursuant to transactions solely between the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries non-exclusive licenses entered into in the ordinary course of business consistent with past practicebusiness);
(xis) fail to maintain or protect the confidentiality of any Trade Secret, or proprietary source code related to any Company Product or the business of the Company or any Company Subsidiaries;
(At) cancel or fail to use commercially reasonable efforts to replace or renew any material Company Insurance Policy;
(u) enter into any Affiliate Transaction or into any Contract expressly contemplating any Affiliate Transaction;
(v) enter into any Contract with a counterparty that would, if entered into prior to the date hereof, be is a Material Contract, (B) materially modify, materially amend or extend any Material Contract, (C) terminate any Material Contract, (D) waive or release any material rights or claims under any Material Contract or (E) assign any material rights or claims under any Material Contract, other than Sanctioned Person in violation of Sanctions;
(w) (i) make a commission payment to any Representative or (ii) provide a discount to any Representative (to the extent such discount is not set forth in the case of clauses (A) and (Ba Contract Made Available to Parent), solely with respect to the types of Contracts described in clauses (viii) and (xiv) of the definition of Material Contracteach case, in the ordinary course of business consistent connection with past practice, a Government Contract;
(x) in call or convene any general or special meeting of the case Company Shareholders, or seek any action or other approval of clause (D)or from the Company Shareholders, in the ordinary course connection with any action prohibited by this Agreement, including Section 5.2;
(y) change or discontinue an existing line of business consistent with past practices (so long as such waiver or release is not material to outside of the existing business of the Company and the Company Subsidiaries, taken as a whole); providedor
(z) authorize, that agree, enter into any actions Contract or otherwise make any commitment to do any of a nature contemplated by and to the extent permitted by this Section 6.1(b) shall not require approval under this clause (xi) for any types of Contracts described in clause (xii) below,foregoing.
Appears in 1 contract
Samples: Merger Agreement (WalkMe Ltd.)
Conduct of Business by the Company Pending the Closing. The Company agrees that that, between the date hereof of this Agreement and the earlier of the Effective Time or the date, if any, on which this Agreement is validly terminated pursuant to Section 9.1Time, except as set forth in Section 6.1 5.1 of the Company Disclosure Letter, Letter or as specifically permitted or required by any other provision of this Agreement, as required by applicable Law or as consented to unless Parent shall otherwise agree in writing by Parent writing, which agreement shall not be unreasonably withheld or delayed, the Company (a) shall, and shall cause each Company Subsidiary to, (x) maintain its existence in good standing under applicable Law, (y) subject to the restrictions set forth in this Section 5.1, conduct its business in all material respects operations only in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (i) preserve intact its and their present business organizations, goodwill and ongoing businesses, (ii) keep available the services of its and their present officers and other key employees (other than where termination of such services is for cause) and (iii) preserve its and their present relationships with customers, suppliers, vendors, Governmental Entities, employees and other Persons with whom it and they have material business relations; and (b) shall not, and shall not permit any Company Subsidiary to, directly or indirectly:
(i) amend, modify, waive, rescind or otherwise change the Company’s or any Company Subsidiary’s certificate of incorporation, bylaws or equivalent organizational documents;
(ii) authorize, declare, set aside, make or pay any dividends on or make any distribution with respect to its outstanding shares of capital stock or other equity interests (whether in cash, assets, shares or other securities of the Company or any Company Subsidiary), except for dividends and distributions paid or made by a wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary in the ordinary course of business consistent with past practice;
(iii) enter into any agreement and arrangement with respect to voting or registration, or file any registration statement with the SEC with respect to any, of its capital stock or other equity interests or any other securities;
(iv) split, combine, subdivide, reduce or reclassify any of its capital stock or other equity interests, or redeem, purchase or otherwise acquire any of its capital stock or other equity interests (other than repurchases of Company Common Stock in satisfaction of applicable Tax withholdings or upon the payment of the exercise price upon the exercise or vesting of any Company Equity Award outstanding as of the date hereof and in accordance with the terms thereof), or issue or authorize the issuance of any of its capital stock or other equity interests or any other securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests or any rights, warrants or options to acquire any such shares of capital stock or other equity interests;
(v) except in connection with the pledge of equity interests pursuant to the Company Credit Agreements, issue, deliver, grant, sell, pledge, dispose of or encumber, or authorize the issuance, delivery, grant, sale, pledge, disposition or encumbrance of, any shares in the capital stock, voting securities or other equity interest in the Company or any Company Subsidiary or any securities convertible into or exchangeable or exercisable for any such shares, voting securities or equity interest, or any rights, warrants or options to acquire any such shares, voting securities or equity interest or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units or take any action to cause to be exercisable or vested any otherwise unexercisable or unvested Company Equity Award under any existing Company Equity Plan, other than issuances of Company Common Stock in respect of the vesting or settlement of Company Equity Awards outstanding as of the date hereof, in all cases in accordance with their respective terms;
(vi) except as required by applicable Law or any Company Benefit Plan or other Material Contract as in existence as of the date hereof and made available to Parent prior to the date hereof, (A) increase the compensation or benefits payable or to become payable to any of its directors, executive officers or employees, other than annual merit-based increases in base salary in the ordinary course of business consistent with past practice that do not exceed 3% of the aggregate annual cost of all employee annual base salaries and wage rates in effect as of the date hereof; (B) grant, pay or award, or commit to grant, pay or award, any severance, termination pay, change in control payments, bonuses, retention or incentive compensation to any of its current or former directors, executive officers or employees; (C) establish, adopt, enter into, amend or terminate any collective bargaining agreement or Company Benefit Plan, other than amendments to employee welfare benefit plans or collective bargaining agreements in the ordinary course of business that do not materially increase the annual cost or annual expense (relative to the 2020 annual cost or expense) of maintaining such employee welfare benefit plan or collective bargaining agreement; (D) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Company Benefit Plan (including any grantor trust or similar funding arrangement); (E) terminate the employment of any employee earning in excess of $85.000, other than for cause; or (F) hire any new employees with a base salary in excess of $85,000, other than replacing any such employees in the ordinary course of business consistent with past practice (it being understood that such replacement employee’s compensation and benefits shall be (I) limited to cash compensation only and (II) otherwise consistent in all material respects with the compensation and benefits of such replaced employee);
(vii) acquire (including by merger, consolidation or acquisition of stock or assets or any other means) or authorize or announce an intention to so acquire, or enter into any agreements providing for (x) any acquisitions of, any equity interests in or all or a material portion of the assets of any Person or any business or division thereof, or otherwise engage in any mergers, consolidations or business combinations or (y) acquisitions of material assets, except for, or with respect to, in each case, (A) acquisitions of supplies or equipment in the ordinary course of business consistent with past practice, or (B) with respect to clause (y) only, capital expenditures permitted by Section 6.1(b)(xii);
(viii) liquidate, dissolve, restructure, recapitalize or effect any other reorganization (including any restructuring, recapitalization, or reorganization between or among any of the Company and/or the Company Subsidiaries), or adopt any plan or resolution providing for any of the foregoing;
(ix) make any loans, advances or capital contributions to, or investments in, any other Person, except for (A) loans, advances, or capital contributions solely among the Company and its wholly owned Company Subsidiaries or solely among the Company’s wholly owned Company Subsidiaries in the ordinary course of business consistent with past practice, in each case that do not involve the transfer of funds between the United States of America and another jurisdiction, (B) advances for reimbursable employee expenses in the ordinary usual course of business consistent with past practice and (Cz) extensions of credit to customers in the ordinary course of business consistent with past practice;
(x) sell, lease, license, assign, abandon, permit to lapse, transfer, exchange, swap or otherwise dispose of, or subject to any Lien (other than Permitted Liens), any of use its properties, rights or assets (including shares in the capital of the Company Subsidiaries), except (A) dispositions of obsolete, damaged, worn-out or surplus equipment or property no longer necessary in the conduct of the business or other immaterial equipment or property, in each case, in the ordinary course of business consistent with past practice, (B) leases or subleases of real property or interests therein not used for the conduct of the Company’s or the Company Subsidiaries’ business, as currently conducted, in each case in the ordinary course of business consistent with past practice, (C) non-exclusive licenses or other non-exclusive grants of rights in, to or under Company Intellectual Property Rights in the ordinary course of business consistent with past practice, (D) pursuant to the exercise of creditor rights under any Contract providing for outstanding Indebtedness (so long as the Company and its Subsidiaries have used reasonable best efforts to exhaust all keep available the services of the current officers, key employees, and consultants of the Company and each Company Subsidiary and to preserve the current relationships of the Company and each Company Subsidiary with such of the customers, suppliers and other avenues persons with which the Company or any Company Subsidiary has significant business relations as is reasonably necessary to preserve substantially intact its business organization. In addition, without limiting the foregoing, except as set forth in Section 5.1 of relief)the Company Disclosure Letter or as contemplated by this Agreement, Company shall not and shall not permit any of the Company 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 Parent:
(a) amend or propose to amend or otherwise change its certificate of incorporation or bylaws or equivalent organizational documents;
(b) 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, the Company or any Company Subsidiary, or securities convertible or exchangeable or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, or any other ownership interest, of the Company or any Company Subsidiary, except that (i) the Company may issue shares of Company Common Stock upon exercise of Company Stock Options outstanding as of the date hereof in accordance with their terms or the vesting of Company Restricted Stock Awards or Company Deferred Stock Units outstanding as of the date hereof in accordance with their terms, (ii) the Company Subsidiaries may issue shares of capital stock to the Company or any wholly owned Company Subsidiary, and (Eiii) pursuant to transactions solely between the Company and a wholly owned may issue shares of Company Subsidiary or solely between wholly owned Company Subsidiaries in the ordinary course of business consistent with past practice;
(xi) (A) enter into any Contract that would, if entered into prior to the date hereof, be a Material Contract, (B) materially modify, materially amend or extend any Material Contract, (C) terminate any Material Contract, (D) waive or release any material rights or claims under any Material Contract or (E) assign any material rights or claims under any Material Contract, other than (w) in the case of clauses (A) and (B), solely with respect to the types of Contracts described in clauses (viii) and (xiv) Preferred Stock as payment of the definition Change of Material Contract, Control Distribution in accordance with the ordinary course terms of business consistent with past practice, (x) in the case of clause (D), in the ordinary course of business consistent with past practices (so long as such waiver or release is not material to the Company and the Company Subsidiaries, taken as whole); provided, that any actions Preferred Stock Certificate of a nature contemplated by and to the extent permitted by this Section 6.1(b) shall not require approval under this clause (xi) for any types of Contracts described in clause (xii) below,Designations;
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. The Company agrees that that, between the date hereof of this Agreement and the earlier of the Effective Time or the date, if any, on which this Agreement is validly terminated pursuant to Section 9.1Time, except as set forth in Section 6.1 of the Company Disclosure LetterSchedule, as specifically permitted or required by this Agreement, as required by applicable Law or as consented to in writing by Parent (such consent not to be unreasonably withheld or delayed), the Company (a) shallwill, and shall will cause each Company Subsidiary to, (i) conduct its business in all material respects in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (i) preserve intact its and their present business organizations, goodwill and ongoing businesses, (ii) endeavor to keep available the services of its and their present officers and other the current officers, key employees (other than where termination and consultants of such services is for cause) the Company and (iii) each Company Subsidiary and to preserve its the current relationships of the Company and their present relationships each Company Subsidiary with each of the customers, suppliers, vendors, Governmental Entities, employees suppliers and other Persons with whom it the Company or any Company Subsidiary has significant business relations as is reasonably necessary to preserve substantially intact its business organization. Without limiting the foregoing, and they have material business relations; and as an extension thereof, except as set forth in Section 6.1 of the Company Disclosure Schedule, as otherwise permitted or contemplated by this Agreement, as required by applicable Law or as consented to in writing by Parent (b) such consent not to be unreasonably withheld or delayed), the Company shall not, and shall not permit any Company Subsidiary to, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following:
(ia) amend, modify, waive, rescind amend or otherwise change the Company’s or any Company Subsidiary’s certificate of incorporationCertificate, bylaws the Company By-laws or equivalent organizational documents;
(iib) issue, deliver, sell, pledge or encumber, or authorize, propose or agree to the issuance, delivery, sale, pledge or encumbrance of, any shares of the capital stock of the Company or any Equity Interest in any Company Subsidiary or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of the capital stock of the Company or any Equity Interest in any Company Subsidiary (other than pursuant to the exercise of Company Options, Company Stock-Based Awards, warrants, conversion rights and other contractual rights existing on the date hereof);
(c) declare, set aside, make or pay any dividends on dividend or make any other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its outstanding shares capital stock (other than dividends paid by a wholly-owned Company Subsidiary to the Company or to any other wholly-owned Company Subsidiary), other than ordinary course dividends in amounts and at times consistent with the Company's past practice, not to exceed $0.18 per share per full fiscal quarter, or enter into any agreement with respect to the voting of its capital stock;
(d) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or other equity interests Equity Interests, except pursuant to the exercise of Company Options, Company Stock-Based Awards, warrants, conversion rights, employee severance, retention, termination, change of control and other contractual rights existing on the date hereof;
(whether e) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) or make any investment in cashany interest in any Person or any division thereof or any assets thereof, assetsexcept any such acquisitions or investments that are for consideration not in excess of $5,000,000 in the aggregate;
(f) incur any Indebtedness or issue any debt securities or assume, shares guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any Person (other than a wholly-owned Company Subsidiary) for borrowed money, except for (i) Indebtedness incurred under the Company's existing credit facilities or renewals or any refinancing thereof, (ii) Indebtedness owing by any wholly-owned Company Subsidiary to the Company or any other wholly-owned Company Subsidiary, (iii) Indebtedness incurred in the ordinary course to refinance any existing Indebtedness, after consultation with Parent, in an amount not to exceed, and on terms no less favorable in the aggregate than, such existing Indebtedness and repayable within 180 days, and (iv) with respect to capital expenditures permitted pursuant to Section 6.1(i);
(g) grant any Lien in any of its material assets to secure any Indebtedness for borrowed money, except in connection with Indebtedness permitted under Section 6.1(f) or Section 6.1(h);
(h) except as otherwise permitted pursuant to Section 6.1(e), authorize, or make any commitment with respect to, any single capital expenditure which is in excess of $10,000,000 or capital expenditures which are, in the aggregate, in excess of $30,000,000 per fiscal quarter in 2007 for the Company and the Subsidiaries taken as a whole, or which would exceed the Company's existing plan for annual capital expenditures for 2006;
(i) enter into any new line of business outside of its existing business segments;
(j) make any deposits or contributions of cash or other securities property to or take any other action to fund or in any other way secure the payment of compensation or benefits under the Company Benefit Plans or agreements subject to the Company Benefit Plans or any other plan, agreement, contract or arrangement of the Company or any Company Subsidiary), except for dividends and distributions paid or made by a wholly owned adopt, enter into, terminate, modify or amend any Company Subsidiary to Benefit Plan, increase in any manner the compensation or benefits of any director, officer, employee or independent contractor of the Company or another wholly owned pay any benefit not provided for by any existing Company Benefit Plan, in each case except (i) as reasonably necessary to comply with applicable Law, including Section 409A of the Code, (ii) to address the requirements of written Contracts the Company or any Company Subsidiary has entered into prior to the date hereof, and listed in the Company Disclosure Schedule, (iii) in connection with entering into or extending any employment or other compensatory agreements in the ordinary course of business and consistent with past practice with any individuals, other than (A) any individual who is or will become an officer at or above the level of a senior vice president (an "Executive Officer") or (B) directors of the Company or any Company Subsidiary, (iv) general salary increases in the ordinary course of business and consistent with past practice;
(iii) enter into any agreement and arrangement with respect to voting or registration, or file any registration statement with the SEC with respect to any, of its capital stock or other equity interests or any other securities;
(iv) split, combine, subdivide, reduce or reclassify any of its capital stock or other equity interests, or redeem, purchase or otherwise acquire any of its capital stock or other equity interests (other than repurchases to an Executive Officer or a director of Company Common Stock in satisfaction of applicable Tax withholdings or upon the payment of the exercise price upon the exercise or vesting of any Company Equity Award outstanding as of the date hereof and in accordance with the terms thereof), or issue or authorize the issuance of any of its capital stock or other equity interests or any other securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests or any rights, warrants or options to acquire any such shares of capital stock or other equity interests;
(v) except in connection with the pledge of equity interests pursuant to the Company Credit Agreements, issue, deliver, grant, sell, pledge, dispose of or encumber, or authorize the issuance, delivery, grant, sale, pledge, disposition or encumbrance of, any shares in the capital stock, voting securities or other equity interest in the Company or any Company Subsidiary or (v) as contemplated pursuant to Section 6.8.1;
(k) pay, discharge, settle or satisfy any securities convertible into material claims, liabilities or exchangeable obligations (absolute, accrued, contingent or exercisable for any such shares, voting securities or equity interest, or any rights, warrants or options to acquire any such shares, voting securities or equity interest or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units or take any action to cause to be exercisable or vested any otherwise unexercisable or unvested Company Equity Award under any existing Company Equity Planotherwise), other than issuances (i) performance of Company Common Stock in respect of the vesting or settlement of Company Equity Awards outstanding as of the date hereof, in all cases contractual obligations in accordance with their respective terms;
, (viii) except as required by applicable Law payment, discharge, settlement or any satisfaction in the ordinary course of business in accordance with past practice that involve the payment of monetary damages not in excess of $2,000,000 individually or $6,000,000 in the aggregate (iii) payment, discharge, settlement or satisfaction in accordance with their terms, of claims, liabilities or obligations, which payment, discharge, settlement or satisfaction have been (x) disclosed in the most recent financial statements (or the notes thereto) of the Company Benefit Plan or other Material Contract as included in existence as of the Company SEC Filings filed prior to the date hereof and (to the extent such settlements do not exceed amounts reserved for such claims in the Financial Statements)or contemplated by documents made available to Parent prior to the date hereof, hereof or (Ay) increase incurred since the compensation or benefits payable or to become payable to any date of its directors, executive officers or employees, other than annual merit-based increases in base salary such financial statements in the ordinary course of business consistent with past practice that do not exceed 3% business;
(l) except as otherwise contemplated by this Agreement, including Section 6.4, or as otherwise required by Law or Governmental Entity, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the aggregate annual cost Company or any Company Subsidiary (other than the Merger);
(m) enter into any agreement or understanding or arrangement with respect to the voting or registration of all employee annual base salaries and wage rates in effect as Equity Interests of the Company or any Company Subsidiary;
(n) renew or enter into any non-compete, exclusivity, non-solicitation or similar agreement that would restrict or limit, in any material respect, the operations of the Company or the Company Subsidiaries;
(o) enter into, amend, waive any right under, or terminate (other than expirations in accordance with their terms) any Company Material Contract (other than immaterial or administrative amendments or amendments or waivers favorable to the Company) or any material transaction with any Affiliate of the Company;
(p) knowingly commit or agree to take any of the foregoing actions or any action which would result in any of the conditions to the Merger set forth in Article 7 not being satisfied;
(q) except as permitted pursuant to Sections 6.1(b) or 6.1(k), agree to grant or grant any stock-related, cash-based, performance or similar awards or bonuses;
(r) make or forgive any loans to employees, officers or directors or any of their respective Affiliates or family members;
(s) terminate any officer or director or terminate any employee with an employment agreement with the Company or any Company Subsidiary in violation of such employment agreement;
(t) enter into, amend, or extend any collective bargaining or other labor agreement;
(u) make or change any material Tax election or tax accounting method;
(v) sell, lease or dispose of any of its properties or assets for consideration in excess of $3,000,000 (without giving effect to any purchase price adjustment in connection therewith), other than (A) pursuant to Contracts in force on the date hereof; of this Agreement, (B) grant, pay dispositions of obsolete assets or award, or commit to grant, pay or award, any severance, termination pay, change in control payments, bonuses, retention or incentive compensation to any of its current or former directors, executive officers or employees; (C) establish, adopt, transfers among the Company and the Company Subsidiaries so long as such transfers have a valid business purpose;
(w) enter into, into any leases for real property or purchase any real property or amend or terminate any collective bargaining agreement or Company Benefit Plan, other than amendments to employee welfare benefit plans or collective bargaining agreements in the ordinary course of business existing lease for real property (except that do not materially increase the annual cost or annual expense (relative to the 2020 annual cost or expense) of maintaining such employee welfare benefit plan or collective bargaining agreement; (D) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Company Benefit Plan (including any grantor trust or similar funding arrangement); (E) terminate the employment of any employee earning in excess of $85.000, other than for cause; or (F) hire any new employees with a base salary in excess of $85,000, other than replacing any such employees in the ordinary course of business consistent with past practice (it being understood that such replacement employee’s compensation and benefits shall be (I) limited to cash compensation only and (II) otherwise consistent in all material respects with the compensation and benefits of such replaced employee);
(vii) acquire (including by merger, consolidation or acquisition of stock or assets or any other means) or authorize or announce an intention to so acquire, or enter into any agreements providing for (x) any acquisitions of, any equity interests in or all or a material portion of the assets of any Person or any business or division thereof, or otherwise engage in any mergers, consolidations or business combinations or (y) acquisitions of material assets, except for, or with respect to, in each case, (A) acquisitions of supplies or equipment in the ordinary course of business consistent with past practice, or (B) with respect to clause (y) only, capital expenditures permitted by Section 6.1(b)(xii);
(viii) liquidate, dissolve, restructure, recapitalize or effect any other reorganization (including any restructuring, recapitalization, or reorganization between or among any of the Company and/or the Company Subsidiaries), or adopt any plan or resolution providing for any of the foregoing;
(ix) make any loans, advances or capital contributions to, or investments in, any other Person, except for (A) loans, advances, or capital contributions solely among the Company and the Company Subsidiary, as applicable, may exercise any option to extend the term of a lease related to Company Leased Premises pursuant to its wholly owned Company Subsidiaries or solely among the Company’s wholly owned Company Subsidiaries in the ordinary course of business consistent with past practice, in each case that do not involve the transfer of funds between the United States of America and another jurisdiction, (B) advances for reimbursable employee expenses in the ordinary course of business consistent with past practice and (C) extensions of credit to customers in the ordinary course of business consistent with past practiceterms);
(x) sell, lease, license, assign, abandon, permit to lapse, transfer, exchange, swap make any loans or otherwise dispose of, or subject advances to any Lien (Person other than Permitted Liens), a Company Subsidiary;
(y) convene any regular meeting (or any adjournment thereof) of its properties, rights or assets (including shares in the capital stockholders of the Company Subsidiaries), except (A) dispositions of obsolete, damaged, worn-out other than the regular annual meeting or surplus equipment or property no longer necessary any special meeting in connection with the conduct of the business or other immaterial equipment or property, in each case, in the ordinary course of business consistent with past practice, (B) leases or subleases of real property or interests therein not used for the conduct of the Company’s or the Company Subsidiaries’ business, as currently conducted, in each case in the ordinary course of business consistent with past practice, (C) non-exclusive licenses or other non-exclusive grants of rights in, to or under Company Intellectual Property Rights in the ordinary course of business consistent with past practice, (D) pursuant to the exercise of creditor rights under any Contract providing for outstanding Indebtedness (so long as the Company and its Subsidiaries have used reasonable best efforts to exhaust all other avenues of relief), and (E) pursuant to transactions solely between the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries in the ordinary course of business consistent with past practice;Stockholder Approval; or
(xiz) (A) enter into any Contract that would, if entered into prior fail to the date hereof, be a Material Contract, (B) materially modify, materially amend keep in force insurance policies or extend any Material Contract, (C) terminate any Material Contract, (D) waive replacement or release any material rights or claims under any Material Contract or (E) assign any material rights or claims under any Material Contract, other than (w) in the case of clauses (A) and (B), solely revised provisions providing insurance coverage with respect to the types assets, operations and activities of Contracts described in clauses (viii) and (xiv) of the definition of Material Contract, in the ordinary course of business consistent with past practice, (x) in the case of clause (D), in the ordinary course of business consistent with past practices (so long as such waiver or release is not material to the Company and the Company Subsidiaries, taken Subsidiaries as whole); provided, that any actions of a nature contemplated by and to the extent permitted by this Section 6.1(b) shall not require approval under this clause (xi) for any types of Contracts described in clause (xii) below,effect.
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. The Company agrees that that, between the date hereof of this Agreement and the earlier of the Effective Time or the date, if any, on which this Agreement is validly terminated pursuant to Section 9.1Time, except as set forth in Section 6.1 5.1 of the Company Disclosure Letter, Schedule or as specifically permitted or required by any other provision of this Agreement, as required by applicable Law or as consented to unless Parent shall otherwise agree in writing by Parent writing, the Company (a) shallwill, and shall will cause each Company Subsidiary to, (A) conduct its business in all material respects operations only in the ordinary and usual course of business consistent with past practice and (B) subject to the prohibitions contained in Section 5.1.6, use commercially its reasonable efforts to (i) preserve intact its and their present business organizations, goodwill and ongoing businesses, (ii) keep available the services of its the current executive officers, key employees and their present officers consultants of the Company and each Company Subsidiary and to preserve the current relationships of the Company and each Company Subsidiary with such of the customers, suppliers and other key employees persons with which the Company or any Company 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 of the Company Disclosure Schedule or as specifically permitted by any other provision of this Agreement, the Company shall not (other than where termination unless required by applicable Law or the regulations or requirements of such services is for cause) and (iii) preserve its and their present relationships with customers, suppliers, vendors, Governmental Entities, employees and other Persons with whom it and they have material business relations; and (b) shall notNasdaq), and shall not permit any Company Subsidiary 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 Parent:
(i) amend, modify, waive, rescind Section 5.1.1 amend or otherwise change the Company’s or any Company Subsidiary’s its certificate of incorporation, bylaws incorporation or by-laws or equivalent organizational documents;
Section 5.1.2 (iiA) authorize, declare, set aside, make or pay any dividends on or make any distribution with respect to its outstanding shares of capital stock or other equity interests (whether in cash, assets, shares or other securities of the Company or any Company Subsidiary), except for dividends and distributions paid or made by a wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary in the ordinary course of business consistent with past practice;
(iii) enter into any agreement and arrangement with respect to voting or registration, or file any registration statement with the SEC with respect to any, of its capital stock or other equity interests or any other securities;
(iv) split, combine, subdivide, reduce or reclassify any of its capital stock or other equity interests, or redeem, purchase or otherwise acquire any of its capital stock or other equity interests (other than repurchases of Company Common Stock in satisfaction of applicable Tax withholdings or upon the payment of the exercise price upon the exercise or vesting of any Company Equity Award outstanding as of the date hereof and in accordance with the terms thereof), or issue or authorize the issuance of any of its capital stock or other equity interests or any other securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests or any rights, warrants or options to acquire any such shares of capital stock or other equity interests;
(v) except in connection with the pledge of equity interests pursuant to the Company Credit Agreements, issue, deliver, grant, sell, pledge, dispose of of, grant, transfer or encumber, or authorize the issuance, delivery, grant, sale, pledge, disposition disposition, grant, transfer or encumbrance of any shares of capital stock of, any shares in the capital stock, voting securities or other equity interest in Equity Interests in, the Company or any Company Subsidiary of any class, or any securities convertible into or exchangeable or exercisable for any shares of such shares, voting securities capital stock or equity interestother Equity Interests, or any rights, warrants or options (other than options to acquire any such shares, voting securities or equity interest or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units or take any action purchase up to cause to be exercisable or vested any otherwise unexercisable or unvested Company Equity Award under any existing Company Equity Plan, other than issuances an aggregate of 50,000 shares of Company Common Stock to be granted pursuant to the Company's 1997 Stock Incentive Plan, in respect each case consistent with past practice), 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 vesting Company or settlement any Company Subsidiary, other than the issuance of Company Equity Awards Common Stock (and the related Company Rights) upon the exercise of Company Options or Company Warrants outstanding as of the date hereof, in all cases hereof in accordance with their respective terms;
(vi) except as required by applicable Law or any Company Benefit Plan or other Material Contract as in existence terms as of the date hereof and made available to Parent prior to (or, if a Triggering Event (as defined in the date hereof, (ACompany Rights Agreement) increase the compensation or benefits payable or to become payable to any of its directors, executive officers or employees, by a party other than annual merit-based increases in base salary in Parent or Merger Sub shall occur, the ordinary course of business consistent with past practice that do not exceed 3% of the aggregate annual cost of all employee annual base salaries and wage rates in effect as of the date hereof; Company Rights), (B) grantamend, pay waive or awardmodify any terms of any Company Options or Company Warrants, including, without limitation, by directly or indirectly increasing or reducing the exercise price of or the number of shares of Company Common Stock subject to any Company Option or Company Warrant (provided, however, that, solely with respect to this Section 5.1.2(B), Parent's prior written consent shall not be unreasonably withheld) or (C), sell, pledge, dispose of, transfer, lease, license, guarantee or encumber, or commit to grantauthorize the sale, pay pledge, disposition, transfer, lease, license, guarantee or award, any severance, termination pay, change in control payments, bonuses, retention or incentive compensation to any of its current or former directors, executive officers or employees; (C) establish, adopt, enter into, amend or terminate any collective bargaining agreement or Company Benefit Plan, other than amendments to employee welfare benefit plans or collective bargaining agreements in the ordinary course of business that do not materially increase the annual cost or annual expense (relative to the 2020 annual cost or expense) of maintaining such employee welfare benefit plan or collective bargaining agreement; (D) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Company Benefit Plan (including any grantor trust or similar funding arrangement); (E) terminate the employment of any employee earning in excess of $85.000, other than for cause; or (F) hire any new employees with a base salary in excess of $85,000, other than replacing any such employees in the ordinary course of business consistent with past practice (it being understood that such replacement employee’s compensation and benefits shall be (I) limited to cash compensation only and (II) otherwise consistent in all material respects with the compensation and benefits of such replaced employee);
(vii) acquire (including by merger, consolidation or acquisition of stock or assets or any other means) or authorize or announce an intention to so acquire, or enter into any agreements providing for (x) any acquisitions encumbrance of, any equity interests in material property or all or a material portion assets (including Intellectual Property) of the assets of any Person Company or any business or division thereof, or otherwise engage in any mergers, consolidations or business combinations or (y) acquisitions of material assetsCompany Subsidiary, except forpursuant to the Loan Agreement, existing contracts or with respect to, in each case, (A) acquisitions commitments or the sale or purchase of supplies or equipment goods in the ordinary course of business consistent with past practice, or (B) with respect to clause (y) only, capital expenditures permitted by Section 6.1(b)(xii);
(viii) liquidate, dissolve, restructure, recapitalize enter into any commitment or effect any other reorganization (including any restructuring, recapitalization, or reorganization between or among any of the Company and/or the Company Subsidiaries), or adopt any plan or resolution providing for any of the foregoing;
(ix) make any loans, advances or capital contributions to, or investments in, any other Person, except for (A) loans, advances, or capital contributions solely among the Company and its wholly owned Company Subsidiaries or solely among the Company’s wholly owned Company Subsidiaries in the ordinary course of business consistent with past practice, in each case that do not involve the transfer of funds between the United States of America and another jurisdiction, (B) advances for reimbursable employee expenses in transaction outside the ordinary course of business consistent with past practice other than transactions between a wholly-owned Company Subsidiary and (C) extensions of credit to customers in the ordinary course of business consistent with past practiceCompany or another wholly-owned Company Subsidiary;
Section 5.1.3 declare, set aside, make or pay any dividend or other distribution (xwhether payable in cash, stock, property or a combination thereof) sell, lease, license, assign, abandon, permit to lapse, transfer, exchange, swap or otherwise dispose of, or subject with respect to any Lien of its capital stock (other than Permitted Liens)dividends paid by a wholly-owned Company Subsidiary to the Company or to any other wholly-owned Company Subsidiary) or enter into any agreement with respect to the voting of its capital stock; provided, however, that the Company shall be permitted to pay dividends on the Series D Preferred Stock in accordance with the requirements of Section 2 of the certificate of designations relating to the Series D Preferred Stock; and provided further, that any such dividends paid on the Series D-1 Preferred Stock shall be paid in shares of Company Common Stock to the fullest extent possible;
Section 5.1. 4 reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its propertiescapital stock, rights or assets (including shares in the capital of the Company Subsidiaries), except (A) dispositions of obsolete, damaged, worn-out or surplus equipment or property no longer necessary in the conduct of the business other Equity Interests or other immaterial equipment or property, in each case, in the ordinary course of business consistent with past practice, (B) leases or subleases of real property or interests therein not used for the conduct of the Company’s or the Company Subsidiaries’ business, as currently conducted, in each case in the ordinary course of business consistent with past practice, (C) non-exclusive licenses or other non-exclusive grants of rights in, to or under Company Intellectual Property Rights in the ordinary course of business consistent with past practice, (D) pursuant to the exercise of creditor rights under any Contract providing for outstanding Indebtedness (so long as the Company and its Subsidiaries have used reasonable best efforts to exhaust all other avenues of relief), and (E) pursuant to transactions solely between the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries in the ordinary course of business consistent with past practicesecurities;
(xi) (A) enter into any Contract that would, if entered into prior to the date hereof, be a Material Contract, (B) materially modify, materially amend or extend any Material Contract, (C) terminate any Material Contract, (D) waive or release any material rights or claims under any Material Contract or (E) assign any material rights or claims under any Material Contract, other than (w) in the case of clauses (A) and (B), solely with respect to the types of Contracts described in clauses (viii) and (xiv) of the definition of Material Contract, in the ordinary course of business consistent with past practice, (x) in the case of clause (D), in the ordinary course of business consistent with past practices (so long as such waiver or release is not material to the Company and the Company Subsidiaries, taken as whole); provided, that any actions of a nature contemplated by and to the extent permitted by this Section 6.1(b) shall not require approval under this clause (xi) for any types of Contracts described in clause (xii) below,
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. The Company agrees that that, between the date hereof of this Agreement and the earlier of the Effective Time or the date, if any, on which this Agreement is validly terminated pursuant to Section 9.1Time, except as set forth in Section 6.1 5.1(a) of the Company Disclosure LetterSchedule, as specifically permitted or required by this Agreement, as expressly required by applicable Law or as consented to in writing by this Agreement or otherwise with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company (a) shallwill, and shall will cause each Company Subsidiary to, (i) conduct its business in all material respects only in the ordinary course of business consistent with past practice and practice, (ii) use its commercially reasonable efforts to (i) preserve intact its and their present business organizations, goodwill and ongoing businesses, (ii) keep available the services of its the current officers, employees and their present officers consultants of the Company and each Company Subsidiary and preserve the goodwill and current relationships of the Company and each Company Subsidiary with customers, suppliers and other key employees (other than where termination of such services is for cause) Persons with which the Company or any Company Subsidiary has significant business relations and (iii) use its commercially reasonable efforts to preserve intact its business organization. Without limiting the foregoing, and their present relationships as an extension thereof, except as set forth in Section 5.1 of the Company Disclosure Schedule, as expressly required by applicable Law or this Agreement, or otherwise with customersthe prior written consent of Parent (which consent shall not be unreasonably withheld, suppliersconditioned or delayed), vendors, Governmental Entities, employees and other Persons with whom it and they have material business relations; and (b) the Company shall not, and shall not permit any Company Subsidiary to, between the date of this Agreement and the Effective Time, directly or indirectly, do any of the following:
(i) amend, modify, waive, rescind or otherwise change amend the Company’s or any Company Subsidiary’s certificate of incorporation, bylaws or equivalent other comparable charter or organizational documents;
(ii) authorize, declare, set aside, make or pay any dividends on or make any distribution with respect to its outstanding shares of capital stock or other equity interests documents (whether in cashby merger, assets, shares consolidation or other securities otherwise) of the Company or any Company Subsidiary), except for dividends and distributions paid or made by a wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary in the ordinary course of business consistent with past practice;
(iiiii) (A) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement and arrangement with respect to the voting or registrationof, or file any registration statement with the SEC with respect to any, of its capital stock or other equity interests of the Company or any Company Subsidiary (other securities;
than dividends and distributions by a direct or indirect wholly-owned Subsidiary of the Company to its parent, distributions under the ESOP as permitted by this Agreement and distributions resulting from the vesting or exercise of Company Options outstanding on the date of this Agreement), (ivB) split, combine, subdivide, reduce combine or reclassify any of its capital stock or other equity interests, or redeem, purchase or otherwise acquire any of its capital stock or other equity interests (other than repurchases of Company Common Stock in satisfaction of applicable Tax withholdings or upon the payment of the exercise price upon the exercise Company or vesting of any Company Equity Award outstanding as of the date hereof and in accordance with the terms thereof)Subsidiary, or (C) issue or authorize the issuance of any of its capital stock or other equity interests or any other securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests of the Company or any rightsCompany Subsidiary, warrants (D) purchase, redeem or options to otherwise acquire any such shares of capital stock or other equity interests;
(v) except in connection with the pledge of equity interests pursuant to the Company Credit Agreements, issue, deliver, grant, sell, pledge, dispose of or encumber, or authorize the issuance, delivery, grant, sale, pledge, disposition or encumbrance of, any shares in the capital stock, voting securities or other equity interest Equity Interest in the Company or any Company Subsidiary or any securities convertible into or exchangeable or exercisable except for any such shares, voting securities or equity interest, or any rights, warrants or options to acquire any such shares, voting securities or equity interest or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units or take any action to cause to be exercisable or vested any otherwise unexercisable or unvested Company Equity Award under any existing Company Equity Plan, other than issuances acquisitions of Company Common Stock by the Company in respect satisfaction by holders of Company Options, outstanding on the date of this Agreement, of the vesting applicable exercise price and/or withholding taxes or settlement (E) take any action that would result in any amendment, modification or change of any term of any Indebtedness of the Company or any Company Subsidiary;
(iii) (A) issue, deliver, sell, grant, pledge, transfer, subject to any Lien (other than Permitted Liens) or otherwise encumber or dispose of any Equity Interest in the Company or any Company Subsidiary, other than the issuance of shares of Company Equity Awards Common Stock upon the exercise of Company Options that are outstanding as of on the date hereofof this Agreement, in all cases each case in accordance with their respective termsthe applicable equity award’s terms as in effect on the date of this Agreement or (B) amend any term of any Equity Interest of the Company or any Company Security (in each case, whether by merger, consolidation or otherwise);
(iv) adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization, each with respect to the Company or any Company Subsidiary;
(v) incur any capital expenditures or any obligations or liabilities in respect thereof in excess of $200,000 in the aggregate in any fiscal quarter;
(vi) except as required by applicable Law or any Company Benefit Plan or other Material Contract as in existence as of the date hereof and made available to Parent prior to the date hereof, acquire (A) increase the compensation any material business, assets or benefits payable capital stock of any Person or to become payable to division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, or otherwise), (B) any of its directors, executive officers or employees, other assets other than annual merit-based increases in base salary assets acquired in the ordinary course of business consistent with past practice that do not exceed 3% of the aggregate annual cost of all employee annual base salaries and wage rates in effect as of the date hereof; (B) grant, pay or award, or commit to grant, pay or award, any severance, termination pay, change in control payments, bonuses, retention or incentive compensation to any of its current or former directors, executive officers or employees; (C) establish, adopt, enter into, amend acquire or terminate license from any collective bargaining agreement Person any Intellectual Property Rights or Company Benefit Plan, Technology other than amendments to employee welfare benefit plans or collective bargaining agreements in the ordinary course of business that do not materially increase the annual cost consistent with past practice;
(vii) (A) sell, lease, license, pledge, transfer, subject to any Lien or annual expense otherwise dispose of any of its Intellectual Property Rights or Technology, material assets or material properties (relative including Company Products) except (1) pursuant to existing Contracts or commitments in effect prior to the 2020 annual cost execution of this Agreement, (2) sales of Inventory or expenseused equipment in the ordinary course of business consistent with past practice or (3) Permitted Liens incurred in the ordinary course of maintaining such business consistent with past practice; (B) sell, dispose of, disclose, or license the source code for Company Proprietary Software to any Person (other than immaterial portions of source code of Company Proprietary Software provided pursuant to a software development kit license or disclosed in connection with trials, demonstrations or similar arrangements, in each case on a non-exclusive basis and subject to written non-disclosure and non-use restrictions imposed on and agreed to by the recipient), (C) disclose any material trade secrets or other proprietary and confidential information to any Person that is not subject to any confidentiality or non-disclosure agreement or (D) enter into any arrangement, the result of which is the loss, expiration or termination of any license or right under or to any Third Party Intellectual Property;
(viii) (A) hire any new employee welfare benefit plan to whom a written offer of employment has not previously been offered and accepted prior to the date of this Agreement or, after the date of this Agreement, extend any new offers of employment with the Company or any Company Subsidiary to any individual, (B) grant to any current or former director, officer, employee or consultant of the Company or any Company Subsidiary any (1) increase in compensation, (2) bonus or (3) other benefits, except as agreed to prior to the date of this Agreement (C) grant to any current or former director, officer, employee or consultant of the Company or any Company Subsidiary any severance or termination pay or benefits or any increase in severance, change of control or termination pay or benefits, (D) except as otherwise contemplated pursuant to Section 5.11 hereof, establish, adopt, enter into or amend any Company Employee Plan (other than offer letters that contemplate “at will” employment without severance benefits) or collective bargaining agreement; , in each case except as required by applicable Law, (DE) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability any rights or funding benefits or take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Employee Plan except to the extent required pursuant to the terms thereof or applicable Law or (F) make any Person a beneficiary of any retention plan under which such Person is not as of the date of this Agreement a beneficiary which would entitle such Person to vesting, acceleration or any other right as a consequence of consummation of the transactions contemplated by this Agreement;
(ix) (A) write-down any of its material assets, including any grantor trust capitalized Inventory or similar funding arrangement); (E) terminate the employment of any employee earning Company IP, in excess of $85.000150,000, other than except for cause; depreciation and amortization in accordance with GAAP or (F) hire any new employees in accordance with a base salary in excess of $85,000, other than replacing any such employees in the ordinary course of business consistent with past practice or (it being understood that B) make any change in any method of financial accounting principles, method or practices, in each case except for any such replacement employee’s compensation and benefits shall be change required by GAAP or applicable Law, including Regulation S-X under the Exchange Act (I) limited to cash compensation only and (II) otherwise consistent in all material respects each case following consultation with the compensation and benefits of such replaced employeeCompany’s independent auditor);
(vii) acquire (including by merger, consolidation or acquisition of stock or assets or any other means) or authorize or announce an intention to so acquire, or enter into any agreements providing for (x) any acquisitions of, any equity interests in or all or a material portion of the assets of any Person or any business or division thereof, or otherwise engage in any mergers, consolidations or business combinations or (y) acquisitions of material assets, except for, or with respect to, in each case, (A) acquisitions incur any Indebtedness in an amount in excess of supplies $50,000 or equipment modify in any material respect the ordinary course terms of business consistent with past practiceany Indebtedness, including by way of a guarantee or an issuance or sale of debt securities, or issue and sell options, warrants, calls or other rights to acquire any debt securities of the Company or any Company Subsidiary or (B) with respect to clause (y) only, capital expenditures permitted by Section 6.1(b)(xii);
(viii) liquidate, dissolve, restructure, recapitalize or effect any other reorganization (including any restructuring, recapitalization, or reorganization between or among any of the Company and/or the Company Subsidiaries), or adopt any plan or resolution providing for any of the foregoing;
(ix) make any loans, advances or capital contributions to, or investments in, any other PersonPerson in excess of $50,000, except for other than (A1) loans, advances, or capital contributions solely among to the Company or any Company Subsidiary or (2) accounts receivable and its wholly owned Company Subsidiaries or solely among the Company’s wholly owned Company Subsidiaries extensions of credit in the ordinary course of business consistent with past practicebusiness, and advances in expenses to employees, in each case that do not involve the transfer of funds between the United States of America and another jurisdiction, (B) advances for reimbursable employee expenses in the ordinary course of business consistent with past practice and (C) extensions of credit to customers in the ordinary course of business consistent with past practice;
(x) sell, lease, license, assign, abandon, permit to lapse, transfer, exchange, swap or otherwise dispose of, or subject to any Lien (other than Permitted Liens), any of its properties, rights or assets (including shares in the capital of the Company Subsidiaries), except (A) dispositions of obsolete, damaged, worn-out or surplus equipment or property no longer necessary in the conduct of the business or other immaterial equipment or property, in each case, in the ordinary course of business consistent with past practice, (B) leases or subleases of real property or interests therein not used for the conduct of the Company’s or the Company Subsidiaries’ business, as currently conducted, in each case in the ordinary course of business consistent with past practice, (C) non-exclusive licenses or other non-exclusive grants of rights in, to or under Company Intellectual Property Rights in the ordinary course of business consistent with past practice, (D) pursuant to the exercise of creditor rights under any Contract providing for outstanding Indebtedness (so long as the Company and its Subsidiaries have used reasonable best efforts to exhaust all other avenues of relief), and (E) pursuant to transactions solely between the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries in the ordinary course of business consistent with past practice;
(xi) agree to any exclusivity, non-competition, most favored nation, or similar provision or covenant restricting the Company, any Company Subsidiary, or any of their respective Affiliates, from competing in any line of business or with any Person or in any area or engaging in any activity or business (Aincluding with respect to the development, manufacture, marketing or distribution of their respective products or services), or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the consummation of the Mergers or the Closing Date;
(xii) enter into any Contract that would, if entered into prior to the date hereof, be a Material or materially amend any Contract, (B) materially modify, materially amend or extend relinquish or terminate any Material Contract, (C) terminate in any Material Contract, (D) waive individual case with an annual value in excess of $75,000 or release any material rights or claims under any Material with a value over the life of the Contract or (E) assign any material rights or claims under any Material Contractin excess of $200,000, other than (w) in the case of clauses (A) and (B), solely with respect to entering into non-exclusive software license agreements where the types of Contracts described in clauses (viii) and (xiv) of Company or any Company Subsidiary is the definition of Material Contract, licensor in the ordinary course of business consistent with past practice, (xB) in the case of clause (D), service or maintenance Contracts entered into in the ordinary course of business consistent with past practice pursuant to which the Company or any Company Subsidiary is providing services to customers, (C) non-exclusive distribution, marketing, reselling or consulting agreements entered into in the ordinary course of business consistent with past practice that provide for distribution of a Company Product by a Third Party or (D) non-exclusive OEM agreements entered into in the ordinary course of business consistent with past practice that are terminable without penalty within twelve months;
(xiii) make or change any material Tax election, change any annual Tax accounting period, adopt or change any material method of Tax accounting, amend any material Tax Returns or file any material claim for Tax refunds, enter into any material closing agreement, enter into any Tax allocation agreement, Tax sharing agreement or Tax indemnity agreement, settle any material Tax claim, audit or assessment, or surrender any right to claim a material Tax refund or credit;
(xiv) (A) institute, compromise or settle (or agree to do any of the preceding with respect to) any Actions, (B) waive, relinquish, release, grant, transfer or assign any right with a value of more than $100,000 in any individual case except in the ordinary course of business consistent with past practice or (C) commence any material litigation, investigation, arbitration or other Action against any Third Party;
(xv) engage in (A) any trade loading practices or any other promotional sales or discount activity with any customers or distributors with any intent of accelerating to prior fiscal quarters (so long as such waiver or release is not material including the current fiscal quarter) sales to the Company and trade or otherwise that would otherwise be expected (based on past practice) to occur in subsequent fiscal quarters, (B) any practice which would reasonably be expected to have the effect of accelerating to prior fiscal quarters (including the current fiscal quarter) collections of receivables that would otherwise be expected (based on past practice) to be made in subsequent fiscal quarters, (C) any practice which would reasonably be expected to have the effect of postponing to subsequent fiscal quarters payments by the Company Subsidiariesor any Company Subsidiary that would otherwise be expected (based on past practice) to be made in prior fiscal quarters (including the current fiscal quarter) or (D) any other promotional sales or discount activity, taken as whole); providedin each case in clauses (A) through (C) in a manner outside the ordinary course of business consistent with past practice;
(xvi) cancel or terminate or allow to lapse without commercially reasonably substitute policy therefor, or amend in any material respect or enter into, any material Insurance Policy, other than the renewal of existing Insurance Policies or enter into commercial reasonable substitute policies therefor;
(xvii) take any action that is intended or would reasonably be expected to result in any actions of a nature contemplated by the conditions and requirements of the Offer set forth in Annex I or the conditions to the extent permitted Merger set forth in Article 6 not being satisfied;
(xviii) except as required by this Section 6.1(bapplicable Law, convene any regular or special meeting (or any adjournment thereof) shall not require approval under this clause of the stockholders of the Company other than the Special Meeting;
(xixix) for make any types material change in its investment policies with respect to cash or marketable securities; or
(xx) authorize or enter into any Contract or otherwise make any commitment to do any of Contracts described in clause (xii) below,the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Integrated Device Technology Inc)
Conduct of Business by the Company Pending the Closing. The Company agrees that that, between the date hereof of this Agreement and the earlier of the Effective Time or the date, if any, on which this Agreement is validly terminated pursuant to Section 9.1Time, except as set forth in Section 6.1 5.1(a) of the Company Disclosure LetterSchedule, as specifically permitted or required by this Agreement, as expressly required by applicable Law or as consented to in writing by this Agreement or otherwise with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company (a) shallwill, and shall will cause each Company Subsidiary to, (i) conduct its business in all material respects only in the ordinary course of business consistent with past practice and practice, (ii) use its commercially reasonable efforts to (i) preserve intact its and their present business organizations, goodwill and ongoing businesses, (ii) keep available the services of its the current officers, employees and their present officers consultants of the Company and each Company Subsidiary and preserve the goodwill and current relationships of the Company and each Company Subsidiary with customers, suppliers and other key employees (other than where termination of such services is for cause) Persons with which the Company or any Company Subsidiary has significant business relations and (iii) use its commercially reasonable efforts to preserve intact its business organization. Without limiting the foregoing, and their present relationships as an extension thereof, except as set forth in Section 5.1 of the Company Disclosure Schedule, as expressly required by applicable Law or this Agreement, or otherwise with customersthe prior written consent of Parent (which consent shall not be unreasonably withheld, suppliersconditioned or delayed), vendors, Governmental Entities, employees and other Persons with whom it and they have material business relations; and (b) the Company shall not, and shall not permit any Company Subsidiary to, between the date of this Agreement and the Effective Time, directly or indirectly, do any of the following:
(i) amend, modify, waive, rescind or otherwise change amend the Company’s or any Company Subsidiary’s certificate of incorporation, bylaws or equivalent other comparable charter or organizational documents;
(ii) authorize, declare, set aside, make or pay any dividends on or make any distribution with respect to its outstanding shares of capital stock or other equity interests documents (whether in cashby merger, assets, shares consolidation or other securities otherwise) of the Company or any Company Subsidiary), except for dividends and distributions paid or made by a wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary in the ordinary course of business consistent with past practice;
(iiiii) (A) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement and arrangement with respect to the voting or registrationof, or file any registration statement with the SEC with respect to any, of its capital stock or other equity interests of the Company or any Company Subsidiary (other securities;
than dividends and distributions by a direct or indirect wholly-owned Subsidiary of the Company to its parent, distributions under the ESOP as permitted by this Agreement and distributions resulting from the vesting or exercise of Company Options outstanding on the date of this Agreement), (ivB) split, combine, subdivide, reduce combine or reclassify any of its capital stock or other equity interests, or redeem, purchase or otherwise acquire any of its capital stock or other equity interests (other than repurchases of Company Common Stock in satisfaction of applicable Tax withholdings or upon the payment of the exercise price upon the exercise Company or vesting of any Company Equity Award outstanding as of the date hereof and in accordance with the terms thereof)Subsidiary, or (C) issue or authorize the issuance of any of its capital stock or other equity interests or any other securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests of the Company or any rightsCompany Subsidiary, warrants (D) purchase, redeem or options to otherwise acquire any such shares of capital stock or other equity interests;
(v) except in connection with the pledge of equity interests pursuant to the Company Credit Agreements, issue, deliver, grant, sell, pledge, dispose of or encumber, or authorize the issuance, delivery, grant, sale, pledge, disposition or encumbrance of, any shares in the capital stock, voting securities or other equity interest Equity Interest in the Company or any Company Subsidiary or any securities convertible into or exchangeable or exercisable except for any such shares, voting securities or equity interest, or any rights, warrants or options to acquire any such shares, voting securities or equity interest or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units or take any action to cause to be exercisable or vested any otherwise unexercisable or unvested Company Equity Award under any existing Company Equity Plan, other than issuances acquisitions of Company Common Stock by the Company in respect satisfaction by holders of Company Options, outstanding on the date of this Agreement, of the vesting applicable exercise price and/or withholding taxes or settlement (E) take any action that would result in any amendment, modification or change of any term of any Indebtedness of the Company or any Company Subsidiary;
(iii) (A) issue, deliver, sell, grant, pledge, transfer, subject to any Lien (other than Permitted Liens) or otherwise encumber or dispose of any Equity Interest in the Company or any Company Subsidiary, other than the issuance of shares of Company Equity Awards Common Stock upon the exercise of Company Options that are outstanding as of on the date hereofof this Agreement, in all cases each case in accordance with their respective termsthe applicable equity award’s terms as in effect on the date of this Agreement or (B) amend any term of any Equity Interest of the Company or any Company Security (in each case, whether by merger, consolidation or otherwise);
(iv) adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization, each with respect to the Company or any Company Subsidiary;
(v) incur any capital expenditures or any obligations or liabilities in respect thereof in excess of $200,000 in the aggregate in any fiscal quarter;
(vi) except as required by applicable Law or any Company Benefit Plan or other Material Contract as in existence as of the date hereof and made available to Parent prior to the date hereof, acquire (A) increase the compensation any material business, assets or benefits payable capital stock of any Person or to become payable to division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, or otherwise), (B) any of its directors, executive officers or employees, other assets other than annual merit-based increases in base salary assets acquired in the ordinary course of business consistent with past practice that do not exceed 3% of the aggregate annual cost of all employee annual base salaries and wage rates in effect as of the date hereof; (B) grant, pay or award, or commit to grant, pay or award, any severance, termination pay, change in control payments, bonuses, retention or incentive compensation to any of its current or former directors, executive officers or employees; (C) establish, adopt, enter into, amend acquire or terminate license from any collective bargaining agreement Person any Intellectual Property Rights or Company Benefit Plan, Technology other than amendments to employee welfare benefit plans or collective bargaining agreements in the ordinary course of business that do not materially increase the annual cost consistent with past practice;
(vii) (A) sell, lease, license, pledge, transfer, subject to any Lien or annual expense otherwise dispose of any of its Intellectual Property Rights or Technology, material assets or material properties (relative including Company Products) except (1) pursuant to existing Contracts or commitments in effect prior to the 2020 annual cost execution of this Agreement, (2) sales of Inventory or expenseused equipment in the ordinary course of business consistent with past practice or (3) Permitted Liens incurred in the ordinary course of maintaining such business consistent with past practice; (B) sell, dispose of, disclose, or license the source code for Company Proprietary Software to any Person (other than immaterial portions of source code of Company Proprietary Software provided pursuant to a software development kit license or disclosed in connection with trials, demonstrations or similar arrangements, in each case on a non-exclusive basis and subject to written non-disclosure and non-use restrictions imposed on and agreed to by the recipient), (C) disclose any material trade secrets or other proprietary and confidential information to any Person that is not subject to any confidentiality or non-disclosure agreement or (D) enter into any arrangement, the result of which is the loss, expiration or termination of any license or right under or to any Third Party Intellectual Property;
(viii) (A) hire any new employee welfare benefit plan to whom a written offer of employment has not previously been offered and accepted prior to the date of this Agreement or, after the date of this Agreement, extend any new offers of employment with the Company or any Company Subsidiary to any individual, (B) grant to any current or former director, officer, employee or consultant of the Company or any Company Subsidiary any (1) increase in compensation, (2) bonus or (3) other benefits, except as agreed to prior to the date of this Agreement (C) grant to any current or former director, officer, employee or consultant of the Company or any Company Subsidiary any severance or termination pay or benefits or any increase in severance, change of control or termination pay or benefits, (D) except as otherwisec contemplated pursuant to Section 5.11 hereof, establish, adopt, enter into or amend any Company Employee Plan (other than offer letters that contemplate “at will” employment without severance benefits) or collective bargaining agreement; , in each case except as required by applicable Law, (DE) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability any rights or funding benefits or take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Employee Plan except to the extent required pursuant to the terms thereof or applicable Law or (F) make any Person a beneficiary of any retention plan under which such Person is not as of the date of this Agreement a beneficiary which would entitle such Person to vesting, acceleration or any other right as a consequence of consummation of the transactions contemplated by this Agreement;
(ix) (A) write-down any of its material assets, including any grantor trust capitalized Inventory or similar funding arrangement); (E) terminate the employment of any employee earning Company IP, in excess of $85.000150,000, other than except for cause; depreciation and amortization in accordance with GAAP or (F) hire any new employees in accordance with a base salary in excess of $85,000, other than replacing any such employees in the ordinary course of business consistent with past practice or (it being understood that B) make any change in any method of financial accounting principles, method or practices, in each case except for any such replacement employee’s compensation and benefits shall be change required by GAAP or applicable Law, including Regulation S-X under the Exchange Act (I) limited to cash compensation only and (II) otherwise consistent in all material respects each case following consultation with the compensation and benefits of such replaced employeeCompany’s independent auditor);
(vii) acquire (including by merger, consolidation or acquisition of stock or assets or any other means) or authorize or announce an intention to so acquire, or enter into any agreements providing for (x) any acquisitions of, any equity interests in or all or a material portion of the assets of any Person or any business or division thereof, or otherwise engage in any mergers, consolidations or business combinations or (y) acquisitions of material assets, except for, or with respect to, in each case, (A) acquisitions incur any Indebtedness in an amount in excess of supplies $50,000 or equipment modify in any material respect the ordinary course terms of business consistent with past practiceany Indebtedness, including by way of a guarantee or an issuance or sale of debt securities, or issue and sell options, warrants, calls or other rights to acquire any debt securities of the Company or any Company Subsidiary or (B) with respect to clause (y) only, capital expenditures permitted by Section 6.1(b)(xii);
(viii) liquidate, dissolve, restructure, recapitalize or effect any other reorganization (including any restructuring, recapitalization, or reorganization between or among any of the Company and/or the Company Subsidiaries), or adopt any plan or resolution providing for any of the foregoing;
(ix) make any loans, advances or capital contributions to, or investments in, any other PersonPerson in excess of $50,000, except for other than (A1) loans, advances, or capital contributions solely among to the Company or any Company Subsidiary or (2) accounts receivable and its wholly owned Company Subsidiaries or solely among the Company’s wholly owned Company Subsidiaries extensions of credit in the ordinary course of business consistent with past practicebusiness, and advances in expenses to employees, in each case that do not involve the transfer of funds between the United States of America and another jurisdiction, (B) advances for reimbursable employee expenses in the ordinary course of business consistent with past practice and (C) extensions of credit to customers in the ordinary course of business consistent with past practice;
(x) sell, lease, license, assign, abandon, permit to lapse, transfer, exchange, swap or otherwise dispose of, or subject to any Lien (other than Permitted Liens), any of its properties, rights or assets (including shares in the capital of the Company Subsidiaries), except (A) dispositions of obsolete, damaged, worn-out or surplus equipment or property no longer necessary in the conduct of the business or other immaterial equipment or property, in each case, in the ordinary course of business consistent with past practice, (B) leases or subleases of real property or interests therein not used for the conduct of the Company’s or the Company Subsidiaries’ business, as currently conducted, in each case in the ordinary course of business consistent with past practice, (C) non-exclusive licenses or other non-exclusive grants of rights in, to or under Company Intellectual Property Rights in the ordinary course of business consistent with past practice, (D) pursuant to the exercise of creditor rights under any Contract providing for outstanding Indebtedness (so long as the Company and its Subsidiaries have used reasonable best efforts to exhaust all other avenues of relief), and (E) pursuant to transactions solely between the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries in the ordinary course of business consistent with past practice;
(xi) agree to any exclusivity, non-competition, most favored nation, or similar provision or covenant restricting the Company, any Company Subsidiary, or any of their respective Affiliates, from competing in any line of business or with any Person or in any area or engaging in any activity or business (Aincluding with respect to the development, manufacture, marketing or distribution of their respective products or services), or pursuant to which any benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the consummation of the Mergers or the Closing Date;
(xii) enter into any Contract that would, if entered into prior to the date hereof, be a Material or materially amend any Contract, (B) materially modify, materially amend or extend relinquish or terminate any Material Contract, (C) terminate in any Material Contract, (D) waive individual case with an annual value in excess of $75,000 or release any material rights or claims under any Material with a value over the life of the Contract or (E) assign any material rights or claims under any Material Contractin excess of $200,000, other than (w) in the case of clauses (A) and (B), solely with respect to entering into non-exclusive software license agreements where the types of Contracts described in clauses (viii) and (xiv) of Company or any Company Subsidiary is the definition of Material Contract, licensor in the ordinary course of business consistent with past practice, (xB) in the case of clause (D), service or maintenance Contracts entered into in the ordinary course of business consistent with past practice pursuant to which the Company or any Company Subsidiary is providing services to customers, (C) non-exclusive distribution, marketing, reselling or consulting agreements entered into in the ordinary course of business consistent with past practice that provide for distribution of a Company Product by a Third Party or (D) non-exclusive OEM agreements entered into in the ordinary course of business consistent with past practice that are terminable without penalty within twelve months;
(xiii) make or change any material Tax election, change any annual Tax accounting period, adopt or change any material method of Tax accounting, amend any material Tax Returns or file any material claim for Tax refunds, enter into any material closing agreement, enter into any Tax allocation agreement, Tax sharing agreement or Tax indemnity agreement, settle any material Tax claim, audit or assessment, or surrender any right to claim a material Tax refund or credit;
(xiv) (A) institute, compromise or settle (or agree to do any of the preceding with respect to) any Actions, (B) waive, relinquish, release, grant, transfer or assign any right with a value of more than $100,000 in any individual case except in the ordinary course of business consistent with past practice or (C) commence any material litigation, investigation, arbitration or other Action against any Third Party;
(xv) engage in (A) any trade loading practices or any other promotional sales or discount activity with any customers or distributors with any intent of accelerating to prior fiscal quarters (so long as such waiver or release is not material including the current fiscal quarter) sales to the Company and trade or otherwise that would otherwise be expected (based on past practice) to occur in subsequent fiscal quarters, (B) any practice which would reasonably be expected to have the effect of accelerating to prior fiscal quarters (including the current fiscal quarter) collections of receivables that would otherwise be expected (based on past practice) to be made in subsequent fiscal quarters, (C) any practice which would reasonably be expected to have the effect of postponing to subsequent fiscal quarters payments by the Company Subsidiariesor any Company Subsidiary that would otherwise be expected (based on past practice) to be made in prior fiscal quarters (including the current fiscal quarter) or (D) any other promotional sales or discount activity, taken as whole); providedin each case in clauses (A) through (C) in a manner outside the ordinary course of business consistent with past practice;
(xvi) cancel or terminate or allow to lapse without commercially reasonably substitute policy therefor, or amend in any material respect or enter into, any material Insurance Policy, other than the renewal of existing Insurance Policies or enter into commercial reasonable substitute policies therefor;
(xvii) take any action that is intended or would reasonably be expected to result in any actions of a nature contemplated by the conditions and requirements of the Offer set forth in Annex I or the conditions to the extent permitted Merger set forth in ARTICLE 6 not being satisfied;
(xviii) except as required by this Section 6.1(bapplicable Law, convene any regular or special meeting (or any adjournment thereof) shall not require approval under this clause of the stockholders of the Company other than the Special Meeting;
(xixix) for make any types material change in its investment policies with respect to cash or marketable securities; or
(xx) authorize or enter into any Contract or otherwise make any commitment to do any of Contracts described in clause (xii) below,the foregoing.
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. The Company agrees that that, between the date hereof of this Agreement and the earlier of the Effective Time or the date, if any, on which this Agreement is validly terminated pursuant to Section 9.1Time, except as set forth in Section 6.1 of the Company Disclosure Letter, as specifically permitted or required by any other provision of this Agreement, as required by applicable Law or as consented to unless Parent shall otherwise consent in writing by Parent (such consent not to be unreasonably withheld), the Company (a) shallwill, and shall will cause each Company Subsidiary to, (i) conduct its business in all material respects operations only in the ordinary and usual course of business consistent with past practice practice, and use commercially reasonable efforts to (i) preserve intact its and their present business organizations, goodwill and ongoing businessesshall not take any action inconsistent therewith or with this Agreement, (ii) use its reasonable best efforts to keep available the services of its the current officers, employees and their present officers consultants of the Company and other key employees (other than where termination each Company Subsidiary and to preserve the current relationships of the Company and each Company Subsidiary with such services is for cause) and (iii) preserve its and their present relationships with of the customers, suppliers, vendorsdistributors, Governmental Entities, employees business partners and other Persons persons with whom it and they have material which the Company or any Company Subsidiary has business relations; , (iii) have in effect and maintain at all times insurance of the kinds, in the amounts and with the insurers as is in effect as of the date of this Agreement, (iv) keep in working condition and good order and repair all of its assets and other properties, normal wear and tear excepted, and (bv) protect the Company’s Intellectual Property. Without limiting the foregoing, and as an extension thereof, except as specifically permitted by any other provision of this Agreement, the Company shall not, and shall not permit any Company Subsidiary to, between the date of this Agreement and the Effective Time, directly or indirectly:, do, or agree to do, any of the following without Parent’s prior written consent (such consent not to be unreasonably withheld):
(ia) amendacquire by merging or consolidating with or by purchasing a substantial Equity Interest in or a substantial portion of the assets of, modifyor by any other manner, waiveany business, rescind corporation, partnership, association or otherwise change the Company’s other business organization or any division thereof other than a Company Subsidiary’s certificate of incorporation, bylaws or equivalent organizational documentsenter into any agreement providing for any merger, acquisition, divestiture or similar transaction;
(iib) authorizesell, declarelease, set aside, make license or pay otherwise dispose of any dividends on of its properties or make any distribution with respect to its outstanding shares of capital stock or other equity interests (whether in cash, assets, shares or other securities of the Company or any Company Subsidiary), except for dividends and distributions paid or made by a wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary than in the ordinary course of business consistent with past practice;
(iiic) enter into amend or propose to amend its certificate of incorporation or bylaws or, in the case of the Company Subsidiaries, their respective constituent documents;
(d) declare, set aside or pay any agreement and arrangement dividend or other distribution payable in cash, capital stock, property or otherwise with respect to voting or registration, or file any registration statement with the SEC with respect to any, shares of its capital stock stock, or purchase, redeem or otherwise acquire, or offer to purchase, redeem or otherwise acquire, any shares of its capital stock, other equity securities, other ownership interests or any other securities;
(iv) splitoptions, combine, subdivide, reduce warrants or reclassify any of its capital stock or other equity interests, or redeem, purchase or otherwise rights to acquire any of its capital stock such stock, securities or other equity interests (other than except for repurchases of Company Common Stock Shares from former employees pursuant to Repurchase Rights and Company purchases of securities of Company Subsidiaries in satisfaction the ordinary course of applicable Tax withholdings business related to intra-company financing);
(e) split, combine or upon the payment of the exercise price upon the exercise or vesting of reclassify any Company Equity Award outstanding as of the date hereof and in accordance with the terms thereof), or issue or authorize the issuance of any of its capital stock or other equity interests or any other securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests or any rights, warrants or options to acquire any such shares of capital stock or other equity interestsstock;
(vf) except in connection with the pledge of equity interests pursuant to the Company Credit Agreements, issue, deliver, grant, sell, pledge, dispose of or encumberauthorize, or authorize agree to the issuance, delivery, grant, sale, pledge, disposition issuance or encumbrance sale of, any shares in the capital stockof, voting securities or other equity interest in the Company or any Company Subsidiary options, warrants or rights of any kind to acquire any shares of, or any securities convertible into or exchangeable or exercisable for any such sharesshares of, voting securities or equity interest, any Equity Interests of the Company or any rightsCompany Subsidiary, warrants or options to acquire any such shares, voting securities or equity interest or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units or take any action to cause to be exercisable or vested any otherwise unexercisable or unvested Company Equity Award under any existing Company Equity Plan, other than issuances of except (i) for the Company Common Stock in respect Shares issuable upon exercise of (A) Company Options outstanding on the vesting date hereof or settlement of (B) Company Equity Awards Warrants outstanding as of on the date hereof, (ii) other than Company Options or grants of Company Common Shares subject to Repurchase Rights in all cases each case that are expressly permitted by Section 6.1(g) or required by Section 6.11 and (iii) Company purchases of securities of Company Subsidiaries in accordance with their respective termsthe ordinary course of business related to intra-company financings;
(vig) grant, amend or change the terms of any Company Options, or accelerate or change the period of exercisability or vesting of any Company Options, or amend any Repurchase Rights or accelerate or change the period of vesting of any Company Common Shares subject to Repurchase Rights, or authorize cash payments in exchange for any Company Options, except that (i) the Company may grant Company Options to purchase up to an aggregate of 55,000 Company Common Shares in the ordinary course of business, consistent with past practices, to newly hired employees, and (ii) the Company may grant Company Options to the employees set forth on Section 6.1(g) of the Company Disclosure Schedule to purchase up to the number of Company Common Shares set forth with respect to such employees on Section 6.1(g) of the Company Disclosure Schedule, provided that in the case of any Company Options granted pursuant to clause (i) or (ii) of this Section 6.1(g), (A) the exercise price of such Company Option shall be the fair market value at the date of grant, (B) the terms of such Company Option shall provide for vesting over a four year period, and (C) except for such changes as required by are necessary to reflect that the grants are of Company Options under the Company Stock Option Plan, the stock option agreement shall be identical to Parent’s customary stock option form (including its form of grant document and applicable Law terms and conditions) or any other such form as Parent may reasonably approve;
(i) take any action with respect to the grant of or increase in any severance or termination pay to any current or former director, executive officer or employee of the Company or any Company Subsidiary, (ii) execute any employment, deferred compensation or other similar agreement (or any amendment to any such existing agreement) with any director, executive officer or employee of the Company or any Company Subsidiary (other than immaterial agreements entered into in the ordinary course of business with non-U.S. employees on customary terms), (iii) increase the benefits payable under any existing severance or termination pay policies or employment agreements, (iv) increase the compensation, bonus or other benefits of current or former directors, executive officers or employees of the Company or any Company Subsidiary, (v) pay any bonuses to employees in excess of the amount set forth in Section 6.1(h) of the Company Disclosure Schedule, (vi) adopt or establish any new Employee Benefit Plan or other Material Contract as amend any existing Employee Benefit Plan, (vii) pay any benefit to a current or former director, executive officer or employee of the Company or any Company Subsidiary not required by any existing agreement or employee benefit plan, or (viii) take any action that would result in its incurring any obligation for any payments or benefits described in clauses (i)-(viii) except to the extent required in a written contract or agreement in existence as of the date hereof of this Agreement and set forth in Section 6.1(h) of the Company Disclosure Schedule;
(i) hire any employees at the Vice President or equivalent level or above, or enter into, amend or extend the term of, any employment or consulting agreement with any officer, employee, consultant or independent contractor (other than offer letters to new employees using the Company’s standard, unmodified form of offer letter which provides for at-will employment and which does not provide for severance, acceleration or post-termination benefits, and statements of work for consultants in the ordinary course of business using the Company’s standard, unmodified form which provides for not more than 30 days’ notice of termination, and does not provide for any severance, acceleration or post-termination benefits or similar payments upon termination), or enter into any collective bargaining agreement (unless required by applicable Law);
(j) make any material changes in its reporting for Taxes or accounting methods; make or rescind any Tax election; make any change to its method or adopt any method of reporting income, deductions, or other Tax items for Tax purposes that is inconsistent with positions taken, elections made available to Parent or methods used in reporting such Tax items in prior periods (all except as may be required by applicable Law); or settle or compromise any Tax liability;
(k) except as set forth on Section 6.1(k) of the Company Disclosure Schedule, commence any legal proceeding, or settle, compromise or otherwise resolve any litigation or other legal proceedings, involving (i) Intellectual Property that is used in the development or distribution of, or that is incorporated into, any of the Company Material Products or (ii) a payment of more than $100,000 in any one case by or to the date hereofCompany or any of the Company Subsidiaries;
(l) except as set forth on Section 6.1(l) of the Company Disclosure Schedule, (i) incur any Indebtedness other than (A) increase short-term borrowings incurred in the compensation ordinary course of business not to exceed $500,000 in the aggregate, (B) borrowings incurred on commercially reasonable terms to refinance Indebtedness existing on the date of this Agreement, in an aggregate principal amount of no more than the principal amount of such refinanced Indebtedness, and (C) Indebtedness incurred on commercially reasonable terms to finance any payments required to be made under the terms of the Purchase Agreement dated as of April 20, 2005 among JAMDAT Mobile (Hawaii) LLC, the Company, Blue Lava Wireless, LLC and its members, provided that in the case of any such Indebtedness permitted under clauses (A)-(C), the Company shall be entitled to prepay such Indebtedness without penalty or benefits payable more than one business day’s advance notice, or (ii) modify the terms of any existing Indebtedness of the Company or any Company Subsidiary;
(m) assume, guarantee, endorse or otherwise as an accommodation become responsible for, the obligations of any other person, or make any loans or advances, except (i) to become payable to or for the benefit of the Company Subsidiaries or (ii) for those not in excess of $100,000 in the aggregate;
(n) create or assume any of its directors, executive officers material Encumbrance on any asset;
(o) pay or employees, discharge any claims or liabilities other than annual merit-based increases in base salary the payment in the ordinary course of business consistent with past practice practices of claims or liabilities that do not exceed 3% were reflected on the Company Balance Sheet or that were incurred after the date of the aggregate annual cost Company Balance Sheet in the ordinary course of all employee annual base salaries and wage rates business;
(p) write off any accounts or notes receivable in effect as excess of $100,000 in the date hereof; aggregate;
(Bq) grant, pay or award, make or commit to grantmake capital expenditures in excess of $750,000 in any three month period after the date of this Agreement;
(r) make any loans or advances (other than routine travel advances and sales commission draws to employees of the Company or any Company Subsidiary consistent with past practice) to, pay or awardany investments in or capital contributions to, any severanceperson (including any officer, termination paydirector or employee of the Company) other than a Company Subsidiary, change or forgive or discharge in control payments, bonuses, retention whole or incentive compensation in part any outstanding loans or advances; or otherwise materially modify any loan previously granted other than loans or advances by the Company to any of its current or former directors, executive officers or employees; (C) establish, adopt, enter into, amend or terminate any collective bargaining agreement or Company Benefit Plan, other than amendments to employee welfare benefit plans or collective bargaining agreements Subsidiary in the ordinary course of business related to intercompany financing;
(s) enter into any agreement or arrangement that do not materially increase limits or otherwise restricts the annual cost Company or annual expense (relative to the 2020 annual cost or expense) of maintaining such employee welfare benefit plan or collective bargaining agreement; (D) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Company Benefit Plan (including Subsidiary, or that, after the Effective Time, would be reasonably expected to limit or restrict Parent or any grantor trust of the Parent Subsidiaries or similar funding arrangement); (E) terminate the employment any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area, or which provides exclusive rights or “most favored nation” rights of any employee earning in excess of $85.000, kind or scope to any party (other than for cause; or (F) hire any new employees with a base salary in excess of $85,000, rights granted to wireless carriers and other than replacing any such employees distributors in the ordinary course of business consistent with past practice (it being understood that such replacement employee’s compensation and benefits shall be (I) limited entitling them to cash compensation only and (II) otherwise consistent offer one or more titles on an exclusive basis in all material respects with the compensation and benefits their market for a period of such replaced employeeno more than 90 days);
(viit) acquire (including by mergerterminate, consolidation amend, modify or acquisition waive any provision of stock or assets any standstill agreement to which it is a party, or any other meansconfidentiality agreement not entered into in the ordinary course of business, or fail to enforce, to the fullest extent permitted by Law, the provisions of such agreement;
(u) terminate, or authorize amend or announce an intention to so acquiremodify in any material respect, any Company Material Contract, or enter into any contract that would have been a Company Material Contract if it were in effect on the date hereof, other than (i) agreements providing for (x) any acquisitions ofwith wireless carriers, any equity interests in or all or a material portion of the assets of any Person or any business or division thereof, or otherwise engage in any mergers, consolidations or business combinations or (y) acquisitions of material assets, except for, or with respect to, in each case, (A) acquisitions of supplies or equipment in the ordinary course of business consistent with past practice, or (B) with respect to clause (y) only, capital expenditures permitted by Section 6.1(b)(xii);
(viii) liquidate, dissolve, restructure, recapitalize or effect any other reorganization (including any restructuring, recapitalization, or reorganization between or among any of the Company and/or the Company Subsidiaries), or adopt any plan or resolution providing for any of the foregoing;
(ix) make any loans, advances or capital contributions to, or investments in, any other Person, except for (A) loans, advances, or capital contributions solely among the Company distributors and its wholly owned Company Subsidiaries or solely among the Company’s wholly owned Company Subsidiaries in the ordinary course of business consistent with past practice, in each case that do not involve the transfer of funds between the United States of America and another jurisdiction, (B) advances for reimbursable employee expenses in the ordinary course of business consistent with past practice and (C) extensions of credit to customers in the ordinary course of business consistent with past practicepractices and (ii) contracts described in Section 4.12(l);
(xv) sell, lease, license, assign, abandon, permit to lapse, transfer, exchange, swap intentionally take any action that would make any representation or otherwise dispose of, or subject to any Lien (other than Permitted Liens), any of its properties, rights or assets (including shares in the capital warranty of the Company Subsidiaries)contained herein inaccurate in any material respect at, or as of any time prior to, the Effective Time, which action is not cured within thirty (30) days after notice thereof, except (A) dispositions of obsolete, damaged, worn-out or surplus equipment or property no longer necessary in the conduct of the business or other immaterial equipment or property, in each case, in the ordinary course of business consistent with past practice, (B) leases or subleases of real property or interests therein not used for the conduct of the Company’s or the Company Subsidiaries’ business, as currently conducted, in each case in the ordinary course of business consistent with past practice, (C) non-exclusive licenses or other non-exclusive grants of rights in, to or under Company Intellectual Property Rights in the ordinary course of business consistent with past practice, (D) pursuant to the exercise of creditor rights under any Contract providing for outstanding Indebtedness (so long as the Company and its Subsidiaries have used reasonable best efforts to exhaust all other avenues of relief), and (E) pursuant to transactions solely between the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries in the ordinary course of business consistent with past practice;expressly permitted by this Agreement; or
(xi) (A) enter into any Contract that would, if entered into prior to the date hereof, be a Material Contract, (B) materially modify, materially amend or extend any Material Contract, (C) terminate any Material Contract, (D) waive or release any material rights or claims under any Material Contract or (E) assign any material rights or claims under any Material Contract, other than (w) in take or agree to take any of the case of clauses (A) and (B), solely with respect to the types of Contracts actions described in clauses subsections (viiia) and through (xivv) of the definition of Material Contract, in the ordinary course of business consistent with past practice, (x) in the case of clause (D), in the ordinary course of business consistent with past practices (so long as such waiver this Section 6.1 or release is not material to prevent the Company and from performing, or cause the Company Subsidiariesnot to perform, taken as whole); providedone or more covenants required hereunder to be performed by the Company. Notwithstanding the foregoing, that any actions of a nature contemplated by and to the extent permitted any of the foregoing actions are required by applicable Law, then the Company shall be entitled to take such action as set forth in subsections (a)-(w) of this Section 6.1(b) shall not require approval under this clause (xi) for any types of Contracts described in clause (xii) below,6.1 without prior consent by Parent, provided the Company gives notice thereof to Parent as promptly as practicable.
Appears in 1 contract
Samples: Merger Agreement (Jamdat Mobile Inc)
Conduct of Business by the Company Pending the Closing. The Company covenants and agrees that that, between the date hereof of this Agreement and the earlier of the Effective Time or the date, if any, on which this Agreement is validly terminated pursuant to Section 9.1Time, except as set forth in Section 6.1 5.1 of the Company Disclosure Letter, Schedule or as specifically permitted or required by any other provision of this Agreement, as required by applicable Law or as consented to unless Parent will otherwise agree in writing by Parent (which agreement will not be unreasonably withheld, delayed or conditioned), the Company (a) shallwill, and shall will cause each Company Subsidiary to, conduct its operations in the ordinary course of business and use commercially reasonable efforts to preserve substantially intact its business organization and maintain existing relations and goodwill with customers, suppliers and employees in all the ordinary course of business consistent with past practice. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 of the Company Disclosure Schedule or as permitted by any other provision of this Agreement, the Company will not (unless required by applicable Law), and will not permit any Company Subsidiary 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 Parent (which consent will not be unreasonably withheld, delayed or conditioned):
(a) amend or otherwise change its certificate of incorporation or bylaws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, transfer or 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 Company or any Company Subsidiary of any class, or securities convertible into, 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 Company or any Company Subsidiary, other than the issuance of Shares upon the vesting of Company RSUs or Company Restricted Shares or the exercise of Company Options outstanding as of the date hereof in accordance with their terms;
(c) sell, pledge, dispose of, let lapse, abandon, assign, transfer, lease, license, guarantee or encumber any material respects property or assets of the Company or any Company Subsidiary (including any Registered Intellectual Property and unregistered Owned Intellectual Property), except (i) to the extent required pursuant to Contracts in effect prior to the date hereof, (ii) pursuant to the sale, purchase or licensing of inventory, raw materials, equipment, goods, or other supplies in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (i) preserve intact its and their present business organizations, goodwill and ongoing businesses, (ii) keep available the services of its and their present officers and other key employees (other than where termination of such services is for cause) and or (iii) preserve its and their present relationships for non-exclusive licenses in the ordinary course of business consistent with customers, suppliers, vendors, Governmental Entities, employees and other Persons past practice with whom it and they have material business relations; and (b) shall not, and shall a fair market value not permit any Company Subsidiary to, directly or indirectly:
(i) amend, modify, waive, rescind or otherwise change in excess of $2,500,000 in the Company’s or any Company Subsidiary’s certificate of incorporation, bylaws or equivalent organizational documentsaggregate;
(iid) authorize, declare, set aside, make or pay any dividends on dividend or make any other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its outstanding shares of capital stock or (other equity interests (whether in cash, assets, shares or other securities of the Company or any Company Subsidiary), except for than dividends and distributions paid or made by a wholly wholly-owned Company Subsidiary to the Company or another wholly wholly-owned Company Subsidiary in the ordinary course of business consistent with past practice;
(iiiSubsidiary) or enter into any agreement and arrangement with respect to the voting or registration, or file any registration statement with the SEC with respect to any, of its capital stock or other equity interests or any other securitiesstock;
(ive) splitreclassify, combine, subdividesplit, reduce subdivide or reclassify any of its capital stock or other equity interestsamend the terms of, or redeem, purchase or otherwise acquire acquire, directly or indirectly, any of its capital stock stock, other Equity Interests or any other equity interests (other than repurchases of Company Common Stock in satisfaction of applicable Tax withholdings or upon the payment of the exercise price upon the exercise or vesting of any Company Equity Award outstanding as of the date hereof and in accordance with the terms thereof)securities, or issue authorize or authorize propose the issuance of any of its capital stock or other equity interests or any other securities in respect of, in lieu of or in substitution for, for shares of its capital stock or other equity interests or any rights, warrants or options to acquire any such shares of capital stock or other equity interestssecurities;
(vf) except in connection with the pledge of equity interests pursuant to the Company Credit Agreements, issue, deliver, grant, sell, pledge, dispose of merge or encumber, or authorize the issuance, delivery, grant, sale, pledge, disposition or encumbrance of, any shares in the capital stock, voting securities or other equity interest in consolidate the Company or any Company Subsidiary with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any securities convertible into or exchangeable or exercisable for any such shares, voting securities or equity interestCompany Subsidiary, or otherwise enter into any rightsagreements imposing material restrictions on the assets, warrants operations or options to acquire any such shares, voting securities or equity interest businesses of the Company or any “phantom” stockCompany Subsidiary;
(g) enter into a new line of business (other than currently-projected extensions of existing product lines);
(h) acquire (including, “phantom” without limitation, by merger, consolidation, or acquisition of stock rights, stock appreciation rights or stock based performance units assets) any interest in any Person or take any action to cause to be exercisable division thereof or vested any otherwise unexercisable or unvested Company Equity Award under any existing Company Equity Planassets, other than issuances acquisitions of Company Common Stock in respect assets (including, without limitation, the purchase of the vesting or settlement of Company Equity Awards outstanding as of the date hereofinventory, in all cases in accordance with their respective terms;
(vi) except as required by applicable Law or any Company Benefit Plan raw materials, equipment, goods, or other Material Contract as in existence as of the date hereof and made available to Parent prior to the date hereof, (Asupplies) increase the compensation or benefits payable or to become payable to any of its directors, executive officers or employees, other than annual merit-based increases in base salary in the ordinary course of business consistent with past practice and any other acquisitions for consideration that do is individually not exceed 3% of the aggregate annual cost of all employee annual base salaries and wage rates in effect as of the date hereof; (B) grant, pay or award, or commit to grant, pay or award, any severance, termination pay, change in control payments, bonuses, retention or incentive compensation to any of its current or former directors, executive officers or employees; (C) establish, adopt, enter into, amend or terminate any collective bargaining agreement or Company Benefit Plan, other than amendments to employee welfare benefit plans or collective bargaining agreements in the ordinary course of business that do not materially increase the annual cost or annual expense (relative to the 2020 annual cost or expense) of maintaining such employee welfare benefit plan or collective bargaining agreement; (D) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Company Benefit Plan (including any grantor trust or similar funding arrangement); (E) terminate the employment of any employee earning in excess of $85.0002,500,000, other than for cause; or (F) hire any new employees with a base salary in the aggregate not in excess of $85,000, other than replacing any such employees in the ordinary course of business consistent with past practice (it being understood that such replacement employee’s compensation and benefits shall be (I) limited to cash compensation only and (II) otherwise consistent in all material respects with the compensation and benefits of such replaced employee)5,000,000;
(viii) acquire (including by mergerincur any indebtedness for borrowed money or issue any debt securities or assume, consolidation guarantee or acquisition of stock or assets or any other means) or authorize or announce an intention to so acquireendorse, or enter into any agreements providing otherwise become responsible for (x) any acquisitions of, any equity interests in or all or a material portion of the assets obligations of any Person or any business or division thereof, or otherwise engage in any mergers, consolidations or business combinations or (yother than a wholly-owned Company Subsidiary) acquisitions of material assets, except for, or with respect to, in each case, (A) acquisitions of supplies or equipment in the ordinary course of business consistent with past practice, or (B) with respect to clause (y) only, capital expenditures permitted by Section 6.1(b)(xii)for borrowed money;
(viii) liquidate, dissolve, restructure, recapitalize or effect any other reorganization (including any restructuring, recapitalization, or reorganization between or among any of the Company and/or the Company Subsidiaries), or adopt any plan or resolution providing for any of the foregoing;
(ixj) make any loans, advances advances, guarantees or capital contributions to, or investments in, any other PersonPerson (other than any wholly-owned Company Subsidiary) in excess of $2,500,000 in the aggregate;
(k) terminate, cancel or amend any Company Material Contract, or cancel, modify or waive any rights thereunder, or enter into or amend any Contract that, if existing on the date hereof, would be a Company Material Contract;
(l) make or authorize any capital expenditure in excess of the Company’s capital expenditure budget as disclosed to Parent prior to the date hereof, other than capital expenditures that are not, in the aggregate, in excess of $2,500,000;
(m) except for to the extent required by (i) applicable Law, (ii) the existing terms of any Company Benefit Plan, (iii) contractual commitments or corporate policies with respect to severance or termination pay as in existence on the date hereof and listed on Section 5.1(m) of the Company Disclosure Schedule or (iv) as otherwise provided on Section 5.1(m) of the Company Disclosure Schedule: (A) loansincrease in any manner the compensation, advances, bonus or capital contributions solely among the Company and benefits payable or to become payable to its wholly owned Company Subsidiaries or solely among the Company’s wholly owned Company Subsidiaries in the ordinary course of business consistent with past practice, in each case that do not involve the transfer of funds between the United States of America and another jurisdiction, Service Providers (B) advances except for reimbursable employee expenses increases in the ordinary course of business consistent with past practice and in base salaries or base wages of employees of the Company or any Company Subsidiary); (B) grant any additional rights to severance or termination pay to, or enter into any severance agreement with, any Service Provider, or establish, adopt, enter into or amend any Company Benefit Plan; (C) extensions grant any new awards under any Company Benefit Plan, (D) amend or modify any outstanding award under any Company Benefit Plan, (E) take any action to amend, waive or accelerate the vesting criteria or vesting requirements of credit payment of any compensation or benefit under any Company Benefit Plan or remove any existing restrictions in any Company Benefit Plans or awards made thereunder, (F) take any action to accelerate the payment, or to fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, to the extent not already provided in any such Company Benefit Plan or (G) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or applicable laws;
(n) forgive any loans to Service Providers or any of their respective affiliates;
(o) make any material change in accounting policies, practices, principles, methods or procedures, other than as required by GAAP or by a Governmental Entity;
(p) encourage customers to make payments earlier than would otherwise reasonably be expected (based on past practice) to be made to the Company or the Company Subsidiaries, or agree to payment terms or conditions with suppliers that are not consistent in all material respects with past practice;
(q) compromise, settle or agree to settle any Proceeding (including any Proceeding relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements in the ordinary course of business consistent with past practicethat involve only the payment of monetary damages not in excess of $2,500,000 individually or $5,000,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company or any Company Subsidiary;
(xr) sell(i) make, lease, license, assign, abandon, permit to lapse, transfer, exchange, swap or otherwise dispose ofchange, or subject to rescind any Lien material Tax election, (other than Permitted Liens), ii) file any material amended Tax Return of its properties, rights the Company or assets (including shares in the capital any of the Company Subsidiaries), except (Aiii) dispositions or adopt or change any material method or period of obsoleteTax accounting, damaged, worn-out (iv) settle or surplus equipment or property no longer necessary compromise any material claim relating to Taxes; (v) surrender any material claim for a refund of Taxes; (vi) enter into any “closing agreement” as described in the conduct Section 7121 of the business Code with respect to material Taxes; or (vii) consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment (other immaterial equipment or property, in each case, than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business consistent business);
(s) write up, write down or write off the book value of any assets, except for depreciation and amortization and normal valuation adjustments to accounts receivable and inventory in accordance with past practice, GAAP consistently applied;
(Bt) leases pre-pay any long-term debt; or
(u) authorize or subleases of real property enter into any Contract or interests therein not used for the conduct of the Company’s or the Company Subsidiaries’ business, as currently conductedotherwise make any commitment, in each case in to do any of the ordinary course of business consistent with past practice, (C) non-exclusive licenses or other non-exclusive grants of rights in, to or under Company Intellectual Property Rights in the ordinary course of business consistent with past practice, (D) pursuant to the exercise of creditor rights under any Contract providing for outstanding Indebtedness (so long as the Company and its Subsidiaries have used reasonable best efforts to exhaust all other avenues of relief), and (E) pursuant to transactions solely between the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries in the ordinary course of business consistent with past practice;
(xi) (A) enter into any Contract that would, if entered into prior to the date hereof, be a Material Contract, (B) materially modify, materially amend or extend any Material Contract, (C) terminate any Material Contract, (D) waive or release any material rights or claims under any Material Contract or (E) assign any material rights or claims under any Material Contract, other than (w) in the case of clauses (A) and (B), solely with respect to the types of Contracts described foregoing in clauses (viiia) and through (xiv) of the definition of Material Contract, in the ordinary course of business consistent with past practice, (x) in the case of clause (Dt), in the ordinary course of business consistent with past practices (so long as such waiver or release is not material to the Company and the Company Subsidiaries, taken as whole); provided, that any actions of a nature contemplated by and to the extent permitted by this Section 6.1(b) shall not require approval under this clause (xi) for any types of Contracts described in clause (xii) below,.
Appears in 1 contract
Samples: Merger Agreement (Schiff Nutrition International, Inc.)
Conduct of Business by the Company Pending the Closing. The Company agrees that between the date hereof of this Agreement and the earlier of the Effective Time or the date, if any, on which this Agreement is validly terminated pursuant to Section 9.18.1, except (1) as set forth in Section 6.1 5.1 of the Company Disclosure Letter, (2) as specifically permitted or required contemplated by this Agreement, (3) as required by applicable Law or Order or (4) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), the Company (ai) shall, shall and shall cause each Company Subsidiary to, conduct its business business, in all material respects respects, in the ordinary course of business consistent with past practice and use practice, including, to the extent consistent therewith, using commercially reasonable efforts to (i) preserve intact its and their present business organizations, goodwill organizations and ongoing businesses, (ii) keep available the services of its and their present officers and other key employees (other than where termination of such services is for cause) and (iii) to preserve its and their present relationships with customers, suppliers, vendors, Governmental Entities, employees suppliers and other Persons with whom it and they have material business relations; provided, however, that no action that is specifically permitted by any of clauses (a) through (w) of this Section 5.1 shall be deemed a breach of this clause (i), and (bii) shall not, and shall not permit any Company Subsidiary to, directly or indirectly:
(ia) amend, modify, waive, rescind or otherwise change the Company’s or any Company Subsidiary’s certificate of incorporation, bylaws or equivalent organizational documents;
(ii) authorize, declare, set aside, make declare or pay any dividends on or make any distribution with respect to its outstanding shares of capital stock or other equity interests (whether in cash, assets, shares or other securities of the Company or any Company Subsidiary), except for dividends and distributions paid or made by a wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary;
(b) split, combine, reduce or reclassify any of its capital stock, except for any such transaction by a wholly owned Company Subsidiary that remains a wholly owned Company Subsidiary after consummation of such transaction; Table of Contents
(c) except as required by any Company Plan:
(i) terminate any of its present executive officers or any other employee whose base annual compensation exceeds $300,000, unless the termination is for cause, based on the Company’s reasonable determination of the individual’s material misconduct or poor performance;
(ii) grant or provide any retention or change in control bonus payments or benefits to any employee or consultant, except pursuant to those arrangements existing and disclosed as of the date of this Agreement;
(iii) grant or provide any severance payments or benefits to any employee or consultant, except pursuant to those arrangements existing and disclosed as of the date of this Agreement (including, with respect to employees, severance pursuant to the Company’s generally applicable severance policies or practices as of the date of this Agreement);
(iv) increase the cash and equity compensation payable or to become payable to any of its employees or individual independent contractors, other than (A) increases in annual base salaries or base wage rates and target incentive cash compensation in amounts that are in the ordinary course of business consistent with past practice;
practice (it being understood that payment of bonuses and other incentive compensation pursuant to the terms of arrangements or policies existing on the date of this Agreement shall not be considered to be an increase in compensation or benefits payable), but in no event shall the aggregate increase for all employees exceed four and one-half percent (4.5%), and (B) the grant of Company Equity Awards or other equity-based awards in amounts that are in the ordinary course of business consistent with past practice and provided that (i) no Company PSUs or Company Options shall be issued (provided, that the Company shall be permitted to grant Company PSUs in the ordinary course in connection with its annual focal process in May 2019 which provide that such awards shall be assumed by Parent and converted, in the event the Closing occurs, into a Parent One Yen Option based on target performance pursuant to Section 2.4(b)(ii)), (ii) the Company shall take all actions as may be required to ensure that any Company Equity Awards that are granted after the date of this Agreement will have a time-based vesting schedule of four (4) years, without acceleration of vesting due to the closing of the Transaction, (iii) enter into any agreement the aggregate number of shares of Company Common Stock subject to Company Equity Awards so granted shall not exceed (A) 750,000 shares of Company Common Stock for purposes of new hire, promotion and arrangement with respect similar awards and (B) if the Effective Time has not occurred prior to voting or registrationMay 15, or file any registration statement with the SEC with respect to any2019, of its capital stock or other equity interests or any other securities;
(iv) split, combine, subdivide, reduce or reclassify any of its capital stock or other equity interests, or redeem, purchase or otherwise acquire any of its capital stock or other equity interests (other than repurchases 2.6 million shares of Company Common Stock in satisfaction connection with the Company’s annual focal process (which, in the case of applicable Tax withholdings Company PSUs, shall be calculated based on target performance), and (iv) this Section 5.1(c)(iv)(B) provides the exclusive means by which the Company can grant Company Equity Awards or upon any other equity-based awards between the date of this Agreement and the Effective Time or the date, if any, on which this Agreement is terminated pursuant to Section 8.1; Table of Contents
(v) establish, adopt, enter into, materially amend or terminate any collective bargaining agreement;
(vi) establish, adopt, enter into, or materially amend any material Company Plan (or any arrangement that would be a material Company Plan if in effect on the date hereof), other than ordinary course annual renewals of or modifications to Company Plans consistent with past practice;
(vii) take any action to accelerate the vesting or payment of the exercise price upon the exercise or vesting date of any Company Equity Award outstanding Awards or other equity-based awards or accelerate any material payment or benefit, or the funding of any material payment or benefit, payable or to become payable under a Company Plan; or
(viii) hire or retain any person for employment or to be a consultant with the Company or any Company Subsidiary at the level of vice president or above, provided, that, with written approval from Parent, not to be unreasonably withheld or delayed, the Company and the Company Subsidiaries may hire any person for employment (including by means of internal promotion) at the level of vice president or above to fill any currently existing vice president or higher position that is vacant as of the date hereof and of this Agreement or that becomes vacant after the date of this Agreement, and, notwithstanding anything to the contrary in accordance with the terms thereofthis Section 5.1(c), provide such person with compensation and benefits and other terms for such position consistent with past practice.
(d) make any material change in its financial accounting policies or issue procedures or authorize the issuance of any of its capital methods of reporting income, deductions or other material items for financial accounting purposes, except as required by Law, GAAP or SEC policy;
(e) enter into an agreement providing for the acquisition, directly or indirectly (including by merger, consolidation, or acquisition of stock or other equity interests assets or any other securities in respect ofbusiness combination) of any corporation, in lieu of or in substitution forpartnership, shares of its capital stock or other equity interests business organization or any rightsdivision thereof that would be material to the Company and the Company Subsidiaries, warrants taken as a whole, except for transactions between the Company and a wholly owned Company Subsidiary or options to acquire any such shares of capital stock or other equity interestsbetween wholly owned Company Subsidiaries;
(vf) amend the Company Governing Documents or permit any Company Subsidiary to adopt any amendments to its governing documents;
(g) except in connection with the pledge of equity interests pursuant to the Company Credit Agreementsas permitted by Section 5.1(c), issue, deliver, grant, sell, pledge, dispose of or encumber, or authorize the issuance, delivery, grant, sale, pledge, disposition or encumbrance of, subject to any Lien (other than Permitted Liens) any shares in the its capital stock, stock or voting securities or other equity interest in of the Company or any Company Subsidiary or any securities convertible into or exchangeable or exercisable for any such shares, shares or voting securities or equity interestsecurities, or any rights, warrants or options to acquire any such shares, shares in its capital stock or voting securities or equity interest or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units or take any action to cause to be exercisable or vested any otherwise unexercisable or unvested Company Equity Award under any existing Company Equity Planunits, other than (i) issuances of Company Common Stock Shares in respect of the exercise of purchase rights under the Company ESPP in accordance with Section 2.4(a), upon exercise of Company Options, or the vesting or and settlement of Company Equity Awards outstanding as of the date hereof, in all cases RSUs and Company PSUs in accordance with their respective termsterms and the terms of this Agreement; (ii) transactions between the Company and a wholly owned Company Subsidiary Table of Contents or between wholly owned Company Subsidiaries; (iii) in connection with the conversion, settlement or repurchase of the Company Convertible Notes; and (iv) in connection with any determination, adjustment, cancellation, termination, exercise, settlement or computation in connection with the Company Warrants or the Company Convertible Note Hedge Obligations;
(vih) directly or indirectly, purchase, redeem or otherwise acquire any shares in its capital or any rights, warrants or options to acquire any such shares in its capital, except as required for (i) acquisitions of Company Shares tendered by applicable Law holders of Company Equity Awards in order to satisfy obligations to pay the exercise price and/or Tax withholding obligations with respect thereto, (ii) the acquisition by the Company of Company Equity Awards in connection with the forfeiture or cancellation of such awards and (iii) transactions between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries;
(i) redeem, repurchase, prepay (other than prepayments of revolving loans), defease, incur, assume, endorse, guarantee or otherwise become liable for or modify in any material respects the terms of any Indebtedness for borrowed money or issue or sell any debt securities or calls, options, warrants or other rights to acquire any debt securities (directly, contingently or otherwise), except for (i) any Indebtedness among the Company and its wholly owned Company Subsidiaries or among wholly owned Company Subsidiaries, (ii) guarantees by the Company of Indebtedness of Company Subsidiaries or guarantees by Company Subsidiaries of Indebtedness of the Company or any Company Benefit Plan Subsidiary, which Indebtedness is incurred in compliance with this clause (ii), (iii) borrowings under the Credit Agreement and (iv) in connection with the refinancing of any outstanding Indebtedness at or other Material Contract as in existence as anticipation of its maturity, (v) in connection with the conversion, settlement or repurchase of the date hereof and made available to Parent prior to the date hereofCompany Convertible Notes, (Avi) increase in connection with any determination, adjustment, cancellation, termination, exercise, settlement or computation in connection with the compensation Company Warrants or benefits payable or to become payable to any of its directors, executive officers or employees, other than annual merit-based increases in base salary in the ordinary course of business consistent with past practice that do not exceed 3% of the aggregate annual cost of all employee annual base salaries and wage rates in effect as of the date hereof; (B) grant, pay or award, or commit to grant, pay or award, any severance, termination pay, change in control payments, bonuses, retention or incentive compensation to any of its current or former directors, executive officers or employees; (C) establish, adopt, enter into, amend or terminate any collective bargaining agreement or Company Benefit Plan, other than amendments to employee welfare benefit plans or collective bargaining agreements in the ordinary course of business that do not materially increase the annual cost or annual expense (relative to the 2020 annual cost or expense) of maintaining such employee welfare benefit plan or collective bargaining agreement; (D) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Company Benefit Plan (including any grantor trust or similar funding arrangement); (E) terminate the employment of any employee earning in excess of $85.000, other than for cause; or (F) hire any new employees with a base salary in excess of $85,000, other than replacing any such employees in the ordinary course of business consistent with past practice (it being understood that such replacement employee’s compensation and benefits shall be (I) limited to cash compensation only Convertible Note Hedge Obligations and (IIvii) otherwise consistent any other Indebtedness in all material respects with the compensation and benefits of such replaced employee)an amount not to exceed $10,000,000 in aggregate principal amount;
(viij) acquire (including by mergermake any loans, consolidation advances or acquisition of stock or assets or any other means) or authorize or announce an intention to so acquirecapital contributions, or enter into any agreements providing except for (xi) any acquisitions ofloans or advances to employees or independent contractors for indemnification, any equity interests in or all or a material portion of the assets of any Person or any attorneys’ fees, travel and other business or division thereof, or otherwise engage in any mergers, consolidations or business combinations or (y) acquisitions of material assets, except for, or with respect to, in each case, (A) acquisitions of supplies or equipment expenses in the ordinary course of business consistent with past practice, or (Bii) with respect to clause (y) only, capital expenditures permitted by Section 6.1(b)(xii);
(viii) liquidate, dissolve, restructure, recapitalize or effect any other reorganization (including any restructuring, recapitalization, or reorganization between or among any of the Company and/or the Company Subsidiaries), or adopt any plan or resolution providing for any of the foregoing;
(ix) make any loans, advances loans or capital contributions to, or investments in, any other Person, except for (A) loans, advances, or capital contributions solely among the Company and its wholly owned Company Subsidiaries or solely among the Company’s wholly owned Company Subsidiaries in the ordinary course of business consistent with past practice, in each case that do not involve the transfer of funds between the United States of America and another jurisdiction, (B) advances for reimbursable employee expenses in the ordinary course of business consistent with past practice and (Ciii) extensions of credit to extended payment terms for customers in the ordinary course of business consistent with past practicebusiness;
(xk) sell, lease, license, assign, abandon, permit to lapse, transfer, exchange, swap or otherwise dispose of, or subject to any Lien (other than Permitted Liens), any of its properties, rights properties or assets (including shares in the capital of the Company Subsidiaries)assets, except for (Ai) sales of inventory or Company Products, or dispositions of obsolete, damaged, worn-out obsolete or surplus equipment or property no longer necessary in the conduct of the business or other immaterial equipment or property, in each caseworthless equipment, in the ordinary course of business consistent with past practicebusiness, (Bii) leases or subleases non-exclusive licenses of real property or interests therein not used for the conduct of the Company’s or the Company Subsidiaries’ business, as currently conducted, in each case Intellectual Property in the ordinary course of business consistent with past practicebusiness, (Ciii) non-exclusive licenses or other non-exclusive grants of rights in, to or under Company Intellectual Property Rights in the ordinary course of business consistent with past practice, (D) pursuant to the exercise of creditor rights under any Contract providing for outstanding Indebtedness (so long as transactions among the Company and its Subsidiaries have used reasonable best efforts to exhaust all other avenues of relief), and (E) pursuant to transactions solely between the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries in the ordinary course of business consistent with past practice;
(xi) (A) enter into any Contract that would, if entered into prior to the date hereof, be a Material Contract, (B) materially modify, materially amend or extend any Material Contract, (C) terminate any Material Contract, (D) waive or release any material rights or claims under any Material Contract or (E) assign any material rights or claims under any Material Contract, other than (w) in the case of clauses (A) among wholly owned Company Subsidiaries and (B), solely iv) transactions with respect to the types of Contracts described in clauses assets (viiiother than any corporation, partnership other business organization or any division thereof or any other business) and (xiv) of the definition of Material Contractthat, in the ordinary course of business consistent with past practiceaggregate, (x) in the case of clause (D), in the ordinary course of business consistent with past practices (so long as such waiver or release is are not material to the Company and the Company Subsidiaries, taken as a whole); providedTable of Contents (l) settle, pay, discharge or satisfy any material Actions other than (i) the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of liabilities reflected or reserved against in the Most Recent Company Balance Sheet, or (ii) those that do not (A) impose any actions material injunctive relief on the Company or any Company Subsidiary and (B) involve the payment of a nature contemplated by and to money greater than the extent permitted by this applicable amount set forth on Section 6.1(b5.1(l) shall not require approval under this clause (xi) for any types of Contracts described the Company Disclosure Letter in clause (xii) below,excess of existing insurance coverage;
Appears in 1 contract
Samples: Merger Agreement (Integrated Device Technology Inc)
Conduct of Business by the Company Pending the Closing. The Company agrees that between the date hereof and the earlier of the Effective Time or the date, if any, on which this Agreement is validly terminated pursuant to Section 9.110.1, except as set forth in Section 6.1 7.1 of the Company Disclosure Letter, as specifically permitted required or required expressly contemplated by this Agreement, as required by applicable Law (including COVID-19 Measures), as reasonably required in response to COVID-19, or as consented to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company (a) shall, and shall cause each Company Subsidiary to, (i) conduct its business in all material respects in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (i) preserve intact its and their present business organizations, goodwill and ongoing businessespractice, (ii) use its good faith efforts to keep available the services of its and their present officers and other key employees each Business Employee (other than where termination of such services is for cause) and (iii) use its good faith efforts to preserve its the Company’s and their present each Company Subsidiary’s beneficial relationships with customers, suppliers, vendorsdistributors, Governmental Entitieslicensors, employees licensees and other Persons others having such business dealings with whom it and they have material business relations; and (b) shall not, and shall not permit any cause each Company Subsidiary not to, directly or indirectly:
(i) amend, modify, waive, rescind rescind, restate or otherwise change the Company’s Company Certificate, the Company LLCA or any Company Subsidiary’s certificate of incorporation, bylaws or equivalent or governing organizational documents;
(ii) authorize, declare, set aside, make or pay any dividends on or make any distribution distributions with respect to its outstanding shares units of capital stock limited liability company interests or other equity interests (whether in cash, assets, shares shares, units or other securities of the Company or any Company Subsidiary), except for dividends and distributions paid or made by a wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary in the ordinary course of business consistent with past practice;
(iii) enter into any agreement and arrangement with respect to the voting or registration, or file any registration statement with the SEC with respect to any, of its capital stock stock, units or other equity interests interests; provided that nothing in this Agreement shall restrict the Company from making distributions to the Company Members (A) of the expected state sales Tax refunds set forth on Section 7.1(b)(ii)(A) of the Company Disclosure Letter or (B) in respect of distributions pursuant to and in accordance with Section 4.1 and Section 4.3 of the Company LLCA as set forth on Section 7.1(b)(ii)(B) of the Company Disclosure Letter; provided, further, that, for the avoidance of doubt and notwithstanding anything herein to the contrary, following any such distributions by the Company to the Company Members in respect of any such expected state sales Tax refunds referred to in Section 7.1(b)(ii)(A), the Company Members shall have no further claim against the Surviving Company (or any other securitiesof its Affiliates) after the Effective Time in respect of the actual amount of any such state sales Tax refunds;
(iviii) split, combine, subdivide, reduce or reclassify any units of its capital stock limited liability company interests or other equity interests, or redeem, purchase or otherwise acquire any of its capital stock limited liability company interests or other equity interests (other than repurchases of Company Common Stock in satisfaction of applicable Tax withholdings or upon the payment of the exercise price upon the exercise or vesting of any Company Equity Award outstanding as of the date hereof and in accordance with the terms thereof)interests, or issue or authorize the issuance of any of its capital stock limited liability company interests or other equity interests or any other securities in respect of, in lieu of or in substitution for, shares units of its capital stock or other equity limited liability company interests or any rights, warrants or options to acquire any such shares of capital stock or other equity interests;
(viv) except in connection with the pledge of equity interests pursuant to the Company Credit Agreements, issue, deliver, grant, sell, pledge, dispose of or encumber, or authorize the issuance, delivery, grant, sale, pledge, disposition or encumbrance of, encumber any shares in the capital stock, voting securities units of its limited liability company interests or other equity interest in the Company or any Company Subsidiary interests or any securities convertible into or exchangeable or exercisable for any such shares, voting securities limited liability company interests or equity interestinterests, or any rights, warrants or options to acquire any such shares, voting securities limited liability company interests or equity interest interests or any “phantom” stockstock or units, “phantom” stock or units rights, stock or units appreciation rights or stock or units based performance units or take any action to cause to units;
(v) except (A) as may be exercisable or vested any otherwise unexercisable or unvested Company Equity Award required under any existing United Benefit Plan or Company Equity Benefit Plan, other than issuances of Company Common Stock in respect of the vesting or settlement of Company Equity Awards outstanding each case in accordance with its terms as in effect as of the date hereof, or (B) in all cases in accordance connection with their respective terms;
(vi) except as required by applicable Law any action that applies uniformly to Company Employees and other similarly situated employees of United or any Company Benefit Plan or other Material Contract as in existence as of the date hereof and made available to Parent prior to the date hereofits Affiliates, (AI) increase the compensation or benefits payable or to become payable to any of its current or former directors, executive officers officers, employees or employeesother service providers, other than annual merit-based increases in base salary in the ordinary course of business consistent with past practice that do not exceed 3% of the aggregate annual cost of all employee annual base salaries and wage rates in effect as of the date hereof; (BII) grant, pay or award, or commit to grant, pay or award, any severance, termination pay, change in control payments, bonuses, retention or incentive compensation grant to any of its current or former directors, executive officers officers, employees or employees; other service providers any increase in severance or termination pay, (CIII) establish, adopt, enter into, amend or terminate any collective bargaining agreement or Company Benefit Plan, other than amendments to employee welfare benefit plans or collective bargaining agreements in the ordinary course of business that do not materially increase the annual cost or annual expense (relative to the 2020 annual cost or expense) of maintaining such employee welfare benefit plan or collective bargaining agreement; (DIV) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Company Benefit Plan Plan, (including any grantor trust or similar funding arrangement); (EV) terminate the employment of any employee earning in excess of $85.000employee, other than for cause; or , (FVI) hire any new employees with a base salary in excess employee without the preapproval of $85,000Parent, other than replacing or (VII) promote any such employees in employee, except for promotions as part of the Company’s ordinary course of business consistent with past practice (it being understood that such replacement employee’s compensation and benefits shall be (I) limited to cash compensation only and (II) otherwise consistent in all material respects with the compensation and benefits of such replaced employee)annual performance review process;
(viivi) acquire (including by merger, business combination, consolidation or acquisition of stock or assets or any other means) or authorize or announce an intention to so acquire, or enter into any agreements providing for (x) any acquisitions of, any equity interests in or all or a material portion of the assets of any Person or any business or division thereof, or otherwise engage in any mergers, consolidations or business combinations or (y) acquisitions of material assetscombinations, except for, or with respect to, in each case, for (A) acquisitions of supplies or and equipment in the ordinary course of business consistent with past practice, practice or (B) capital expenditures made in accordance with respect to clause (yxii) only, capital expenditures permitted by Section 6.1(b)(xii)below;
(viiivii) liquidateliquidate (completely or partially), dissolve, restructure, recapitalize or effect any other similar reorganization (including any restructuring, recapitalization, recapitalization or reorganization between or among any of the Company and/or or the Company Subsidiaries), or adopt any plan or resolution providing for any of the foregoing;
(ixviii) make any loans, advances or capital contributions to, or investments in, any other Person, except for (A) loans, advances, or capital contributions solely among the Company and its wholly owned Company Subsidiaries or solely among the Company’s wholly owned Company Subsidiaries in the ordinary course of business consistent with past practice, in each case that do not involve the transfer of funds between the United States of America and another jurisdiction, (B) advances for reimbursable employee expenses in the ordinary course of business consistent with past practice and (C) extensions of credit to customers in the ordinary course of business consistent with past practice;
(xix) (A) sell, lease, license, assign, abandon, permit to lapse, transfer, exchange, swap or otherwise dispose of, or subject to any Lien (other than Permitted Liens), any of its properties, rights or assets (including shares in the capital limited liability company interests or other equity interests of the Company Subsidiariesor the Company Subsidiaries and including Company Intellectual Property), except (AI) dispositions the lapse or abandonment of obsolete, damaged, worn-out or surplus equipment or property no longer necessary Company Registered Intellectual Property in the conduct ordinary course of business consistent with past practice and (II) the business transfer by the Company or any Company Subsidiary to United (or its applicable Affiliate) of any Retained Intellectual Property in accordance with the First Amendment to the Company IP Matters Agreement, or (B) defer any actions on Patents such that extension fees would accrue;
(x) enter into, materially amend or modify, terminate, or waive any material provision of, any Contract related to the acquisition or disposition or granting of any license with respect to Intellectual Property Rights, other immaterial equipment than entry into Contracts or propertyamendments, in each casemodifications, terminations or waivers in the ordinary course of business consistent with past practice, or otherwise encumber any material Intellectual Property Rights (B) leases including by the granting of any covenants, including any covenant not to xxx or subleases covenant not to assert), other than nonexclusive licenses of real property or interests therein not used for the conduct of the Company’s or the Company Subsidiaries’ business, as currently conducted, in each case in the ordinary course of business consistent with past practice, (C) non-exclusive licenses or other non-exclusive grants of rights in, to or under Company Intellectual Property Rights in the ordinary course of business consistent with past practice, (D) pursuant to the exercise of creditor rights under any Contract providing for outstanding Indebtedness (so long as the Company and its Subsidiaries have used reasonable best efforts to exhaust all other avenues of relief), and (E) pursuant to transactions solely between the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries entered in the ordinary course of business consistent with past practice;
(xi) (A) enter into any Contract that would, if entered into prior to the date hereof, be a Company Material Contract, (B) materially modifymodify or amend, materially amend or extend terminate, any Material Contract, (C) terminate any Material Contract, (D) waive or release any material rights or claims under any Company Material Contract or (EC) waive, release or assign any material rights or claims under any Company Material Contract;
(xii) except in accordance with the Company’s capital budget provided to Parent prior to the date hereof and set forth on Section 7.1(b)(xii) of the Company Disclosure Letter, make any capital expenditures in excess of $1,000,000 individually or $4,000,000 in the aggregate;
(xiii) commence, waive, release, assign, compromise or settle any claim, litigation, investigation or proceeding, other than (wx) in the case compromise or settlement of clauses any claim, litigation, investigation or proceeding that is not brought by Governmental Entities and that (A) is for an amount not to exceed, for any such compromise or settlement, $1,000,000 individually, or for all such compromises and settlements, $5,000,000 in the aggregate, and (B) does not impose any non-monetary relief or obligation on the Company and the Company Subsidiaries (other than confidentiality and non-disparagement obligations, releases of claims and other immaterial non-monetary restrictions or obligations that are ancillary to the monetary relief granted) or (y) any claim, litigation, investigation or proceeding related to Taxes or Tax matters, which shall be governed by Section 7.1(b)(xv);
(xiv) make any material change in financial accounting policies, solely practices, principles or procedures or any of its methods of reporting income, deductions or other material items for financial accounting purposes, except (A) for such changes as may be made by United or (B) as required by GAAP or applicable Law;
(xv) (A) make, change or revoke any Tax election if such action could reasonably be expected to increase the Taxes payable by or with respect to the types Surviving Company following the Effective Time, (B) change any annual Tax accounting period or method of Contracts described in clauses Tax accounting, (viiiC) and file any amended income or other material Tax Return, (xivD) settle or compromise any Tax audit, claim or other proceeding, (E) enter into any material “closing agreement” within the meaning of Section 7121 of the definition Code (or any similar provision of Material Contractstate, local or non-U.S. Law) or (F) surrender any right to claim a material refund of Taxes; provided that, for the avoidance of doubt, in no event will the use of any Tax attributes (including Tax basis) by the Company in any Pre-Closing Tax Period constitute a basis for Parent to withhold, condition or delay consent to any of the actions in this Section 7.1(b)(xv);
(xvi) redeem, repurchase, prepay, defease, incur, assume, endorse, guarantee or otherwise become liable for or modify in any material respects the terms of any Indebtedness for borrowed money;
(xvii) enter into or modify any Company Affiliate Arrangement or take any action under a Company Affiliate Arrangement that is not in accordance with the terms of such Company Affiliate Arrangement, including any modifications or amendments that would result in payment of cash or incurrence of any obligation to make any payment of cash to any Company Member or any of its Affiliates that is not in accordance with the terms of such Company Affiliate Arrangement as in effect on the date hereof or that would result in any material liability or obligation of the Company or the Company Subsidiaries following the Closing;
(xviii) acquire any real property or any interest therein or exercise any option or enter into any Contract to acquire any real property or interest therein, sell or transfer any real property or any interest therein or exercise any option or enter into any Contract to sell or transfer any real property or interest therein or enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee), other than renewals of leases or subleases in the ordinary course of business;
(xix) perform or construct any material improvements to the Allegheny Test Track Land, enter into any commitment or agreement with respect to the design or construction of such improvements or submit or apply for any governmental permits or approvals in connection with the development of such land;
(xx) enter into any agreement with respect to, or consummate, any acquisition (including by merger, business consistent with past practicecombination, consolidation or acquisition of stock or assets or any other means) of, or investment in (x) in the case by contribution to capital, transfer of clause (Dproperty, purchase of securities or otherwise), any Person (or any material portion of the capital stock, equity interests, securities or assets of such Person), if any such acquisition or investment would reasonably be expected to prevent, or materially delay or materially impair, the consummation of the Transactions;
(xxi) make any cash payments to any Company Member or its Affiliates, or enter into any agreements to make such cash payments to any Company Member or its Affiliates, other than as provided under Section 7.1(b)(ii); or
(xxii) agree, commit or authorize, in writing or otherwise, to take any of the ordinary course foregoing actions. Nothing contained in this Agreement is intended to give Parent, HoldCo, Avian Merger Sub, United Merger Sub or Blocker Merger Sub, directly or indirectly, the right to control or direct the operations of business consistent with past practices (so long as such waiver the Company or release is not material any of the Company Subsidiaries prior to the Company and the Company Subsidiaries, taken as whole); provided, that any actions Effective Time in violation of a nature contemplated by and to the extent permitted by this Section 6.1(b) shall not require approval under this clause (xi) for any types of Contracts described in clause (xii) below,applicable Antitrust Law.
Appears in 1 contract
Samples: Stock Purchase and Agreement and Plan of Merger (Reinvent Technology Partners Y)
Conduct of Business by the Company Pending the Closing. The Company covenants and agrees that that, between the date hereof of this Agreement and the earlier of the Effective Time or and the date, if any, on which termination of this Agreement is validly terminated pursuant to Section 9.1in accordance with Article 7, except as set forth in Section 6.1 5.1 of the Company Disclosure Letter, as specifically permitted or required by this AgreementSchedule, as required by applicable Law any other provision of this Agreement (including, for the avoidance of doubt, in connection with the Hawkeye Reorganization and the Intermediate Holdings Reorganization) or as consented required by applicable Law, unless Parent will otherwise consent to in writing by Parent writing, the Company (a) shall, shall and shall cause each Company Subsidiary to, to conduct its business in all material respects operations in the ordinary course of business consistent with past practice and in all material respects and, to the extent consistent therewith, use commercially reasonable efforts to (a) preserve substantially intact its current business organization and (b) maintain and preserve in all material respects its assets, properties and business relationships (including employees and material customers and suppliers). Without limiting the foregoing, except in each case as set forth in Section 5.1 of the Company Disclosure Schedule, as required by any other provision of this Agreement (including, for the avoidance of doubt, in connection with the Hawkeye Reorganization and the Intermediate Holdings Reorganization) or as required by applicable Law, the Company shall not and shall cause each Company Subsidiary not to, between the date of this Agreement and the earlier of the Effective Time and the termination of this Agreement in accordance with Article 7 do any of the following without the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned):
(a) amend the Company Charter or Company Bylaws or equivalent documents of any Company Subsidiary;
(b) issue, deliver, sell, pledge, dispose of, grant, transfer or 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 Company or any Company Subsidiary of any class, or securities convertible into, 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 Company or any Company Subsidiary and except for (i) preserve intact its and the issuance of shares of Company Common Stock or Intermediate Holdings common stock, par value $0.01 per share, upon the exercise of Company Options or Intermediate Holdings Options, as applicable, outstanding as of the date hereof in accordance with their present business organizations, goodwill and ongoing businessesterms (but subject to conversion as a result of the Intermediate Holdings Reorganization in the case of Company Options), (ii) keep available transactions between the services Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries or (iii) the issuance of its and their present officers and other key employees shares of Company Common Stock required by any Company Equity Plan or Company Material Contract set forth on the Company Disclosure Schedule;
(c) sell, pledge, dispose of, transfer, lease, license, assign or encumber any property or assets of the Company or the Company Subsidiaries (other than where termination non-exclusive grants of such services is for causeIntellectual Property Rights in the ordinary course of business consistent with past practice) and (iii) preserve its and their present relationships with customers, suppliers, vendors, Governmental Entities, employees and other Persons with whom it and they have material business relations; and (b) shall not, and shall not permit any Company Subsidiary to, directly or indirectly:
except as required by (i) amend, modify, waive, rescind or otherwise change the Company’s or any Company Subsidiary’s certificate Material Contract in effect as of incorporationthe date of this Agreement or (ii) any sale, bylaws pledge, disposition, transfer, lease, license or equivalent organizational documentsencumbrance is individually not in excess of $100,000, or in the aggregate not in excess of $250,000;
(iid) authorize, declare, set aside, make or pay any dividends on dividend or make any other distribution (whether payable in cash, stock, property or a combination thereof or otherwise) with respect to any of its outstanding shares capital stock or Equity Interests (except as between the Company and the wholly owned Company Subsidiaries or between the wholly owned Company Subsidiaries), or otherwise make any payments to stockholders of the Company in their capacity as such;
(e) reclassify, adjust, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or other equity interests Equity Interests;
(whether in cashf) adopt or enter into a plan of complete or partial liquidation or adopt resolutions providing for a complete or partial liquidation, assetsdissolution, shares consolidation, restructuring, recapitalization or other securities reorganization or file a petition in bankruptcy or consent to the filing of any bankruptcy petition under any applicable Law;
(g) acquire by merging or consolidating with, or by purchasing a substantial portion of the Company assets of, or by any Company Subsidiary)other manner, except for dividends and distributions paid any business or made by a wholly owned Company Subsidiary to the Company Person or another wholly owned Company Subsidiary division thereof, other than purchases of assets in the ordinary course of business consistent with past practice;
(iiih) enter into amend, modify, incur, assume or guarantee any agreement and arrangement with respect Indebtedness or issue or sell any debt securities (or rights to voting acquire debt securities) or registrationassume, guarantee or endorse, or file otherwise become responsible for the obligations of any registration statement with the SEC with respect to anyPerson for Indebtedness, of its capital stock or in each case other equity interests than (i) any Indebtedness (or any guarantee of such Indebtedness) solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries which Indebtedness is incurred in compliance with this clause (h) or (ii) other securitiesIndebtedness in an aggregate amount not to exceed $500,000;
(ivi) splitmake or authorize any capital expenditure or commitments in respect thereof in excess of $500,000 in the aggregate;
(j) except to the extent required by (i) applicable Law, combine, subdivide, reduce or reclassify any of its capital stock or other equity interests, or redeem, purchase or otherwise acquire any of its capital stock or other equity interests (other than repurchases of Company Common Stock in satisfaction of applicable Tax withholdings or upon ii) the payment of the exercise price upon the exercise or vesting existing terms of any Company Equity Award outstanding as of the date hereof and in accordance with the terms thereof)Benefit Plan, or issue or authorize the issuance of any of its capital stock or other equity interests or any other securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests or any rights, warrants or options to acquire any such shares of capital stock or other equity interests;
(viii) except in connection with the pledge of equity interests pursuant to the Company Credit Agreements, issue, deliver, grant, sell, pledge, dispose of or encumber, or authorize the issuance, delivery, grant, sale, pledge, disposition or encumbrance of, any shares in the capital stock, voting securities or other equity interest in the Company or any Company Subsidiary or any securities convertible into or exchangeable or exercisable for any such shares, voting securities or equity interest, or any rights, warrants or options to acquire any such shares, voting securities or equity interest or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units or take any action to cause to be exercisable or vested any otherwise unexercisable or unvested Company Equity Award under any existing Company Equity Plan, other than issuances of Company Common Stock in respect of the vesting or settlement of Company Equity Awards outstanding as of the date hereof, in all cases in accordance with their respective terms;
this Agreement: (vi) except as required by applicable Law or any Company Benefit Plan or other Material Contract as in existence as of the date hereof and made available to Parent prior to the date hereof, (A1) increase the compensation or benefits payable or to become payable to any employee or director of its directors, executive officers the Company or employees, other than annual merit-based any Company Subsidiary (except for increases in annual base salary in the ordinary course of business consistent with past practice that do not exceed 3% and target annual bonus opportunity and commission rates for employees of the aggregate annual cost of all employee annual base salaries and wage rates in effect as of the date hereof; (B) grant, pay Company or award, or commit to grant, pay or award, any severance, termination pay, change in control payments, bonuses, retention or incentive compensation to any of its current or former directors, executive officers or employees; (C) establish, adopt, enter into, amend or terminate any collective bargaining agreement or Company Benefit Plan, other than amendments to employee welfare benefit plans or collective bargaining agreements in the ordinary course of business that do not materially increase the annual cost or annual expense (relative to the 2020 annual cost or expense) of maintaining such employee welfare benefit plan or collective bargaining agreement; (D) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Company Benefit Plan (including any grantor trust Subsidiary whose total annual compensation is less than or similar funding arrangement); (E) terminate the employment of any employee earning equal to $150,000 in excess of $85.000, other than for cause; connection with promotions or (F) hire any new employees with a base salary in excess of $85,000, other than replacing any such employees in the ordinary course of business consistent with past practice (it being understood that such replacement employee’s compensation and benefits shall be (I) limited to cash compensation only and (II) otherwise consistent in all material respects with the compensation and benefits of such replaced employee);
(vii) acquire (including by merger, consolidation or acquisition of stock or assets or any other means) or authorize or announce an intention to so acquire, or enter into any agreements providing for (x) any acquisitions of, any equity interests in or all or a material portion of the assets of any Person or any business or division thereof, or otherwise engage in any mergers, consolidations or business combinations or (y) acquisitions of material assets, except for, or with respect to, in each case, (A) acquisitions of supplies or equipment periodic reviews in the ordinary course of business consistent with past practice), (2) amend any Company Benefit Plan or establish, adopt, or enter into any arrangement that would be a Company Benefit Plan if in effect on the date hereof that would, in either case, increase the annual cost of the Company Benefit Plans by more than $100,000, or (B3) hire or terminate any employee of the Company or its Subsidiaries holding the title of Vice President, or a more senior title, other than for cause;
(k) make any change in accounting policies, practices, principles or methods, other than as required by GAAP or by applicable Law;
(l) (i) make or change any material Tax election, (ii) adopt or change any material Tax accounting method, (iii) enter into any closing agreement with a Governmental Entity with respect to clause Taxes, (yiv) only, capital expenditures permitted by Section 6.1(b)(xii)settle or compromise any claim or assessment in respect of material Taxes or (v) enter into any material Tax sharing or similar agreement;
(viiim) liquidate, dissolve, restructure, recapitalize enter into any Affiliate Transactions or effect any other reorganization (including any restructuring, recapitalization, or reorganization between or among any of the Company and/or the Company Subsidiaries), or adopt any plan or resolution providing for any of the foregoingInterests;
(ixn) make enter into, transfer, terminate, modify, amend, waive any loans, advances or capital contributions torights under, or investments indischarge any other party of any obligation under, any Company Material Contract other Person, except for (A) loans, advances, or capital contributions solely among the Company and its wholly owned Company Subsidiaries or solely among the Company’s wholly owned Company Subsidiaries in the ordinary course of business consistent with past practice, in each case that do not involve the transfer of funds between the United States of America and another jurisdiction, (B) advances for reimbursable employee expenses in the ordinary course of business consistent with past practice and (C) extensions of credit to customers than in the ordinary course of business consistent with past practice;
(xo) sellenter into any settlement, lease, license, assign, abandon, permit to lapse, transfer, exchange, swap compromise or otherwise dispose of, release contemplating or subject to involving any admission of wrong doing or misconduct or providing for any relief or settlement other than the payment of money not in excess of $100,000 individually or $250,000 in the aggregate; or
(p) create or incur any Lien (on any asset other than Permitted Liens), any of its properties, rights or assets (including shares in the capital of the Company Subsidiaries), except (A) dispositions of obsolete, damaged, worn-out or surplus equipment or property no longer necessary in the conduct of the business or other immaterial equipment or property, in each case, in the ordinary course of business consistent with past practice, (B) leases or subleases of real property or interests therein not used for the conduct of the Company’s or the Company Subsidiaries’ business, as currently conducted, in each case in the ordinary course of business consistent with past practice, (C) non-exclusive licenses or other non-exclusive grants of rights in, to or under Company Intellectual Property Rights in the ordinary course of business consistent with past practice, (D) pursuant to the exercise of creditor rights under any Contract providing for outstanding Indebtedness (so long as the Company and its Subsidiaries have used reasonable best efforts to exhaust all other avenues of relief), and (E) pursuant to transactions solely between the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries in the ordinary course of business consistent with past practice;
(xiq) make or enter into any Leakage transactions or Leakage payments; or
(Ar) authorize or enter into any Contract that wouldor otherwise make any commitment, if entered into prior in each case to do any of the date hereof, be a Material Contract, (B) materially modify, materially amend or extend any Material Contract, (C) terminate any Material Contract, (D) waive or release any material rights or claims under any Material Contract or (E) assign any material rights or claims under any Material Contract, other than (w) in the case of clauses (A) and (B), solely with respect to the types of Contracts described foregoing in clauses (viiia) and through (xiv) of the definition of Material Contract, in the ordinary course of business consistent with past practice, (x) in the case of clause (Dp), in the ordinary course of business consistent with past practices (so long as such waiver or release is not material to the Company and the Company Subsidiaries, taken as whole); provided, that any actions of a nature contemplated by and to the extent permitted by this Section 6.1(b) shall not require approval under this clause (xi) for any types of Contracts described in clause (xii) below,.
Appears in 1 contract
Samples: Merger Agreement (Office Depot Inc)
Conduct of Business by the Company Pending the Closing. The Company agrees that that, between the date hereof of this Agreement and the earlier of the Effective Time or and the date, if any, on which termination of this Agreement is validly terminated pursuant to Section 9.1in accordance with Article 7, except as set forth in Section 6.1 5.1 of the Company Disclosure Letter, as specifically permitted Schedule or required by this Agreement, as required by applicable Law or as consented contemplated or permitted by this Agreement (including the remainder of this Section) or otherwise with the prior written consent of the Purchaser (not to in writing by Parent be unreasonably withheld, conditioned or delayed), the Company (a) shallwill, and shall will cause each Company Subsidiary to, (i) conduct and carry on its operations and business in all material respects only in the ordinary course of business consistent with past practice and (ii) use its commercially reasonable efforts to (i) preserve substantially intact its business organization and their present business organizations, goodwill and ongoing businessesits relationships with customers, (ii) vendors, suppliers, landlords and other persons with which it has material business relations, and to keep available the services of its and their present current officers and other key employees (other than where in all material respects. Without limiting the foregoing, from the date of this Agreement and the earlier of the Effective Time and the termination of such services is for cause) and this Agreement in accordance with Article 7, except as set forth in Section 5.1 of the Company Disclosure Schedule, as expressly required by applicable Law or this Agreement, or otherwise with the prior written consent of the Purchaser (iii) preserve its and their present relationships with customersnot to be unreasonably withheld, suppliersconditioned or delayed), vendors, Governmental Entities, employees and other Persons with whom it and they have material business relations; and (b) the Company shall not, and shall not permit any cause each Company Subsidiary not to, directly or indirectly:
(ia) amend, modify, waive, rescind or otherwise change the Company Charter or the Company Bylaws or other comparable charter or organizational documents of any of the Company’s Subsidiaries;
(b) issue, sell, pledge, dispose of, grant, transfer or 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 Company or any Company Subsidiary’s certificate , or any rights based on the value of incorporationany such Equity Interests (except for transactions between the Company and any wholly owned Company Subsidiary or among wholly owned Company Subsidiaries), bylaws other than (i) grants of Company Options and Company RSU Awards in the ordinary course of business, consistent with past practice, and in an amount that is not material or equivalent organizational documentsin connection with any retention program established by the Company in connection with the transactions contemplated by this Agreement as in effect on the date of this Agreement as described in Section 5.1(b) of the Company Disclosure Schedule, and (ii) the issuance of Shares upon the exercise of Company Options, the Company Warrant or the Company Convertible Notes and the vesting of Company RSU Awards outstanding as of the date hereof or otherwise permitted to be granted hereunder in accordance with their terms and (iii) pledges of Equity Interests in connection with the incurrence or refinancing of Indebtedness permitted under Section 5.1(j) below;
(c) sell, pledge, dispose of, transfer, assign, lease, license, abandon, dedicate to the public, or permit to lapse (solely in the case of material Company Intellectual Property) any material property or assets of the Company or any Company Subsidiary (other than transactions between the Company and any wholly owned Company Subsidiary or among wholly owned Company Subsidiaries), except (i) pursuant to Contracts in effect prior to the date hereof (as such Contracts may be modified, extended or amended in the ordinary course of business), (ii) authorizeif the fair market value of such property or assets does not exceed $500,000 in the aggregate, (iii) Liens existing as of the date hereof and Permitted Liens and Liens securing Indebtedness permitted by this Agreement or (iv) in the ordinary course of business;
(d) sell, transfer, lease, sublease or license to any Third Party, or encumber, pledge, abandon or dispose of, any of the Leased Real Property, other than in the ordinary course of business consistent with past practice;
(e) declare, set aside, make or pay any dividends on dividend or make any other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its outstanding shares of capital stock or other equity interests Equity Interests (whether in cash, assets, shares or other securities of the Company or any Company Subsidiary), except for than dividends and distributions paid or made by a wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary in the ordinary course of business consistent with past practice;
(iiiSubsidiary) or enter into any agreement and arrangement with respect to the voting or registration, or file any registration statement with the SEC with respect to any, of its capital stock or other equity interests or any other securitiesEquity Interests;
(ivf) splitreclassify, combine, subdividesplit, reduce subdivide or reclassify any of its capital stock or other equity interestsamend the terms of, or redeem, purchase or otherwise acquire acquire, directly or indirectly, any of its capital stock stock, or other equity interests Equity Interests, except (other than repurchases i) the acquisition by the Company of Company Common Stock in satisfaction of applicable Tax withholdings or upon the payment of the exercise price upon the exercise or vesting of any Company Equity Award outstanding as of the date hereof and in accordance with the terms thereof), or issue or authorize the issuance of any of its capital stock or other equity interests or any other securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests or any rights, warrants or options to acquire any such shares of capital stock or other equity interests;
(v) except Shares in connection with the pledge surrender of equity interests Shares by holders of Company Options in order to pay the exercise price of the Company Option, (ii) the withholding or disposition of Shares to satisfy withholding Tax obligations with respect to awards granted pursuant to the Company Credit AgreementsEquity Plans or (iii) upon the forfeiture of outstanding Company Options, issue, deliver, grant, sell, pledge, dispose Restricted Shares or Company RSU Awards upon the termination of the employment of the holder thereof or encumber, otherwise;
(g) merge or authorize the issuance, delivery, grant, sale, pledge, disposition or encumbrance of, any shares in the capital stock, voting securities or other equity interest in consolidate the Company or any Company Subsidiary with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any securities convertible into or exchangeable or exercisable for any such shares, voting securities or equity interest, or any rights, warrants or options to acquire any such shares, voting securities or equity interest or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units or take any action to cause to be exercisable or vested any otherwise unexercisable or unvested Company Equity Award under any existing Company Equity PlanSubsidiary, other than issuances of a merger with and into another Company Common Stock in respect of the vesting or settlement of Company Equity Awards outstanding as of the date hereof, in all cases in accordance with their respective termsSubsidiary;
(vih) except as required acquire or agree to acquire (including by applicable Law merger or any Company Benefit Plan consolidation, or other Material Contract as in existence as acquisition of all or a substantial portion of the date hereof and made available stock or assets or voting interest in, or by any other manner) any Person or business or division thereof except with respect to Parent prior to the date hereof, (A) increase the compensation or benefits payable or to become payable to any of its directors, executive officers or employees, other than annual merit-based increases in base salary such acquisitions in the ordinary course of business consistent with past practice that do with a total purchase price (including assumed indebtedness for borrowed money and any contingent payments) not exceed 3% exceeding $500,000 individually or $2,500,000 in the aggregate;
(i) acquire any ownership interest in real property;
(j) (A) incur or assume any indebtedness for borrowed money or issue any debt securities, except (i) in connection with refinancings of contracts described in Section 3.13(a)(vi) of the aggregate annual Company Disclosure Schedule at a lower cost of all employee annual base salaries and wage rates in effect as of the date hereof; funds, (Bii) grant, pay or award, or commit to grant, pay or award, any severance, termination pay, change in control payments, bonuses, retention or incentive compensation to any of its current or former directors, executive officers or employees; (C) establish, adopt, enter into, amend or terminate any collective bargaining agreement or Company Benefit Plan, other than amendments to employee welfare benefit plans or collective bargaining agreements for borrowings in the ordinary course of business that do not materially increase under the annual cost Company’s existing credit facilities or annual expense (relative to the 2020 annual cost or expensecontracts described in Section 3.13(a)(vi) of maintaining such employee welfare benefit plan the Company Disclosure Schedule, (iii) indebtedness for borrowed money, that is prepayable at any time without penalty or collective bargaining agreement; premium, in an amount not to exceed $1,000,000 in the aggregate, (Div) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding short-term borrowings (exclusive of those under any Company Benefit Plan (including existing credit facilities or refinancings of existing credit facilities) in an aggregate principal amount not to exceed $1,000,000 outstanding at any grantor trust or similar funding arrangement); (E) terminate the employment of any employee earning in excess of $85.000, other than time for cause; or (F) hire any new employees with a base salary in excess of $85,000, other than replacing any such employees working capital in the ordinary course of business business, or (v) letters of credit and similar instruments issued in the ordinary course of the Company’s business, consistent with past practice practice, including the pledging of cash or other security as may be required by the issuer, (it being understood that such replacement employee’s compensation and benefits shall be B) assume, guarantee, endorse or otherwise become liable or responsible (Iwhether directly, contingently or otherwise) limited to cash compensation only and (II) otherwise consistent in all material respects with for the compensation and benefits obligations of such replaced employee);
(vii) acquire (including by merger, consolidation or acquisition of stock or assets or any other means) or authorize or announce an intention to so acquire, or enter into any agreements providing for (x) any acquisitions of, any equity interests in or all or a material portion of the assets of any Person or any business or division thereof, or otherwise engage in any mergers, consolidations or business combinations or (y) acquisitions of material assetsPerson, except for, or with respect to, in each case, (A1) acquisitions of supplies or equipment such liabilities incurred in the ordinary course of business consistent with past practice, or and (B2) with respect to clause obligations of Company Subsidiaries, or (yC) onlymortgage or pledge any of the Company’s or the Company Subsidiaries’ capital stock, capital expenditures permitted by Section 6.1(b)(xiiEquity Interest, material assets, tangible or intangible, or create or suffer to exist any material Lien thereupon (other than Permitted Liens);
(viii) liquidate, dissolve, restructure, recapitalize or effect any other reorganization (including any restructuring, recapitalization, or reorganization between or among any of the Company and/or the Company Subsidiaries), or adopt any plan or resolution providing for any of the foregoing;
(ixk) make any loans, advances or capital contributions to, or investments in, any other PersonPerson (other than any Company Subsidiary) in excess of $500,000 in the aggregate;
(l) materially modify or amend or cancel or terminate any Company Material Contract or Lease or waive, except for (A) loansrelease or assign any material rights or claims under any Company Material Contract or Lease or enter into any Contract that would be a Material Contract if it had been entered into on or prior to the date of this Agreement, advances, or capital contributions solely among other than any of the Company and its wholly owned Company Subsidiaries or solely among the Company’s wholly owned Company Subsidiaries foregoing actions taken in the ordinary course of business and consistent with past practicepractice with respect to any Contract (i) of the type described in Section 3.13(a)(xii) or (xiii), or (ii) that has a term of one (1) year or less and requires payments by the Company of less than $100,000;
(m) except as required by Law or to comply with any Benefit Plan as in each case that do not involve effect on the transfer date of funds between the United States of America and another jurisdictionthis Agreement, (Bi) advances increase the compensation or benefits of any employee of the Company, except for reimbursable employee expenses routine increases in cash compensation in the ordinary course of business consistent with past practice and or in connection with promotions, in each case, for employees at or below the level of vice president or managing director or that are not officers, (Cii) extensions of credit to customers except in the ordinary course of business consistent with past practicepractice grant any rights to severance or termination pay to, or enter into any employment or severance agreement with, any employee of the Company or any Company Subsidiary at or below the level of vice president or managing director or that is not an officer, (iii) grant any rights to severance or termination pay to, or enter into any employment or severance agreement with, any employee of the Company or any Company Subsidiary at or above the level of vice president or managing director or that is an officer, or (iv) establish, adopt, enter into, amend or terminate any collective bargaining, bonus, profit sharing, thrift, pension, retirement, deferred compensation, employment, termination, or severance plan or similar agreement;
(xn) sell(i) forgive any loans to directors, leaseofficers, license, assign, abandon, permit employees or any of their respective affiliates or (ii) enter into any transactions or Contracts with any affiliates or other Person that would be required to lapse, transfer, exchange, swap or otherwise dispose of, or subject to any Lien (be disclosed by the Company under Item 404 of Regulation S-K promulgated under the Securities Act other than Permitted Liens), any of its properties, rights or assets (including shares in the capital of the Company Subsidiaries), except (A) dispositions of obsolete, damaged, worn-out or surplus equipment or property no longer necessary in the conduct of the business or other immaterial equipment or property, in each case, in the ordinary course of business consistent with past practice, (B) leases or subleases of real property or interests therein not used for the conduct of the Company’s or the Company Subsidiaries’ business, as currently conducted, in each case in the ordinary course of business consistent with past practice, (C) non-exclusive licenses or other non-exclusive grants of rights in, to or under Company Intellectual Property Rights in the ordinary course of business consistent with past practice, (D) pursuant to the exercise of creditor rights under any Contract providing for outstanding Indebtedness (so long as the Company and its Subsidiaries have used reasonable best efforts to exhaust all other avenues of relief), and (E) pursuant to transactions solely between the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries in the ordinary course of business consistent with past practice;
(xio) make any change in accounting policies, practices, principles, methods or procedures, other than as required by GAAP or Regulation S-X promulgated under the Securities Act or applicable rules and regulations of the SEC;
(Ap) enter into waive, release, assign, settle or compromise, or offer or propose to waive, release, assign, settle or compromise, any Contract that would(i) governmental complaint or Proceeding or (ii) claims, if entered into prior liabilities or obligations arising out of, related to or in connection with litigation or other Proceedings, other than settlements of, or compromises for, any such litigation or other Proceedings (A)(i) where the date hereofamount paid in settlement or compromise does not exceed $250,000 individually or (ii) where the amount paid in settlement does not exceed the amount reserved against such matter in the Company Financial Statements, be a Material Contract, and (B) materially modifywhich do not impose material restrictions on the business operations of the Company and the Company Subsidiaries, materially amend taken as a whole (provided that, for the avoidance of doubt, any stockholder litigation relating to the Offer, the Merger or extend any Material Contractthe transactions contemplated by this Agreement shall be governed by Section 5.13);
(q) make, (C) terminate any Material Contract, (D) waive change or release rescind any material rights or claims under any Material Contract or Tax election (E) assign any material rights or claims under any Material Contract, other than (w) in the case of clauses (A) and (B), solely with respect to the types of Contracts described in clauses (viii) and (xiv) of the definition of Material Contract, in the ordinary course of business consistent with past practicebusiness), change any annual Tax accounting period or adopt or change any material Tax method of accounting, file any amended material income Tax Return, settle or compromise any material Tax liability or any audit or other proceeding relating to a material Tax or surrender any right to claim a material refund of Taxes, seek any Tax ruling from any taxing authority or enter into any “closing agreement” within the meaning of Section 7121 of the Code (xor any corresponding or similar provision of state, local or foreign tax Law);
(r) make any change in the case of clause (D)investment, in the ordinary course of business consistent with past hedging, reserving, underwriting or claims administration policies, practices (so long as such waiver or release is not principles that would be material to the Company and the Company Subsidiaries, taken as a whole, except as may be required to conform to changes in GAAP or applicable Law;
(s) fund any capital expenditure in any calendar quarter which, when added to all other capital expenditures made by the Company and the Company Subsidiaries in such calendar quarter, would exceed by more than $250,000 the aggregate amount budgeted for capital expenditures in such calendar quarter (as set forth in Section 5.1(s) of the Company Disclosure Schedule); provided, that any actions of a nature contemplated by and ;
(t) fail to use commercially reasonable efforts to maintain existing insurance policies or comparable replacement policies to the extent available for a reasonable cost;
(u) adopt or amend any Benefit Plan in a manner that would materially increase the costs or benefits under such Plan except as required to comply with applicable Laws; or
(v) agree, authorize or enter into any Contract to do any of the foregoing or otherwise make any commitment to do any of the foregoing. The Parent will, promptly following the date hereof, designate two individuals from either of whom the Company may seek approval to undertake any actions not otherwise permitted by to be taken under Section 5.1 of this Agreement, and will cause such person to respond, on behalf of the Parent, to the Company’s requests as promptly as practicable. If the Company desires to take an action which would be prohibited pursuant to this Section 6.1(b) 5.1 without the written consent of the Parent, prior to taking such action the Company may request such written consent by sending an e-mail or facsimile, pursuant to Section 8.3 of this Agreement, to each such individual as designated by the Parent. An approval of either such individual shall not require constitute an approval of the Purchaser to the taking of an action otherwise specifically proscribed under this clause (xi) for any types Section 5.1 of Contracts described in clause (xii) below,this Agreement.
Appears in 1 contract
Samples: Merger Agreement (Gannett Co., Inc.)
Conduct of Business by the Company Pending the Closing. The Company agrees that between the date hereof and the earlier of the Effective Time or the date, if any, on which this Agreement is validly terminated pursuant to Section 9.1in accordance with Article VIII, except as set forth in Section 6.1 5.1 of the Company Disclosure Letter, as specifically permitted or expressly required by this Agreement, as required by applicable Law or as consented otherwise with the prior written consent of Parent (such consent not to in writing by Parent be unreasonably withheld, conditioned or delayed), the Company (a) shallshall use commercially reasonable efforts to, and shall to cause each Company Subsidiary to, conduct its business in all material respects in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (i) preserve intact its and their present business organizations, goodwill and ongoing businesses, (ii) keep available the services of its and their present officers and other key employees (other than where termination of such services is for cause) and (iii) preserve its and their present relationships with customers, suppliers, vendors, licensors, licensees, Governmental Entities, employees and other Persons with whom it and they have material business relations; relations and (b) shall not, and shall not permit any Company Subsidiary to, directly or indirectly:
(i) amend, modify, waive, rescind or otherwise change the Company’s or any Company Subsidiary’s certificate of incorporation, bylaws or equivalent organizational documentsdocuments (whether by merger, consolidation, acquisition of stock or assets or otherwise);
(ii) authorize, declare, set aside, establish a record date, make or pay any dividends on or make any distribution with respect to its outstanding shares of capital stock or other equity interests (whether in cash, assets, shares shares, property or other securities or any combination thereof) of the Company or any Company Subsidiary), except for dividends and distributions paid or made by a wholly owned Company Subsidiary to the Company or another wholly wholly-owned Company Subsidiary in the ordinary course of business consistent with past practice;
(iii) Subsidiary, or enter into any agreement and arrangement with respect to voting or registration, or file any registration statement with the SEC with respect to any, of its capital stock or other equity interests or any other securities;
(iviii) split, combine, subdivide, reduce reduce, recapitalize or reclassify any of its capital stock or other equity interests, or redeem, purchase or otherwise acquire any of its capital stock or other equity interests (other than repurchases of Company Common Stock in satisfaction of applicable Tax withholdings or upon the payment of the exercise price upon the exercise or vesting of any Company Equity Award outstanding as of the date hereof and in accordance with the terms thereof)interests, or issue or authorize the issuance of any of its capital stock or other equity interests or any other securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests interests, except for the issuance of securities of any Company Subsidiary to the Company or any rights, warrants or options to acquire any such shares of capital stock or other equity interestswholly-owned Company Subsidiary;
(viv) except in connection with the pledge of equity interests pursuant to the Company Credit Agreements, issue, deliver, grant, sell, pledge, transfer, dispose of or encumber, or authorize the issuance, delivery, grant, sale, pledge, transfer, disposition or encumbrance of, any shares in the capital stock, voting securities or other equity interest in the Company or any Company Subsidiary or any securities convertible into or exchangeable or exercisable for any such shares, voting securities or equity interest, or any rights, warrants or options to acquire any such shares, voting securities or equity interest or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units or take any action to cause to be exercisable or vested any otherwise unexercisable or unvested Company Equity Award under any existing Company Equity PlanPlan (except as otherwise provided by the express terms of any Company Equity Award), other than (A) issuances of Company Common Stock in respect of options issued under the ESPP for the offering period commenced prior to the date of this Agreement or in respect of vesting or settlement of Company Equity Awards outstanding as of the date hereofAwards, in all cases in accordance with their respective termsterms or as permitted by this Agreement and (B) transactions solely between the Company and a wholly-owned Company Subsidiary or solely between wholly-owned Company Subsidiaries;
(viv) except as required by applicable Law or any Company Benefit Plan or other Material Contract as in existence as of the date hereof and made available to Parent prior to the date hereof, (A) increase the compensation or benefits payable or to become payable to any of its directors, executive officers or employees, other than annual merit-based increases in base salary in the ordinary course of business consistent with past practice that do not exceed 3% of the aggregate annual cost of all employee annual base salaries and wage rates in effect as of the date hereof; (B) grantgrant to any of its directors, executive officers or employees any retention, severance or termination pay or increase the entitlement to any such payments; (C) pay or award, or commit to grant, pay or award, any severance, termination pay, change in control payments, bonuses, retention or incentive compensation to any of its current directors or former directors, executive officers or employeesofficers; (CD) establish, adopt, enter into, amend or terminate any collective bargaining agreement or Company Benefit Plan, other than amendments to employee welfare benefit plans or collective bargaining agreements in the ordinary course of business that do not materially increase the annual cost or annual expense (relative to the 2020 annual cost or expense) of maintaining such employee welfare benefit plan or collective bargaining agreement; (DE) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Company Benefit Plan (including any grantor trust or similar funding arrangement)Plan; (EF) terminate the employment of any employee earning in excess at the level of $85.000vice president or above, other than for cause; or (FG) hire any new employees with a base salary in excess of $85,000directors, officers or employees; or (H) provide any funding for any rabbi trust or similar arrangement, other than replacing any such employees with respect to monthly fundings of the Company’s Nonqualified Deferred Compensation Plan in the ordinary course of business consistent accordance with past practice (it being understood that such replacement employee’s compensation and benefits shall be (I) limited to cash compensation only and (II) otherwise consistent in all material respects with the compensation and benefits of such replaced employee)practice;
(viivi) acquire (including by merger, consolidation or acquisition of stock or assets or any other means) or authorize or announce an intention to so acquire, or enter into any agreements providing for (x) any acquisitions of, directly or indirectly, any equity interests in or all or a material portion of the assets (including intangible assets) of any Person or any business business, division, securities, properties or division interests thereof, or otherwise engage in any mergers, consolidations or business combinations or (y) acquisitions of material assetscombinations, except for, or with respect to, in each case, for (A) transactions solely between the Company and a wholly-owned Company Subsidiary or solely between wholly-owned Company Subsidiaries or acquisitions of supplies or equipment in the ordinary course of business consistent with past practice, or practice and (B) acquisitions of Oil and Gas Interests or Oil and Gas Leases for an amount not in excess of $5,000,000 individually or $30,000,000 in the aggregate;
(vii) dispose of any of its Oil and Gas Interests or Oil and Gas Leases (other than sales of Hydrocarbons in the ordinary course of business consistent with respect past practice), whether voluntarily or by the failure to clause (y) onlyexercise a right or make a payment, capital expenditures permitted by Section 6.1(b)(xii)involving an amount in excess of $5,000,000 individually or $30,000,000 in the aggregate;
(viii) liquidateadopt any plan of merger, dissolveconsolidation, restructurereorganization, recapitalize liquidation or effect any other reorganization (including any restructuring, recapitalization, dissolution of the Company or reorganization between or among any of the Company and/or Subsidiaries, adopt resolutions providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization, file a petition in bankruptcy under any provisions of federal or state bankruptcy applicable Law on behalf of the Company Subsidiaries), or adopt any plan Company Subsidiaries or resolution providing for consent to the filing of any bankruptcy petition against the Company or any of the foregoingCompany Subsidiaries under applicable Law;
(ix) make any loans, advances or capital contributions to, or investments in, any other Person, except for (A) loans, advances, or capital contributions loans solely among the Company and its wholly wholly-owned Company Subsidiaries or solely among the Company’s wholly wholly-owned Company Subsidiaries in the ordinary course of business consistent with past practice, in each case that do not involve the transfer of funds between the United States of America and another jurisdiction, (B) or advances for reimbursable employee expenses in the ordinary course of business consistent with past practice and (C) extensions of credit to customers in the ordinary course of business consistent with past practice;
(x) sell, lease, license, assign, abandon, mortgage, permit to lapselapse or expire, transfer, pledge, surrender, encumber, divest, cancel, exchange, swap or otherwise dispose of, or subject to any Lien (other than Permitted Liens), ) any of its material properties, rights or assets (including any intangible assets and shares in the capital of the Company Subsidiariesor the Company Subsidiaries and Company IP), except (A) dispositions of obsolete, damaged, worn-out obsolete or surplus equipment or property no longer necessary in the conduct of the business or other immaterial equipment or property, in each caseworthless equipment, in the ordinary course of business consistent with past practice, (B) leases or subleases of real property or interests therein not used for the conduct of the Company’s or the Company Subsidiaries’ business, as currently conducted, in each case in the ordinary course of business consistent with past practice, (C) non-exclusive licenses or other non-exclusive grants of rights in, to or under Company Intellectual Property Rights IP entered in the ordinary course of business consistent with past practice, (D) pursuant to the exercise practice with customers of creditor rights under any Contract providing for outstanding Indebtedness (so long as the Company and its Subsidiaries have used reasonable best efforts to exhaust all other avenues of relief), and (E) pursuant to transactions solely between or the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries (C) sales of Hydrocarbons in the ordinary course of business consistent with past practicebusiness, and (D) for transactions solely among the Company and its wholly-owned Company Subsidiaries or solely among wholly-owned Company Subsidiaries;
(xi) (A) enter into any Contract that would, if entered into prior to the date hereof, be a Company Material Contract, (B)
(1) materially modify, materially amend amend, extend, accelerate, terminate, cancel, exercise or extend any Material Contract, (C) fail to exercise an expiring renewal option or terminate any Material Contract, (D) waive or release any material rights or claims under any Company Material Contract or (E2) waive, release or assign any material rights or claims under any Material Contractthereunder, other than (w) in the case of clauses this clause (A2) and (B), solely with respect to the types of Contracts described in clauses (viii) and (xiv) of the definition of Material Contract, other than in the ordinary course of business consistent with past practicepractice or (C) enter into any Contract for terminal, storage, transportation, processing or gathering services, or dedications or commitments relating to such services (xincluding any dedication of production or acreage or revenue, volumetric or capacity commitments), other than any such Contract that is terminable on sixty (60) days’ or less prior notice;
(xii) make any capital expenditure or expenditures, enter into agreements or arrangements providing for capital expenditure or expenditures or otherwise commit to do so, in excess of the budgeted amount of capital expenditures scheduled to be made in the case Company’s capital expenditure budget from the date hereof to June 30, 2019 set forth in Section 5.1(b)(xii) of clause the Company Disclosure Letter, except for capital expenditures to repair damages resulting from insured casualty events or capital expenditures required on an emergency basis or for the safety of individuals, assets or the environment;
(D)xiii) compromise or settle, or offer to compromise or settle any Proceeding (other than any collection action in the ordinary course of business consistent with past practices practice or any action to enforce the provisions hereof or any Proceeding relating to Tax matters, which shall be governed by clause (so long as xv)) other than any Proceeding that (A) is for an amount (in excess of insurance proceeds) not to exceed, for any such waiver compromise or release is settlement, $1,000,000 per Proceeding or $2,000,000 in the aggregate for all such Proceedings, (B) does not impose any injunctive or non-monetary relief on the Company and the Company Subsidiaries which, in either case, imposes material to restrictions on the business operations of the Company and the Company Subsidiaries, taken as whole)a whole and (C) does not provide for the license of any material Company IP in favor of a third party; provided, that the compromise or settlement, or offer to compromise or settle any actions Stockholder Litigation shall be subject to Section 6.9;
(xiv) make any change in financial accounting policies, practices, principles or procedures or any of its methods of reporting income, deductions or other material items for financial accounting purposes, except as required by GAAP or applicable Law;
(xv) make, change or rescind any material Tax election, adopt or change any Tax accounting period or material method of Tax accounting, file any income or other material Tax Return (other than in a manner that is not inconsistent with past practice), settle or compromise any material liability for Taxes or any Tax audit, claim or other Proceeding relating to a material amount of Taxes, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local or non-U.S. Law), surrender any right to claim a material refund of Taxes, or agree to an extension or waiver of the statute of limitations with respect to a material amount of Taxes without timely notifying Parent in writing;
(xvi) redeem, terminate early, unwind, repurchase, prepay, defease, create, suffer to exist, incur, enter into, assume, endorse, guarantee or otherwise become liable for or modify in any material respects the terms of any Indebtedness or any Derivative instruments or arrangements, or issue or sell any debt securities or calls, options, warrants or other rights to acquire any debt securities (directly, contingently or otherwise), except for (A) any Indebtedness solely among the Company and its wholly-owned Company Subsidiaries or solely among wholly-owned Company Subsidiaries, and (B) any incremental borrowings under the Credit Agreement in the ordinary course of business consistent with past practice not to exceed $5,000,000;
(xvii) enter into any Contract or transaction with (including the making of any payment to) a Related Person (other than the Company or one of the Company Subsidiaries) or an Affiliate of a nature contemplated Related Person (other than the Company or one of the Company Subsidiaries), in each case of a type that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(xviii) enter into a new line of business or abandon or discontinue any existing line of business;
(xix) convene any special meeting (or any adjournment or postponement thereof) of the Company Stockholders;
(xx) adopt or otherwise implement any stockholder rights plan, “poison pill” or other comparable agreement;
(xxi) fail to timely file any report required to be filed by the Company or any Company Subsidiary with the SEC or any other Governmental Entity;
(xxii) enter into any Derivative instrument or position with, or amend or extend any Derivative instrument or position to have, a term in excess of three (3) months;
(xxiii) enter into any Contract with any oilfield services company or other independent contractors that could not be terminated without payment in excess of $1,000,000;
(xxiv) enter into any Contract that limits in any material respect the freedom of the Company, any Company Subsidiary or any of their respective Affiliates (including Parent and its Affiliates after the Effective Time) to compete or engage in any line of business or geographic region or with any Person or sell, supply or distribute any product or service or that otherwise has the effect of restricting the Company, the Company Subsidiaries or their Affiliates (including Parent and its Affiliates after the Effective Time) from the development, marketing or distribution of products and services, in each case, in any geographic area;
(xxv) enter into any Contract providing for the purchase or sale, transportation, or processing of Hydrocarbons that has a remaining term of greater than ninety (90) days and does not allow the Company or such Company Subsidiary to terminate it without penalty on ninety (90) days’ notice or less;
(xxvi) enter into any material Contract providing for the sale by the Company or any of the Company Subsidiaries of Hydrocarbons that contains a “take-or-pay” clause or any similar material prepayment or forward sale arrangement or obligation (excluding “gas balancing” arrangements associated with customary joint operating agreements) to deliver Hydrocarbons at some future time without then or thereafter receiving full payment therefor;
(xxvii) enter into any material Contract that provides for a call or option on production, or acreage dedication to a gathering, transportation or other arrangement downstream of the wellhead; and
(xxviii) agree or authorize, in writing or otherwise, to take any of the foregoing actions. Notwithstanding anything to the extent permitted by contrary in this Section 6.1(b5.1, the Parties acknowledge and agree that nothing contained in this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control or direct the Company’s operations (including for purposes of the HSR Act) shall not require approval under this clause (xi) for any types prior to the consummation of Contracts described in clause (xii) below,the Merger.
Appears in 1 contract
Samples: Merger Agreement (Encana Corp)
