Conduct of Business by the Company Pending the Closing. The Company covenants and agrees that, between the date of this Agreement and the Effective Time, except as set forth in Section 5.1 of the Company Disclosure Schedule, as specifically required or permitted by any other provision of this Agreement (including Section 5.3(a)) or as required by applicable Law, unless Parent will otherwise agree in writing, the Company will, and will cause each Company Subsidiary to, conduct its operations in the ordinary course of business and consistent with past practice and use commercially reasonable efforts 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, as specifically required or permitted by any other provision of this Agreement (including Section 5.3(a)) or as required by applicable Law, the Company will not, 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, other than in the case of subclauses (a), (b), (f), (g), (j), (k), (m) or (w), will not be unreasonably withheld, delayed or conditioned): (a) amend or otherwise change its articles of incorporation or bylaws or equivalent organizational documents, other than the organizational documents of non-material Company Subsidiaries; (b) issue, deliver, sell, pledge, dispose of, grant, transfer or otherwise encumber or subject to any Lien, or authorize the issuance, sale, pledge, disposition, grant, transfer or other encumbrance or subjection to any Lien 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: (i) the issuance of Shares upon the vesting of Company RSUs or the exercise of Company Options outstanding as of the date of this Agreement in accordance with their terms; (ii) the award to new hires or in connection with promotions made in the ordinary course of business of Company Options or Company RSUs pursuant to the Company Stock Option Plans not to exceed 75,000 Shares (and up to an additional 75,000 Shares if consented to by Parent) in the aggregate upon the vesting of such Company RSUs or the exercise of such Company Options or (iii) distributions of Shares under the Company ESPP in accordance with its terms on the date of this Agreement and in accordance with Section 2.4(g) of this Agreement; (c) directly or indirectly sell, pledge, transfer, lease, license, sell and leaseback, abandon, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of in whole or in part any material property, assets or rights or any interest therein of the Company or any Company Subsidiary, except (i) pursuant to any Company Material Contract in effect prior to the date of this Agreement, (ii) the sale, purchase or licensing of inventory, raw materials, equipment, goods or other supplies in the ordinary course of business consistent with past practice, or (iii) licenses of Intellectual Property Rights to third parties not restricted by Section 5.1(d); (d) sell, pledge, dispose of, transfer or encumber any material Owned Intellectual Property to any third party, enter into any portfolio-wide patent cross-license or covenant not to xxx agreement, grant any exclusive license to any third party of any material Owned Intellectual Property or grant any other license or covenant not to xxx to any third party under or with respect to material Owned Intellectual Property outside the ordinary course of business; (e) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Registered Intellectual Property; (f) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or other Equity Interest (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 any other Equity Interests; (g) reclassify, combine, split, subdivide or otherwise amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its or its Subsidiary’s capital stock, other Equity Interests or any other securities, options, warrants or rights to acquire any such shares or Equity Interests or other securities, or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other securities; (h) merge or consolidate, or agree to merge or consolidate, the Company or any Company Subsidiary with any Person, 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 Company Subsidiary; (i) directly or indirectly acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest in any Person or any division thereof or any assets, other than acquisitions of inventory, raw materials, equipment, goods or other supplies in the ordinary course of business consistent with past practice and any other acquisitions for consideration that is individually not in excess of $1,000,000 or in the aggregate not in excess of $5,000,000; (j) other than any intercompany arrangements between the Company and/or any of the Company Subsidiaries, incur or create any indebtedness for borrowed money, any obligations under conditional or installment sale Contracts or other retention Contracts relating to purchased property, any capital lease obligations or any guarantee or any such indebtedness of any other Person, issue or sell any debt securities, options, warrants, calls or other rights to acquire any debt securities of the Company or any Company Subsidiaries, guarantee any debt securities of any other Person, enter into any “keepwell” or other agreement to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, assume, guarantee or endorse, or otherwise become responsible for any of the foregoing obligations of any Person (other than a wholly-owned Company Subsidiary), cancel any of the foregoing owed to the Company or any Company Subsidiary, or waive, release, grant or transfer any right of material value; (k) make any loans, guarantees or capital contributions to, or investments in, any other Person (other than any wholly-owned Company Subsidiary) in excess of $3,000,000 in the aggregate; (l) modify, 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 of this Agreement, would be a Company Material Contract, in each case other than in the ordinary course of business consistent with past practice; (m) make, authorize or commit to any capital expenditure in excess of the Company’s capital expenditure budget set forth in Section 5.1(m) of the Company Disclosure Schedule, other than capital expenditures that individually are not in excess of $500,000 and are not, in the aggregate, in excess of $2,500,000; (n) except (i) for increases or grants or agreements to provide an increase in compensation, bonus or benefits in the ordinary course consistent with past practice that does not exceed 4% of the existing such compensation, bonus or benefit, (ii) pursuant to written Company Benefits Plans or Foreign Benefit Plans in place on the date of this Agreement or (iii) applicable Law, (A) grant any current or former director, officer, employee or independent contractor any increase in compensation, bonus or other benefits, or any such grant of any type of compensation or benefits to any current or former director, officer, employee or independent contractor not previously receiving or entitled to receive such type of compensation or benefit, or pay any bonus of any kind or amount to any current or former director, officer, employee or independent contractor, other than increases or grants to new hire employees or in connection with promotions in the ordinary course of business consistent with past practice, (B) grant or pay to any current or former director, officer, employee or independent contractor any additional severance, change in control or termination pay, or modifications thereto or increases therein, (C) adopt or enter into any collective bargaining agreement or other labor union contract, (D) take any action to accelerate the time of payment or vesting, increase the amount of payment, or trigger any payment, of any Company Option or Company RSU, or otherwise amend or modify any Company Option or Company RSU, except as contemplated by this Agreement, or (E) adopt any new employee benefit or compensation plan or arrangement or amend, modify or terminate any existing Company Benefit Plan or Foreign Benefit Plan, in each case for the benefit of any current or former director, officer, employee or independent contractor, other than arrangements with new hire employees or in connection with promotions in the ordinary course of business consistent with past practice; (o) forgive any loans to Service Providers or any of their respective affiliates; (p) make any material change in its financial accounting policies, practices, principles, methods or procedures, other than as required by GAAP or by a Governmental Entity; (q) commence, 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 that involve only the payment of monetary damages not in excess of $1,000,000 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; (r) (i) make, change or revoke any material Tax election; (ii) settle or compromise any material claim or liability for Taxes; (iii) change (or make a request to any Governmental Entity to change) any material aspect of its method of accounting for Tax purposes or material Tax procedures or policies, other than as required by applicable Law or a Governmental Entity; (iv) file any material amendment to a Tax Return; (v) surrender any claim for a refund of a material amount of Taxes; (vi) file any federal income or California, Illinois, Minnesota, New York, Pennsylvania and Massachusetts state income Tax Returns in a manner inconsistent with past practices; or (vii) destroy or dispose of any books and records with respect to Tax matters relating to periods beginning before the Effective Time and for which the statute of limitations is still open; (s) change the fiscal year of the Company; (t) write up, write down or write off the book value of any tangible assets, in the aggregate, in excess of $5,000,000, except for depreciation and amortization in accordance with GAAP consistently applied; (i) hire employees at, or promote employees to, the vice-president level or higher, other than (A) the hiring of a new Vice President of Marketing or (B) as replacements for employees in such positions who terminate employment after the date of this Agreement, or (ii) other than in the ordinary course of business consistent with past practice, any other employees; provided, that, with respect to subclauses (A) and (B), the Company shall provide Parent with notice and consult with Parent in good faith prior to taking such actions; (v) terminate any employees at the vice-president level or higher of the Company, other than (i) in the ordinary course of business consistent with past practice or (ii) for cause or poor performance (documented in accordance with the Company’s past practices); (w) enter into any new line of business outside of its existing businesses; (x) commence any clinical trials or patient registries with a budget of $1,000,000 or higher other than those listed on Section 5.1(x) of the Company Disclosure Schedule; (y) make a material change in the standard warranty policies for products sold by the Company; (z) enter into, renew, or amend any distribution agreements not terminable by the Company or the Company’s Subsidiaries on 90 days’ notice without penalty; (aa) enter into any Affiliate Transaction; or (bb) authorize or enter into any Contract or otherwise make any commitment, resolve or agree, in each case, to do any of the foregoing in clauses (a) through (aa).
Appears in 2 contracts
Samples: Merger Agreement (Thoratec Corp), Merger Agreement (St Jude Medical Inc)
Conduct of Business by the Company Pending the Closing. The Company covenants and agrees that, between the date of this Agreement and the Effective TimeClosing, except as set forth in Section 5.1 of the Company Disclosure Schedule, as specifically required or permitted contemplated by any other provision of this Agreement (including Section 5.3(a)) or Agreement, except as required by applicable Law, unless Parent will otherwise agree in writingprovided below, the business of the Company willand its subsidiaries shall be conducted in, and will cause each the Company Subsidiary toand its subsidiaries shall not take any action except in, conduct its operations in the ordinary course of business and consistent with past practice and use commercially reasonable efforts to preserve substantially intact its business organizationpractice. Without limiting the generality of the foregoing, and as an extension thereof, except as set forth in Section 5.1 of contemplated by this Agreement, neither the Company Disclosure Schedule, as specifically required or permitted by nor any other provision of this Agreement (including Section 5.3(a)) or as required by applicable Law, the Company will not, and will not permit any Company Subsidiary toits subsidiaries shall, between the date of this Agreement and the Effective TimeClosing, directly or indirectly, do, or agree propose to do, any of the following without the prior written consent of Parent (which consent, other than in the case of subclauses (a), (b), (f), (g), (j), (k), (m) or (w), will not be unreasonably withheld, delayed or conditioned):Purchaser:
(a) amend or otherwise change its articles certificate of incorporation or bylaws or equivalent organizational documents, other than the organizational documents of non-material Company Subsidiariesbylaws;
(b) issue, deliver, sell, pledge, dispose of, grant, transfer or otherwise encumber or subject to any Lienencumber, or authorize the issuance, sale, pledge, disposition, grant, transfer grant or other encumbrance or subjection to any Lien of, any shares of any class of capital stock of, or other Equity Interests in, equity interests in or of 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 Interestsits subsidiaries, or any options, warrants warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securitiesequity interests, or any other ownership interest (including, without limitation, including any such phantom interest or other interest represented by Contract rightcontract), of the Company or any Company Subsidiary, other than: of its subsidiaries (i) except for the issuance of Shares upon the vesting CCM Warrant and the issuance of Company RSUs or shares of Common Stock issuable pursuant to the exercise terms of Company Options outstanding the Plans, as in effect as of the date of this Agreement in accordance with their terms; (ii) the award to new hires or in connection with promotions made in the ordinary course of business of Company Options or Company RSUs pursuant to the Company Stock Option Plans not to exceed 75,000 Shares (and up to an additional 75,000 Shares if consented to by Parent) in the aggregate upon the vesting of such Company RSUs Agreement, or the exercise of such Company Options or (iii) distributions of Shares under the Company ESPP in accordance with its terms on the date of this Agreement and in accordance with Section 2.4(g) of this Agreementoutstanding Warrants);
(c) directly or indirectly sell, pledge, transfer, lease, license, sell and leaseback, abandon, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of in whole or in part any material property, assets or rights or any interest therein of the Company or any Company Subsidiary, except (i) pursuant to any Company Material Contract in effect prior to the date of this Agreement, (ii) the sale, purchase or licensing of inventory, raw materials, equipment, goods or other supplies in the ordinary course of business consistent with past practice, or (iii) licenses of Intellectual Property Rights to third parties not restricted by Section 5.1(d);
(d) sell, pledge, dispose of, transfer or encumber any material Owned Intellectual Property to any third party, enter into any portfolio-wide patent cross-license or covenant not to xxx agreement, grant any exclusive license to any third party of any material Owned Intellectual Property or grant any other license or covenant not to xxx to any third party under or with respect to material Owned Intellectual Property outside the ordinary course of business;
(e) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Registered Intellectual Property;
(f) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or other Equity Interest (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 any other Equity Interests;
(g) reclassify, combine, split, subdivide or otherwise amend the terms ofredeem, or redeem, purchase or otherwise acquire, directly or indirectly, any of its or its Subsidiary’s capital stock, other Equity Interests or any other securities, options, warrants or rights to acquire any such shares or Equity Interests or other securities, or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other securitiesequity interests;
(hd) merge or consolidate, or agree to merge or consolidate, the Company or any Company Subsidiary with any Person, 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 Company Subsidiary;
(i) directly or indirectly acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest in any Person or any division thereof or any assets, other than acquisitions of inventory, raw materials, equipment, goods or other supplies in the ordinary course of business consistent with past practice and any other acquisitions for consideration that is individually not in excess of $1,000,000 or in the aggregate not in excess of $5,000,000;
(j) other than any intercompany arrangements between the Company and/or any of the Company Subsidiaries, incur or create any indebtedness for borrowed money, any obligations under conditional or installment sale Contracts or other retention Contracts relating to purchased property, any capital lease obligations or any guarantee or any such indebtedness of any other Person, issue or sell any debt securities, options, warrants, calls or other rights to acquire any debt securities of the Company or any Company Subsidiaries, guarantee any debt securities of any other Personannounce an intention, enter into any “keepwell” or other agreement to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, assume, guarantee or endorse, or otherwise become responsible for any of the foregoing obligations of any Person (other than a wholly-owned Company Subsidiary), cancel any of the foregoing owed to the Company or any Company Subsidiary, or waive, release, grant or transfer any right of material value;
(k) make any loans, guarantees or capital contributions to, or investments in, any other Person (other than any wholly-owned Company Subsidiary) in excess of $3,000,000 in the aggregate;
(l) modify, 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 of this Agreement, would be a Company Material Contract, in each case other than in the ordinary course of business consistent with past practice;
(m) make, authorize or commit to any capital expenditure in excess of the Company’s capital expenditure budget set forth in Section 5.1(m) of the Company Disclosure Schedule, other than capital expenditures that individually are not in excess of $500,000 and are not, in the aggregate, in excess of $2,500,000;
(n) except (i) for increases or grants or agreements to provide an increase in compensation, bonus or benefits in the ordinary course consistent with past practice that does not exceed 4% of the existing such compensation, bonus or benefit, (ii) pursuant to written Company Benefits Plans or Foreign Benefit Plans in place on the date of this Agreement or (iii) applicable Law, (A) grant any current or former director, officer, employee or independent contractor any increase in compensation, bonus or other benefits, or any such grant of any type of compensation or benefits to any current or former director, officer, employee or independent contractor not previously receiving or entitled to receive such type of compensation or benefit, or pay any bonus of any kind or amount to any current or former director, officer, employee or independent contractor, other than increases or grants to new hire employees or in connection with promotions in the ordinary course of business consistent with past practice, (B) grant or pay to any current or former director, officer, employee or independent contractor any additional severance, change in control or termination pay, or modifications thereto or increases therein, (C) adopt or enter into any collective bargaining agreement or other labor union contract, (D) take any action to accelerate the time of payment or vesting, increase the amount of payment, or trigger any payment, of any Company Option or Company RSU, or otherwise amend or modify any Company Option or Company RSU, except as contemplated by this Agreement, or (E) adopt any new employee benefit or compensation plan or arrangement or amend, modify or terminate any existing Company Benefit Plan or Foreign Benefit Plan, in each case for the benefit of any current or former director, officer, employee or independent contractor, other than arrangements with new hire employees or in connection with promotions in the ordinary course of business consistent with past practice;
(o) forgive any loans to Service Providers or any of their respective affiliates;
(p) make any material change in its financial accounting policies, practices, principles, methods or procedures, other than as required by GAAP or by a Governmental Entity;
(q) commence, 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 that involve only the payment of monetary damages not in excess of $1,000,000 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;
(r) (i) make, change or revoke any material Tax election; (ii) settle or compromise any material claim or liability for Taxes; (iii) change (or make a request to any Governmental Entity to change) any material aspect of its method of accounting for Tax purposes or material Tax procedures or policies, other than as required by applicable Law or a Governmental Entity; (iv) file any material amendment to a Tax Return; (v) surrender any claim for a refund of a material amount of Taxes; (vi) file any federal income or California, Illinois, Minnesota, New York, Pennsylvania and Massachusetts state income Tax Returns in a manner inconsistent with past practices; or (vii) destroy or dispose of any books and records with respect to Tax matters relating to periods beginning before the Effective Time and for which the statute of limitations is still open;
(s) change the fiscal year of the Company;
(t) write up, write down or write off the book value of any tangible assets, in the aggregate, in excess of $5,000,000, except for depreciation and amortization in accordance with GAAP consistently applied;
(i) hire employees at, or promote employees to, the vice-president level or higher, other than (A) the hiring of a new Vice President of Marketing or (B) as replacements for employees in such positions who terminate employment after the date of this Agreement, or (ii) other than in the ordinary course of business consistent with past practice, any other employees; provided, that, with respect to subclauses (A) and (B), the Company shall provide Parent with notice and consult with Parent in good faith prior to taking such actions;
(v) terminate any employees at the vice-president level or higher of the Company, other than (i) in the ordinary course of business consistent with past practice or (ii) for cause or poor performance (documented in accordance with the Company’s past practices);
(w) enter into any new line of business outside of its existing businesses;
(x) commence any clinical trials or patient registries with a budget of $1,000,000 or higher other than those listed on Section 5.1(x) of the Company Disclosure Schedule;
(y) make a material change in the standard warranty policies for products sold by the Company;
(z) enter into, renew, or amend any distribution agreements not terminable by the Company or the Company’s Subsidiaries on 90 days’ notice without penalty;
(aa) enter into any Affiliate Transaction; or
(bb) authorize or enter into any Contract or otherwise make any a commitment, resolve or agree, in each case, to do any of the foregoing in clauses (a) through (aa)foregoing.
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. The Company covenants and agrees that, between the date of this Agreement and the Effective Time, except as set forth in Section 5.1 5.1(a) of the Company Disclosure Schedule, Memorandum or as specifically required or permitted by any other provision of this Agreement (including Section 5.3(a)) or as required by applicable LawAgreement, unless Parent will shall otherwise agree in writing, the Company will, and will cause each Company Subsidiary to, conduct its operations only in the ordinary and usual course of business and consistent with past practice and use commercially reasonable efforts to preserve substantially intact its business organizationpractice. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 5.1(a) of the Company Disclosure Schedule, Memorandum or as specifically required or permitted by any other provision of this Agreement Agreement, the Company shall not (including Section 5.3(a)) or as unless required by applicable Law, the Company will not, 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, other than in the case of subclauses (a), (b), (f), (g), (j), (k), (m) or (w), will not be unreasonably withheld, delayed or conditioned):Parent:
(ai) amend or otherwise change its articles of incorporation the Company Certificate or bylaws or equivalent organizational documents, other than the organizational documents of non-material Company SubsidiariesBylaws;
(bii) (A) issue, deliver, sell, pledge, dispose of, grant, transfer or otherwise encumber or subject to any Lientransfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer transfer, or other encumbrance or subjection to any Lien of, 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, 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 contract right), of the Company or any Company SubsidiaryCompany, other than: (i) than the issuance of Shares Company Common Stock upon the vesting of Company RSUs or the exercise of Company Options outstanding as of the date of this Agreement hereof in accordance with their terms; (ii) the award to new hires or in connection with promotions made in the ordinary course of business of Company Options or Company RSUs pursuant to the Company Stock Option Plans not to exceed 75,000 Shares (and up to an additional 75,000 Shares if consented to by Parent) in the aggregate upon the vesting of such Company RSUs or the exercise of such Company Options , or (iiiB) distributions of Shares under the Company ESPP in accordance with its terms on the date of this Agreement and in accordance with Section 2.4(g) of this Agreement;
(c) directly or indirectly sell, pledge, dispose of, transfer, lease, license, sell and leasebackguarantee or encumber, abandon, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of in whole or in part any material property, assets or rights or any interest therein of the Company or any Company Subsidiary, except (i) pursuant to any Company Material Contract in effect prior to the date of this Agreement, (ii) authorize the sale, pledge, disposition, transfer, lease, license, guarantee or encumbrance of, any material property or assets (including Company Material Intellectual Property) of the Company, except pursuant to existing Contracts or commitments or the sale or purchase or licensing of inventory, raw materials, equipment, goods or other supplies in the ordinary course of business consistent with past practice, or (iii) licenses of Intellectual Property Rights to third parties not restricted by Section 5.1(d);
(d) sell, pledge, dispose of, transfer or encumber any material Owned Intellectual Property to any third party, enter into any portfolio-wide patent cross-license commitment or covenant not to xxx agreement, grant any exclusive license to any third party of any material Owned Intellectual Property or grant any other license or covenant not to xxx to any third party under or with respect to material Owned Intellectual Property transaction outside the ordinary course of businessbusiness consistent with past practice;
(e) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material Registered Intellectual Property;
(fiii) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or other Equity Interest (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 any other Equity Interestsstock;
(giv) reclassify, combine, split, subdivide or otherwise amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its or its Subsidiary’s capital stock, other Equity Interests or any other securities, options, warrants or rights to acquire any such shares or Equity Interests or other securities, or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other securities;
(hv) merge or consolidate, or agree to merge or consolidate, the Company or any Company Subsidiary with any Person, 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 Company Subsidiary;
(iA) directly or indirectly acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest in any Person person or any division thereof or any assets, other than acquisitions of inventory, raw materials, equipment, goods inventory or other supplies in the ordinary course of business consistent with past practice and any other acquisitions for consideration that is individually not in excess of $1,000,000 or in the aggregate not in excess of $5,000,000;
(j) other than any intercompany arrangements between the Company and/or any of the Company Subsidiaries, incur or create any indebtedness for borrowed money, any obligations under conditional or installment sale Contracts or other retention Contracts relating to purchased property, any capital lease obligations or any guarantee or any such indebtedness of any other Person, issue or sell any debt securities, options, warrants, calls or other rights to acquire any debt securities of the Company or any Company Subsidiaries, guarantee any debt securities of any other Person, enter into any “keepwell” or other agreement to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, assume, guarantee or endorse, or otherwise become responsible for any of the foregoing obligations of any Person (other than a wholly-owned Company Subsidiary), cancel any of the foregoing owed to the Company or any Company Subsidiary, or waive, release, grant or transfer any right of material value;
(k) make any loans, guarantees or capital contributions to, or investments in, any other Person (other than any wholly-owned Company Subsidiary) in excess of $3,000,000 in the aggregate;
(l) modify, 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 of this Agreement, would be a Company Material Contract, in each case other than in the ordinary course of business consistent with past practice;
(m) make, authorize or commit to any capital expenditure in excess of the Company’s capital expenditure budget set forth in Section 5.1(m) of the Company Disclosure Schedule, other than capital expenditures that individually are not in excess of $500,000 and are not, in the aggregate, in excess of $2,500,000;
(n) except (i) for increases or grants or agreements to provide an increase in compensation, bonus or benefits in the ordinary course consistent with past practice that does not exceed 4% of the existing such compensation, bonus or benefit, (ii) pursuant to written Company Benefits Plans or Foreign Benefit Plans in place on the date of this Agreement or (iii) applicable Law, (A) grant any current or former director, officer, employee or independent contractor any increase in compensation, bonus or other benefits, or any such grant of any type of compensation or benefits to any current or former director, officer, employee or independent contractor not previously receiving or entitled to receive such type of compensation or benefit, or pay any bonus of any kind or amount to any current or former director, officer, employee or independent contractor, other than increases or grants to new hire employees or in connection with promotions assets in the ordinary course of business consistent with past practice, (B) grant incur any indebtedness for borrowed money or pay to issue any current debt securities or former directorassume, officer, employee guarantee or independent contractor any additional severance, change in control or termination payendorse, or modifications thereto or increases thereinotherwise as an accommodation become responsible for, the obligations of any person, except for indebtedness for borrowed money incurred by the Company pursuant to the terms of a Company Material Contract, (C) adopt terminate, cancel or request any material change in, or agree to any material change in, any Company Material Contract, or (D) enter into or amend any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 5.1(a)(v);
(vi) except as may be required by contractual commitments or corporate policies with respect to employee severance or termination pay in existence on the date of this Agreement as disclosed in Section 3.11(b) of the Company Disclosure Memorandum or in the ordinary course of business consistent with past practice: (A) materially increase the compensation or benefits payable or to become payable to its directors, officers or employees; (B) grant any rights to severance or termination pay to, or amend or enter into any collective bargaining agreement new Company Benefit Plan, except to the extent required by applicable Law; or other labor union contract(C) amend or waive any performance or vesting criteria or accelerate the vesting, exercisability or funding under any Company Benefit Plan (except to the extent required by the terms of any such Company Benefit Plan as of the date of this Agreement);
(vii) (A) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, contingent or otherwise), except in the ordinary course of business consistent with past practice and in accordance with their terms, (DB) take any action to accelerate the time of payment or vesting, increase the amount of payment, or trigger any payment, delay collection of any Company Option material notes or Company RSU, accounts receivable in advance of or otherwise amend beyond their regular due dates or modify any Company Option or Company RSU, except as contemplated by this Agreementthe dates when the same would have been collected in the ordinary course of business consistent with past practice, or (EC) adopt any new employee benefit delay or compensation plan or arrangement or amend, modify or terminate any existing Company Benefit Plan or Foreign Benefit Plan, in each case for the benefit accelerate payment of any current material account payable in advance of its due date or former director, officer, employee or independent contractor, other than arrangements with new hire employees or in connection with promotions the date such liability would have been paid in the ordinary course of business consistent with past practice;
(o) forgive any loans to Service Providers or any of their respective affiliates;
(pviii) make any material change in its financial accounting policies, practices, principles, methods policies or procedures, other than in the ordinary course of business consistent with past practice or except as required by GAAP or by a Governmental Entity;
(qix) commencewaive, compromiserelease, settle or agree to settle any Proceeding (including any Proceeding relating to this Agreement or the transactions contemplated hereby) other than compromisesassign, settlements or agreements in the ordinary course of business that involve only the payment of monetary damages not in excess of $1,000,000 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;
(r) (i) make, change or revoke any material Tax election; (ii) settle or compromise any material claim claims, or any material litigation or arbitration;
(x) make any material Tax election, settle or compromise any material liability for Taxes, amend any material Tax Return or file any refund for any material amount of Taxes; provided, that the Company shall promptly provide to Parent a copy of any such amended Tax Return or filing for any refund;
(iiixi) change (modify, amend or make a request terminate, or waive, release or assign any material rights or claims with respect to any Governmental Entity confidentiality or standstill agreement to changewhich the Company is a party;
(xii) knowingly act in a manner intended or reasonably expected to materially delay the consummation of the Merger or result in any material aspect of its method of accounting for Tax purposes the conditions to the Merger set forth in Article VI not being satisfied, except as otherwise permitted by this Agreement or material Tax procedures or policies, other than as required by applicable Law or a Governmental Entity; (iv) file any material amendment to a Tax Return; (v) surrender any claim for a refund of a material amount of Taxes; (vi) file any federal income judicial or California, Illinois, Minnesota, New York, Pennsylvania and Massachusetts state income Tax Returns in a manner inconsistent with past practices; or (vii) destroy or dispose of any books and records with respect to Tax matters relating to periods beginning before the Effective Time and for which the statute of limitations is still openregulatory authority;
(sxiii) change the fiscal year of the Company;
(t) write up, write down fail to comply with its obligations under that certain letter agreement dated on or write off the book value of any tangible assets, in the aggregate, in excess of $5,000,000, except for depreciation and amortization in accordance with GAAP consistently applied;
(i) hire employees at, or promote employees to, the vice-president level or higher, other than (A) the hiring of a new Vice President of Marketing or (B) as replacements for employees in such positions who terminate employment after about the date of this Agreement, or (ii) other than in the ordinary course of business consistent with past practice, any other employees; provided, that, with respect to subclauses (A) and (B), hereof between the Company shall provide Parent with notice and consult with Parent in good faith prior to taking such actions;
(v) terminate any employees at the vice-president level or higher of the Company, other than (i) in the ordinary course of business consistent with past practice or (ii) for cause or poor performance (documented in accordance with the Company’s past practices);
(w) enter into any new line of business outside of its existing businesses;
(x) commence any clinical trials or patient registries with a budget of $1,000,000 or higher other than those listed on Section 5.1(x) of the Company Disclosure Schedule;
(y) make a material change in the standard warranty policies for products sold by the Company;
(z) enter into, renew, or amend any distribution agreements not terminable by the Company or the Company’s Subsidiaries on 90 days’ notice without penalty;
(aa) enter into any Affiliate TransactionPC Mall; or
(bbxiv) authorize or enter into any Contract agreement or otherwise make any commitment, resolve or agree, in each case, commitment to do any of the foregoing in clauses (a) through (aa)foregoing.
Appears in 1 contract
Samples: Merger Agreement (Ecost Com Inc)
