Conduct of Business by the Company Pending the Merger. The Company agrees that between the date of this Agreement and the earlier of the Effective Time and the valid termination of this Agreement in accordance with Article VII, except (w) as specifically set forth in Section 5.01 of the Company Disclosure Letter as an exception to the corresponding restriction of this Section 5.01, (x) as expressly required or expressly provided for by this Agreement, (y) as required by applicable Law or (z) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed, or conditioned), the Company will, and will cause each Company Subsidiary to, use commercially reasonable efforts to conduct its business and operations in all material respects in the ordinary course of business consistent with past practice, and the Company will use, and will cause each Company Subsidiary to use, commercially reasonable efforts to (1) preserve intact its and their business organization, (2) preserve the present relationships and goodwill with those persons having significant business relationships with the Company and the Company Subsidiaries and (3) comply with and maintain all material Permits required to conduct its and their businesses and to own, lease and operate its and their properties and assets. Without limiting the foregoing, subject to the exceptions described in clauses (w) through (z) of the foregoing sentence, the Company shall not, and shall not permit any Company Subsidiary to: (a) amend the Company Charter, Company Bylaws or certificate of incorporation or bylaws (or other similar governing documents) of any Company Subsidiary; (b) issue, sell, grant options, restricted stock units, restricted stock or rights to purchase, pledge, or authorize or propose the issuance of, sale of, or grant of options, restricted stock units, restricted stock or rights to purchase or pledge, any Company Securities or Subsidiary Securities, other than (i) the issuance of Shares upon the exercise of Company Options or the vesting and settlement of RSU Awards, in each case outstanding as of the date hereof in accordance with their terms, or the issuance of Shares pursuant to the terms of the Company Stock Purchase Plan and (ii) the issuance of securities by a wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary; (c) adjust, split, combine, recapitalize, subdivide or reclassify or otherwise amend the terms of any shares of its capital stock or other equity interests; (d) sell, pledge, dispose of, transfer, lease, mortgage, license, sublicense, abandon, allow to lapse, assign or encumber any Company Subsidiary or any material property, securities, or material assets of the Company or any Company Subsidiary, except (i) pursuant to Company Material Contracts existing as of, and true, correct and complete copies of which have been made available to Parent prior to, the date of this Agreement and set forth in Section 5.01(d)(i) of the Company Disclosure Letter, (ii) pursuant to Incidental Contracts, or (iii) for de minimis dispositions or abandonments of immaterial tangible assets not currently used in the Company’s or Company’s Subsidiaries business, in the ordinary course of business and consistent with past practice; (e) declare, set aside, make or pay any dividend or other distribution with respect to any shares of its capital stock or other equity interests, whether payable in cash, stock, property or a combination thereof; (f) other than (i) in connection with the exercise of any outstanding Company Options or offers of purchase rights under the Company Stock Purchase Plan permitted by the terms of such Company Options or the Company Stock Purchase Plan, as applicable, or the payment of related withholding Taxes, by net exercise or by tendering of shares or (ii) Tax withholdings on the vesting or payment of RSU Awards or the vesting of Restricted Stock Awards, reclassify, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its equity securities or any options, warrants, securities of the Company or other rights exercisable for or convertible into any such equity securities; (g) (i) make any acquisition or disposition, or make any offer or agreement to acquire or dispose by means of a merger, consolidation, recapitalization, purchase, sale or otherwise, in one transaction or any series of related transactions, of any business, assets or securities or any sale, lease, encumbrance or other disposition of assets or securities of the Company or any of its Subsidiaries or any person or (ii) adopt, publicly propose or enter into a plan of complete or partial liquidation, dissolution, recapitalization or restructuring, or file or consent to the filing of a petition in bankruptcy under any provisions of applicable Law, except for in the ordinary course of business and consistent with past practice; (h) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations (excluding existing obligations as of the date hereof) of any other person; (i) incur, create, assume or otherwise become liable or responsible for any Indebtedness or issue any debt securities, or assume or guarantee the obligations of any person (other than a wholly owned Company Subsidiary) for borrowed money; (j) make any loans, advances or capital contributions to, or investments in, any other person, other than (i) loans solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries, (ii) advances for travel and other out-of-pocket expenses to officers, directors or employees of the Company or any Company Subsidiary made in the ordinary course consistent with past practice, and (iii) advances to directors and officers required to be made pursuant to any indemnification or advancement obligations in the Company Charter, the Company Bylaws, the governing documents of any Company Subsidiary, or any employment agreement or indemnification agreement to which the Company or any Company Subsidiary is party as of the date of this Agreement (true and accurate copies of which have been made available to Parent prior to the date of this Agreement); (k) except to the extent required by this Agreement, applicable Law or the terms of any Company Benefit Plan, as in effect on the date hereof and set forth on Section 5.01(k) of the Company Disclosure Letter: (i) hire any employee at the level of Director or higher, except in the ordinary course of business or as otherwise required by applicable Law, or an existing Contract, (ii) increase the compensation or benefits payable or to become payable to its directors, officers or employees (other than if the Closing has not yet occurred as of February 28, 2024 merit increases in salaries for employees with titles below the level of Vice President, not to exceed four percent (4%) in the aggregate of such employees’ salaries on the date hereof in the ordinary course of business consistent with prior years’ annual compensation review cycles), or promote any non-officer employee to an officer position; (iii) grant any rights to severance or termination pay or other termination benefit or terminate any such individual, other than for cause or due to death or disability; (iv) establish, terminate, adopt, enter into or materially amend any CBA or Company Benefit Plans (or any collective bargaining or similar labor agreement, or employee benefit plan or arrangement, that would be a CBA or a Company Benefit Plan (as applicable) if in effect on the date hereof); or (v) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability, time of payment or funding of any compensation or any equity award or other benefit under any Company Benefit Plan with respect to any current or former service provider; (l) make any change in accounting policies or procedures, other than as required by GAAP, applicable Law or any Governmental Entity with competent jurisdiction; (m) engage in any transaction with, or enter into any agreement, arrangement or understanding with any affiliate of the Company or other person covered by Item 404 of Regulation S-K promulgated under the Exchange Act; (i) prepare or file any material Tax Return materially inconsistent with past practice or take any position or adopt any method on any such Tax Return that is materially inconsistent with positions taken or methods used in preparing or filing similar Tax Returns in prior periods, (ii) make, change or revoke any material Tax election, (iii) enter into any Tax allocation, indemnity or sharing agreement (other than any such agreement entered into in the ordinary course of business, the primary purpose of which is unrelated to Taxes or any agreement solely among any of the Company or the Company Subsidiaries), (iv) change any annual Tax accounting period, (v) file any amendment to a material Tax Return, (vi) enter into any “closing agreement” with any taxing authority regarding a material amount of Tax, (vii) consent to any material Tax claim or assessment or surrender a right to a material refund of Taxes, (viii) adopt or change any method of Tax accounting, or (ix) consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment; (o) make or authorize any capital expenditure, or incur any obligations, liabilities or Indebtedness in respect thereof, except for those in an amount less than $75,000 contemplated by the capital expenditure budget for the relevant fiscal year at or after the time contemplated by such budget, which capital expenditure budget has been made available to Parent prior to the date of this Agreement; (p) change in any material respect the policies or practices regarding accounts receivable or accounts payable or cash management or fail to manage working capital in accordance with past practices, except as required by GAAP or applicable Law; (q) settle any suit, action, claim, proceeding or investigation other than a settlement solely for monetary damages (net of insurance proceeds received) not in excess of $25,000 individually or $50,000 in the aggregate; (r) except in the ordinary course of business consistent with past practice or in connection with any transaction to the extent specifically permitted by any other subclause of this Section 5.01, (i) enter into any Contract that would, if entered into prior to the date hereof, be a Company Material Contract or a Real Property Lease, (ii) materially modify, materially amend, let lapse or terminate (other than expirations in accordance with its terms) any Company Material Contract or Real Property Lease or waive, release or assign any material rights or material claims or make any material payment, directly or indirectly, of any liability of the Company or the Company Subsidiaries before the same comes due in accordance with its terms, thereunder, (iii) sublease or license any portion of the real property leased under any Real Property Lease, or (iv) acquire a fee interest in any real property; (s) create any Subsidiary of the Company or any of its Subsidiaries; (t) enter into any new line of business, or form or commence the operations of any joint venture; (u) amend in a manner that adversely impacts in any material respect the ability to conduct its business, or terminate or allow to lapse any material Permits of the Company or its Subsidiaries; (v) except in the ordinary course of business consistent with past practice or pursuant to a Contract in effect as of the date hereof, exclusively license or sublicense, sell, transfer, dispose of, abandon, cancel, knowingly allow to lapse, or fail to renew, maintain, diligently pursue applications for or defend any Intellectual Property Rights of the Company or any Company Subsidiary that are individually or in the aggregate material to the Company and the Company Subsidiaries; or (w) authorize, resolve or offer, agree or commit, in writing or otherwise, to do any of the foregoing. Nothing contained in this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control or direct the operations of the Company or its Subsidiaries prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective business operations.
Appears in 4 contracts
Samples: Merger Agreement (Pc Tel Inc), Merger Agreement (Pc Tel Inc), Merger Agreement (Pc Tel Inc)
Conduct of Business by the Company Pending the Merger. (a) The Company agrees that that, between the date of this Agreement and the earlier of the Effective Time and or the valid earlier termination of this Agreement in accordance with Article VIIAgreement, except as (w1) expressly contemplated by any other provision of this Agreement or any Ancillary Agreement, (2) as specifically set forth in Section 5.01 6.01 of the Company Disclosure Letter as an exception to the corresponding restriction of this Section 5.01Schedule, and (x) as expressly required or expressly provided for by this Agreement, (y3) as required by applicable Law (including as may be requested or (z) as consented to compelled by any Governmental Authority), unless Adara shall otherwise consent in writing by Parent (which consent shall not be unreasonably withheldconditioned, withheld or delayed, or conditioned), ):
(i) the Company willshall, and will shall cause each the Company Subsidiary Subsidiaries to, use commercially reasonable efforts to conduct its their business and operations in all material respects in the ordinary course of business and in a manner consistent with past practice; and
(ii) the Company shall, and shall cause the Company Subsidiaries to, use their reasonable best efforts to preserve substantially intact the business organization of the Company and the Company will useSubsidiaries, to keep available the services of the current officers, key employees and will cause each Company Subsidiary to use, commercially reasonable efforts to (1) preserve intact its and their business organization, (2) preserve the present relationships and goodwill with those persons having significant business relationships with consultants of the Company and the Company Subsidiaries and (3) comply with and maintain all material Permits required to conduct its and their businesses and to own, lease and operate its and their properties and assets. Without limiting preserve the foregoing, subject to the exceptions described in clauses (w) through (z) current relationships of the foregoing sentence, Company and the Company shall notSubsidiaries with its material customers, material suppliers and shall not permit any Company Subsidiary to:
(a) amend other persons with which the Company Charter, and the Company Bylaws or certificate of incorporation or bylaws (or other similar governing documents) of any Company Subsidiary;Subsidiaries have significant business relations.
(b) issueBy way of amplification and not limitation, sellexcept as (1) expressly contemplated by any other provision of this Agreement or any Ancillary Agreement, grant options(2) as set forth in Section 6.01(b) of the Company Disclosure Schedule, restricted stock unitsand (3) as required by applicable Law (including as may be requested or compelled by any Governmental Authority), restricted stock no Company Group Member shall, between the date of this Agreement and the Effective Time or rights to purchasethe earlier termination of this Agreement, pledgedirectly or indirectly, do any of the following without the prior written consent of Adara (which consent shall not be unreasonably conditioned, withheld or authorize or propose the issuance of, sale of, or grant of options, restricted stock units, restricted stock or rights to purchase or pledge, any Company Securities or Subsidiary Securities, other than delayed):
(i) the issuance of Shares upon the exercise of amend or otherwise change its Company Options or the vesting and settlement of RSU Awards, in each case outstanding as of the date hereof in accordance with their terms, or the issuance of Shares pursuant to the terms of the Company Stock Purchase Plan and Group Organizational Documents;
(ii) the issuance of securities by a wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary;
(c) adjustissue, split, combine, recapitalize, subdivide or reclassify or otherwise amend the terms of any shares of its capital stock or other equity interests;
(d) sell, pledge, dispose of, transfergrant or encumber, leaseor authorize the issuance, mortgagesale, licensepledge, sublicensedisposition, abandongrant or encumbrance of, allow to lapse, assign or encumber (A) any shares of any class of capital stock of any Company Subsidiary Group Member, or any material propertyoptions, securitieswarrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or material assets any other ownership interest (including, without limitation, any phantom interest), of any Company Group Member, provided that the issuance or sale of any class of capital stock of the Company or any Company Subsidiary, except (i) pursuant to Company Material Contracts existing as of, and true, correct and complete copies of which have been made available to Parent prior to, in a bona fide financing in accordance with the date of this Agreement and limitations set forth in Section 5.01(d)(i6.01(b)(ii) of the Company Disclosure Letter, Schedule shall not require the consent of Adara; or (iiB) pursuant to Incidental Contracts, or any material assets of any Company Group Member; f
(iii) for de minimis dispositions form any subsidiary or abandonments of immaterial tangible assets not currently used acquire any equity interest or other interest in the Company’s any other entity or Company’s Subsidiaries business, in the ordinary course of business and consistent enter into a joint venture with past practiceany other entity;
(eiv) declare, set aside, make or pay any dividend or other distribution with respect to any shares of its capital stock or other equity interestsdistribution, whether payable in cash, stock, property or a combination thereofotherwise, with respect to any of its capital stock;
(fv) other than (i) in connection with the exercise of any outstanding Company Options or offers of purchase rights under the Company Stock Purchase Plan permitted by the terms of such Company Options or the Company Stock Purchase Plan, as applicable, or the payment of related withholding Taxes, by net exercise or by tendering of shares or (ii) Tax withholdings on the vesting or payment of RSU Awards or the vesting of Restricted Stock Awards, reclassify, combine, split, subdivide or amend the terms ofredeem, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, other than redemptions of equity securities or any options, warrants, securities of from former employees upon the Company or other rights exercisable for or convertible into any terms set forth in the underlying agreements governing such equity securities;
(gvi) (iA) make any acquisition or dispositionacquire (including, or make any offer or agreement to acquire or dispose without limitation, by means of a merger, consolidation, recapitalization, purchase, sale or otherwise, in one transaction acquisition of stock or any series of related transactions, of any business, assets or securities any other business combination) any corporation, partnership, other business organization or any sale, lease, encumbrance or other disposition of assets or securities of the Company or any of its Subsidiaries or any person or (ii) adopt, publicly propose or enter into a plan of complete or partial liquidation, dissolution, recapitalization or restructuring, or file or consent to the filing of a petition in bankruptcy under any provisions of applicable Law, except for in the ordinary course of business and consistent with past practice;
(h) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations (excluding existing obligations as of the date hereof) of any other person;
(i) incur, create, assume or otherwise become liable or responsible for any Indebtedness or issue any debt securities, or assume or guarantee the obligations of any person (other than a wholly owned Company Subsidiary) for borrowed money;
(j) make any loans, advances or capital contributions to, or investments in, any other persondivision thereof, other than (i) loans solely between the Company acquisition of inventory and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries, (ii) advances for travel and other out-of-pocket expenses up to officers, directors or employees $5,000,000 of the Company or any Company Subsidiary made in the ordinary course consistent with past practice, and (iii) advances to directors and officers required to be made pursuant to any indemnification or advancement obligations in the Company Charter, the Company Bylaws, the governing documents of any Company Subsidiary, or any employment agreement or indemnification agreement to which the Company or any Company Subsidiary is party as of the date of this Agreement (true and accurate copies of which have been made available to Parent prior to the date of this Agreement);
(k) except to the extent required by this Agreement, applicable Law or the terms of any Company Benefit Plan, as in effect on the date hereof and set forth on Section 5.01(k) of the Company Disclosure Letter: (i) hire any employee at the level of Director or higher, except in the ordinary course of business or as otherwise required by applicable Law, or an existing Contract, (ii) increase the compensation or benefits payable or to become payable to its directors, officers or employees (other than if the Closing has not yet occurred as of February 28, 2024 merit increases in salaries for employees with titles below the level of Vice President, not to exceed four percent (4%) in the aggregate of such employees’ salaries on the date hereof in the ordinary course of business consistent with prior years’ annual compensation review cycles), or promote any non-officer employee to an officer position; (iii) grant any rights to severance or termination pay or other termination benefit or terminate any such individual, other than for cause or due to death or disability; (iv) establish, terminate, adopt, enter into or materially amend any CBA or Company Benefit Plans (or any collective bargaining or similar labor agreement, or employee benefit plan or arrangement, that would be a CBA or a Company Benefit Plan (as applicable) if in effect on the date hereof); or (v) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability, time of payment or funding of any compensation or any equity award or other benefit under any Company Benefit Plan with respect to any current or former service provider;
(l) make any change in accounting policies or procedures, other than as required by GAAP, applicable Law or any Governmental Entity with competent jurisdiction;
(m) engage in any transaction with, or enter into any agreement, arrangement or understanding with any affiliate of the Company or other person covered by Item 404 of Regulation S-K promulgated under the Exchange Act;
(i) prepare or file any material Tax Return materially inconsistent with past practice or take any position or adopt any method on any such Tax Return that is materially inconsistent with positions taken or methods used in preparing or filing similar Tax Returns in prior periods, (ii) make, change or revoke any material Tax election, (iii) enter into any Tax allocation, indemnity or sharing agreement (other than any such agreement entered into in the ordinary course of business, the primary purpose of which is unrelated to Taxes or any agreement solely among any of the Company or the Company Subsidiaries), (iv) change any annual Tax accounting period, (v) file any amendment to a material Tax Return, (vi) enter into any “closing agreement” with any taxing authority regarding a material amount of Tax, (vii) consent to any material Tax claim or assessment or surrender a right to a material refund of Taxes, (viii) adopt or change any method of Tax accounting, or (ix) consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment;
(o) make or authorize any capital expenditure, or incur any obligations, liabilities or Indebtedness in respect thereof, except for those in an amount less than $75,000 contemplated by the capital expenditure budget for the relevant fiscal year at or after the time contemplated by such budget, which capital expenditure budget has been made available to Parent prior to the date of this Agreement;
(p) change in any material respect the policies or practices regarding accounts receivable or accounts payable or cash management or fail to manage working capital in accordance with past practices, except as required by GAAP or applicable Law;
(q) settle any suit, action, claim, proceeding or investigation other than a settlement solely for monetary damages (net of insurance proceeds received) not in excess of $25,000 individually or $50,000 in the aggregate;
(r) except fixed assets in the ordinary course of business consistent with past practice practice; or (B) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any person, or make any loans or advances, or intentionally grant any security interest in connection with any transaction of its assets, other than indebtedness incurred under the Credit Facility;
(vii) (A) grant any increase in the compensation, incentives or benefits payable or to become payable to any current or former director, officer, employee or consultant of any Company Group Member (or their respective beneficiaries or dependents) as of the extent specifically permitted by any other subclause date of this Section 5.01Agreement, (iB) enter into any Contract that wouldnew, if entered into prior or amend any existing employment or severance or termination agreement with any current or former director, officer, employee or consultant, or (C) accelerate or commit to accelerate the date hereoffunding, be a Company Material Contract or a Real Property Lease, (ii) materially modify, materially amend, let lapse or terminate (other than expirations in accordance with its terms) any Company Material Contract or Real Property Lease or waive, release or assign any material rights or material claims or make any material payment, directly or indirectly, vesting of any liability compensation or benefits to any current or former director, officer, employee or consultant (except that the Company Group may (1) increase base compensation of current directors, officers, employees or consultants as set forth on Section 6.01(b)(vii) of the Company or the Company Subsidiaries before the same comes due in accordance with its terms, thereunderDisclosure Schedule, (iii2) sublease provide increases in salary, wages, bonuses or license any portion of the real property leased benefits to employees as required under any Real Property Lease, employment or (ivconsulting agreement in effect on the date of this Agreement and reflected on Section 4.10(a) acquire a fee interest in any real property;
(s) create any Subsidiary of the Company or any Disclosure Schedule, (3) change the title of its Subsidiaries;
(t) enter into any new line of business, or form or commence the operations of any joint venture;
(u) amend in a manner that adversely impacts in any material respect the ability to conduct its business, or terminate or allow to lapse any material Permits of the Company or its Subsidiaries;
(v) except employees in the ordinary course of business consistent with past practice practice, (4) make annual or quarterly bonus or commission payments in the ordinary course of business and in accordance with the bonus or commission plans existing on the date of this Agreement and reflected on Section 4.10(a) of the Company Disclosure Letter), and (5) IC-DISC commissions payable to My Worldwide Marketplace;
(viii) other than as required by Law or pursuant to a Contract in effect as the terms of an agreement entered into prior to the date of this Agreement and reflected on Section 4.10(a) of the Company Disclosure Schedule or that any Company Group Member is not prohibited from entering into after the date hereof, exclusively license grant any severance or sublicensetermination pay to, sellany director or officer of any Company Group Member;
(ix) adopt, transferamend and/or terminate any material Plan except as may be required by applicable Law, dispose ofis necessary in order to consummate the Transactions, abandonor health and welfare plan renewals in the ordinary course of business;
(x) (A) amend any material Tax Return, cancel(B) change any material method of Tax accounting, knowingly allow (C) make, change or rescind any material election relating to lapseTaxes, or (D) settle or compromise any material U.S. federal, state, local or non-U.S. Tax audit, assessment, Tax claim or other controversy relating to Taxes;
(xi) materially amend, or modify or consent to the termination (excluding any expiration in accordance with its terms) of any Material Contract or amend, waive, modify or consent to the termination (excluding any expiration in accordance with its terms) of the Company’s material rights thereunder, in each case in a manner that is adverse to any Company Group Member, except in the ordinary course of business;
(xii) enter into any contract, agreement or arrangement that obligates any Company Group Member to develop any Intellectual Property related to the business of any Company Group Member, other than where the results of the Company’s or any Company Subsidiary’s performance would be Company-Owned IP;
(xiii) intentionally permit any material item of Company-Owned IP to lapse or to be abandoned, invalidated, dedicated to the public, or disclaimed, or otherwise become unenforceable or fail to perform or make any applicable filings, recordings or other similar actions or filings, or fail to renew, maintain, diligently pursue applications for pay all required fees required or defend advisable to maintain and protect its interest in each and every material item of Company-Owned IP;
(xiv) fail to satisfy the Company’s obligations under any Intellectual Property Rights of the Company Lease or any Company Subsidiary that are individually or in the aggregate material to the Company and the Company SubsidiariesMaterial Contract; or
(wxv) authorize, resolve enter into any agreement or offer, agree or commit, in writing or otherwise, otherwise make a binding commitment to do any of the foregoing. Nothing herein shall require any Company Group Member to obtain consent from Adara to do any of the foregoing if obtaining such consent might reasonably be expected to violate applicable Law, and nothing contained in this Agreement Section 6.01 shall give Parent or Merger Subto Adara, directly or indirectly, the right to control or direct the operations of the any Company or its Subsidiaries Group Member prior to the Effective TimeClosing Date. Prior to the Effective TimeClosing Date, each of Adara and the Company shall exercise, consistent with the terms and conditions of this Agreementhereof, complete control and supervision over of its and its Subsidiaries’ respective business operations, as required by Law.
Appears in 3 contracts
Samples: Business Combination Agreement (Ogilvie Bruce a Jr), Business Combination Agreement (Walker Jeffrey Clinton), Business Combination Agreement (Adara Acquisition Corp.)
Conduct of Business by the Company Pending the Merger. (a) The Company hereby covenants and agrees that between that, prior to the date of Effective Time, unless otherwise expressly contemplated by this Agreement and the earlier of the Effective Time and the valid termination of this Agreement in accordance with Article VII, except (w) as specifically set forth in Section 5.01 of the Company Disclosure Letter as an exception to the corresponding restriction of this Section 5.01, (x) as expressly required or expressly provided for by this Agreement, (y) as required by applicable Law or (z) as consented to in writing by Ford, Parent (which consent shall not be unreasonably withheld, delayed, or conditioned)FSG II, the Company will, will and will cause each Company Subsidiary to, use commercially reasonable efforts its subsidiaries to conduct (i) operate its business and operations in all material respects in the usual and ordinary course of business consistent with past practicepractices, and the Company will use, and will cause each Company Subsidiary to use, commercially (ii) use its reasonable best efforts to (1) preserve substantially intact its and their business organization, (2) preserve maintain its rights and franchises, retain the present services of its respective principal officers and key employees and maintain its relationships with its respective principal customers, suppliers and goodwill other persons with those persons having which it or any of its subsidiaries has significant business relationships relations, (iii) use its reasonable best efforts to maintain and keep its properties and assets in as good repair and condition as at present, ordinary wear and tear excepted, and (iv) take no action with respect to the Company Stock Options that would result in an acceleration of vesting of the Company Stock Options in connection with the Company execution and delivery of this Agreement or the Company Subsidiaries and (3) comply with and maintain all material Permits required to conduct its and their businesses and to own, lease and operate its and their properties and assets. Without limiting the foregoing, subject to the exceptions described in clauses (w) through (z) of the foregoing sentence, the Company shall not, and shall not permit any Company Subsidiary to:
(a) amend the Company Charter, Company Bylaws or certificate of incorporation or bylaws (or other similar governing documents) consummation of any Company Subsidiary;transactions contemplated hereby or otherwise.
(b) issue, sell, grant options, restricted stock units, restricted stock or rights to purchase, pledge, or authorize or propose the issuance of, sale of, or grant of options, restricted stock units, restricted stock or rights to purchase or pledge, any Company Securities or Subsidiary Securities, other than (i) the issuance of Shares upon the exercise of Company Options or the vesting and settlement of RSU Awards, in each case outstanding Except as of the date hereof in accordance with their terms, or the issuance of Shares pursuant to the terms of the Company Stock Purchase Plan and (ii) the issuance of securities expressly contemplated by a wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary;
(c) adjust, split, combine, recapitalize, subdivide or reclassify or otherwise amend the terms of any shares of its capital stock or other equity interests;
(d) sell, pledge, dispose of, transfer, lease, mortgage, license, sublicense, abandon, allow to lapse, assign or encumber any Company Subsidiary or any material property, securities, or material assets of the Company or any Company Subsidiary, except (i) pursuant to Company Material Contracts existing as of, and true, correct and complete copies of which have been made available to Parent prior to, the date of this Agreement and except as set forth in Section 5.01(d)(i6.01(b) of the Company Disclosure Letter, (ii) pursuant to Incidental ContractsSchedule, or otherwise consented to in writing by Ford, Parent or FSG II, from the date hereof until the Effective Time, the Company will not do, and will not permit any of its subsidiaries to do, any of the following:
(iiii) for de minimis dispositions (A) increase the compensation payable to or abandonments to become payable to any director or executive officer of immaterial tangible assets not currently used in the Company’s , except for increases in salary, wages or Company’s Subsidiaries business, bonuses payable or to become payable in the ordinary course of business and consistent with past practice; (B) grant any severance or termination pay (other than pursuant to existing severance arrangements or policies as in effect on the date of this Agreement) to, or enter into any employment or severance agreement with, any director or executive officer of the Company; or (C) adopt, amend or terminate any employee benefit plan or arrangement affecting any director or executive officer of the Company, except as may be required by applicable law;
(eii) declare, set aside, make declare or pay any dividend on, or make any other distribution with in respect of outstanding shares of its capital stock except for regular quarterly dividends payable on the Common Stock in an amount not to exceed $0.05 per quarter, provided that the foregoing shall not prohibit dividends or distributions between or among the Company and its subsidiaries;
(iii) (A) redeem, repurchase or otherwise reacquire any shares of its capital stock or any securities or obligations convertible into or exchangeable for any shares of its or its subsidiaries’ capital stock; (B) effect any reorganization or recapitalization of the Company; or (C) split, combine or reclassify any of the Company’s capital stock or issue or authorize or propose the issuance of any other equity interestssecurities in respect of in lieu of, whether payable or in cashsubstitution for, shares of its capital stock;
(iv) (A) issue, property deliver, award, grant or a combination sell, or authorize or propose the issuance, delivery, award, grant or sale (including the grant of any security interest, pledge, mortgage, lien, charge, adverse claim of ownership or use, or other encumbrance of any kind) of, any shares of stock of the Company (including shares held in treasury), any securities convertible into or exercisable or exchangeable for any such shares, or any rights, warrants or options to acquire any such shares (except for the issuance of shares upon the exercise of Company Stock Options outstanding on the date of this Agreement); or (B) amend or otherwise modify the terms of any such rights, warrants or options the effect of which shall be to make such terms more favorable to the holders thereof;
(fv) acquire or agree to acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other person (other than (i) in connection with the exercise of any outstanding Company Options or offers of purchase rights under the Company Stock Purchase Plan permitted by the terms of such Company Options or the Company Stock Purchase Plan, as applicable, or the payment of related withholding Taxes, by net exercise or by tendering of shares or (ii) Tax withholdings on the vesting or payment of RSU Awards or the vesting of Restricted Stock Awards, reclassify, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its equity securities or any options, warrants, securities of the Company or other rights exercisable for or convertible into any such equity securities;
(g) (i) make any acquisition or disposition, or make any offer or agreement to acquire or dispose by means of a merger, consolidation, recapitalization, purchase, sale or otherwise, in one transaction or any series of related transactions, of any business, assets or securities or any sale, lease, encumbrance or other disposition of assets or securities of the Company or any of its Subsidiaries or any person or (ii) adopt, publicly propose or enter into a plan of complete or partial liquidation, dissolution, recapitalization or restructuring, or file or consent to the filing of a petition in bankruptcy under any provisions of applicable Law, except for in the ordinary course of business and consistent with past practice;
(h) assume), guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for except that the obligations (excluding existing obligations as foregoing restrictions shall not apply to any action by the Company that would not require the approval of the date hereof) of any other person;
(i) incur, create, assume or otherwise become liable or responsible for any Indebtedness or issue any debt securities, or assume or guarantee Board under the obligations of any person (other than a wholly owned Company Subsidiary) for borrowed money;
(j) make any loans, advances or capital contributions to, or investments in, any other person, other than (i) loans solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries, (ii) advances for travel and other out-of-pocket expenses to officers, directors or employees of the Company or any Company Subsidiary made in the ordinary course consistent with past practice, and (iii) advances to directors and officers required to be made pursuant to any indemnification or advancement obligations in the Company Charter, the Company Bylaws, the governing documents of any Company Subsidiary, or any employment agreement or indemnification agreement to which the Company or any Company Subsidiary is party as of the date of this Agreement (true and accurate copies of which have been made available to Parent prior to the date of this Agreement);
(k) except to the extent required by this Agreement, applicable Law or the terms of any Company Benefit Plan, as in effect on the date hereof and Board policy set forth on in Section 5.01(k6.01(b) of the Company Disclosure Letter: Schedule;
(ivi) hire make or commit to make any employee capital expenditures, except that the foregoing restrictions shall not apply to any action by the Company that would not require the approval of the Board under the Board policy set forth in Section 6.01(b) of the Company Disclosure Schedule;
(vii) sell, lease, exchange, mortgage, pledge, transfer, license or otherwise dispose of or encumber, or agree to sell, lease, exchange, mortgage, pledge, transfer, license or otherwise dispose of or encumber, any of its material assets or any material assets of any of its subsidiaries, measured on a consolidated basis with the Company, or any substantial right therein;
(viii) propose or adopt any amendments to its Restated Certificate of Incorporation or its By-laws;
(ix) (A) change any of its methods of accounting in effect at December 31, 1999, (B) write down in any material amount the level value of Director the intangible assets of the Company or higher(C) make or rescind any express or deemed election relating to federal income taxes, settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to federal income taxes, or change any of its methods of reporting income or deductions for federal income tax purposes from those employed in the preparation of the federal income tax returns for the taxable year ending December 31, 1999, except as may be required by applicable law or generally accepted accounting principles;
(x) incur any obligation for borrowed money other than purchase money indebtedness, whether or not evidenced by a note, bond, debenture or similar instrument, except in the ordinary course of business or as otherwise required by applicable Lawbusiness, or an existing Contractprepay, (ii) increase before the compensation or benefits payable or to become payable to its directors, officers or employees (other than if the Closing has not yet occurred as of February 28, 2024 merit increases in salaries for employees with titles below the level of Vice President, not to exceed four percent (4%) in the aggregate of such employees’ salaries on the date hereof in the ordinary course of business consistent with prior years’ annual compensation review cycles), or promote any non-officer employee to an officer position; (iii) grant any rights to severance or termination pay or other termination benefit or terminate any such individual, other than for cause or due to death or disability; (iv) establish, terminate, adopt, enter into or materially amend any CBA or Company Benefit Plans (or any collective bargaining or similar labor agreement, or employee benefit plan or arrangement, that would be a CBA or a Company Benefit Plan (as applicable) if in effect on the date hereof); or (v) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability, time of payment or funding of any compensation or any equity award or other benefit under any Company Benefit Plan with respect to any current or former service provider;
(l) make any change in accounting policies or procedures, other than as required by GAAP, applicable Law or any Governmental Entity with competent jurisdiction;
(m) engage in any transaction with, or enter into any agreement, arrangement or understanding with any affiliate of the Company or other person covered by Item 404 of Regulation S-K promulgated under the Exchange Act;
(i) prepare or file any material Tax Return materially inconsistent with past practice or take any position or adopt any method on any such Tax Return that is materially inconsistent with positions taken or methods used in preparing or filing similar Tax Returns in prior periods, (ii) make, change or revoke any material Tax election, (iii) enter into any Tax allocation, indemnity or sharing agreement (other than any such agreement entered into in the ordinary course of business, the primary purpose of which is unrelated to Taxes or any agreement solely among any of the Company or the Company Subsidiaries), (iv) change any annual Tax accounting period, (v) file any amendment to a material Tax Return, (vi) enter into any “closing agreement” with any taxing authority regarding a material amount of Tax, (vii) consent to any material Tax claim or assessment or surrender a right to a material refund of Taxes, (viii) adopt or change any method of Tax accounting, or (ix) consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment;
(o) make or authorize any capital expenditure, or incur any obligations, liabilities or Indebtedness in respect scheduled maturity thereof, except for those in an amount less than $75,000 contemplated by the capital expenditure budget for the relevant fiscal year at or after the time contemplated by such budget, which capital expenditure budget has been made available to Parent prior to the date of this Agreement;
(p) change in any material respect the policies or practices regarding accounts receivable or accounts payable or cash management or fail to manage working capital in accordance with past practices, except as required by GAAP or applicable Law;
(q) settle any suit, action, claim, proceeding or investigation other than a settlement solely for monetary damages (net of insurance proceeds received) not in excess of $25,000 individually or $50,000 in the aggregate;
(r) except in the ordinary course of business consistent with past practice or in connection with any transaction to the extent specifically permitted by any other subclause of this Section 5.01, (i) enter into any Contract that would, if entered into prior to the date hereof, be a Company Material Contract or a Real Property Lease, (ii) materially modify, materially amend, let lapse or terminate (other than expirations in accordance with its terms) any Company Material Contract or Real Property Lease or waive, release or assign any material rights or material claims or make any material payment, directly or indirectly, of any liability of the Company or the Company Subsidiaries before the same comes due in accordance with its terms, thereunder, (iii) sublease or license any portion of the real property leased under any Real Property Lease, or (iv) acquire a fee interest in any real property;
(s) create any Subsidiary of the Company or any of its Subsidiaries;
(t) enter into any new line of business, or form or commence the operations of any joint venture;
(u) amend in a manner that adversely impacts in any material respect the ability to conduct its business, or terminate or allow to lapse any material Permits of the Company or its Subsidiaries;
(v) except in the ordinary course of business consistent with past practice or pursuant to a Contract in effect as of the date hereof, exclusively license or sublicense, sell, transfer, dispose of, abandon, cancel, knowingly allow to lapse, or fail to renew, maintain, diligently pursue applications for or defend any Intellectual Property Rights of the Company or any Company Subsidiary that are individually or in the aggregate material to the Company and the Company Subsidiarieslong-term debt; or
(wxi) authorize, resolve or offer, agree or commit, in writing or otherwise, otherwise to do any of the foregoing. Nothing contained in this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control or direct the operations of the Company or its Subsidiaries prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective business operations.
Appears in 2 contracts
Samples: Offer to Purchase (Ford Motor Co), Offer to Purchase (Ford Motor Co)
Conduct of Business by the Company Pending the Merger. The Company agrees that between Except as expressly permitted by clauses (a)(i) through (xxviii) of this Section 4.1, during the period from the date of this Agreement through the Effective Time, the Company shall, and shall cause its Subsidiaries to, carry on its business in the earlier ordinary course of its business as currently conducted and, to the extent consistent therewith, use its commercially reasonable efforts to preserve intact its current business organizations, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired in all material respects at the Effective Time. Without limiting the generality of the foregoing, and except as otherwise expressly contemplated by this Agreement or as set forth in the Company Letter (with specific reference to the applicable subsection below), prior to the Effective Time Time:
(a) The Company shall not, and shall cause its Subsidiaries not to, without the valid prior written consent of Buyer:
(i) (A) declare, set aside or pay any dividends on, or make any other actual, constructive or deemed distributions in respect of, any of its capital stock, or otherwise make any payments to its stockholders in their capacity as such, (B) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (C) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities (other than the redemption or repurchase at cost of shares repurchased from employees upon termination of employment);
(ii) issue, deliver, sell, pledge, dispose of or otherwise encumber any shares of its capital stock, any other voting securities or equity equivalent or any securities convertible into, or any rights, warrants or options (including options under the Company Stock Option Plans) to acquire any such shares, voting securities, equity equivalent or convertible securities, other than the issuance of shares of Company Common Stock upon the exercise of Company Stock Options outstanding on the date of this Agreement in accordance with Article VIItheir current terms;
(iii) amend the Company Charter or by-laws;
(iv) acquire or agree to acquire by merging or consolidating with, except or by purchasing a substantial portion of the assets of or equity in, or by any other manner, any business or any corporation, limited liability company, partnership, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets not in the ordinary course of business;
(wv) as specifically set forth in Section 5.01 alter through merger, liquidation, reorganization, restructuring or any other fashion the corporate structure of any Subsidiary of the Company Disclosure Letter as an exception to the corresponding restriction (other than any wholly owned Subsidiary or foreign Subsidiary that would be wholly owned but for a nominal number of this Section 5.01, (x) as expressly required director or expressly provided for similar shares being owned by this Agreement, (y) a foreign national as required by applicable Law the law of the jurisdiction of such foreign Subsidiary’s organization);
(vi) sell, lease or (z) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayedotherwise dispose of, or conditioned)agree to sell, the Company willlease or otherwise dispose of, and will cause each Company Subsidiary toany of its assets, use commercially reasonable efforts to conduct its business and operations in all material respects other than sales of inventory that are in the ordinary course of business consistent with past practice, and the Company will use, and will cause each Company Subsidiary to use, commercially reasonable efforts to (1) preserve intact its and their business organization, (2) preserve the present relationships and goodwill with those persons having significant business relationships with the Company and the Company Subsidiaries and (3) comply with and maintain all material Permits required to conduct its and their businesses and to own, lease and operate its and their properties and assets. Without limiting the foregoing, subject to the exceptions described in clauses (w) through (z) of the foregoing sentence, the Company shall not, and shall not permit any Company Subsidiary to:
(a) amend the Company Charter, Company Bylaws or certificate of incorporation or bylaws (or other similar governing documents) of any Company Subsidiary;
(bvii) issue, sell, grant options, restricted stock units, restricted stock or rights to purchase, pledge, or authorize or propose the issuance of, sale of, or grant of options, restricted stock units, restricted stock or rights to purchase or pledge, incur any Company Securities or Subsidiary Securities, other than (i) the issuance of Shares upon the exercise of Company Options or the vesting and settlement of RSU Awards, in each case outstanding as of the date hereof in accordance with their terms, or the issuance of Shares pursuant to the terms of the Company Stock Purchase Plan and (ii) the issuance of securities by a wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary;
(c) adjust, split, combine, recapitalize, subdivide or reclassify or otherwise amend the terms of any shares of its capital stock or other equity interests;
(d) sell, pledge, dispose of, transfer, lease, mortgage, license, sublicense, abandon, allow to lapse, assign or encumber any Company Subsidiary or any material property, securities, or material assets of the Company or any Company Subsidiary, except (i) pursuant to Company Material Contracts existing as of, and true, correct and complete copies of which have been made available to Parent prior to, the date of this Agreement and set forth in Section 5.01(d)(i) of the Company Disclosure Letter, (ii) pursuant to Incidental Contracts, or (iii) for de minimis dispositions or abandonments of immaterial tangible assets not currently used in the Company’s or Company’s Subsidiaries business, in the ordinary course of business and consistent with past practice;
(e) declare, set aside, make or pay any dividend or other distribution with respect to any shares of its capital stock or other equity interests, whether payable in cash, stock, property or a combination thereof;
(f) other than (i) in connection with the exercise of any outstanding Company Options or offers of purchase rights under the Company Stock Purchase Plan permitted by the terms of such Company Options or the Company Stock Purchase Plan, as applicable, or the payment of related withholding Taxes, by net exercise or by tendering of shares or (ii) Tax withholdings on the vesting or payment of RSU Awards or the vesting of Restricted Stock Awards, reclassify, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its equity securities or any options, warrants, securities of the Company or other rights exercisable for or convertible into any such equity securities;
(g) (i) make any acquisition or disposition, or make any offer or agreement to acquire or dispose by means of a merger, consolidation, recapitalization, purchase, sale or otherwise, in one transaction or any series of related transactions, of any business, assets or securities or any sale, lease, encumbrance or other disposition of assets or securities of the Company or any of its Subsidiaries or any person or (ii) adopt, publicly propose or enter into a plan of complete or partial liquidation, dissolution, recapitalization or restructuring, or file or consent to the filing of a petition in bankruptcy under any provisions of applicable Law, except for in the ordinary course of business and consistent with past practice;
(h) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations (excluding existing obligations as of the date hereof) of any other person;
(i) incur, create, assume or otherwise become liable or responsible for any Indebtedness or issue any debt securities, or assume or guarantee the obligations of any person (other than a wholly owned Company Subsidiary) indebtedness for borrowed money;
(j) , guarantee any such indebtedness or make any loans, advances or capital contributions to, or other investments in, any other personPerson, other than (i) loans solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries, (ii) advances for travel except pursuant to existing lines of credit and other out-of-pocket expenses to officers, directors or employees of the Company or any Company Subsidiary made in the ordinary course consistent with past practice, and (iii) advances to directors and officers required to be made pursuant to any indemnification or advancement obligations in the Company Charter, the Company Bylaws, the governing documents of any Company Subsidiary, or any employment agreement or indemnification agreement to which the Company or any Company Subsidiary is party outstanding debt instruments as of the date of this Agreement (true and accurate copies of which have been made available to Parent prior to the date of this Agreement);
(kviii) except adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization (other than the Merger) or otherwise permit its corporate existence, or any of the rights or franchises or any license, permit or authorization under which the business operates to the extent required by this Agreementbe suspended, applicable Law lapsed or the terms of revoked;
(ix) enter into or adopt any, or amend any existing, severance plan, agreement or arrangement or enter into or amend any Company Benefit Plan, as in effect on the date hereof and set forth on Section 5.01(k) of the Company Disclosure Letter: employment, or any consulting agreement;
(ix) hire any employee at the level of Director additional employees, consultants or higher, except in the ordinary course of business other independent contractors or as otherwise required by applicable Law, or an existing Contract, (ii) increase the compensation or benefits payable or to become payable to its directors, officers or employees (other than if except for the Closing has not yet occurred as hiring of February 28, 2024 merit increases in salaries for new employees with titles below the level of Vice President, not to exceed four percent (4%) in the aggregate of such employees’ salaries on the date hereof in the ordinary course of business consistent with prior years’ annual past practice each of whose compensation review cycles)does not exceed $80,000 per year, and increases in the ordinary course of business consistent with past practice in salaries or promote any non-officer employee to an officer position; (iiiwages of employees of the Company who are not officers of the Company) or grant any rights to severance or termination pay or other termination benefit or terminate any such individual, other than for cause or due to death or disability; (iv) establish, terminate, adopt, enter into or materially amend any CBA or Company Benefit Plans (or any collective bargaining or similar labor agreement, or employee benefit plan or arrangement, that would be a CBA or a Company Benefit Plan (as applicable) if in effect on the date hereof); or (v) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability, time of payment or funding of any compensation or any equity award or other benefit under any Company Benefit Plan with respect to any current or former service provider;
(l) make any change in accounting policies or procedures, other than as required by GAAP, applicable Law or any Governmental Entity with competent jurisdiction;
(m) engage in any transaction withto, or enter into any employment or severance agreement with, any director or officer of the Company, or establish, adopt, enter into, or, except as may be required to comply with Applicable Law, amend in any material respect or take action to enhance in any material respect or accelerate any rights or benefits under, any labor, collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or understanding with any affiliate of the Company or other person covered by Item 404 of Regulation S-K promulgated under the Exchange Actemployee;
(ixi) knowingly violate or knowingly fail to perform any obligation or duty imposed upon it by any applicable material federal, state or local law, rule, regulation, guideline or ordinance;
(xii) make any change to accounting policies or procedures (other than actions required to be taken by generally accepted accounting principles);
(xiii) prepare or file any material Tax Return materially inconsistent with its past practice in preparing or filing similar Tax Returns in prior periods or, on any such Tax Return, take any position position, make any election, or adopt any method on any such Tax Return that is materially inconsistent with positions taken taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods, ;
(iixiv) make, fail to file in a timely manner any Tax Returns (except as to filings for which a proper extension has been obtained) that become due or fail to pay any Taxes that become due;
(xv) make or rescind any express or deemed election relating to Taxes or change any of its methods of reporting income or revoke deductions for Tax purposes;
(xvi) commence any litigation or proceeding with respect to any material Tax election, liability or settle or compromise any material Tax liability or commence any other litigation or proceedings or settle or compromise any other material claims or litigation;
(iiixvii) enter into any Tax allocation, indemnity or sharing agreement (other than any such agreement entered into except for sales of inventory in the ordinary course of business, business and the primary purpose hiring of which is unrelated to Taxes or any agreement solely among any employees in the ordinary course of the Company or the Company Subsidiariesbusiness as permitted in subsection (x), (iv) change enter into, renew, terminate or amend any annual Tax accounting period, (v) file Material Contract; or purchase or lease any amendment to a material Tax Return, (vi) enter into any “closing agreement” with any taxing authority regarding a material amount of Tax, (vii) consent to any material Tax claim or assessment or surrender a right to a material refund of Taxes, (viii) adopt or change any method of Tax accounting, or (ix) consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessmentreal property;
(oxviii) make pay, discharge or authorize satisfy any capital expenditure, or incur any obligationsmaterial claims, liabilities or Indebtedness in respect thereofobligations (absolute, except for those in an amount less than $75,000 contemplated by the capital expenditure budget for the relevant fiscal year at accrued, asserted or after the time contemplated by such budgetunasserted, which capital expenditure budget has been made available to Parent prior to the date of this Agreement;
(p) change in any material respect the policies contingent or practices regarding accounts receivable or accounts payable or cash management or fail to manage working capital in accordance with past practicesotherwise), except as required by GAAP or applicable Law;
(q) settle any suit, action, claim, proceeding or investigation other than a settlement solely for monetary damages (net of insurance proceeds received) not in excess of $25,000 individually the payment, discharge or $50,000 in the aggregate;
(r) except satisfaction, in the ordinary course of business consistent with past practice or in connection with any transaction to the extent specifically permitted by any other subclause of this Section 5.01, (i) enter into any Contract that would, if entered into prior to the date hereof, be a Company Material Contract or a Real Property Lease, (ii) materially modify, materially amend, let lapse or terminate (other than expirations in accordance with its their terms) any Company Material Contract or Real Property Lease or waive, release or assign any material rights or material claims or make any material payment, directly or indirectly, of any liability liabilities reflected or reserved against in, or contemplated by, the most recent financial statements (or the notes thereto) of the Company included in the Financial Statements or the Company Subsidiaries before the same comes due in accordance with its terms, thereunder, (iii) sublease or license any portion of the real property leased under any Real Property Lease, or (iv) acquire a fee interest in any real property;
(s) create any Subsidiary of the Company or any of its Subsidiaries;
(t) enter into any new line of business, or form or commence the operations of any joint venture;
(u) amend in a manner that adversely impacts in any material respect the ability to conduct its business, or terminate or allow to lapse any material Permits of the Company or its Subsidiaries;
(v) except incurred in the ordinary course of business consistent with past practice practice;
(xix) create or pursuant to a Contract form any Subsidiary or make any other investment in another Person (other than short term investments for the purpose of cash management only);
(xx) modify the standard warranty terms for products sold by the Company or amend or modify any product warranties in effect as of the date hereof, exclusively license hereof in any manner that is adverse to the Company;
(xxi) make or sublicense, sell, transfer, dispose of, abandon, cancel, knowingly allow to lapse, authorize any new capital expenditure or fail to renew, maintain, diligently pursue applications for or defend any Intellectual Property Rights expenditures that individually is in excess of the Company or any Company Subsidiary that are individually $80,000 or in the aggregate material are in excess of $160,000;
(xxii) allow any of the Company’s Intellectual Property rights relating to the Company’s existing products or products currently under development to be disclosed, other than under appropriate non-disclosure agreements, abandoned, or otherwise become unavailable to the Company on the same terms and conditions as such rights were available to the Company Subsidiariesas of the date of this Agreement;
(xxiii) (A) enter into any exclusive license, distribution, marketing or sales agreements; (B) enter into any commitment to any person to (1) develop software without charge, (2) incorporate any software into any of the Company’s products other than pursuant to valid license agreements executed in the ordinary course of business, or (3) enter into any license, distributorship, or sales agreement that by its terms would purport to relate to any of the products of Buyer or its affiliates; (C) sell, transfer or otherwise dispose of any Intellectual Property other than sales of its products and other non-exclusive licenses that are in the ordinary course of business and consistent with past practices, or (D) grant “most favored nation” pricing to any Person;
(xxiv) allow any insurance policy relating to the Company’s business to be amended or terminated without replacing such policy without a policy providing at least equal coverage, insuring comparable risks and issued by an insurance company financially comparable to the prior insurance company;
(xxv) enter into or amend any contract, agreement, commitment or arrangement with any Affiliated Person;
(xxvi) fail to make in a timely manner any filings with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder;
(xxvii) knowingly take any action that would result in a failure to maintain trading of the Company Common Stock on the Nasdaq National Market; or
(wxxviii) authorize, resolve propose (other than in a request to Buyer for consent pursuant to this Section 4.1(a)) or offer, agree or commit, in writing or otherwise, announce an intention to do any of the foregoing. Nothing contained in this Agreement shall give Parent , or Merger Subenter into any contract, directly agreement, commitment or indirectly, the right arrangement to control or direct the operations do any of the foregoing.
(b) The Company shall:
(i) maintain its assets and properties in the ordinary course of business in the manner historically maintained, reasonable wear and tear, damage by fire and other casualty excepted;
(ii) promptly repair, restore or replace all assets and properties in the ordinary course of business consistent with past practice;
(iii) upon any damage, destruction or loss to any of its Subsidiaries prior assets or properties, apply any and all insurance proceeds, if any, received with respect thereto to the Effective Time. Prior prompt repair, replacement and restoration thereof;
(iv) comply with all Applicable Laws;
(v) take all actions necessary to be in compliance with all Material Contracts and to maintain the Effective Timeeffectiveness of all Company Permits;
(vi) notify Buyer in writing of the commencement of any action, suit, claim, investigation or other like proceeding by or against the Company shall exerciseCompany; and
(vii) pay accounts payable and pursue collection of its accounts receivable in the ordinary course of business, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective business operationspast practices.
Appears in 2 contracts
Samples: Merger Agreement (Endocardial Solutions Inc), Agreement and Plan of Merger (Endocardial Solutions Inc)
Conduct of Business by the Company Pending the Merger. The Except as otherwise contemplated by this Agreement or disclosed in Section 6.01 of the Company agrees that between Disclosure Schedule, after the date of this Agreement hereof and until the earlier of the Merger Effective Time and the valid or earlier termination of this Agreement in accordance with Article VII(the “Pre-Closing Period”), except (w) as specifically set forth in Section 5.01 of the Company Disclosure Letter as an exception to the corresponding restriction of this Section 5.01, (x) as expressly required or expressly provided for by this Agreement, (y) as required by applicable Law or (z) as consented to unless Yuma shall otherwise agree in writing by Parent (which consent agreement shall not be unreasonably withheld, conditioned or delayed, or conditioned), the Company willshall, and will shall cause each Company Subsidiary its Subsidiaries to, use commercially reasonable efforts to :
(a) conduct its business in the ordinary course of business consistent with past practice;
(b) not make capital expenditures or enter into any binding commitment or contract to make capital expenditures, except (i) capital expenditures which the Company is currently committed to make, (ii) capital expenditures in the ordinary course of the Company’s business, (iii) capital expenditures for repairs and other capital expenditures necessary in light of circumstances not anticipated as of the date of this Agreement which are necessary to avoid significant disruption to the Company’s business or operations consistent with past practice, and (iv) repairs and maintenance in all material respects the ordinary course of business; provided, however, that the DPAC Companies shall not make any capital expenditure or series of related capital expenditures in an amount greater than $1,000,000 without the prior written consent of Yuma, not to be unreasonably withheld, conditioned or delayed;
(c) not (i) amend or propose to amend its Governing Documents, except as agreed to by the parties hereto, (ii) split, combine, subdivide or reclassify any shares of outstanding Capital Stock, (iii) declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise, or make any other distribution in respect of any shares of its Capital Stock, except for dividends by a direct or wholly-owned Subsidiary of the Company to its parent, or a quarterly in-kind dividend on the Company Preferred Stock, or (iv) repurchase, redeem or otherwise acquire, or modify or amend, any shares of its Capital Stock or any other securities or any rights, warrants or options to acquire any such shares or other securities except, with respect to each of the foregoing, (A) the issuance of securities upon the exercise of outstanding options, warrants, rights, or upon the conversion of outstanding securities, (B) the declaration, set aside or payment of dividends (including by way of issuance of securities) pursuant to terms of the Company Preferred Stock existing on the date hereof, and (C) any obligation of the Company with respect to Company Plans or the awards or securities issued thereunder in connection with this Agreement;
(d) not, nor shall it permit any of its Subsidiaries to (i) issue, sell, pledge, grant or dispose of, or agree to issue, sell, pledge, grant or dispose of, any equity awards under any Company incentive plans, or any additional shares of, or any options, warrants or rights of any kind to acquire any shares of, its Capital Stock of any class or any debt or equity securities convertible into or exchangeable for its Capital Stock, or (ii) incur or assume any indebtedness for borrowed money or guarantee any indebtedness or issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries; except (A) that the Company may issue shares pursuant to awards outstanding as of the date hereof under Company Plans or pursuant to bonus awards described in Section 6.21(d), (B) upon conversion of Company Preferred Stock outstanding on the date hereof, (C) the DPAC Companies may from time to time, borrow, repay and reborrow under its revolving credit facility, and the DPAC Companies may pledge their properties, issue debt securities and amend, modify, increase, extend, replace or refinance such bank credit facility;
(e) not, nor shall it permit any of its Subsidiaries to (i) redeem, purchase, acquire or offer to purchase or acquire any shares of its Capital Stock or any options, warrants or rights to acquire any of its Capital Stock or any security convertible into or exchangeable for its Capital Stock, (ii) make any acquisition of any Capital Stock, assets or businesses of any other Person other than expenditures for current assets in the ordinary course of business consistent with past practice and expenditures for fixed or capital assets in the ordinary course of business consistent with past practice, and the Company will use, and will cause each Company Subsidiary to use, commercially reasonable efforts to (1) preserve intact its and their business organization, (2) preserve the present relationships and goodwill with those persons having significant business relationships with the Company and the Company Subsidiaries and (3) comply with and maintain all material Permits required to conduct its and their businesses and to own, lease and operate its and their properties and assets. Without limiting the foregoing, subject to the exceptions described in clauses (w) through (z) of the foregoing sentence, the Company shall not, and shall not permit any Company Subsidiary to:
(a) amend the Company Charter, Company Bylaws or certificate of incorporation or bylaws (or other similar governing documents) of any Company Subsidiary;
(b) issue, sell, grant options, restricted stock units, restricted stock or rights to purchase, pledge, or authorize or propose the issuance of, sale of, or grant of options, restricted stock units, restricted stock or rights to purchase or pledge, any Company Securities or Subsidiary Securities, other than (i) the issuance of Shares upon the exercise of Company Options or the vesting and settlement of RSU Awards, in each case outstanding as of the date hereof in accordance with their terms, or the issuance of Shares pursuant to the terms of the Company Stock Purchase Plan and (ii) the issuance of securities by a wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary;
(c) adjust, split, combine, recapitalize, subdivide or reclassify or otherwise amend the terms of any shares of its capital stock or other equity interests;
(diii) sell, pledge, dispose of, transfer, lease, mortgage, license, sublicense, abandon, allow to lapse, assign of or encumber any Company Subsidiary assets or any businesses that are material property, securities, or material assets of to the Company or any Company Subsidiaryits Subsidiaries, except (i) pursuant to Company Material Contracts existing as ofexcept, and true, correct and complete copies of which have been made available to Parent prior to, the date of this Agreement and set forth in Section 5.01(d)(i) of the Company Disclosure Letter, (ii) pursuant to Incidental Contracts, or (iii) for de minimis dispositions or abandonments of immaterial tangible assets not currently used in the Company’s or Company’s Subsidiaries business, in the ordinary course of business and consistent with past practice;
(e) declare, set aside, make or pay any dividend or other distribution with respect to any shares of its capital stock or other equity interests, whether payable in cash, stock, property or a combination thereof;
(f) other than (i) in connection with the exercise of any outstanding Company Options or offers of purchase rights under the Company Stock Purchase Plan permitted by the terms of such Company Options or the Company Stock Purchase Plan, as applicable, or the payment of related withholding Taxes, by net exercise or by tendering of shares or (ii) Tax withholdings on the vesting or payment of RSU Awards or the vesting of Restricted Stock Awards, reclassify, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its equity securities or any options, warrants, securities each of the Company or other rights exercisable for or convertible into any such equity securities;
(g) (i) make any acquisition or disposition, or make any offer or agreement to acquire or dispose by means of a merger, consolidation, recapitalization, purchase, sale or otherwise, in one transaction or any series of related transactions, of any business, assets or securities or any sale, lease, encumbrance or other disposition of assets or securities of the Company or any of its Subsidiaries or any person or (ii) adopt, publicly propose or enter into a plan of complete or partial liquidation, dissolution, recapitalization or restructuring, or file or consent to the filing of a petition in bankruptcy under any provisions of applicable Law, except for in the ordinary course of business and consistent with past practice;
(h) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations (excluding existing obligations as of the date hereof) of any other person;
(i) incur, create, assume or otherwise become liable or responsible for any Indebtedness or issue any debt securities, or assume or guarantee the obligations of any person (other than a wholly owned Company Subsidiary) for borrowed money;
(j) make any loans, advances or capital contributions to, or investments in, any other person, other than (i) loans solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiariesforegoing, (iiA) advances for travel sales, leases, rentals and other out-of-pocket expenses to officers, directors or employees of the Company or any Company Subsidiary made in the ordinary course consistent with past practice, and (iii) advances to directors and officers required to be made pursuant to any indemnification or advancement obligations in the Company Charter, the Company Bylaws, the governing documents of any Company Subsidiary, or any employment agreement or indemnification agreement to which the Company or any Company Subsidiary is party as of the date of this Agreement (true and accurate copies of which have been made available to Parent prior to the date of this Agreement);
(k) except to the extent required by this Agreement, applicable Law or the terms of any Company Benefit Plan, as in effect on the date hereof and set forth on Section 5.01(k) of the Company Disclosure Letter: (i) hire any employee at the level of Director or higher, except in the ordinary course of business or as otherwise required by applicable Law, or an existing Contract, (ii) increase the compensation or benefits payable or to become payable to its directors, officers or employees (other than if the Closing has not yet occurred as of February 28, 2024 merit increases in salaries for employees with titles below the level of Vice President, not to exceed four percent (4%) in the aggregate of such employees’ salaries on the date hereof licenses in the ordinary course of business consistent with prior years’ annual compensation review cycles)past practice, (B) pursuant to contracts that are in force at the date of this Agreement and are disclosed in Section 5.10 of the Company Disclosure Schedule, and (C) dispositions of obsolete or worthless assets, or promote any non-officer employee to an officer position; (iii) grant any rights to severance or termination pay or other termination benefit or terminate any such individual, other than for cause or due to death or disability; (iv) establish, terminate, adopt, enter into or materially amend any CBA or Company Benefit Plans (or any collective bargaining or similar labor agreement, or employee benefit plan or arrangement, that would be a CBA or a Company Benefit Plan (as applicable) if in effect on the date hereof); or (v) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability, time of payment or funding of any compensation or any equity award or other benefit under any Company Benefit Plan contract with respect to any current or former service providerof the foregoing items (i) through (iii);
(lf) make any change in accounting policies or proceduresuse commercially reasonable efforts to preserve intact its business organization and goodwill, keep available the services of its present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with it, other than as required by GAAP, applicable Law or any Governmental Entity with competent jurisdiction;
(m) engage in any transaction with, or enter into any agreement, arrangement or understanding with any affiliate of the Company or other person covered by Item 404 of Regulation S-K promulgated under the Exchange Act;
(i) prepare or file any material Tax Return materially inconsistent with past practice or take any position or adopt any method on any such Tax Return that is materially inconsistent with positions taken or methods used in preparing or filing similar Tax Returns in prior periods, (ii) make, change or revoke any material Tax election, (iii) enter into any Tax allocation, indemnity or sharing agreement (other than any such agreement entered into in the ordinary course of business, the primary purpose of which is unrelated to Taxes or any agreement solely among any of the Company or the Company Subsidiaries), (iv) change any annual Tax accounting period, (v) file any amendment to a material Tax Return, (vi) enter into any “closing agreement” with any taxing authority regarding a material amount of Tax, (vii) consent to any material Tax claim or assessment or surrender a right to a material refund of Taxes, (viii) adopt or change any method of Tax accounting, or (ix) consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment;
(o) make or authorize any capital expenditure, or incur any obligations, liabilities or Indebtedness in respect thereof, except for those in an amount less than $75,000 contemplated expressly permitted by the capital expenditure budget for the relevant fiscal year at or after the time contemplated by such budget, which capital expenditure budget has been made available to Parent prior to the date terms of this Agreement;
(pg) change in any material respect the policies not adopt a plan or practices regarding accounts receivable agreement of complete or accounts payable partial liquidation or cash management or fail to manage working capital in accordance with past practices, except as required by GAAP or applicable Lawdissolution;
(qh) settle not pay, discharge or satisfy any suitmaterial claims, actionmaterial liabilities or material obligations (absolute, claimaccrued, proceeding asserted or investigation unasserted, contingent or otherwise), other than a settlement solely for monetary damages the payment, discharge or satisfaction (net i) of insurance proceeds received) not in excess of $25,000 individually any such material claims, material liabilities or $50,000 in the aggregate;
(r) except material obligations in the ordinary course of business consistent with past practice or in connection with any transaction to (ii) of material claims, material liabilities or material obligations reflected or reserved against in, or contemplated by, the extent specifically permitted by any other subclause of this Section 5.01, Company Financial Statements (or the notes thereto);
(i) not enter into any Contract contract that wouldrestrains, if entered into prior to limits or impedes the date hereof, be a Company Material Contract or a Real Property Lease, (ii) materially modify, materially amend, let lapse or terminate (other than expirations in accordance with its terms) any Company Material Contract or Real Property Lease or waive, release or assign any material rights or material claims or make any material payment, directly or indirectly, of any liability ability of the Company or the Surviving Company Subsidiaries before the same comes due in accordance to compete with its terms, thereunder, (iii) sublease or license conduct any portion of the real property leased under any Real Property Lease, business or (iv) acquire a fee interest in any real property;
(s) create any Subsidiary of the Company or any of its Subsidiaries;
(t) enter into any new line of business, or form or commence including geographic limitations on the operations activities of any joint venturethe Company;
(uj) amend not enter into, amend, modify or renew any employment, consulting, severance or similar contract with, pay any bonus or grant any material increase in a manner that adversely impacts salary, wage or other compensation or any increase in any material respect the ability to conduct employee benefit to, any of its businessdirectors, officers or employees, except in each such case (i) as may be required by applicable Law, or terminate or allow (ii) to lapse any material Permits satisfy obligations existing as of the Company or its Subsidiariesdate hereof pursuant to the terms of contracts that are in effect on the date hereof;
(vk) not enter into, establish, adopt, amend or modify any pension, retirement, stock purchase, savings, profit sharing, deferred compensation, consulting, bonus, group insurance or other employee benefit, incentive or welfare plan, agreement, program or arrangement, in respect of any of its directors, officers or employees, except, in each such case (i) as may be required by applicable Law or pursuant to the terms of this Agreement, or (ii) to satisfy obligations existing as of the date hereof pursuant to the terms of contracts that are in effect on the date hereof;
(l) except to the extent required under existing employee and director benefit plans, agreements or arrangements as in effect on the date hereof or as expressly provided by this Agreement, not accelerate the payment, right to payment or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits;
(m) not agree to the settlement of any claim, litigation, investigation or other action that is material to it;
(n) except in the ordinary course of business consistent with past practice the Company’s business, not materially modify or pursuant to amend, or terminate any Company Material Contract, or waive, relinquish, release or terminate any material right or material claim, or enter into any contract that would have been a Company Material Contract if it had been in effect as existence at the time of the date hereof, exclusively license or sublicense, sell, transfer, dispose of, abandon, cancel, knowingly allow to lapse, or fail to renew, maintain, diligently pursue applications for or defend any Intellectual Property Rights execution of the Company or any Company Subsidiary that are individually or in the aggregate material to the Company and the Company Subsidiariesthis Agreement; orand
(wo) authorize, resolve or offer, not agree or commit, in writing or otherwise, to do take any of the foregoing. Nothing contained in this Agreement shall give Parent or Merger Subforegoing actions, directly or indirectly, the right to control or direct the operations of the Company or its Subsidiaries prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms other than Section 6.01(a) and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective business operations(f).
Appears in 2 contracts
Samples: Merger Agreement (Yuma Energy, Inc.), Agreement and Plan of Merger and Reorganization (Yuma Energy, Inc.)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that that, between the date of this Agreement and the earlier of the Merger Effective Time and the valid termination of date, if any, on which this Agreement is terminated in accordance with Article VIISection 8.1, except (wi) as specifically set forth in Section 5.01 of the Company Disclosure Letter as an exception to the corresponding restriction of this Section 5.01may be required by Applicable Law, (xii) as expressly required or expressly provided for by this Agreement, (y) as required by applicable Law or (z) as may be consented to in writing by the Parent (which consent shall not be unreasonably withheld, delayed, or conditioned), or (iii) as may be expressly contemplated or required pursuant to this Agreement, (A) the Company willshall, and will shall cause each its Subsidiaries to, conduct the business of the Company Subsidiary toand its Subsidiaries in the ordinary course of business in all material respects and, to the extent consistent therewith, use commercially reasonable efforts to conduct preserve its material assets and business organization and operations maintain its existing relationships with material customers, suppliers, distributors, regulators, and business partners, and (B) the Company shall not, and shall cause its Subsidiaries not to, directly or indirectly:
(a) amend (i) its Organizational Documents or (ii) such equivalent organizational or governing documents of any of its Subsidiaries, other than amendments to such documents of any of its Subsidiaries that would not be adverse in any material respect to the Parent or the Merger Sub and would not reasonably be expected to prevent, impede, or delay the consummation of any of the Merger or the other transactions contemplated by this Agreement;
(b) split, reverse split, combine, subdivide, reclassify, redeem, repurchase, or otherwise acquire the Company’s capital stock or other equity or voting securities, or any options, warrants, convertible securities, or other rights of any kind to acquire any shares of the Company’s capital stock or other equity or voting securities; provided that the Company may repurchase or otherwise acquire shares in connection with (i) the applicable Company equity plan in effect as of the date of this Agreement, (ii) the acceptance of shares of common stock of the Company as payment for the per share exercise price of the equity awards of the Company or as payment for Taxes incurred in connection with the exercise, vesting, and/or settlement of equity awards of the Company, in each case in accordance with the applicable Company equity plan, or (iii) the forfeiture of equity awards of the Company;
(c) issue, sell, pledge, dispose of, encumber, grant, or authorize the same with respect to, any shares of the Company’s or its Subsidiaries’ capital stock, or other equity or voting securities, or any options, warrants, convertible securities, or other rights of any kind to acquire any shares of the Company’s or any of its Subsidiaries’ capital stock or other equity or voting securities; provided that the Company may take any of the foregoing actions in connection with any Company option issued or granted and the Company may issue shares of the Company’s capital stock upon the settlement of any equity award of the Company outstanding as of the date of this Agreement in accordance with its terms as in effect on the date of this Agreement or pledge, encumber, mortgage, or otherwise subject to any Lien (other than a Permitted Lien), any other assets of the Company;
(d) acquire (including by merger, consolidation, or acquisition of stock or assets or otherwise) any corporation, partnership, limited liability company, joint venture, other business organization, any division or segment thereof, or any assets of any other Person comprising a business or division or segment thereof;
(i) terminate, materially amend or modify, renew (other than automatic renewals), or waive any material rights under, any material contract of the Company or material Company Real Property Lease or (ii) enter into any contract that would have been a material contract of the Company had it been entered into prior to the date of this Agreement, in each case other than (A) in the ordinary course of business or (B) to take any of the actions permitted by this Section 6.1 in the ordinary course of business on terms that do not impose any additional material obligations;
(f) adopt a plan of complete or partial liquidation, dissolution, recapitalization, or other reorganization of the Company;
(g) cancel, forfeit, fail to renew, fail to continue to prosecute, abandon, or allow to lapse (except with respect to patents expiring in accordance with their terms) any material Company Owned Intellectual Property Rights;
(h) (i) settle or compromise any material Tax claim, audit, or assessment for an amount materially in excess of the amount reserved or accrued on the Company Balance Sheet (or most recent consolidated balance sheet included in the Company SEC Documents), (ii) make or change any material Tax election, change any annual Tax accounting period, or adopt or change any method of Tax accounting, (iii) amend any material Tax Returns or file claims for material Tax refunds, or (iv) enter into any material closing agreement, surrender in writing any right to claim a material Tax refund, offset or other reduction in Tax liability or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or its Subsidiaries;
(i) terminate, cancel, or let lapse, in each case voluntarily, a material existing insurance policy covering the Company and its Subsidiaries and their respective properties, assets, and businesses, unless substantially concurrently with such termination, cancellation, or lapse, replacement policies underwritten by reputable insurance companies providing coverage at least substantially equal in all material respects to the coverage under the terminated, canceled, or lapsed policies, as applicable, are entered into;
(j) discontinue any material line of business;
(k) except as required by Applicable Law or by any equity incentive plan of the Company or agreement in effect as of the date of this Agreement (i) increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors, officers, or employees, other than increases in compensation made to non-officer employees in the ordinary course of business consistent with past practice, and the Company will use, and will cause each Company Subsidiary to use, commercially reasonable efforts to (1) preserve intact its and their business organization, (2) preserve the present relationships and goodwill with those persons having significant business relationships with the Company and the Company Subsidiaries and (3) comply with and maintain all material Permits required to conduct its and their businesses and to own, lease and operate its and their properties and assets. Without limiting the foregoing, subject to the exceptions described in clauses (w) through (z) of the foregoing sentence, the Company shall not, and shall not permit any Company Subsidiary to:
(a) amend the Company Charter, Company Bylaws or certificate of incorporation or bylaws (or other similar governing documents) of any Company Subsidiary;
(b) issue, sell, grant options, restricted stock units, restricted stock or rights to purchase, pledge, or authorize or propose the issuance of, sale of, or grant of options, restricted stock units, restricted stock or rights to purchase or pledge, any Company Securities or Subsidiary Securities, other than (i) the issuance of Shares upon the exercise of Company Options or the vesting and settlement of RSU Awards, in each case outstanding as of the date hereof in accordance with their terms, or the issuance of Shares pursuant to the terms of the Company Stock Purchase Plan and (ii) promote any officers or employees, except in connection with the issuance Company’s annual or quarterly compensation review cycle or as the result of securities by a wholly owned Company Subsidiary to the Company termination or another wholly owned Company Subsidiary;
(c) adjust, split, combine, recapitalize, subdivide or reclassify or otherwise amend the terms resignation of any shares of its capital stock officer or other equity interests;
(d) sell, pledge, dispose of, transfer, lease, mortgage, license, sublicense, abandon, allow to lapse, assign or encumber any Company Subsidiary or any material property, securitiesemployee, or material assets (iii) establish, adopt, enter into, amend, terminate, exercise any discretion under, or take any action to accelerate rights under any employee plans of the Company or any Company Subsidiaryplan, except (i) pursuant to Company Material Contracts existing as ofagreement, and trueprogram, correct and complete copies of which have been made available to Parent prior topolicy, the date of this Agreement and set forth in Section 5.01(d)(i) trust, fund, or other arrangement that would be an employee plan of the Company Disclosure Letter, (ii) pursuant to Incidental Contracts, or (iii) for de minimis dispositions or abandonments of immaterial tangible assets not currently used if it were in the Company’s or Company’s Subsidiaries business, in the ordinary course of business and consistent with past practice;
(e) declare, set aside, make or pay any dividend or other distribution with respect to any shares of its capital stock or other equity interests, whether payable in cash, stock, property or a combination thereof;
(f) other than (i) in connection with the exercise of any outstanding Company Options or offers of purchase rights under the Company Stock Purchase Plan permitted by the terms of such Company Options or the Company Stock Purchase Plan, as applicable, or the payment of related withholding Taxes, by net exercise or by tendering of shares or (ii) Tax withholdings on the vesting or payment of RSU Awards or the vesting of Restricted Stock Awards, reclassify, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its equity securities or any options, warrants, securities of the Company or other rights exercisable for or convertible into any such equity securities;
(g) (i) make any acquisition or disposition, or make any offer or agreement to acquire or dispose by means of a merger, consolidation, recapitalization, purchase, sale or otherwise, in one transaction or any series of related transactions, of any business, assets or securities or any sale, lease, encumbrance or other disposition of assets or securities of the Company or any of its Subsidiaries or any person or (ii) adopt, publicly propose or enter into a plan of complete or partial liquidation, dissolution, recapitalization or restructuring, or file or consent to the filing of a petition in bankruptcy under any provisions of applicable Law, except for in the ordinary course of business and consistent with past practice;
(h) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations (excluding existing obligations as of the date hereof) of any other person;
(i) incur, create, assume or otherwise become liable or responsible for any Indebtedness or issue any debt securities, or assume or guarantee the obligations of any person (other than a wholly owned Company Subsidiary) for borrowed money;
(j) make any loans, advances or capital contributions to, or investments in, any other person, other than (i) loans solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries, (ii) advances for travel and other out-of-pocket expenses to officers, directors or employees of the Company or any Company Subsidiary made in the ordinary course consistent with past practice, and (iii) advances to directors and officers required to be made pursuant to any indemnification or advancement obligations in the Company Charter, the Company Bylaws, the governing documents of any Company Subsidiary, or any employment agreement or indemnification agreement to which the Company or any Company Subsidiary is party existence as of the date of this Agreement (true and accurate copies Agreement, or make any contribution to any employee plans of which have been made available to Parent prior to the date of this Agreement);
(k) except to the extent Company, other than contributions required by this AgreementLaw, applicable Law or the terms of any such employee plans of the Company Benefit Plan, as in effect on the date hereof and set forth on Section 5.01(k) of the Company Disclosure Letter: (i) hire any employee at the level of Director or higher, except in the ordinary course of business or as otherwise required by applicable Lawhereof, or an existing Contract, (ii) increase the compensation or benefits payable or to become payable to its directors, officers or employees (other than if the Closing has not yet occurred as of February 28, 2024 merit increases in salaries for employees with titles below the level of Vice President, not to exceed four percent (4%) in the aggregate of such employees’ salaries on the date hereof in the ordinary course of business consistent with prior years’ annual compensation review cycles), or promote any non-officer employee to an officer position; (iii) grant any rights to severance or termination pay or other termination benefit or terminate any such individual, other than for cause or due to death or disability; (iv) establish, terminate, adopt, enter into or materially amend any CBA or Company Benefit Plans (or any collective bargaining or similar labor agreement, or employee benefit plan or arrangement, that would be a CBA or a Company Benefit Plan (as applicable) if in effect on the date hereof); or (v) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability, time of payment or funding of any compensation or any equity award or other benefit under any Company Benefit Plan with respect to any current or former service provider;
(l) make any change in accounting policies or procedures, other than as required by GAAP, applicable Law or any Governmental Entity with competent jurisdiction;
(m) engage in any transaction with, or enter into any agreement, arrangement or understanding with any affiliate of the Company or other person covered by Item 404 of Regulation S-K promulgated under the Exchange Act;
(i) prepare or file any material Tax Return materially inconsistent with past practice or take any position or adopt any method on any such Tax Return that is materially inconsistent with positions taken or methods used in preparing or filing similar Tax Returns in prior periods, (ii) make, change or revoke any material Tax election, (iii) enter into any Tax allocation, indemnity or sharing agreement (other than any such agreement entered into in the ordinary course of business, the primary purpose of which is unrelated to Taxes or any agreement solely among any of the Company or the Company Subsidiaries), (iv) change any annual Tax accounting period, (v) file any amendment to a material Tax Return, (vi) enter into any “closing agreement” with any taxing authority regarding a material amount of Tax, (vii) consent to any material Tax claim or assessment or surrender a right to a material refund of Taxes, (viii) adopt or change any method of Tax accounting, or (ix) consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment;
(o) make or authorize any capital expenditure, or incur any obligations, liabilities or Indebtedness in respect thereof, except for those in an amount less than $75,000 contemplated by the capital expenditure budget for the relevant fiscal year at or after the time contemplated by such budget, which capital expenditure budget has been are made available to Parent prior to the date of this Agreement;
(p) change in any material respect the policies or practices regarding accounts receivable or accounts payable or cash management or fail to manage working capital in accordance with past practices, except as required by GAAP or applicable Law;
(q) settle any suit, action, claim, proceeding or investigation other than a settlement solely for monetary damages (net of insurance proceeds received) not in excess of $25,000 individually or $50,000 in the aggregate;
(r) except in the ordinary course of business consistent with past practice or in connection with any transaction to the extent specifically permitted by any other subclause of this Section 5.01, (i) enter into any Contract that would, if entered into prior to the date hereof, be a Company Material Contract or a Real Property Lease, (ii) materially modify, materially amend, let lapse or terminate (other than expirations in accordance with its terms) any Company Material Contract or Real Property Lease or waive, release or assign any material rights or material claims or make any material payment, directly or indirectly, of any liability of the Company or the Company Subsidiaries before the same comes due in accordance with its terms, thereunder, (iii) sublease or license any portion of the real property leased under any Real Property Lease, or (iv) acquire a fee interest in any real propertypractice;
(sl) create repurchase, prepay, or incur any Subsidiary indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls, or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of any other Person (other than any wholly owned Subsidiary of it or enter into any arrangement having the economic effect of any of the foregoing, other than in connection with the financing of ordinary course trade payables consistent with past practice;
(tm) enter into any new line of businessinstitute, settle, or form or commence compromise any Legal Action involving the operations payment of any joint venture;
(u) amend in a manner that adversely impacts in any material respect the ability to conduct its business, or terminate or allow to lapse any material Permits of the Company or its Subsidiaries;
(v) except in the ordinary course of business consistent with past practice or pursuant to a Contract in effect as of the date hereof, exclusively license or sublicense, sell, transfer, dispose of, abandon, cancel, knowingly allow to lapse, or fail to renew, maintain, diligently pursue applications for or defend any Intellectual Property Rights of monetary damages by the Company or any Company Subsidiary that are individually or of its Subsidiaries of any amount exceeding Five Hundred Thousand Dollars ($500,000) in the aggregate aggregate, other than (i) any Legal Action brought against the Parent or the Merger Sub arising out of a breach or alleged breach of this Agreement by the Parent or the Merger Sub, and (ii) the settlement of claims, liabilities, or obligations reserved against on the Company Balance Sheet; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business;
(n) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or Applicable Law;
(o) take any action to exempt any Person from, or make any acquisition of securities of the Company by any Person not subject to, any state takeover statute or similar statute or regulation that applies to the Company and with respect to a Takeover Proposal or otherwise, including the Company Subsidiariesrestrictions on business combinations with an interested stockholder as set forth in the NRS, except for the Parent, the Merger Sub, or any of their respective Subsidiaries or Affiliates, or the transactions contemplated by this Agreement;
(p) consummate, or enter into any agreement related to, any Variable Rate Transaction; or
(wq) commit to, authorize, resolve or offeradopt any resolutions approving, agree or commitannounce an intention to do, in writing or otherwise, to do any of the foregoing. Nothing contained Notwithstanding the foregoing, nothing in this Agreement shall is intended to give Parent or Merger Subthe Parent, directly or indirectly, the right to control or direct the business or operations of the Company or its Subsidiaries at any time prior to the Merger Effective Time, and the Company and its Subsidiaries shall not be required to violate any Applicable Law. Prior to the Merger Effective Time, the Company and its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its their own business and its Subsidiaries’ respective business operations.
Appears in 2 contracts
Samples: Merger Agreement (Nature's Miracle Holding Inc.), Merger Agreement (Agrify Corp)
Conduct of Business by the Company Pending the Merger. The Company agrees that between (a) From the date of this Agreement and until the earlier of the Effective Time Closing Date and the valid termination of date on which this Agreement is terminated in accordance with Article VIISection 9.01, except except, (wi) as specifically set forth in Section 5.01 6.01 of the Company Disclosure Letter as an exception to the corresponding restriction of this Section 5.01Letter, (xii) as expressly required or expressly provided for contemplated by this Agreementthe Contemplated Transactions, (yiii) for actions required by Applicable Law and (iv) as required by applicable Law or (z) as consented Parent otherwise shall consent to in writing by Parent (which such consent shall not to be unreasonably withheld, delayed, delayed or conditioned), (A) the Company willshall, and will shall cause each Company Subsidiary its Subsidiaries to, use commercially reasonable efforts to conduct its business and operations their businesses in the ordinary course consistent with past practice and preserve intact in all material respects the business organization and assets of their businesses, including by using commercially reasonable efforts to (1) keep available the services of the Company’s and its Subsidiaries’ key employees and (2) preserve the goodwill and current relationships of the Company and its Subsidiaries with customers, suppliers, distributors, licensors, licensees and other Persons with which they have business relations and (B) the Company shall not, and shall cause its Subsidiaries not to:
(i) ( A) issue, sell or dispose of or (B) authorize the issuance, sale or disposition of any shares of any class of capital stock, or other ownership interests, of the Company or any of its Subsidiaries, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including any phantom interest) of the Company or any of its Subsidiaries, other than, as applicable, (1) any such transaction by a directly or indirectly wholly owned Subsidiary of the Company which remains a directly or indirectly wholly owned Subsidiary of the Company after consummation of such transaction and (2) upon the exercise or settlement of, or as otherwise required by, any Company Stock Options, Company RSUs, awards of Company Restricted Stock or Company PSUs granted pursuant to the Company Stock Plans and, in each case, outstanding on the date of this Agreement, in accordance with their terms in effect on the date of this Agreement or thereafter granted in accordance with Section 6.01(a)(vi);
(ii) (A) sell, pledge or dispose of, (B) xxxxx x Xxxx on or permit a Lien to exist on or (C) authorize the sale, pledge or disposition of, or granting or placing of a Lien on, any assets of the businesses of the Company and its Subsidiaries, except (1) dispositions of obsolete or worn-out assets that are no longer used or useful in the operation or conduct of the businesses of the Company or its Subsidiaries, (2) Liens that are Permitted Liens and (3) Liens securing indebtedness that would not be prohibited by Section 6.01(a)(ix);
(iii) amend or restate the articles or certificate of incorporation or bylaws (or similar organizational documents) of the Company or any of its Subsidiaries;
(iv) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock or property, with respect to any of its capital stock except for dividends or distributions by any directly or indirectly wholly owned Subsidiary of the Company;
(A) acquire or dispose of (including by merger, consolidation or acquisition of stock or assets or any other business combination) any corporation, partnership, other business organization or any division thereof or (B) make any loans or advances or capital contribution to, or investment in, any Person other than the Company or a Subsidiary of the Company;
(vi) (A) grant any increase in the base salaries, target bonus opportunities, or other benefits payable by the Company or its Subsidiaries to any of its or their employees, (B) adopt, terminate, accelerate the timing of payments or vesting under, or otherwise amend or supplement, any Company Plans, (C) adopt any collective bargaining agreements or similar labor agreements or arrangements or (D) enter into or amend any employment, consulting, change in control, transaction-related bonus, retention, severance or termination agreement with any Company Employee except, in the case of clauses (A), (B) and (C) above, (1) as required by Applicable Law, (2) as required by any Company Plan in effect on the date hereof or pursuant to the terms of any Company Union Contract, (3) grants of equity or equity-based awards pursuant to the Company’s equity compensation plans as set forth in Section 6.01(a)(vi)(3) of the Company Disclosure Letter, (4) in the ordinary course of business consistent with the past practices of the Company or its Subsidiaries (including in the context of new hires or promotions based on job performance or workplace requirements) or (5) to the extent undertaken in connection with the implementation of a program that affects all similarly situated employees of the Company and/or its Subsidiaries;
(vii) change any method of accounting or accounting practice or policy used by the Company as it relates to the businesses of the Company and its Subsidiaries, other than such changes as are required by GAAP, Applicable Law or a Governmental Authority;
(viii) other than in the ordinary course of business and consistent with past practice or as required by Applicable Law, (A) make any change (or file any such change) in any method of Tax accounting or any annual Tax accounting period, (B) make, change or rescind any Tax election, (C) settle or compromise any Tax Liability or consent to any claim or assessment relating to Taxes, (D) file any amended Tax Return or claim for refund, (E) enter into any closing agreement relating to Taxes or (F) waive or extend the statute of limitations in respect of Taxes, in each case, to the extent that doing so would reasonably be expected to result in an incremental cost to Parent, the Company or any of their respective Subsidiaries;
(ix) incur, guarantee or assume or otherwise become responsible for any indebtedness for borrowed money other than (A) indebtedness incurred under the Company’s and its Subsidiaries’ current credit facilities and the Existing Company Credit Agreement, (B) indebtedness solely between or among the Company and its Subsidiaries, (C) refinancings, replacements, extensions and renewals of existing indebtedness entered into in the ordinary course of business consistent with past practice, and (D) indebtedness incurred in connection with the Company will use, and will cause each Company Subsidiary to use, commercially reasonable efforts to (1) preserve intact its and their business organizationContemplated Transactions, (2E) preserve letters of credit or similar arrangements entered into in the present relationships ordinary course of business consistent with past practice, (F) purchase money indebtedness and goodwill capital leases entered into in the ordinary course of business consistent with those persons having significant business relationships with the Company and the Company Subsidiaries past practice and (3G) comply with and maintain all material Permits required to conduct its and their businesses and to own, lease and operate its and their properties and assets. Without limiting the foregoing, subject to the exceptions described guarantees made by any Company Entity in clauses (w) through (z) respect of the foregoing sentence, the Company shall not, and shall not permit any Company Subsidiary to:
(a) amend the Company Charter, Company Bylaws or certificate of incorporation or bylaws (or other similar governing documents) obligations of any other Company SubsidiaryEntity;
(bx) issue, sell, grant options, restricted stock units, restricted stock commence or rights to purchase, pledge, settle any Proceeding involving the payment of monetary damages by the Company or authorize or propose any of its Subsidiaries of any amount exceeding $100,000 in the issuance of, sale of, or grant of options, restricted stock units, restricted stock or rights to purchase or pledge, any Company Securities or Subsidiary Securitiesaggregate, other than (i) the issuance any Proceeding brought against Parent or Merger Sub arising out of Shares upon the exercise a breach or alleged breach of Company Options this Agreement by Parent or the vesting and settlement of RSU AwardsMerger Sub, in each case outstanding as of the date hereof in accordance with their terms, or the issuance of Shares pursuant to the terms of the Company Stock Purchase Plan and (ii) the issuance settlement of securities by a wholly owned Company Subsidiary to claims, liabilities, or obligations reserved against on the Company’s most recent audited balance sheet; provided, that neither the Company nor any of its Subsidiaries shall settle or another wholly owned Company Subsidiaryagree to settle any Proceeding which settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Company’s business;
(cxi) adjustenter into or amend or modify in any material respect, splitor consent to the termination of (other than at its stated expiry date), combineany Company Material Contract or any Company Lease with respect to any material Company Leased Real Property or Company Owned Real Property, recapitalizeas the case may be, subdivide or reclassify any other Contract or otherwise amend Company Lease that, if in effect as of the terms of any shares of its capital stock date hereof, would constitute a Company Material Contract or other equity interestsCompany Lease with respect to material Company Leased Real Property and/or Company Owned Real Property;
(dxii) sellfail to exercise any rights of renewal with respect to any Company Leased Real Property that by its terms would otherwise expire unless the Company (or, pledgeif the lessee is a Subsidiary of the Company, dispose ofsuch Subsidiary) determines in good faith that a renewal would not be in the best interests of the Company;
(xiii) (A) abandon, transferdisclaim, leasesell or assign any Company Owned Intellectual Property, mortgageincluding failing to perform or cause to be performed all applicable filings, recordings and other acts, or to pay or cause to be paid all required fees and Taxes, to maintain and protect its interest in any Company Owned Intellectual Property, (B) grant to any third party any exclusive license, sublicense, abandon, allow or enter into any covenant not to lapse, assign or encumber any Company Subsidiary or any material property, securities, or material assets of the Company or any Company Subsidiary, except (i) pursuant to Company Material Contracts existing as of, and true, correct and complete copies of which have been made available to Parent prior to, the date of this Agreement and set forth in Section 5.01(d)(i) of the Company Disclosure Letter, (ii) pursuant to Incidental Contractsxxx, or (iiiC) for de minimis dispositions disclose to any Person any trade secret or abandonments of immaterial tangible assets not currently used confidential information, in the Company’s or Company’s Subsidiaries businesscase of (B) and (C) with respect to any Company Owned Intellectual Property, in each case ((A) through (C)), except in the ordinary course of business and consistent with past practice;
(exiv) declare, set aside, fail to use commercially reasonable efforts to maintain (with insurance companies substantially as financially responsible as their existing insurers) insurance in at least such amounts and against at least such risks and losses as are consistent with the past practice of the businesses of the Company and its Subsidiaries;
(xv) make or pay any dividend capital expenditures or other distribution expenditures with respect to any shares of its capital stock property, plant or other equity interests, whether payable in cash, stock, property or a combination thereof;
(f) other than (i) in connection with the exercise of any outstanding Company Options or offers of purchase rights under the Company Stock Purchase Plan permitted by the terms of such Company Options or the Company Stock Purchase Plan, as applicable, or the payment of related withholding Taxes, by net exercise or by tendering of shares or (ii) Tax withholdings on the vesting or payment of RSU Awards or the vesting of Restricted Stock Awards, reclassify, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its equity securities or any options, warrants, securities of the Company or other rights exercisable for or convertible into any such equity securities;
(g) (i) make any acquisition or disposition, or make any offer or agreement to acquire or dispose by means of a merger, consolidation, recapitalization, purchase, sale or otherwise, in one transaction or any series of related transactions, of any business, assets or securities or any sale, lease, encumbrance or other disposition of assets or securities of the Company or any of its Subsidiaries or any person or (ii) adopt, publicly propose or enter into a plan of complete or partial liquidation, dissolution, recapitalization or restructuring, or file or consent to the filing of a petition in bankruptcy under any provisions of applicable Law, except for in the ordinary course of business and consistent with past practice;
(h) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations (excluding existing obligations as of the date hereof) of any other person;
(i) incur, create, assume or otherwise become liable or responsible for any Indebtedness or issue any debt securities, or assume or guarantee the obligations of any person (other than a wholly owned Company Subsidiary) for borrowed money;
(j) make any loans, advances or capital contributions to, or investments in, any other personequipment, other than (i) loans solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries, (ii) advances for travel and other out-of-pocket expenses to officers, directors or employees of the Company or any Company Subsidiary made in the ordinary course consistent with past practice, and (iii) advances to directors and officers required to be made pursuant to any indemnification or advancement obligations in the Company Charter, the Company Bylaws, the governing documents of any Company Subsidiary, or any employment agreement or indemnification agreement to which the Company or any Company Subsidiary is party as of the date of this Agreement (true and accurate copies of which have been made available to Parent prior to the date of this Agreement);
(k) except to the extent required by this Agreement, applicable Law or the terms of any Company Benefit Plan, as in effect on the date hereof and set forth on Section 5.01(k) of the Company Disclosure Letter: (i) hire any employee at the level of Director or higher, except in the ordinary course of business or as otherwise required by applicable Law, or an existing Contract, (ii) increase the compensation or benefits payable or to become payable to its directors, officers or employees (other than if the Closing has not yet occurred as of February 28, 2024 merit increases in salaries for employees with titles below the level of Vice President, not to exceed four percent (4%) in the aggregate of such employees’ salaries on the date hereof in the ordinary course of business consistent with prior years’ annual compensation review cycles), or promote any non-officer employee to an officer position; (iii) grant any rights to severance or termination pay or other termination benefit or terminate any such individual, other than for cause or due to death or disability; (iv) establish, terminate, adopt, enter into or materially amend any CBA or Company Benefit Plans (or any collective bargaining or similar labor agreement, or employee benefit plan or arrangement, that would be a CBA or a Company Benefit Plan (as applicable) if in effect on the date hereof); or (v) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability, time of payment or funding of any compensation or any equity award or other benefit under any Company Benefit Plan with respect to any current or former service provider;
(l) make any change in accounting policies or procedures, other than as required by GAAP, applicable Law or any Governmental Entity with competent jurisdiction;
(m) engage in any transaction with, or enter into any agreement, arrangement or understanding with any affiliate of the Company or other person covered by Item 404 of Regulation S-K promulgated under the Exchange Act;
(i) prepare or file any material Tax Return materially inconsistent with past practice or take any position or adopt any method on any such Tax Return that is materially inconsistent with positions taken or methods used in preparing or filing similar Tax Returns in prior periods, (ii) make, change or revoke any material Tax election, (iii) enter into any Tax allocation, indemnity or sharing agreement (other than any such agreement entered into in the ordinary course of business, the primary purpose of which is unrelated to Taxes or any agreement solely among any of the Company or the Company Subsidiaries), (iv) change any annual Tax accounting period, (v) file any amendment to a material Tax Return, (vi) enter into any “closing agreement” with any taxing authority regarding a material amount of Tax, (vii) consent to any material Tax claim or assessment or surrender a right to a material refund of Taxes, (viii) adopt or change any method of Tax accounting, or (ix) consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment;
(o) make or authorize any capital expenditure, or incur any obligations, liabilities or Indebtedness in respect thereof, except for those in an amount less than $75,000 contemplated by the capital expenditure budget for the relevant fiscal year at or after the time contemplated by such budget, which capital expenditure budget has been made available to Parent prior to the date of this Agreement;
(p) change in any material respect the policies or practices regarding accounts receivable or accounts payable or cash management or fail to manage working capital in accordance with past practices, except as required by GAAP or applicable Law;
(q) settle any suit, action, claim, proceeding or investigation other than a settlement solely for monetary damages (net of insurance proceeds received) not in excess of $25,000 individually or $50,000 in the aggregate;
(r) except in the ordinary course of business consistent with past practice or in connection with any transaction to the extent specifically permitted by any other subclause of this Section 5.01, and not exceeding $600,000 per calendar month; or
(ixvi) enter into any Contract that would, if entered into prior to the date hereof, be a Company Material Contract or a Real Property Lease, (ii) materially modify, materially amend, let lapse or terminate (other than expirations in accordance with its terms) any Company Material Contract or Real Property Lease or waive, release or assign any material rights or material claims or make any material payment, directly or indirectly, of any liability of the Company or the Company Subsidiaries before the same comes due in accordance with its terms, thereunder, (iii) sublease or license any portion of the real property leased under any Real Property Lease, or (iv) acquire a fee interest in any real property;
(s) create any Subsidiary of the Company or any of its Subsidiaries;
(t) enter into any new line of business, or form or commence the operations of any joint venture;
(u) amend in a manner that adversely impacts in any material respect the ability to conduct its business, or terminate or allow to lapse any material Permits of the Company or its Subsidiaries;
(v) except in the ordinary course of business consistent with past practice or pursuant to a Contract in effect as of the date hereof, exclusively license or sublicense, sell, transfer, dispose of, abandon, cancel, knowingly allow to lapse, or fail to renew, maintain, diligently pursue applications for or defend any Intellectual Property Rights of the Company or any Company Subsidiary that are individually or in the aggregate material to the Company and the Company Subsidiaries; or
(w) authorize, resolve or offer, agree or commit, in writing or otherwise, agreement to do any of the foregoing. Nothing contained in .
(b) From the date of this Agreement shall give Parent or until the Merger Sub, directly or indirectly, the right to control or direct the operations of the Company or its Subsidiaries prior to the Effective Time. Prior to the Effective Time, the Company shall, and shall exercisecause each of its Subsidiaries to, consistent use reasonable best efforts to (i) prepare and timely file all material Tax Returns that it is required to file, (ii) timely pay all material Taxes shown to be due and payable on such Tax Returns and (iii) promptly notify Parent of any notice of any Proceeding or audit in respect of any Tax matters (or any significant developments with the terms and conditions respect to ongoing Proceedings or audits in respect of this Agreement, complete control and supervision over its and its Subsidiaries’ respective business operationssuch Tax matters).
Appears in 2 contracts
Samples: Merger Agreement (Ig Design Group Americas, Inc.), Merger Agreement (CSS Industries Inc)
Conduct of Business by the Company Pending the Merger. The Company agrees that between the date of this Agreement and the earlier of the Effective Time and the valid termination of this Agreement in accordance with Article VIIits terms, except (w) as specifically set forth in Section 5.01 of the Company Disclosure Letter Letter, as an exception to the corresponding restriction expressly contemplated or required by any other provision of this Section 5.01, (x) as expressly required Agreement or expressly provided for by this Agreement, (y) as required by applicable Law Law, or (z) as consented to any order of a Governmental Entity of competent jurisdiction or the rules or regulations of the Nasdaq, unless Parent shall otherwise agree in writing by Parent (which consent agreement shall not be unreasonably withheld, conditioned or delayed, or conditioned), the Company will, and will cause each Company Subsidiary to, to (x) use commercially reasonable best efforts to conduct its business and operations in all material respects in the ordinary course of business consistent with past practice, and the Company will use, and will cause each Company Subsidiary to use, commercially reasonable efforts to (1) preserve intact its and their business organization, (2) preserve the present relationships and goodwill with those persons having significant business relationships with the Company and the Company Subsidiaries and (3) comply with and maintain all material Permits required to conduct its and their businesses and to own, lease and operate its and their properties and assets. Without limiting the foregoing, subject to the exceptions described in clauses (w) through (z) of the foregoing sentence, the Company shall not, and shall not permit any Company Subsidiary to:
(a) amend the Company Charter, Company Bylaws or certificate of incorporation or bylaws (or other similar governing documents) of any Company Subsidiary;
(b) issue, sell, grant options, restricted stock units, restricted stock or rights to purchase, pledge, or authorize or propose the issuance of, sale of, or grant of options, restricted stock units, restricted stock or rights to purchase or pledge, any Company Securities or Subsidiary Securities, other than (i) the issuance of Shares upon the exercise of Company Options or the vesting and settlement of RSU Awards, in each case outstanding as of the date hereof in accordance with their terms, or the issuance of Shares pursuant to the terms of the Company Stock Purchase Plan and (ii) the issuance of securities by a wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary;
(c) adjust, split, combine, recapitalize, subdivide or reclassify or otherwise amend the terms of any shares of its capital stock or other equity interests;
(d) sell, pledge, dispose of, transfer, lease, mortgage, license, sublicense, abandon, allow to lapse, assign or encumber any Company Subsidiary or any material property, securities, or material assets of the Company or any Company Subsidiary, except (i) pursuant to Company Material Contracts existing as of, and true, correct and complete copies of which have been made available to Parent prior to, the date of this Agreement and set forth in Section 5.01(d)(i) of the Company Disclosure Letter, (ii) pursuant to Incidental Contracts, or (iii) for de minimis dispositions or abandonments of immaterial tangible assets not currently used in the Company’s or Company’s Subsidiaries business, in the ordinary course of business and consistent with past practice;
(e) declare, set aside, make or pay any dividend or other distribution with respect to any shares of its capital stock or other equity interests, whether payable in cash, stock, property or a combination thereof;
(f) other than (i) in connection with the exercise of any outstanding Company Options or offers of purchase rights under the Company Stock Purchase Plan permitted by the terms of such Company Options or the Company Stock Purchase Plan, as applicable, or the payment of related withholding Taxes, by net exercise or by tendering of shares or (ii) Tax withholdings on the vesting or payment of RSU Awards or the vesting of Restricted Stock Awards, reclassify, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its equity securities or any options, warrants, securities of the Company or other rights exercisable for or convertible into any such equity securities;
(g) (i) make any acquisition or disposition, or make any offer or agreement to acquire or dispose by means of a merger, consolidation, recapitalization, purchase, sale or otherwise, in one transaction or any series of related transactions, of any business, assets or securities or any sale, lease, encumbrance or other disposition of assets or securities of the Company or any of its Subsidiaries or any person or (ii) adopt, publicly propose or enter into a plan of complete or partial liquidation, dissolution, recapitalization or restructuring, or file or consent to the filing of a petition in bankruptcy under any provisions of applicable Law, except for in the ordinary course of business and consistent with past practice;
(h) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations (excluding existing obligations as of the date hereof) of any other person;
(i) incur, create, assume or otherwise become liable or responsible for any Indebtedness or issue any debt securities, or assume or guarantee the obligations of any person (other than a wholly owned Company Subsidiary) for borrowed money;
(j) make any loans, advances or capital contributions to, or investments in, any other person, other than (i) loans solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries, (ii) advances for travel and other out-of-pocket expenses to officers, directors or employees of the Company or any Company Subsidiary made in the ordinary course consistent with past practice, and (iii) advances to directors and officers required to be made pursuant to any indemnification or advancement obligations in the Company Charter, the Company Bylaws, the governing documents of any Company Subsidiary, or any employment agreement or indemnification agreement to which the Company or any Company Subsidiary is party as of the date of this Agreement (true and accurate copies of which have been made available to Parent prior to the date of this Agreement);
(k) except to the extent required by this Agreement, applicable Law or the terms of any Company Benefit Plan, as in effect on the date hereof and set forth on Section 5.01(k) of the Company Disclosure Letter: (i) hire any employee at the level of Director or higher, except in the ordinary course of business or as otherwise required by applicable Law, or an existing Contract, (ii) increase the compensation or benefits payable or to become payable to its directors, officers or employees (other than if the Closing has not yet occurred as of February 28, 2024 merit increases in salaries for employees with titles below the level of Vice President, not to exceed four percent (4%) in the aggregate of such employees’ salaries on the date hereof in the ordinary course of business consistent with prior years’ annual compensation review cycles), or promote any non-officer employee to an officer position; (iii) grant any rights to severance or termination pay or other termination benefit or terminate any such individual, other than for cause or due to death or disability; (iv) establish, terminate, adopt, enter into or materially amend any CBA or Company Benefit Plans (or any collective bargaining or similar labor agreement, or employee benefit plan or arrangement, that would be a CBA or a Company Benefit Plan (as applicable) if in effect on the date hereof); or (v) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability, time of payment or funding of any compensation or any equity award or other benefit under any Company Benefit Plan with respect to any current or former service provider;
(l) make any change in accounting policies or procedures, other than as required by GAAP, applicable Law or any Governmental Entity with competent jurisdiction;
(m) engage in any transaction with, or enter into any agreement, arrangement or understanding with any affiliate of the Company or other person covered by Item 404 of Regulation S-K promulgated under the Exchange Act;
(i) prepare or file any material Tax Return materially inconsistent with past practice or take any position or adopt any method on any such Tax Return that is materially inconsistent with positions taken or methods used in preparing or filing similar Tax Returns in prior periods, (ii) make, change or revoke any material Tax election, (iii) enter into any Tax allocation, indemnity or sharing agreement (other than any such agreement entered into in the ordinary course of business, the primary purpose of which is unrelated to Taxes or any agreement solely among any of the Company or the Company Subsidiaries), (iv) change any annual Tax accounting period, (v) file any amendment to a material Tax Return, (vi) enter into any “closing agreement” with any taxing authority regarding a material amount of Tax, (vii) consent to any material Tax claim or assessment or surrender a right to a material refund of Taxes, (viii) adopt or change any method of Tax accounting, or (ix) consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment;
(o) make or authorize any capital expenditure, or incur any obligations, liabilities or Indebtedness in respect thereof, except for those in an amount less than $75,000 contemplated by the capital expenditure budget for the relevant fiscal year at or after the time contemplated by such budget, which capital expenditure budget has been made available to Parent prior to the date of this Agreement;
(p) change in any material respect the policies or practices regarding accounts receivable or accounts payable or cash management or fail to manage working capital in accordance with past practices, except as required by GAAP or applicable Law;
(q) settle any suit, action, claim, proceeding or investigation other than a settlement solely for monetary damages (net of insurance proceeds received) not in excess of $25,000 individually or $50,000 in the aggregate;
(r) except in the ordinary course of business consistent with past practice and (y) use commercially reasonable efforts to preserve substantially intact its respective business organization, keep available the services of its respective current officers and employees, and preserve its respective present relationships with material customers, suppliers, distributors, licensors and licensees and Governmental Entities and other persons having material business relationships with it. Without limiting the foregoing, except as set forth in Section 5.01 of the Company Disclosure Letter, as expressly contemplated or in connection with any transaction to the extent specifically permitted required by any other subclause provision of this Section 5.01Agreement or as required by applicable Law, (i) enter into or any Contract that wouldorder of a Governmental Entity of competent jurisdiction, if entered into prior to the Company shall not, and shall cause each Company Subsidiary not to, between the date hereof, be a Company Material Contract or a Real Property Lease, (ii) materially modify, materially amend, let lapse or terminate (other than expirations in accordance with its terms) any Company Material Contract or Real Property Lease or waive, release or assign any material rights or material claims or make any material payment, directly or indirectly, of any liability this Agreement and the earlier of the Company or Effective Time and the Company Subsidiaries before the same comes due termination of this Agreement in accordance with its terms, thereunder, (iii) sublease or license any portion of the real property leased under any Real Property Lease, or (iv) acquire a fee interest in any real property;
(s) create any Subsidiary of the Company or any of its Subsidiaries;
(t) enter into any new line of business, or form or commence the operations of any joint venture;
(u) amend in a manner that adversely impacts in any material respect the ability to conduct its business, or terminate or allow to lapse any material Permits of the Company or its Subsidiaries;
(v) except in the ordinary course of business consistent with past practice or pursuant to a Contract in effect as of the date hereof, exclusively license or sublicense, sell, transfer, dispose of, abandon, cancel, knowingly allow to lapse, or fail to renew, maintain, diligently pursue applications for or defend any Intellectual Property Rights of the Company or any Company Subsidiary that are individually or in the aggregate material to the Company and the Company Subsidiaries; or
(w) authorize, resolve or offer, agree or commit, in writing or otherwise, to do any of the foregoing. Nothing contained following without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed): (a) amend the Company Charter or the Company Code (or any organizational documents of a Company Subsidiary), except, in the case of a Company Subsidiary that is not a Significant Subsidiary, for amendments that would not be materially adverse to the Company, or adopt a rights plan, “poison pill” or similar agreement that is, or at the Effective Time will be, applicable to this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control or direct the operations of the Company or its Subsidiaries prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective business operations.Transactions;
Appears in 1 contract
Samples: Merger Agreement (MULTI COLOR Corp)
Conduct of Business by the Company Pending the Merger. (a) The Company agrees that during the period from the date of this Agreement until the earlier of the termination of the Agreement pursuant to its terms or the Effective Time, unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, conditioned or delayed), the businesses of the Company and the Company Subsidiary shall be conducted only in, and the Company and the Company Subsidiary shall not take any action except in, the ordinary course of business; and the Company shall use its commercially reasonable efforts to (i) preserve substantially intact, the business organization of the Company and the Company Subsidiary, taken as a whole, (ii) keep available the services of the current officers, employees and consultants of the Company and the Company Subsidiary and (iii) preserve the current relationships of the Company and the Company Subsidiary with customers, suppliers and other persons with which the Company or the Company Subsidiary has significant business relations. By way of amplification and not limitation, except as expressly contemplated by this Agreement and Section 6.01 of the Company Disclosure Letter, neither the Company nor the Company Subsidiary shall, between the date of this Agreement and the earlier Effective Time, do, or propose to do, any of the Effective Time and following without the valid termination prior written consent of this Agreement in accordance with Article VII, except (w) as specifically set forth in Section 5.01 of the Company Disclosure Letter as an exception to the corresponding restriction of this Section 5.01, (x) as expressly required or expressly provided for by this Agreement, (y) as required by applicable Law or (z) as consented to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed, or conditioned), the Company will, and will cause each Company Subsidiary to, use commercially reasonable efforts to conduct its business and operations in all material respects in the ordinary course of business consistent with past practice, and the Company will use, and will cause each Company Subsidiary to use, commercially reasonable efforts to (1) preserve intact its and their business organization, (2) preserve the present relationships and goodwill with those persons having significant business relationships with the Company and the Company Subsidiaries and (3) comply with and maintain all material Permits required to conduct its and their businesses and to own, lease and operate its and their properties and assets. Without limiting the foregoing, subject to the exceptions described in clauses (w) through (z) of the foregoing sentence, the Company shall not, and shall not permit any Company Subsidiary to:):
(ai) amend or otherwise change the Company Charter, Company Bylaws or certificate articles of incorporation or bylaws (or other similar governing documents) equivalent organizational documents of any the Company or the Company Subsidiary, except to the extent required to change the Company’s jurisdiction of incorporation as contemplated by Section 2.01(a);
(bii) issueissue or sell or authorize the issuance or sale of any shares of any class of capital stock of the Company or the Company Subsidiary, sell, grant or any options, restricted stock unitswarrants, restricted stock convertible securities or other rights of any kind to purchase, pledgeacquire any shares of such capital stock, or authorize any other ownership interest, of the Company or propose the issuance of, sale of, or grant of options, restricted stock units, restricted stock or rights to purchase or pledge, any Company Securities or Subsidiary SecuritiesSubsidiary, other than (i) the issuance of Shares upon shares pursuant to the exercise of Company Options or the vesting and settlement of RSU Awards, in each case outstanding as of the date hereof in accordance with their terms, or the issuance of Shares pursuant to the terms of the Company Stock Purchase Plan and (ii) the issuance of securities by a wholly owned Company Subsidiary to the Company or another wholly owned Company SubsidiaryWarrant;
(c) adjust, split, combine, recapitalize, subdivide or reclassify or otherwise amend the terms of any shares of its capital stock or other equity interests;
(d) sell, pledge, dispose of, transfer, lease, mortgage, license, sublicense, abandon, allow to lapse, assign or encumber any Company Subsidiary or any material property, securities, or material assets of the Company or any Company Subsidiary, except (i) pursuant to Company Material Contracts existing as of, and true, correct and complete copies of which have been made available to Parent prior to, the date of this Agreement and set forth in Section 5.01(d)(i) of the Company Disclosure Letter, (ii) pursuant to Incidental Contracts, or (iii) for de minimis dispositions or abandonments of immaterial tangible assets not currently used in the Company’s or Company’s Subsidiaries business, in the ordinary course of business and consistent with past practice;
(e) declare, set aside, make or pay any dividend or other distribution with respect to any shares of its capital stock or other equity interestsdistribution, whether payable in cash, stock, property or a combination thereofotherwise, with respect to any of its capital stock, other than dividends or distributions by the Company Subsidiary to the Company;
(fiv) other than (i) in connection with the exercise of repurchase or redeem any outstanding Company Options or offers of purchase rights under the Company Stock Purchase Plan permitted by except for repurchases from employees following their termination pursuant to the terms of such Company Options or the Company Stock Purchase Plan, as applicable, or the payment of related withholding Taxes, by net exercise or by tendering of shares or (ii) Tax withholdings on the vesting or payment of RSU Awards or the vesting of Restricted Stock Awards, reclassify, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its equity securities or any options, warrants, securities of the Company or other rights exercisable for or convertible into any such equity securitiespre-existing agreements;
(gv) (i) make split, combine or reclassify any acquisition class or disposition, or make any offer or agreement to acquire or dispose by means of a merger, consolidation, recapitalization, purchase, sale or otherwise, in one transaction or any series of related transactions, of any business, assets or securities or any saleCompany Stock;
(vi) sell, lease, encumbrance transfer or other disposition of assign any assets or securities of the Company properties, tangible or any of its Subsidiaries or any person or (ii) adopt, publicly propose or enter into a plan of complete or partial liquidation, dissolution, recapitalization or restructuring, or file or consent to the filing of a petition in bankruptcy under any provisions of applicable Law, except for in the ordinary course of business and consistent with past practiceintangible;
(hvii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations (excluding existing obligations as of the date hereof) of any other person;
(i) incur, create, assume or otherwise become liable or responsible for incur any Indebtedness or issue any debt securitiessecurities or assume, guarantee or endorse, or assume or guarantee otherwise become responsible for, the obligations of any person (other than a wholly owned Company Subsidiary) for borrowed moneyPerson, or make any loans or advances;
(j) make any loans, advances or capital contributions to, or investments in, any other person, other than (i) loans solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries, (ii) advances for travel and other out-of-pocket expenses to officers, directors or employees of the Company or any Company Subsidiary made in the ordinary course consistent with past practice, and (iii) advances to directors and officers required to be made pursuant to any indemnification or advancement obligations in the Company Charter, the Company Bylaws, the governing documents of any Company Subsidiary, or any employment agreement or indemnification agreement to which the Company or any Company Subsidiary is party as of the date of this Agreement (true and accurate copies of which have been made available to Parent prior to the date of this Agreement);
(k) except to the extent required by this Agreement, applicable Law or the terms of any Company Benefit Plan, as in effect on the date hereof and set forth on Section 5.01(k) of the Company Disclosure Letter: (i) hire any employee at the level of Director or higher, except in the ordinary course of business or as otherwise required by applicable Law, or an existing Contract, (ii) increase the compensation or benefits payable or to become payable to its directors, officers or employees (other than if the Closing has not yet occurred as of February 28, 2024 merit increases in salaries for employees with titles below the level of Vice President, not to exceed four percent (4%) in the aggregate of such employees’ salaries on the date hereof in the ordinary course of business consistent with prior years’ annual compensation review cycles), or promote any non-officer employee to an officer position; (iii) grant any rights to severance or termination pay or other termination benefit or terminate any such individual, other than for cause or due to death or disability; (iv) establish, terminate, adopt, enter into or materially amend any CBA or Company Benefit Plans (or any collective bargaining or similar labor agreement, or employee benefit plan or arrangement, that would be a CBA or a Company Benefit Plan (as applicable) if in effect on the date hereof); or (v) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability, time of payment or funding of any compensation or any equity award or other benefit under any Company Benefit Plan with respect to any current or former service provider;
(l) make any change in accounting policies or procedures, other than as required by GAAP, applicable Law or any Governmental Entity with competent jurisdiction;
(m) engage in any transaction with, or enter into any agreement, arrangement or understanding with any affiliate of the Company or other person covered by Item 404 of Regulation S-K promulgated under the Exchange Act;
(i) prepare or file any material Tax Return materially inconsistent with past practice or take any position or adopt any method on any such Tax Return that is materially inconsistent with positions taken or methods used in preparing or filing similar Tax Returns in prior periods, (ii) make, change or revoke any material Tax election, (iiiviii) enter into any Tax allocationcontract or agreement that contemplates the payment or receipt by the Company or the Company Subsidiary of an amount in excess of twenty five thousand ($25,000) in any twelve (12) month period, indemnity or sharing agreement (other than any such agreement entered into in the ordinary course of business;
(ix) authorize, or make any commitment with respect to any capital expenditures which are in excess of ** dollars ($**), other than capital expenditures for which all unpaid costs and expenses are either Permitted Indebtedness or Closing Indebtedness;
(x) (i) increase the primary purpose compensation payable or to become payable or the benefits provided to directors, officers or employees, (ii) hire or attempt to hire any new employees or (iii) except in accordance with agreements existing as of which is unrelated the date hereof, grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company or of the Company Subsidiary;
(xi) except as required by applicable Law or changes in GAAP, materially change any of its accounting policies;
(xii) (A) make or change any Tax election or adopt or change a accounting method in respect of Taxes, (B) settle or comprise a claim or assessment in respect of Taxes, (C) amend any Tax Return, or (D) take any other action outside the ordinary course of business if taking such action would affect the Taxes of the Company after the Closing Date; ** This portion has been redacted pursuant to Taxes a confidential treatment request.
(xiii) amend or modify in any agreement solely among material respect or consent to the termination of any Contract, or amend or modify in any material respect or waive or consent to the termination of any material rights of the Company or the Company Subsidiaries), (iv) change any annual Tax accounting period, (v) file any amendment to a material Tax Return, (vi) enter into any “closing agreement” with any taxing authority regarding a material amount of Tax, (vii) consent to any material Tax claim or assessment or surrender a right to a material refund of Taxes, (viii) adopt or change any method of Tax accounting, or (ix) consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment;
(o) make or authorize any capital expenditure, or incur any obligations, liabilities or Indebtedness in respect thereof, except for those in an amount less than $75,000 contemplated by the capital expenditure budget for the relevant fiscal year at or after the time contemplated by such budget, which capital expenditure budget has been made available to Parent prior to the date of this Agreement;
(p) change in any material respect the policies or practices regarding accounts receivable or accounts payable or cash management or fail to manage working capital in accordance with past practices, except as required by GAAP or applicable Law;
(q) settle any suit, action, claim, proceeding or investigation other than a settlement solely for monetary damages (net of insurance proceeds received) not in excess of $25,000 individually or $50,000 in the aggregate;
(r) except in the ordinary course of business consistent with past practice or in connection with any transaction to the extent specifically permitted by any other subclause of this Section 5.01, (i) enter into any Contract that would, if entered into prior to the date hereof, be a Company Material Contract or a Real Property Lease, (ii) materially modify, materially amend, let lapse or terminate (other than expirations in accordance with its terms) any Company Material Contract or Real Property Lease or waive, release or assign any material rights or material claims or make any material payment, directly or indirectly, of any liability of the Company or the Company Subsidiaries before the same comes due in accordance with its terms, Subsidiary thereunder, (iii) sublease or license any portion of the real property leased under any Real Property Lease, or (iv) acquire a fee interest in any real property;
(s) create any Subsidiary of the Company or any of its Subsidiaries;
(t) enter into any new line of business, or form or commence the operations of any joint venture;
(u) amend in a manner that adversely impacts in any material respect the ability to conduct its business, or terminate or allow to lapse any material Permits of the Company or its Subsidiaries;
(v) except in the ordinary course of business consistent with past practice or pursuant to a Contract in effect as of the date hereof, exclusively license or sublicense, sell, transfer, dispose of, abandon, cancel, knowingly allow to lapse, or fail to renew, maintain, diligently pursue applications for or defend any Intellectual Property Rights of the Company or any Company Subsidiary that are individually or in the aggregate material to the Company and the Company Subsidiaries; or
(wxiv) authorizeannounce an intention, resolve enter into any formal or offer, agree informal agreement or commit, in writing or otherwiseotherwise make a commitment, to do any of the foregoing. Nothing contained in .
(b) Notwithstanding any provision of this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control or direct the operations of the Company or its Subsidiaries prior to the Effective Time. Prior to the Effective TimeSection 6.01, the Company shall exercise, consistent with may take any action (or refrain from taking any action) as required by applicable Law (including changes to applicable law occurring subsequent to the terms and conditions date of this Agreement) and as required, complete control and supervision over its and its Subsidiaries’ respective business operationspermitted or contemplated by any other provision of this Agreement.
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that between that, during the period from the date of this Agreement and continuing until the earlier of the Effective Time and the valid termination of this Agreement or the Effective Time, unless Parent shall otherwise agree in accordance with Article VIIwriting, and except (w) as specifically set forth in Section 5.01 4.01 of the Company Disclosure Letter as an exception to the corresponding restriction of this Section 5.01, (x) as expressly required or expressly provided for by this Agreement, (y) as required by applicable Law or (z) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed, or conditioned)Schedule, the Company will, and will cause each Company Subsidiary to, use commercially reasonable efforts to shall conduct its business and operations in all material respects in shall cause the businesses of its subsidiaries to be conducted only in, and the Company and its subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice, ; and the Company will use, and will cause each Company Subsidiary to use, commercially shall use reasonable commercial efforts to (1) preserve substantially intact the business organization of the Company and its subsidiaries, to keep available the services of the present officers, employees and their business organization, (2) consultants of the Company and its subsidiaries and to preserve the present relationships and goodwill with those persons having significant business relationships with of the Company and its subsidiaries with customers, suppliers and other persons with which the Company Subsidiaries or any of its subsidiaries has significant business relations. By way of amplification and (3) comply with not limitation, except as contemplated by this Agreement, neither the Company nor any of its subsidiaries shall, during the period from the date of this Agreement and maintain all material Permits required continuing until the earlier of the termination of this Agreement or the Effective Time, and except as set forth in Section 4.01 of the Company Disclosure Schedule, directly or indirectly do, or propose to conduct its and their businesses and to owndo, lease and operate its and their properties and assets. Without limiting any of the foregoingfollowing without the prior written consent of Parent, subject to which in the exceptions described in case of clauses (wc), (d)(iv), (e), (f), (h) through or (zi) of the foregoing sentence, the Company shall not, and shall will not permit any Company Subsidiary tobe unreasonably withheld or delayed:
(a) amend or otherwise change the Company Charter, Company Bylaws Company's Certificate of Incorporation or certificate of incorporation or bylaws (or other similar governing documents) of any Company SubsidiaryBy-Laws;
(b) issue, sell, grant optionspledge, restricted stock unitsdispose of or encumber, restricted stock or rights to purchaseauthorize the issuance, sale, pledge, disposition or authorize or propose the issuance encumbrance of, sale ofany shares of capital stock of any class, or grant of any options, restricted stock unitswarrants, restricted stock convertible securities or other rights of any kind to purchase acquire any shares of capital stock, or pledgeany other ownership interest (including, without limitation, any Company Securities phantom interest) in the Company, any of its subsidiaries or Subsidiary Securities, other than affiliates (i) except for the issuance of Shares upon the exercise shares of Company Options or the vesting and settlement of RSU Awards, in each case outstanding as of the date hereof in accordance with their terms, or the issuance of Shares Common Stock issuable pursuant to the terms of Company Options under the Company Stock Purchase Plan and (ii) Option Plans, which options are outstanding on the issuance of securities by a wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiarydate hereof);
(c) adjust, split, combine, recapitalize, subdivide or reclassify or otherwise amend the terms of any shares of its capital stock or other equity interests;
(d) sell, pledge, dispose of, transfer, lease, mortgage, license, sublicense, abandon, allow to lapse, assign of or encumber any Company Subsidiary or any material property, securities, or material assets of the Company or any Company Subsidiary, of its subsidiaries (except for (i) pursuant to Company Material Contracts existing as of, and true, correct and complete copies sales of which have been made available to Parent prior to, the date of this Agreement and set forth in Section 5.01(d)(i) of the Company Disclosure Letter, (ii) pursuant to Incidental Contracts, or (iii) for de minimis dispositions or abandonments of immaterial tangible assets not currently used in the Company’s or Company’s Subsidiaries business, in the ordinary course of business and in a manner consistent with past practice, (ii) dispositions of obsolete or worthless assets, and (iii) sales of immaterial assets not in excess of $250,000 in the aggregate);
(ei) declare, set aside, make or pay any dividend or other distribution with (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, except that a wholly-owned subsidiary of the Company may declare and pay a dividend to its parent, (ii) split, combine or reclassify any shares of its capital stock or issue or authorize or propose the issuance of any other equity interestssecurities in respect of, whether payable in cash, lieu of or in substitution for shares of its capital stock, property (iii) except as required by the terms of any security as in effect on the date hereof or expressly permitted hereunder, amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any subsidiary to amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, any of its securities or any securities of its subsidiaries, including, without limitation, shares of Company Common Stock, or any option, warrant or right, directly or indirectly, to acquire any such securities, or propose to do any of the foregoing, or (iv) settle, pay or discharge any claim, suit or other action brought or threatened against the Company with respect to or arising out of a combination thereofstockholder equity interest in the Company;
(i) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof other than those listed on Section 4.01(e) of the Company Disclosure Schedule; (ii) incur any indebtedness for borrowed money, except for (x) borrowings and reborrowings under the Company's existing credit facilities not in excess of $5 million and (y) other borrowings not in excess of $500,000 or issue any debt securities or assume, guarantee (other than guarantees of the Company's subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances, except in the ordinary course of business consistent with past practice; or (iii) authorize any capital expenditures or purchases of fixed assets which are, in the aggregate, in excess of $8,000,000 from the date hereof until March 31, 2000; or (iv) enter into or materially amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 4.01(e);
(f) other than except as set forth in Section 4.01(f) of the Company Disclosure Schedule, increase the compensation or severance payable or to become payable to its directors, officers or employees, except for increases in salary or wages of employees of the Company or its subsidiaries (iwho are not directors or executive officers of the Company) in connection accordance with past practices, or grant any severance or termination pay (except to make payments required to be made under obligations existing on the exercise of any outstanding Company Options or offers of purchase rights under the Company Stock Purchase Plan permitted by date hereof in accordance with the terms of such Company Options or the Company Stock Purchase Plan, as applicableobligations) to, or the payment of related withholding Taxes, by net exercise or by tendering of shares or (ii) Tax withholdings on the vesting or payment of RSU Awards or the vesting of Restricted Stock Awards, reclassify, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its equity securities or any options, warrants, securities of the Company or other rights exercisable for or convertible enter into any such equity securities;
(g) (i) make employment or severance agreement, with any acquisition or disposition, or make any offer or agreement to acquire or dispose by means of a merger, consolidation, recapitalization, purchase, sale or otherwise, in one transaction or any series of related transactions, of any business, assets or securities or any sale, lease, encumbrance or other disposition of assets or securities new employee of the Company or any of its Subsidiaries or any person or (ii) adopt, publicly propose or enter into a plan of complete or partial liquidation, dissolution, recapitalization or restructuring, or file or consent to the filing of a petition in bankruptcy under any provisions of applicable Lawsubsidiaries, except for an agreement entered into in the ordinary course of business and providing for annual base and bonus compensation not to exceed $150,000, or establish, adopt, enter into or amend any collective bargaining agreement, Company Employee Plan (within the meaning of Section 2.11 of this Agreement), trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees or any of their beneficiaries, except, in each case, as may be required by law or as would not result in a material increase in the cost of maintaining such collective bargaining agreement, Company Employee Plan, trust, fund, policy or arrangement;
(g) take any action to change accounting policies or procedures (including, without limitation, procedures with respect to revenue recognition, payments of accounts payable and collection of accounts receivable), except as required by a change in GAAP or SEC position occurring after the date hereof;
(h) make any tax election or settle or compromise any United States federal, state, local or non-United States tax liability;
(i) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) in excess of $500,000 in the aggregate, other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements contained in the Company SEC Reports or incurred in the ordinary course of business and consistent with past practice;
(h) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations (excluding existing obligations as of the date hereof) of any other person;
(i) incur, create, assume or otherwise become liable or responsible for any Indebtedness or issue any debt securities, or assume or guarantee the obligations of any person (other than a wholly owned Company Subsidiary) for borrowed money;; or
(j) make any loans, advances or capital contributions totake, or investments inagree in writing or otherwise to take, any other person, other than of the actions described in Sections 4.01(a) through (i) loans solely between above, or any action which would make any of the Company and a wholly owned Company Subsidiary representations or between wholly owned Company Subsidiaries, (ii) advances for travel and other out-of-pocket expenses to officers, directors or employees warranties of the Company or any Company Subsidiary made in the ordinary course consistent with past practice, and (iii) advances to directors and officers required to be made pursuant to any indemnification or advancement obligations in the Company Charter, the Company Bylaws, the governing documents of any Company Subsidiary, or any employment agreement or indemnification agreement to which the Company or any Company Subsidiary is party as of the date of this Agreement (true and accurate copies of which have been made available to Parent prior to the date of this Agreement);
(k) except to the extent required by this Agreement, applicable Law or the terms of any Company Benefit Plan, as in effect on the date hereof and set forth on Section 5.01(k) of the Company Disclosure Letter: (i) hire any employee at the level of Director or higher, except in the ordinary course of business or as otherwise required by applicable Law, or an existing Contract, (ii) increase the compensation or benefits payable or to become payable to its directors, officers or employees (other than if the Closing has not yet occurred as of February 28, 2024 merit increases in salaries for employees with titles below the level of Vice President, not to exceed four percent (4%) in the aggregate of such employees’ salaries on the date hereof in the ordinary course of business consistent with prior years’ annual compensation review cycles), or promote any non-officer employee to an officer position; (iii) grant any rights to severance or termination pay or other termination benefit or terminate any such individual, other than for cause or due to death or disability; (iv) establish, terminate, adopt, enter into or materially amend any CBA or Company Benefit Plans (or any collective bargaining or similar labor agreement, or employee benefit plan or arrangement, that would be a CBA or a Company Benefit Plan (as applicable) if in effect on the date hereof); or (v) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability, time of payment or funding of any compensation or any equity award or other benefit under any Company Benefit Plan with respect to any current or former service provider;
(l) make any change in accounting policies or procedures, other than as required by GAAP, applicable Law or any Governmental Entity with competent jurisdiction;
(m) engage in any transaction with, or enter into any agreement, arrangement or understanding with any affiliate of the Company or other person covered by Item 404 of Regulation S-K promulgated under the Exchange Act;
(i) prepare or file any material Tax Return materially inconsistent with past practice or take any position or adopt any method on any such Tax Return that is materially inconsistent with positions taken or methods used in preparing or filing similar Tax Returns in prior periods, (ii) make, change or revoke any material Tax election, (iii) enter into any Tax allocation, indemnity or sharing agreement (other than any such agreement entered into in the ordinary course of business, the primary purpose of which is unrelated to Taxes or any agreement solely among any of the Company or the Company Subsidiaries), (iv) change any annual Tax accounting period, (v) file any amendment to a material Tax Return, (vi) enter into any “closing agreement” with any taxing authority regarding a material amount of Tax, (vii) consent to any material Tax claim or assessment or surrender a right to a material refund of Taxes, (viii) adopt or change any method of Tax accounting, or (ix) consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment;
(o) make or authorize any capital expenditure, or incur any obligations, liabilities or Indebtedness in respect thereof, except for those in an amount less than $75,000 contemplated by the capital expenditure budget for the relevant fiscal year at or after the time contemplated by such budget, which capital expenditure budget has been made available to Parent prior to the date of this Agreement;
(p) change in any material respect the policies or practices regarding accounts receivable or accounts payable or cash management or fail to manage working capital in accordance with past practices, except as required by GAAP or applicable Law;
(q) settle any suit, action, claim, proceeding or investigation other than a settlement solely for monetary damages (net of insurance proceeds received) not in excess of $25,000 individually or $50,000 in the aggregate;
(r) except in the ordinary course of business consistent with past practice or in connection with any transaction to the extent specifically permitted by any other subclause of this Section 5.01, (i) enter into any Contract that would, if entered into prior to the date hereof, be a Company Material Contract or a Real Property Lease, (ii) materially modify, materially amend, let lapse or terminate (other than expirations in accordance with its terms) any Company Material Contract or Real Property Lease or waive, release or assign any material rights or material claims or make any material payment, directly or indirectly, of any liability of the Company or the Company Subsidiaries before the same comes due in accordance with its terms, thereunder, (iii) sublease or license any portion of the real property leased under any Real Property Lease, or (iv) acquire a fee interest in any real property;
(s) create any Subsidiary of the Company or any of its Subsidiaries;
(t) enter into any new line of business, or form or commence the operations of any joint venture;
(u) amend in a manner that adversely impacts in any material respect the ability to conduct its business, or terminate or allow to lapse any material Permits of the Company or its Subsidiaries;
(v) except in the ordinary course of business consistent with past practice or pursuant to a Contract in effect as of the date hereof, exclusively license or sublicense, sell, transfer, dispose of, abandon, cancel, knowingly allow to lapse, or fail to renew, maintain, diligently pursue applications for or defend any Intellectual Property Rights of the Company or any Company Subsidiary that are individually or in the aggregate material to the Company and the Company Subsidiaries; or
(w) authorize, resolve or offer, agree or commit, in writing or otherwise, to do any of the foregoing. Nothing contained in this Agreement shall give Parent untrue or Merger Sub, directly incorrect (subject to the first sentence of Article II) or indirectly, the right to control or direct the operations of prevent the Company from performing or its Subsidiaries prior to the Effective Time. Prior to the Effective Time, cause the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over not to perform its and its Subsidiaries’ respective business operationscovenants hereunder.
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. The Company agrees that that, between the date of this Agreement and the earlier of the Effective Time and the valid termination of this Agreement in accordance with Article VIITime, except (wi) as specifically expressly contemplated by any other provision of this Agreement, (ii) as may be required by applicable Law, or (iii) as set forth in Section 5.01 of the Company Disclosure Letter as an exception to the corresponding restriction of this Section 5.01Schedule, (x) as expressly required or expressly provided for by this Agreement, (y) as required by applicable Law or (z) as consented to unless Parent shall otherwise consent in writing by Parent (which consent shall not be unreasonably withheld, delayed, or conditioned), it shall, and shall cause the Subsidiaries to:
(i) conduct the businesses of the Company will, and will cause each Company Subsidiary to, use commercially reasonable efforts to conduct its business and operations Subsidiaries in all material respects in the ordinary course of business and in a manner consistent with past practice, and the Company will use, and will cause each Company Subsidiary to use, ;
(ii) use commercially reasonable efforts to (1) preserve substantially intact its and their the business organization, (2) preserve the present relationships and goodwill with those persons having significant business relationships with organization of the Company and the Subsidiaries, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries, to preserve the current relationships of the Company and the Subsidiaries with customers, suppliers and (3) comply other persons with which the Company or any Subsidiary has business relations and to maintain in effect all material Permits foreign, federal, state and local licenses, approvals and authorizations, including, all material licenses and permits that are required for the Company or any of its Subsidiaries to conduct carry on its business; and
(iii) use commercially reasonable efforts to continue to implement all material product enhancement and their businesses and to own, lease and operate its and their properties and assetsintroduction programs consistent with the Company’s plans as of the date of this Agreement. Without limiting the generality of the foregoing, subject to the exceptions described except (i) as expressly contemplated by any other provision of this Agreement, (ii) as may be required by applicable Law, or (iii) as set forth in clauses (w) through (z) Section 5.01 of the foregoing sentenceCompany Disclosure Schedule, the Company shall not, and shall cause each Subsidiary not permit any Company Subsidiary to:
(a) amend the Company Charter, Company Bylaws or certificate of incorporation or bylaws (or other similar governing documents) of any Company Subsidiary;
(b) issue, sell, grant options, restricted stock units, restricted stock or rights to purchase, pledge, or authorize or propose the issuance of, sale of, or grant of options, restricted stock units, restricted stock or rights to purchase or pledge, any Company Securities or Subsidiary Securities, other than (i) the issuance of Shares upon the exercise of Company Options or the vesting and settlement of RSU Awards, in each case outstanding as of the date hereof in accordance with their terms, or the issuance of Shares pursuant to the terms of the Company Stock Purchase Plan and (ii) the issuance of securities by a wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary;
(c) adjust, split, combine, recapitalize, subdivide or reclassify or otherwise amend the terms of any shares of its capital stock or other equity interests;
(d) sell, pledge, dispose of, transfer, lease, mortgage, license, sublicense, abandon, allow to lapse, assign or encumber any Company Subsidiary or any material property, securities, or material assets of the Company or any Company Subsidiary, except (i) pursuant to Company Material Contracts existing as of, and true, correct and complete copies of which have been made available to Parent prior to, between the date of this Agreement and set forth in Section 5.01(d)(ithe Effective Time, without the prior written consent of Parent (which consent shall not be unreasonably withheld):
(a) amend its certificate of incorporation or by-laws or equivalent organizational documents;
(b) split, combine or reclassify any shares of capital stock of the Company Disclosure Letter, (ii) pursuant to Incidental Contractsor any Subsidiary, or (iii) for de minimis dispositions or abandonments of immaterial tangible assets not currently used in the Company’s or Company’s Subsidiaries business, in the ordinary course of business and consistent with past practice;
(e) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of any Shares or any other capital stock of the Company (other than dividends declared and paid in the ordinary course of business consistent with respect past practice in the amount of up to $0.05 per share per quarter), or redeem, repurchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire any equity or equity related securities of the Company or any equity or equity related securities of any Subsidiary of the Company;
(c) issue, deliver or sell or authorize the issuance, delivery or sale of, any shares of its capital stock of the Company of any class or series or any securities convertible into or exercisable for, or any rights, warrants or options to acquire, any such capital stock or any such convertible or exchangeable securities, other equity intereststhan in connection with (i) the issuance of Shares upon the exercise of Company Stock Options; (ii) the issuance of shares upon the settlement of restricted stock units (“RSUs”) granted under the Company Stock Option Plans (including RSUs that have or will be granted as dividend equivalents on RSUs); and (iii) RSUs to be granted as annual director compensation consistent with disclosure in Company SEC Reports filed prior to the date hereof;
(d) amend in any material respect any material term of any outstanding security of the Company or any of its Subsidiaries;
(e) incur any capital expenditures or any obligations or liabilities in respect thereof (other than instruments placed with customers of the Company or the Subsidiaries in the ordinary course of business) in excess of the greater of (A) $3,600,000 per calendar quarter above the applicable quarterly budgeted amount set forth in the capital expenditure budget for the Company and its Subsidiaries, whether payable which budget is included in cashSection 5.01 of the Company Disclosure Schedule or (B) $10,000,000 in the aggregate, stockexcept for those contemplated by the capital expenditure budget for the Company and its Subsidiaries as of the date hereof, property or a combination thereofwhich budget is included in Section 5.01 of the Company Disclosure Schedule;
(f) except for acquisitions in the ordinary course of Intellectual Property or Intellectual Property rights for an aggregate consideration not in excess of $10,000,000 annually, acquire (whether pursuant to merger, stock or asset purchase or other similar transaction) any corporation, partnership, other business organization or any subdivision thereof or any material amount of assets (including any equity interests or other securities);
(g) sell, lease, encumber or otherwise dispose of any material assets, other than (i) sales or licenses thereof in connection the ordinary course of business consistent with the exercise of any outstanding Company Options or offers of purchase rights under the Company Stock Purchase Plan permitted by the terms of such Company Options or the Company Stock Purchase Planpast practice, as applicable, or the payment of related withholding Taxes, by net exercise or by tendering of shares or (ii) Tax withholdings on equipment and property no longer used in the vesting or payment operation of RSU Awards or the vesting business of Restricted Stock Awards, reclassify, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of Company and its equity securities or any options, warrants, securities Subsidiaries and (iii) assets related to discontinued operations of the Company or other rights exercisable for or convertible into any such equity securitiesof its Subsidiaries;
(gh) incur (iwhich shall not be deemed to include entering into credit agreements or lines of credit that may be cancelled without cost until the Company or any of its Subsidiaries becomes liable with respect to any indebtedness for borrowed money or guarantees thereof under such arrangements) make any acquisition indebtedness for borrowed money or disposition, guarantee any such indebtedness or make issue or sell any offer debt securities or agreement warrants or rights to acquire or dispose by means of a merger, consolidation, recapitalization, purchase, sale or otherwise, in one transaction or any series of related transactions, of any business, assets or securities or any sale, lease, encumbrance or other disposition of assets or debt securities of the Company or any of its Subsidiaries or guarantee any person or (ii) adopt, publicly propose or enter into a plan debt securities of complete or partial liquidation, dissolution, recapitalization or restructuring, or file or consent to the filing of a petition in bankruptcy under any provisions of applicable Law, except for in the ordinary course of business and consistent with past practice;
(h) assume, guarantee, endorse others or otherwise agree to become liable or responsible (whether directly, contingently or otherwise) for the material obligations (excluding existing obligations as of the date hereof) of any other person;
(i) incur, create, assume or otherwise become liable or responsible for any Indebtedness or issue any debt securities, or assume or guarantee the obligations of any person (other than a wholly owned Company Subsidiary) for borrowed money;
(j) make any loans, advances or capital contributions to, or investments in, any other person, other than (i) loans solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries, (ii) advances for travel and other out-of-pocket expenses to officers, directors or employees of the Company or any Company Subsidiary made in the ordinary course consistent with past practice, and (iii) advances to directors and officers required to be made pursuant to any indemnification or advancement obligations in the Company Charter, the Company Bylaws, the governing documents of any Company Subsidiary, or any employment agreement or indemnification agreement to which the Company or any Company Subsidiary is party as of the date of this Agreement (true and accurate copies of which have been made available to Parent prior to the date of this Agreement);
(k) except to the extent required by this Agreement, applicable Law or the terms of any Company Benefit Plan, as in effect on the date hereof and set forth on Section 5.01(k) of the Company Disclosure Letter: (i) hire any employee at the level of Director or higher, except in the ordinary course of business or as otherwise required by applicable Law, or an consistent with past practice (which shall include borrowings under existing Contract, (ii) increase credit facilities of the compensation or benefits payable or to become payable to its directors, officers or employees (other than if Company within the Closing has not yet occurred borrowing capacity thereunder as of February 28, 2024 merit increases in salaries for employees with titles below the level of Vice President, not to exceed four percent (4%) in the aggregate of such employees’ salaries on the date hereof in the ordinary course of business consistent with prior years’ annual compensation review cycles), or promote any non-officer employee to an officer position; (iii) grant any rights to severance or termination pay or other termination benefit or terminate any such individual, other than for cause or due to death or disability; (iv) establish, terminate, adopt, enter into or materially amend any CBA or Company Benefit Plans (or any collective bargaining or similar labor agreement, or employee benefit plan or arrangement, that would be a CBA or a Company Benefit Plan (as applicable) if in effect on the date hereof); or (v) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability, time of payment or funding of any compensation or any equity award or other benefit under any Company Benefit Plan with respect to any current or former service provider;
(l) make any change in accounting policies or procedures, other than as required by GAAP, applicable Law or any Governmental Entity with competent jurisdiction;
(m) engage in any transaction with, or enter into any agreement, arrangement or understanding with any affiliate of the Company or other person covered by Item 404 of Regulation S-K promulgated under the Exchange Act;
(i) prepare or file any material Tax Return materially inconsistent with past practice or take any position or adopt any method on any such Tax Return that is materially inconsistent with positions taken or methods used in preparing or filing similar Tax Returns in prior periods, (ii) make, change or revoke any material Tax election, (iii) enter into any Tax allocation, indemnity or sharing agreement (other than any such agreement entered into except in the ordinary course of business, the primary purpose of which is unrelated to Taxes enter into, amend, modify or terminate any agreement solely among Company Material Contract or otherwise waive, release or assign any material rights, claims or benefits of the Company or the Company Subsidiaries), (iv) change any annual Tax accounting period, (v) file any amendment to a material Tax Return, (vi) enter into any “closing agreement” with any taxing authority regarding a material amount of Tax, (vii) consent to any material Tax claim or assessment or surrender a right to a material refund of Taxes, (viii) adopt or change any method of Tax accounting, or (ix) consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessmentits Subsidiaries thereunder;
(o) make or authorize any capital expenditure, or incur any obligations, liabilities or Indebtedness in respect thereof, except for those in an amount less than $75,000 contemplated by the capital expenditure budget for the relevant fiscal year at or after the time contemplated by such budget, which capital expenditure budget has been made available to Parent prior to the date of this Agreement;
(p) change in any material respect the policies or practices regarding accounts receivable or accounts payable or cash management or fail to manage working capital in accordance with past practices, except as required by GAAP or applicable Law;
(q) settle any suit, action, claim, proceeding or investigation other than a settlement solely for monetary damages (net of insurance proceeds received) not in excess of $25,000 individually or $50,000 in the aggregate;
(ri) except in the ordinary course of business consistent with past practice or in connection with any transaction to the extent specifically permitted as required by any other subclause of this Section 5.01Law or an agreement, (i) enter into any Contract that would, if entered into prior to policy or arrangement existing on the date hereof, be a Company Material Contract increase the amount of compensation of any director, officer or a Real Property Leaseemployee or make any increase in or commitment to increase any employee health, welfare or retirement benefits, (ii) materially modifyexcept as required by Law or an agreement, materially amendpolicy or arrangement existing on the date hereof, let lapse grant any retention, severance or terminate (other than expirations in accordance with its terms) termination pay or rights to any Company Material Contract director, officer or Real Property Lease or waive, release or assign any material rights or material claims or make any material payment, directly or indirectly, of any liability of the Company or the Company Subsidiaries before the same comes due in accordance with its terms, thereunder, (iii) sublease or license any portion of the real property leased under any Real Property Lease, or (iv) acquire a fee interest in any real property;
(s) create any Subsidiary employee of the Company or any of its Subsidiaries;
, (tiii) establish, adopt, enter into or terminate any Company Employee Plan or establish, adopt or enter into any new line Employee Plan that would be a Company Employee Plan if it were in existence as of businessthe date of this Agreement for the benefit of any director, officer or employee except as required by this Agreement or the transactions contemplated hereby, or form as required by ERISA, the Code or commence to otherwise comply with applicable Law, (iv) except as may be required by Law or to permit distributions elections in accordance with Section 409A of the operations of any joint venture;
(u) Code, amend in a manner that adversely impacts in any material respect any Company Employee Plan; (v) hire any additional employees except in the ability ordinary course of business (which for avoidance of doubt shall include hirings that the Company shall determine are necessary or appropriate to conduct its businessimplement the Company’s business plan), (vi) make any offers to any existing employee of an employment position other than in the ordinary course of business (which for avoidance of doubt shall include offers as the Company shall determine are necessary or terminate appropriate to implement the Company’s business plan), (vii) loan or allow advance money or other property to lapse any material Permits current or former director, officer or employee of the Company or any of its SubsidiariesSubsidiaries outside of the ordinary course of business (which ordinary course of business shall include the use of company-issued credit cards), (viii) grant any equity or equity based awards except (A) transfers of equity in accordance with existing awards under the applicable Company Stock Option Plan documents or agreements; (B) dividend equivalents on RSUs in accordance with the Company Stock Option Plan documents or agreements or (C) annual director compensation consistent with disclosure in Company SEC Reports filed prior to the date hereof or (ix) hire or engage any consultant to perform services for a rate of compensation which would be in excess of $150,000 on an annual basis or which is not terminable upon notice of thirty (30) days or less;
(k) pay, discharge, settle or satisfy any material claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than in the ordinary course of business, unless such payment, discharge, settlement or satisfaction is (i) made in accordance with the terms of such claim, liability or obligation as such terms exist on the date of this Agreement and was disclosed to Parent prior to the date of this Agreement or (ii) reflected or reserved against in the 2006 Balance Sheet;
(l) commence or settle any Action, other than the settlement of Actions involving payments by the Company or its Subsidiaries not to exceed, with respect to any individual Action, $1,000,000;
(m) change the Company’s (x) methods of accounting in effect at December 31, 2006, except as required by changes in GAAP or by Regulation S-X promulgated under the Exchange Act, as concurred in by its independent public accountants or (y) fiscal year;
(n) make, revoke or change any material Tax election or material method of Tax accounting, file any amended Tax Return, enter into any closing agreement relating to a material amount of Taxes, settle or compromise any material liability with respect to Taxes or consent to any material claim or assessment relating to Taxes;
(o) (i) abandon, sell, assign, cause the diminution in value of or grant any security interest in or to any item of the material Company Intellectual Property, (ii) grant to any third party any license, sublicense or covenant not to xxx with respect to any material Company Intellectual Property, other than to end-customers, (iii) develop, create or invent any Intellectual Property jointly with any third party (other than such joint development, creation or invention with a third party that is in progress as of the date hereof), (iv) disclose, or allow to be disclosed, any confidential material Company Intellectual Property owned by the Company or any of its Subsidiaries, unless such material Company Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against disclosure thereof, (v) except commit any material default under contracts in respect of Company Intellectual Property, or (vi) fail to (A) perform or cause to be performed all applicable filings (including filing applications in the U.S. Patent and Trademark Office and in any other similar governmental offices where the Company has historically made such filings), recordings and other acts (including responding to office actions or other correspondence from the U.S. Patent and Trademark Office, U.S. Copyright Office and all corresponding governmental offices where the Company has historically made such filings and filing affidavits of use in commerce with the U.S. Patent and Trademark Office), (B) pay or caused to be paid all required fees and taxes, to maintain and protect its interest in each and every item of the material Company Intellectual Property owned by the Company or any of its Subsidiaries, or (C) obtain and record documents necessary to establish, maintain, transfer, or identify the rights of the Company and its Subsidiaries in Company Intellectual Property, including all necessary assignments of such Company Intellectual Property, in each of clauses (i) through (vi) of this clause (o), other than in the ordinary course of business consistent with past practice practice;
(p) enter into any contract or pursuant to a Contract in effect as of the date hereof, exclusively license agreement with any director or sublicense, sell, transfer, dispose of, abandon, cancel, knowingly allow to lapse, or fail to renew, maintain, diligently pursue applications for or defend any Intellectual Property Rights officer of the Company or any Subsidiary or any of their respective affiliates (including any immediate family member of such person) or any other affiliate or associate (as such terms are used under SEC rules and regulations) of the Company or any Subsidiary outside of the ordinary course of business (which shall include the issuance or use of company-issued credit cards);
(q) adopt a plan of complete or partial liquidation or a resolution providing for or authorizing such a liquidation;
(r) except as taken in connection with actions permitted by Section 6.04, take any action to exempt or make not subject to or to otherwise waive or cause to be inapplicable (x) the provisions of Section 203 of the DGCL, (y) any other state takeover law or state law that are individually purports to limit or restrict business combinations or the ability to acquire or vote shares or (z) under the Company Rights Agreement, in each case to any individual or entity (other than Parent or its subsidiaries, including Purchaser) or transaction (other than the transactions contemplated hereby) if such individual, entity or transaction would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom;
(s) pay accounts payable or collect accounts receivable (or modify the terms of either) or utilize cash other than in the aggregate material ordinary course of business;
(t) further amend or take any action under or pursuant to the Company and the Company SubsidiariesRights Agreement; or
(wu) authorizeagree, resolve or offer, agree or commit, in writing or otherwise, commit to do any of the foregoing. Nothing contained ; provided, however, that the limitations set forth in clauses (a) through (u) of this Agreement Section 5.01 shall give Parent not restrict any action, transaction or Merger Sub, directly event occurring exclusively between the Company and any of its wholly-owned Subsidiaries or indirectly, the right to control or direct the operations between any wholly-owned Subsidiaries of the Company or its Subsidiaries prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective business operationsCompany.
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. (a) The Company covenants and agrees that between the date of this Agreement and the earlier Effective Time, unless Parent shall otherwise agree in writing (and except as set forth on Section 5.1(a) of the Effective Time Company Disclosure Schedules or as otherwise expressly contemplated, permitted or required by this Agreement), the Company shall and shall cause each of its Subsidiaries to, (i) maintain its existence in good standing under Applicable Law, (ii) subject to the valid termination of this Agreement in accordance with Article VII, except (w) as specifically restrictions and exceptions set forth in Section 5.01 of the Company Disclosure Letter as an exception to the corresponding restriction of this Section 5.01, (x5.1(b) as expressly required or expressly provided for by elsewhere in this Agreement, (y) as required by applicable Law or (z) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed, or conditioned), the Company will, and will cause each Company Subsidiary to, use commercially reasonable efforts to conduct its business and operations in all material respects only in the ordinary course of business consistent business, (iii) maintain its books, accounts and records and otherwise comply in all material respects with past practice, Applicable Laws and the Company will use, and will cause each Company Subsidiary to use, commercially (iv) use reasonable best efforts to (1) preserve substantially intact its business organizations, to keep available the services of its current officers and their business organization, (2) key employees and to preserve the present current relationships and goodwill with those persons having significant business relationships with of the Company and its Subsidiaries with customers, suppliers, distributors and other Persons with which the Company or any of its Subsidiaries and has business relations, except where the failure to preserve such current relationships occurs in the ordinary course of business.
(3b) comply with and maintain all material Permits required to conduct its and their businesses and to own, lease and operate its and their properties and assets. Without limiting the foregoing, subject to the exceptions described in clauses (w) through (z) of the foregoing sentence, the Company shall not, covenants and shall not permit any Company Subsidiary to:
(a) amend the Company Charter, Company Bylaws or certificate of incorporation or bylaws (or other similar governing documents) of any Company Subsidiary;
(b) issue, sell, grant options, restricted stock units, restricted stock or rights to purchase, pledge, or authorize or propose the issuance of, sale of, or grant of options, restricted stock units, restricted stock or rights to purchase or pledge, any Company Securities or Subsidiary Securities, other than (i) the issuance of Shares upon the exercise of Company Options or the vesting and settlement of RSU Awards, in each case outstanding as of the date hereof in accordance with their terms, or the issuance of Shares pursuant to the terms of the Company Stock Purchase Plan and (ii) the issuance of securities by a wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary;
(c) adjust, split, combine, recapitalize, subdivide or reclassify or otherwise amend the terms of any shares of its capital stock or other equity interests;
(d) sell, pledge, dispose of, transfer, lease, mortgage, license, sublicense, abandon, allow to lapse, assign or encumber any Company Subsidiary or any material property, securities, or material assets of the Company or any Company Subsidiary, except (i) pursuant to Company Material Contracts existing as of, and true, correct and complete copies of which have been made available to Parent prior to, agrees that between the date of this Agreement and the Effective Time, the Company shall not and shall cause each of its Subsidiaries not to (except as expressly contemplated, permitted or required by this Agreement, as set forth in on the applicable subsection of Section 5.01(d)(i5.1(b) of the Company Disclosure Letter, Schedules or with the prior written approval of Parent):
(iii) pursuant to Incidental Contracts, amend the Company Certificate of Incorporation or (iii) for de minimis dispositions Company Bylaws or abandonments equivalent organizational documents of immaterial tangible assets not currently used in the Company’s or Company’s Subsidiaries business, in the ordinary course of business and consistent with past practiceSubsidiaries;
(eii) declare, set aside, make or pay any dividend dividends or other distribution with distributions (whether in cash, stock or property or any combination thereof) in respect to of any of its capital stock;
(iii) adjust, split, combine or reclassify any of its capital stock or that of its Subsidiaries or issue 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 equity interests, whether payable in cash, stock, property or a combination thereofthat of its Subsidiaries;
(fiv) other than (i) in connection with the exercise of any outstanding Company Options or offers of purchase rights under the Company Stock Purchase Plan permitted by the terms of such Company Options or the Company Stock Purchase Planrepurchase, as applicable, or the payment of related withholding Taxes, by net exercise or by tendering of shares or (ii) Tax withholdings on the vesting or payment of RSU Awards or the vesting of Restricted Stock Awards, reclassify, combine, split, subdivide or amend the terms of, or redeem, purchase redeem or otherwise acquire, directly or indirectly, any shares of its equity securities or its Subsidiaries’ capital stock or any optionsCompany Stock Rights (except pursuant to restricted stock award agreements outstanding on the date hereof);
(v) issue, warrantsdeliver or sell, securities pledge or encumber any shares of its or its Subsidiaries’ capital stock or any Company Stock Rights (other than the issuance of Shares upon the exercise of Company Stock Options outstanding as of the date of this Agreement);
(vi) take any action that would reasonably be expected to result in any of the conditions set forth in ARTICLE VI not being satisfied or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or other rights exercisable for or convertible into any materially delay such equity securitiesconsummation;
(gvii) incur, create, assume or otherwise become liable for any indebtedness for borrowed money, other than indebtedness of the Company’s Subsidiaries to the Company or any of its wholly-owned Subsidiaries and short-term borrowings under existing lines of credit (ior under any refinancing of such existing lines) incurred in the ordinary course of business consistent with prior practice or assume, guaranty, endorse or otherwise become liable or responsible for the obligations of any other Person;
(viii) make any acquisition loans, advances or disposition, capital contributions to or make investments in any offer or agreement to acquire or dispose other Person (other than by means of a merger, consolidation, recapitalization, purchase, sale or otherwise, in one transaction or any series of related transactions, of any business, assets or securities or any sale, lease, encumbrance or other disposition of assets or securities of the Company or any of its Subsidiaries to or in the Company or any person of its Subsidiaries, with respect to any employee travel expenses or with respect to the Company’s computer loan program benefit);
(iiix) adopt, publicly propose merge or enter into consolidate with any other entity or adopt a plan of complete or partial liquidation, dissolution, recapitalization or restructuring, or file or consent to the filing of a petition in bankruptcy under any provisions of applicable Law, except for in the ordinary course of business and consistent with past practiceother reorganization;
(hx) assumechange its accounting methods, guarantee, endorse principles or otherwise become liable or responsible (whether directly, contingently or otherwise) for practices used in the obligations (excluding existing obligations as preparation of the date hereof) of any other personmost recent Company Financial Statements, except as required by GAAP or Applicable Laws;
(ixi) incuralter, createamend or create any obligations with respect to compensation, assume severance, benefits, change of control payments or otherwise become liable or responsible for any Indebtedness or issue any debt securities, or assume or guarantee the obligations of any person (other than a wholly owned Company Subsidiary) for borrowed money;
(j) make any loans, advances or capital contributions to, or investments in, any other personpayments to present or former employees, directors or Affiliates of the Company, other than (i) loans solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries, (ii) advances for travel and other outhiring of non-of-pocket expenses to officers, directors or officer employees of the Company or any Company Subsidiary made in the ordinary course consistent with past practice, and (iii) advances to directors and officers required to be made pursuant to any indemnification or advancement obligations in the Company Charter, the Company Bylaws, the governing documents of any Company Subsidiary, or any employment agreement or indemnification agreement to which the Company or any Company Subsidiary is party as of the date of this Agreement (true and accurate copies of which have been made available to Parent prior to the date of this Agreement);
(k) except to the extent required by this Agreement, applicable Law or the terms of any Company Benefit Plan, as in effect on the date hereof and set forth on Section 5.01(k) of the Company Disclosure Letter: (i) hire any employee at the level of Director or higher, except in the ordinary course of business or as otherwise required by applicable Law, or an existing Contract, (ii) increase the compensation or benefits payable or to become payable to its directors, officers or employees (other than if the Closing has not yet occurred as of February 28, 2024 merit increases in salaries for employees with titles below the level of Vice President, not to exceed four percent (4%) in the aggregate of such employees’ salaries on the date hereof in the ordinary course of business consistent with prior years’ annual compensation review cycles), past practices and any alterations or promote any non-officer employee to an officer position; amendments (iiiA) grant any rights to severance or termination pay or other termination benefit or terminate any such individual, other than for cause or due to death or disability; (iv) establish, terminate, adopt, enter into or materially amend any CBA or Company Benefit Plans (or any collective bargaining or similar labor agreement, or employee benefit plan or arrangement, that would be a CBA or a Company Benefit Plan (as applicable) if in effect on the date hereof); or (v) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability, time of payment or funding of any compensation or any equity award or other benefit under any Company Benefit Plan made with respect to any current non-officers and non-directors in the ordinary course of business consistent with past practice that, in the aggregate, do not result in a material increase in benefits or former service providercompensation expense to the Company or (B) as expressly contemplated by Section 1.8 and Section 1.9 of this Agreement;
(lxii) make sell, license, mortgage, transfer, lease, pledge or otherwise subject to any change in accounting policies Encumbrance or procedures, otherwise dispose of any material properties or assets (including Intellectual Property or stock or other than as required by GAAP, applicable Law or any Governmental Entity with competent jurisdictionownership interests of its Subsidiaries);
(mxiii) engage in acquire any transaction withmaterial business, assets or securities or enter into any joint venture, partnership agreement, arrangement strategic alliance agreement or understanding with any affiliate of the Company or other person covered by Item 404 of Regulation S-K promulgated under the Exchange Act;
(i) prepare or file any material Tax Return materially inconsistent with past practice or take any position or adopt any method on any such Tax Return that is materially inconsistent with positions taken or methods used in preparing or filing similar Tax Returns in prior periods, (ii) make, change or revoke any material Tax election, (iii) enter into any Tax allocation, indemnity or sharing agreement (other than any such agreement Teaming Agreements or similar agreements entered into in the ordinary course of business, the primary purpose of which is unrelated to Taxes or any agreement solely among any of the Company or the Company Subsidiariesbusiness consistent with past practice), (iv) change any annual Tax accounting period, (v) file any amendment to a material Tax Return, (vi) enter into any “closing agreement” with any taxing authority regarding a material amount of Tax, (vii) consent to any material Tax claim or assessment or surrender a right to a material refund of Taxes, (viii) adopt or change any method of Tax accounting, or (ix) consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment;
(oxiv) make or authorize any capital expenditure, capital addition or incur any obligations, liabilities or Indebtedness capital improvement in respect thereof, except for those in an amount less than amounts exceeding $75,000 contemplated by the capital expenditure budget for the relevant fiscal year at or after the time contemplated by such budget, which capital expenditure budget has been made available to Parent prior to the date of this Agreement;
(p) change 500,000 in any material respect the policies or practices regarding accounts receivable or accounts payable or cash management or fail to manage working capital in accordance with past practices, except as required by GAAP or applicable Law;
(q) settle any suit, action, claim, proceeding or investigation other than a settlement solely for monetary damages (net of insurance proceeds received) not in excess of $25,000 individually individual occurrence or $50,000 2,000,000 in the aggregate;
(rA) enter into any contract, agreement or commitment of a character that is, or would reasonably be expected to be, material to the Company and its Subsidiaries taken as a whole, except that the Company may enter into any contract, agreement or commitment in the ordinary course of business consistent with past practice or in connection with any transaction to the extent specifically permitted by any other subclause of this Section 5.01(B) terminate, (i) enter into any Contract that would, if entered into prior to the date hereof, be a Company Material Contract renew or a Real Property Lease, (ii) materially modify, materially amend, let lapse or terminate (other than expirations in accordance with its terms) any Company Material Contract or Real Property Lease or waive, release or assign any material rights or material claims or make any material payment, directly or indirectly, of any liability of the Company or the Company Subsidiaries before the same comes due in accordance with its terms, thereunder, (iii) sublease or license any portion of the real property leased under any Real Property Lease, or (iv) acquire a fee interest in any real property;
(s) create any Subsidiary of the Company or any of its Subsidiaries;
(t) enter into any new line of business, or form or commence the operations of any joint venture;
(u) amend in a manner that adversely impacts in any material respect the ability to conduct its businessany contract, agreement or commitment that is, or terminate or allow would reasonably be expected to lapse any be, material Permits of to the Company and its Subsidiaries taken as a whole, except for terminations, renewals, or its Subsidiaries;
(v) except amendments of contracts in the ordinary course of business consistent with past practice practice;
(xvi) waive, release or pursuant to a Contract in effect as of the date hereofassign any material rights, exclusively license claims or sublicense, sell, transfer, dispose of, abandon, cancel, knowingly allow to lapse, or fail to renew, maintain, diligently pursue applications for or defend any Intellectual Property Rights benefits of the Company or any Subsidiary under any Company Subsidiary Material Contract or Company Significant Contract;
(xvii) enter into any contract which, if it existed on the date hereof, would have been a Company Material Contract or Company Significant Contract, or submit any bid for a Government Contract that (A) would, under the federal rules covering Organizational Conflicts of Interest (as that term is used in Federal Acquisition Regulation Subpart 9.5), or otherwise, limit Parent, U.S. Parent or the Surviving Corporation from engaging in any line of business, competing with any Person or selling any product or service; (B) is reasonably expected to result in annual revenues of $20,000,000 or more; or (C) is reasonably expected to result in a margin to the Company of an amount that is less than the anticipated margin of such contract disclosed by the Company to Parent or U.S. Parent prior to the date hereof;
(xviii) waive or release any rights that are individually or in the aggregate material to the Company and its Subsidiaries, taken as a whole, or pay, discharge or satisfy any claims, liabilities or obligations that are, or would reasonably be expected to be, material to the Company and its Subsidiaries, taken as a whole, before the same come due in accordance with their terms, except in either case other than the payment, discharge and satisfaction in the ordinary course of business of liabilities reflected on or reserved for in the Company Financial Statements included in the Company’s Form 10-Q for the quarter ended June 28, 2008 or otherwise incurred in the ordinary course of business, consistent with past practice;
(xix) settle or compromise any material pending or threatened suit, action or proceeding;
(xx) terminate any material insurance policy (or fail to replace such policy with an equivalent replacement policy, taking into account the cost and availability of such insurance, deductibles and retentions) covering the Company, its Subsidiaries or their assets;
(xxi) make, amend or rescind any material Tax election not consistent with prior practice, settle or compromise any material Tax Liability or fail to file any material Tax Return when due, fail to cause such Tax Returns when filed to be complete and accurate in all material respects, or file any material amendment to any previously filed Tax Returns or change any material Tax accounting method; or
(wxxii) authorize, resolve or offer, agree or commit, in writing or otherwise, to do take any of the foregoing. Nothing contained actions described in this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control or direct the operations of the Company or its Subsidiaries prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective business operationsSection 5.1(b).
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. (a) The Company agrees that that, between the date of this Agreement and the earlier of the Effective Time and the valid termination of this Agreement in accordance with Article VIIits terms (the “Pre-Closing Period”), except (w) as specifically set forth in Section 5.01 of the Company Disclosure Letter as an exception to the corresponding restriction of this Section 5.01, (x) as expressly required or expressly provided for by this Agreement, (yi) as required by applicable Law or Law, (zii) as consented to in writing by with the prior written consent of Parent (which such consent shall not to be unreasonably withheld, conditioned or delayed), (iii) as expressly contemplated by any other provision of this Agreement or conditioned)(iv) as set forth in Section 5.01(a) of the Company Disclosure Schedule, the Company willshall, and will shall cause each the Company Subsidiary toSubsidiaries, to use commercially reasonable best efforts to conduct its business and operations in all material respects the businesses of the Company Group only in the ordinary course of business and, to the extent consistent with past practicetherewith, and the Company will use, and will cause each Company Subsidiary to use, commercially use reasonable best efforts to to: (1A) preserve substantially intact its and their the business organization, (2) preserve the present relationships material assets and goodwill with those persons having significant business relationships with material properties of the Company Group, (B) keep available the services of its executive officers and key employees on commercially reasonable terms, (C) maintain in effect all Company Permits, and (D) maintain satisfactory relationships of the Company Subsidiaries and (3) comply Group with and maintain all material Permits required to conduct its and their businesses and to own, lease and operate its and their properties and assets. Without limiting the foregoing, subject to the exceptions described in clauses (w) through (z) of the foregoing sentence, any persons with which the Company shall not, Group has material business relations and shall not permit any Company Subsidiary to:
(a) amend the Company Charter, Company Bylaws or certificate of incorporation or bylaws (or other similar governing documents) of any Company Subsidiary;with Governmental Authorities that have jurisdiction over its business and operations.
(b) Without limiting Section 5.01(a), and as an extension thereof, except as expressly contemplated by any other provision of this Agreement, as set forth in Section 5.01(b) of the Company Disclosure Schedule or as required by applicable Law, neither the Company nor any Company Subsidiary shall, during the Pre-Closing Period, do any of the following without the prior written consent of Parent (such consent not to be unreasonably withheld, conditioned or delayed):
(i) amend or otherwise change its certificate of incorporation, bylaws or other similar organizational documents (including the Company Charter and the Company Bylaws);
(ii) issue, grant, sell, grant optionsdispose of, restricted stock units, restricted stock or rights to purchase, pledge, encumber or authorize such issuance, sale, disposition or propose encumbrance of, any Equity Interests of the Company or any Company Subsidiary (except for the issuance of, sale of, or grant of options, restricted stock units, restricted stock or rights to purchase or pledge, any Company Securities or Subsidiary Securities, other than (i) the issuance withholding of Shares upon the exercise of issuable pursuant to Company Options Options, Company RSAs or the vesting and settlement of RSU Awards, in each case Company PSUs that are outstanding as of on the date hereof of this Agreement (or that are granted in accordance with their terms, or the issuance terms of Shares this Agreement) pursuant to the terms of the applicable Company Stock Purchase Plan Options, Company RSAs and (ii) Company PSUs as in effect as of the issuance of securities by a wholly owned Company Subsidiary to Capitalization Date or, if later, the Company or another wholly owned Company Subsidiarygrant date);
(c) adjust, split, combine, recapitalize, subdivide or reclassify or otherwise amend the terms of any shares of its capital stock or other equity interests;
(d) sell, pledge, dispose of, transfer, lease, mortgage, license, sublicense, abandon, allow to lapse, assign or encumber any Company Subsidiary or any material property, securities, or material assets of the Company or any Company Subsidiary, except (i) pursuant to Company Material Contracts existing as of, and true, correct and complete copies of which have been made available to Parent prior to, the date of this Agreement and set forth in Section 5.01(d)(i) of the Company Disclosure Letter, (ii) pursuant to Incidental Contracts, or (iii) for de minimis dispositions or abandonments of immaterial tangible assets not currently used in the Company’s or Company’s Subsidiaries business, in the ordinary course of business and consistent with past practice;
(e) declare, set aside, make or pay any dividend or other distribution distribution, payable in cash, shares, property or otherwise, with respect to any shares of its capital stock Equity Interests of the Company or any Company Subsidiary, except for dividends or other equity interests, whether payable in cash, stock, property distributions by any direct or a combination thereofindirect wholly owned Company Subsidiary to the Company or any other direct or indirect wholly owned Company Subsidiary;
(fiv) other than (i) in connection with the exercise of any outstanding Company Options or offers of purchase rights under the Company Stock Purchase Plan permitted by the terms of such Company Options or the Company Stock Purchase Plan, as applicable, or the payment of related withholding Taxes, by net exercise or by tendering of shares or (ii) Tax withholdings on the vesting or payment of RSU Awards or the vesting of Restricted Stock Awards, reclassify, combine, split, subdivide or amend the terms ofredeem, or redeem, purchase or otherwise acquire, directly or indirectly, any of its equity securities or any options, warrants, securities of the Company or other rights exercisable for or convertible into any such equity securities;
(g) (i) make any acquisition or disposition, or make any offer or agreement to acquire or dispose by means of a merger, consolidation, recapitalization, purchase, sale or otherwise, in one transaction or any series of related transactions, of any business, assets or securities or any sale, lease, encumbrance or other disposition of assets or securities Equity Interests of the Company or any Company Subsidiary, except in connection with any net exercise, net settlement or “sell to cover” transaction with respect to any Company Options, Company RSAs or Company PSUs, in each case, outstanding as of the Capitalization Date, in accordance with their terms;
(v) sell, transfer, lease, sublease, license, mortgage, pledge, encumber, allow to lapse, assign, abandon, disclaim, dedicate to the public, incur any Lien on (other than a Permitted Lien) or otherwise dispose of, or authorize any of the foregoing with respect to, any of its Subsidiaries material properties, assets, licenses, operations, rights, businesses or any person interests therein (but not including Intellectual Property, which is the subject of Section 5.01(b)(xviii)) except (A) pursuant to Contracts or Company Leases in force on the date of this Agreement, (iiB) adopt, publicly propose such dispositions or enter into a plan of complete or partial liquidation, dissolution, recapitalization or restructuring, or file or consent to the filing of a petition in bankruptcy under any provisions of applicable Law, except for authorizations thereof in the ordinary course of business of the Company’s or the applicable Company Subsidiary’s business or (C) such dispositions among the Company and consistent with past practicethe Company Subsidiaries;
(hvi) assumeacquire (including by amalgamation, guaranteemerger, endorse consolidation or otherwise become liable acquisition of Equity Interests or responsible (whether directly, contingently assets or otherwise) for the obligations (excluding existing obligations as of the date hereof) of any other personbusiness combination) (A) any company, corporation, partnership or other business organization (or any division thereof) or (B) any real property;
(ivii) incur(A) repurchase, create, assume prepay or otherwise become liable or responsible incur any indebtedness for any Indebtedness borrowed money or issue any debt securities, or assume issue or guarantee the obligations sell options, warrants, calls or other rights to acquire any of any person its debt securities, (other than a wholly owned Company Subsidiary) for borrowed money;
(jB) make any loans, advances or capital contributions to, or investments in, any other person, person (other than a Company Subsidiary) or (iC) loans solely between assume, guarantee, endorse or otherwise become liable or responsible for the indebtedness or other obligations of another person (other than a guaranty by the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries, (ii) advances for travel and other out-of-pocket expenses to officers, directors or employees on behalf of the Company or any Company Subsidiary made and other than in connection with reimbursements to Employees in the ordinary course consistent with past practiceof business);
(viii) enter into, amend, waive any rights under, or voluntarily terminate any Material Contract (or any other Contract that would be deemed a Material Contract if it had been entered into prior to the date of this Agreement), other than in the ordinary course of business and subject to the other clauses of this Section 5.01(b) (iii) advances to directors and officers required to be made except that no Material Contract pursuant to Section 3.15(a)(vi) or Section 3.15(a)(vii) shall be entered into), or as a result of the expiration or renewal of such Contract in accordance with its terms as in effect on the date of this Agreement;
(ix) authorize, or make any indemnification or advancement obligations commitment with respect to, capital expenditures that (A) in the Company Charter, aggregate exceed the annual capital expenditures budget (a copy of which has been set forth in Section 5.01(b)(ix) of the Company BylawsDisclosure Schedule) of the Company and the Company Subsidiaries, taken as a whole, or, (B) with respect to any capital expenditures not set forth in the governing documents annual capital expenditures budget set forth in Section 5.01(b)(ix) of the Company Disclosure Schedule, exceed $500,000 individually or $2,000,000 in the aggregate;
(x) except as otherwise required under any Plan in effect as of the date hereof, (A) increase the compensation payable or to become payable or the benefits provided to any Employee or Non-Employee Service Provider, (B) grant or amend any retention, severance or termination pay to, or enter into any employment, bonus, incentive, equity, change of control or severance agreement with, any Employee or Non-Employee Service Provider, (C) pay any annual bonus or annual incentive compensation in excess of the amount earned based on actual performance in accordance with the applicable Plan, (D) establish, adopt, enter into, terminate or amend any Plan, or establish, adopt or enter into any plan, agreement, program, policy, trust, fund or other arrangement that would be a Plan if it were in existence as of the date of this Agreement, for the benefit of any Employee or Non-Employee Service Provider, (E) loan or advance any money or other property to any Employee or Non-Employee Service Provider or (F) establish, adopt, enter into or amend any collective bargaining agreement or similar labor arrangement;
(xi) other than in the ordinary course of business with respect to (A) any Employee below the level of vice president or (B) any Employee with annual cash base compensation of not more than $200,000, hire or terminate (other than for cause as determined by the Company Subsidiary, in its reasonable discretion) the employment of such Employee (or any employment agreement individual who would be an Employee if employed on the date hereof);
(xii) take any action to voluntarily accelerate the lapse of restriction, achievement of performance or indemnification agreement vesting of any equity or equity-based awards as a result of the Merger, except as expressly provided in this Agreement;
(xiii) fail to which maintain in full force and effect the Company or any Company Subsidiary is party existing insurance policies as of the date of this Agreement (true or replacement or revised policies with comparable terms and accurate copies of which have been made available to Parent prior to conditions that provide insurance coverage in a manner consistent with past practices) covering the date of this Agreement)Company and the Company Subsidiaries and their respective properties, assets and businesses;
(kxiv) except (A) settle (or propose to settle) any Action, other than (1) settlements for monetary damages (net of insurance proceeds) involving not more than $1,000,000 in the extent required by this Agreement, applicable Law aggregate and that do not (x) require any material actions or the terms of impose any Company Benefit Plan, as in effect restrictions or ongoing royalty or future payment obligations on the date hereof and set forth on Section 5.01(k) business or operations of the Company Disclosure Letter: Group, or after the Effective Time, Parent or its Subsidiaries or (iy) hire include the admission of wrongdoing by any employee at member of the level Company Group, and (2) Transaction Litigation that is the subject of, and settled in accordance with, Section 6.11 or (B) settle (or propose to settle) any investigation or inquiry by any Governmental Authority, including by entering into any consent decree or other similar agreement;
(xv) (A) change the Company’s financial accounting policies or procedures in effect as of Director December 31, 2022, other than as required by Law or higherGAAP or (B) write up, except write down or write off the book value of any of the Company’s assets, other than (1) in the ordinary course of business or (2) as otherwise may be required by applicable LawLaw or GAAP, or an existing Contract, (ii) increase as approved by the compensation or benefits payable or to become payable to its directors, officers or employees (other than if the Closing has not yet occurred as of February 28, 2024 merit increases in salaries for employees with titles below the level of Vice President, not to exceed four percent (4%) in the aggregate of such employees’ salaries on the date hereof in the ordinary course of business consistent with prior years’ annual compensation review cycles), or promote any non-officer employee to an officer position; (iii) grant any rights to severance or termination pay or other termination benefit or terminate any such individual, other than for cause or due to death or disability; (iv) establish, terminate, adopt, enter into or materially amend any CBA or Company Benefit Plans (or any collective bargaining or similar labor agreement, or employee benefit plan or arrangement, that would be a CBA or a Company Benefit Plan (as applicable) if in effect on the date hereof); or (v) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability, time of payment or funding of any compensation or any equity award or other benefit under any Company Benefit Plan with respect to any current or former service providerCompany’s independent public accountants;
(lxvi) make any change in accounting policies adopt a plan of complete or procedurespartial liquidation or resolutions providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or other than as required by GAAP, applicable Law or any Governmental Entity with competent jurisdiction;
(m) engage in any transaction with, or enter into any agreement, arrangement or understanding with any affiliate reorganization of the Company or other person covered by Item 404 any of Regulation S-K promulgated under the Exchange ActCompany Subsidiaries;
(ixvii) prepare (A) change or adopt (or file a request to change or adopt) any material method of Tax Return materially inconsistent with past practice accounting or take any position or adopt any method on any such annual Tax Return that is materially inconsistent with positions taken or methods used in preparing or filing similar Tax Returns in prior periodsaccounting period, (iiB) make, change or revoke rescind any material Tax election, (iiiC) file any Tax Return relating to the Company or any of the Company Subsidiaries that has been prepared in a manner that is inconsistent with past practices, as applicable, (D) settle or compromise any claim, investigation, audit or controversy relating to Taxes, (E) surrender any right to claim a material Tax refund, (F) file any material amended Tax Return, (G) enter into any closing agreement with respect to any Tax allocationor (H) waive or extend the statute of limitations with respect to any Tax Return other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business;
(xviii) (A) abandon, indemnity disclaim, dedicate to the public, allow to lapse, sell, assign, transfer, encumber or sharing agreement incur any Lien (other than Permitted Liens) on, any Owned Intellectual Property or material Licensed Intellectual Property, including failing to perform or cause to be performed all applicable filings, recordings and other acts, or to pay or cause to be paid all required fees and Taxes, to maintain and protect the Company’s or any Company Subsidiary’s interest in such agreement entered into Owned Intellectual Property or material Licensed Intellectual Property; (B) license or sublicense any Intellectual Property to any third party, other than implied non-exclusive licenses granted in connection with customer sales of any Company Products; (C) develop, create or invent any Intellectual Property jointly with any third party, in each case other than in the ordinary course of business; or (D) disclose any confidential information or confidential Company Intellectual Property to any person, other than Representatives of the Company or a Company Subsidiary that are subject to confidentiality and non-disclosure obligations, in each case in the ordinary course of business, the primary purpose of which is unrelated or other than (1) to Taxes Parent or any agreement solely among any of its Affiliates in connection with the Company or the Company Subsidiaries), (iv) change any annual Tax accounting period, (v) file any amendment to a material Tax Return, (vi) enter into any “closing agreement” with any taxing authority regarding a material amount of Tax, (vii) consent to any material Tax claim or assessment or surrender a right to a material refund of Taxes, (viii) adopt or change any method of Tax accounting, Transactions or (ix2) consent in accordance with Section 6.03 and subject to any extension or waiver execution of the statute of limitations period applicable to any material Tax claim or assessment;
(o) make or authorize any capital expenditure, or incur any obligations, liabilities or Indebtedness in respect thereof, except for those in an amount less than $75,000 contemplated by the capital expenditure budget for the relevant fiscal year at or after the time contemplated by such budget, which capital expenditure budget has been made available to Parent prior to the date of this Acceptable Confidentiality Agreement;
(p) change in any material respect the policies or practices regarding accounts receivable or accounts payable or cash management or fail to manage working capital in accordance with past practices, except as required by GAAP or applicable Law;
(q) settle any suit, action, claim, proceeding or investigation other than a settlement solely for monetary damages (net of insurance proceeds received) not in excess of $25,000 individually or $50,000 in the aggregate;
(r) except in the ordinary course of business consistent with past practice or in connection with any transaction to the extent specifically permitted by any other subclause of this Section 5.01, (ixix) enter into any Contract that wouldinto, if entered into prior to the date hereof, be a Company Material Contract or a Real Property Lease, (ii) materially modify, materially amend, let lapse waive or terminate (other than renewals, expirations or terminations in accordance with its their terms) any Company Material Contract or Real Property Lease or waive, release or assign any material rights or material claims or make any material payment, directly or indirectly, of any liability of the Company or the Company Subsidiaries before the same comes due in accordance with its terms, thereunder, (iii) sublease or license any portion of the real property leased under any Real Property Lease, or (iv) acquire a fee interest in any real propertyAffiliate Transaction;
(sxx) create any Subsidiary of the Company or any of its Subsidiaries;
(t) enter into any new line of business, or form or commence the operations of any joint venture;
(u) amend fail to make in a timely manner that adversely impacts in any material respect filings with the ability to conduct its business, SEC required under the Securities Act or terminate the Exchange Act or allow to lapse any material Permits of the Company or its Subsidiaries;
(v) except in the ordinary course of business consistent with past practice or pursuant to a Contract in effect as of the date hereof, exclusively license or sublicense, sell, transfer, dispose of, abandon, cancel, knowingly allow to lapse, or fail to renew, maintain, diligently pursue applications for or defend any Intellectual Property Rights of the Company or any Company Subsidiary that are individually or in the aggregate material to the Company rules and the Company Subsidiariesregulations promulgated thereunder; or
(wxxi) authorizeagree, resolve resolve, announce an intention, enter into any Contract or offer, agree or commit, in writing or otherwise, otherwise make a commitment to do any of the foregoing. Nothing contained in this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control or direct the operations of the Company or its Subsidiaries prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective business operations.
Appears in 1 contract
Samples: Merger Agreement (Axonics, Inc.)
Conduct of Business by the Company Pending the Merger. (a) The Company agrees that that, between the date of this Agreement and the earlier of the Effective Time and or the valid earlier termination of this Agreement in accordance with Article VIIAgreement, except as (w1) expressly contemplated by any other provision of this Agreement or any Ancillary Agreement, (2) as specifically set forth in Section 5.01 6.01 of the Company Disclosure Letter as an exception to the corresponding restriction of this Section 5.01Schedule, and (x) as expressly required or expressly provided for by this Agreement, (y3) as required by applicable Law (including as may be requested or (z) as consented to compelled by any Governmental Authority), unless Novus shall otherwise consent in writing by Parent (which consent shall not be unreasonably withheldconditioned, withheld or delayed):
(i) the Company, or conditioned), and shall cause the Company willSubsidiaries to, conduct their business in the ordinary course of business and in a manner consistent with past practice; and
(ii) the Company shall, and will shall cause each the Company Subsidiary Subsidiaries to, use commercially their reasonable best efforts to conduct preserve substantially intact the business organization of the Company and the Company Subsidiaries, to keep available the services of the current officers, key employees and consultants of the Company and the Company Subsidiaries and to preserve the current relationships of the Company and the Company Subsidiaries with customers, suppliers and other persons with which the Company and the Company Subsidiaries have significant business relations.
(b) By way of amplification and not limitation, except as (1) expressly contemplated by any other provision of this Agreement or any Ancillary Agreement, (2) as set forth in Section 6.01 of the Company Disclosure Schedule, and (3) as required by applicable Law (including as may be requested or compelled by any Governmental Authority), no Company Group Member shall, between the date of this Agreement and the Effective Time or the earlier termination of this Agreement, directly or indirectly, do any of the following without the prior written consent of Novus (which consent shall not be unreasonably conditioned, withheld or delayed) except in connection with the issuance of the Company Series C Interim Preferred Stock:
(i) amend or otherwise change its business and operations Company Group Organizational Documents;
(ii) issue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (A) any shares of any class of capital stock of any Company Group Member, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of any Company Group Member, provided that (1) the exercise or settlement of any Company Award in all material respects effect on the date of this Agreement or grants of Company Awards in the ordinary course of business consistent with past practice, practice and the issuance of shares of Company will use, and will cause each Company Subsidiary to use, commercially reasonable efforts to (1) preserve intact its and their business organization, (2) preserve the present relationships and goodwill with those persons having significant business relationships with the Company and the Company Subsidiaries and (3) comply with and maintain all material Permits required to conduct its and their businesses and to own, lease and operate its and their properties and assets. Without limiting the foregoing, subject to the exceptions described in clauses (w) through (z) of the foregoing sentence, the Company shall not, and shall not permit any Company Subsidiary to:
(a) amend the Company Charter, Company Bylaws or certificate of incorporation or bylaws Common Stock (or other similar governing documents) class of any Company Subsidiary;
(b) issue, sell, grant options, restricted stock units, restricted stock or rights to purchase, pledge, or authorize or propose the issuance of, sale of, or grant of options, restricted stock units, restricted stock or rights to purchase or pledge, any Company Securities or Subsidiary Securities, other than (i) the issuance of Shares upon the exercise of Company Options or the vesting and settlement of RSU Awards, in each case outstanding as equity security of the date hereof in accordance with their termsCompany, or the issuance of Shares as applicable) pursuant to the terms of the Company Preferred Stock Purchase Plan and (ii) the issuance of securities by a wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary;
(c) adjust, split, combine, recapitalize, subdivide or reclassify or otherwise amend the terms of any shares of its capital stock or other equity interests;
(d) sell, pledge, dispose of, transfer, lease, mortgage, license, sublicense, abandon, allow to lapse, assign or encumber any Company Subsidiary or any material property, securities, or material assets of the Company or any Company Subsidiary, except (i) pursuant to Company Material Contracts existing as of, and true, correct and complete copies of which have been made available to Parent prior to, in effect on the date of this Agreement Agreement, and set forth in Section 5.01(d)(i(2) the issuance or sale of any class of capital stock of the Company Disclosure Letter, in a bona fide financing on the same terms as the Series C Preferred Stock up to an aggregate amount of $8,650,000 shall not require the consent of Novus (iia “Company Permitted Interim Financing”); or (B) pursuant to Incidental Contracts, or any material assets of any Company Group Member;
(iii) for de minimis dispositions form any subsidiary or abandonments of immaterial tangible assets not currently used acquire any equity interest or other interest in the Company’s any other entity or Company’s Subsidiaries business, in the ordinary course of business and consistent enter into a joint venture with past practiceany other entity;
(eiv) declare, set aside, make or pay any dividend or other distribution with respect to any shares of its capital stock or other equity interestsdistribution, whether payable in cash, stock, property or a combination thereofotherwise, with respect to any of its capital stock;
(fv) other than (i) in connection with the exercise of any outstanding Company Options or offers of purchase rights under the Company Stock Purchase Plan permitted by the terms of such Company Options or the Company Stock Purchase Plan, as applicable, or the payment of related withholding Taxes, by net exercise or by tendering of shares or (ii) Tax withholdings on the vesting or payment of RSU Awards or the vesting of Restricted Stock Awards, reclassify, combine, split, subdivide or amend the terms ofredeem, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, other than redemptions of equity securities or any options, warrants, securities of from former employees upon the Company or other rights exercisable for or convertible into any terms set forth in the underlying agreements governing such equity securities;
(gvi) (iA) make any acquisition or dispositionacquire (including, or make any offer or agreement to acquire or dispose without limitation, by means of a merger, consolidation, recapitalization, purchase, sale or otherwise, in one transaction acquisition of stock or any series of related transactions, of any business, assets or securities any other business combination) any corporation, partnership, other business organization or any saledivision thereof, lease, encumbrance or other disposition than the acquisition of inventory and up to $1,000,000 of fixed assets or securities of the Company or any of its Subsidiaries or any person or (ii) adopt, publicly propose or enter into a plan of complete or partial liquidation, dissolution, recapitalization or restructuring, or file or consent to the filing of a petition in bankruptcy under any provisions of applicable Law, except for in the ordinary course of business and consistent with past practice;
; or (hB) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) incur any indebtedness for the obligations (excluding existing obligations as of the date hereof) of any other person;
(i) incur, create, assume or otherwise become liable or responsible for any Indebtedness borrowed money or issue any debt securitiessecurities or assume, guarantee or endorse, or assume or guarantee otherwise become responsible for, the obligations of any person (other than a wholly owned person, or make any loans or advances, or intentionally grant any security interest in any of its assets; provided that the incurrence of Company Subsidiary) for borrowed moneyPermitted Interim Financing shall not require the consent of Novus;
(jvii) make (A) grant any loans, advances or capital contributions to, or investments in, any other person, other than (i) loans solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries, (ii) advances for travel and other out-of-pocket expenses to officers, directors or employees of the Company or any Company Subsidiary made increase in the ordinary course consistent with past practicecompensation, and (iii) advances to directors and officers required to be made pursuant to any indemnification or advancement obligations in the Company Charter, the Company Bylaws, the governing documents of any Company Subsidiary, or any employment agreement or indemnification agreement to which the Company or any Company Subsidiary is party as of the date of this Agreement (true and accurate copies of which have been made available to Parent prior to the date of this Agreement);
(k) except to the extent required by this Agreement, applicable Law or the terms of any Company Benefit Plan, as in effect on the date hereof and set forth on Section 5.01(k) of the Company Disclosure Letter: (i) hire any employee at the level of Director or higher, except in the ordinary course of business or as otherwise required by applicable Law, or an existing Contract, (ii) increase the compensation incentives or benefits payable or to become payable to its any current or former director, officer, employee or consultant of any Company Group Member (or their respective beneficiaries or dependents) as of the date of this Agreement, (B) enter into any new, or amend any existing employment or severance or termination agreement with any current or former director, officer, employee or consultant, or (C) accelerate or commit to accelerate the funding, payment, or vesting of any compensation or benefits to any current or former director, officer, employee or consultant (except that the Company Group may (1) increase base compensation of current directors, officers officers, employees or employees consultants as set forth on Section 6.01b)vii) of the Company Disclosure Schedule, (other than if the Closing has not yet occurred as of February 28, 2024 merit 2) provide increases in salaries for salary, wages, bonuses or benefits to employees with titles below the level of Vice President, not to exceed four percent (4%) as required under any employment or consulting agreement in the aggregate of such employees’ salaries effect on the date hereof of this Agreement and reflected on Section 4.10(a) of the Company Disclosure Schedule, (3) change the title of its employees in the ordinary course of business consistent with past practice, (4) enter into a new employment agreement or provide base compensation and incentives and benefits in the ordinary course of business consistent with past practice to any employee or consultant hired after the date of this Agreement who will be making less than $200,000 per annum, and (5) make annual or quarterly bonus or commission payments in the ordinary course of business and in accordance with the bonus or commission plans existing on the date of this Agreement and reflected on Section 4.10(a) of the Company Disclosure Letter or put in place in the ordinary course of business consistent with past practice for any employee or consultant hired after the date of this Agreement that will be making less than $200,000 per annum;
(viii) other than as required by Law or pursuant to the terms of an agreement entered into prior years’ annual compensation review cycles)to the date of this Agreement and reflected on Section 4.10a) of the Company Disclosure Schedule or that any Company Group Member is not prohibited from entering into after the date hereof, or promote any non-officer employee to an officer position; (iii) grant any rights to severance or termination pay to, any director or other termination benefit or officer of any Company Group Member;
(ix) adopt, amend and/or terminate any such individualmaterial Plan except as may be required by applicable Law, is necessary in order to consummate the Transactions, or health and welfare plan renewals in the ordinary course of business;
(x) materially amend other than for cause or due to death or disability; (iv) establishreasonable and usual amendments in the ordinary course of business, terminate, adopt, enter into or materially amend any CBA or Company Benefit Plans (or any collective bargaining or similar labor agreement, or employee benefit plan or arrangement, that would be a CBA or a Company Benefit Plan (as applicable) if in effect on the date hereof); or (v) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability, time of payment or funding of any compensation or any equity award or other benefit under any Company Benefit Plan with respect to any current or former service provider;
(l) make any change in accounting policies or procedures, other than as required by GAAP, applicable Law or any Governmental Entity with competent jurisdiction;
(mxi) engage in any transaction with, or enter into any agreement, arrangement or understanding with any affiliate of the Company or other person covered by Item 404 of Regulation S-K promulgated under the Exchange Act;
(iA) prepare or file amend any material Tax Return materially inconsistent with past practice or take any position or adopt any method on any such Tax Return that is materially inconsistent with positions taken or methods used in preparing or filing similar Tax Returns in prior periodsReturn, (iiB) change any material method of Tax accounting, (C) make, change or revoke rescind any material election relating to Taxes, or (D) settle or compromise any material U.S. federal, state, local or non-U.S. Tax electionaudit, assessment, Tax claim or other controversy relating to Taxes;
(iiixii) enter into materially amend, or modify or consent to the termination (excluding any Tax allocationexpiration in accordance with its terms) of any Material Contract or amend, indemnity waive, modify or sharing agreement consent to the termination (other than excluding any such agreement entered into expiration in accordance with its terms) of the Company’s material rights thereunder, in each case in a manner that is adverse to any Company Group Member, except in the ordinary course of business, the primary purpose of which is unrelated to Taxes or any agreement solely among any of the Company or the Company Subsidiaries), ;
(iv) change any annual Tax accounting period, (v) file any amendment to a material Tax Return, (vixiii) enter into any “closing agreement” with contract, agreement or arrangement that obligates any taxing authority regarding a material amount Company Group Member to develop any Intellectual Property related to the business of Taxany Company Group Member or the Products, (vii) consent to any material Tax claim or assessment or surrender a right to a material refund of Taxes, (viii) adopt or change any method of Tax accounting, or (ix) consent to any extension or waiver other than where the results of the statute of limitations period applicable to Company’s or any material Tax claim or assessmentCompany Subsidiary’s performance would be Company-Owned IP;
(oxiv) make intentionally permit any material item of Company-Owned IP to lapse or authorize any capital expenditureto be abandoned, invalidated, dedicated to the public, or incur disclaimed, or otherwise become unenforceable or fail to perform or make any obligationsapplicable filings, liabilities recordings or Indebtedness other similar actions or filings, or fail to pay all required fees and Taxes required or advisable to maintain and protect its interest in respect thereofeach and every material item of Company-Owned IP; or
(xv) transfer, except for those in an amount less than $75,000 contemplated by sublet, modify, terminate or otherwise amend any Lease or fail to satisfy the capital expenditure budget for the relevant fiscal year at Company’s obligations under any Lease or after the time contemplated by such budget, which capital expenditure budget has been made available to Parent prior to the date of this Agreementother Contract;
(p) change in any material respect the policies or practices regarding accounts receivable or accounts payable or cash management or fail to manage working capital in accordance with past practices, except as required by GAAP or applicable Law;
(q) settle any suit, action, claim, proceeding or investigation other than a settlement solely for monetary damages (net of insurance proceeds received) not in excess of $25,000 individually or $50,000 in the aggregate;
(r) except in the ordinary course of business consistent with past practice or in connection with any transaction to the extent specifically permitted by any other subclause of this Section 5.01, (ixvi) enter into any Contract that would, if entered into prior to the date hereof, be formal or informal agreement or otherwise make a Company Material Contract or a Real Property Lease, (ii) materially modify, materially amend, let lapse or terminate (other than expirations in accordance with its terms) any Company Material Contract or Real Property Lease or waive, release or assign any material rights or material claims or make any material payment, directly or indirectly, of any liability of the Company or the Company Subsidiaries before the same comes due in accordance with its terms, thereunder, (iii) sublease or license any portion of the real property leased under any Real Property Lease, or (iv) acquire a fee interest in any real property;
(s) create any Subsidiary of the Company or any of its Subsidiaries;
(t) enter into any new line of business, or form or commence the operations of any joint venture;
(u) amend in a manner that adversely impacts in any material respect the ability to conduct its business, or terminate or allow to lapse any material Permits of the Company or its Subsidiaries;
(v) except in the ordinary course of business consistent with past practice or pursuant to a Contract in effect as of the date hereof, exclusively license or sublicense, sell, transfer, dispose of, abandon, cancel, knowingly allow to lapse, or fail to renew, maintain, diligently pursue applications for or defend any Intellectual Property Rights of the Company or any Company Subsidiary that are individually or in the aggregate material to the Company and the Company Subsidiaries; or
(w) authorize, resolve or offer, agree or commit, in writing or otherwise, binding commitment to do any of the foregoing. Nothing herein shall require any Company Group Member to obtain consent from Novus to do any of the foregoing if obtaining such consent might reasonably be expected to violate applicable Law, and nothing contained in this Agreement Section 6.01 shall give Parent or Merger Subto Novus, directly or indirectly, the right to control or direct the operations of the any Company or its Subsidiaries Group Member prior to the Effective TimeClosing Date. Prior to the Effective TimeClosing Date, each of Novus and the Company shall exercise, consistent with the terms and conditions of this Agreementhereof, complete control and supervision over of its and its Subsidiaries’ respective business operations, as required by Law.
Appears in 1 contract
Samples: Business Combination Agreement (Novus Capital Corp II)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that that, between the date of this Agreement and the earlier of the Effective Time and the valid termination of this Agreement in accordance with Article VIITime, except (w) as specifically set forth in Section 5.01 6.01 of the Company Disclosure Letter Statement or as an exception to the corresponding restriction of this Section 5.01, (x) as expressly required or otherwise expressly provided for by in this Agreement, (y) as required by applicable Law or (z) as consented to unless Merger Sub shall otherwise agree in writing by Parent (which consent shall not be unreasonably withheld, delayed, or conditioned)writing, the Company willshall, and will shall cause each its subsidiaries to, conduct its business in the ordinary course and in a manner consistent in all material respects with past practice. The Company Subsidiary shall, and shall cause its subsidiaries to, use commercially reasonable efforts to conduct (i) preserve intact its business organization, (ii) keep available the services of the current officers, key employees and operations consultants of the Company and its subsidiaries, (iii) preserve the current relationships of the Company and its subsidiaries with customers, franchisees, distributors, suppliers, licensors, licensees, contractors and other persons with which the Company or its subsidiaries has significant business relations, (iv) maintain all assets in good repair and condition (except for ordinary wear and tear) other than those disposed of in the ordinary course of business, (v) maintain all insurance necessary to the conduct of the Company's business as currently conducted, (vi) maintain its books of account and records in the usual, regular and ordinary manner, and (vii) maintain, enforce and protect all of the material Intellectual Property Rights owned or used by the Company or its subsidiaries in a manner consistent in all material respects with past practice. By way of amplification and not limitation, except as contemplated by this Agreement, or as set forth in Section 6.01 of the Company Disclosure Statement, the Company shall not, and shall cause its subsidiaries not to, between the date of this Agreement and the Effective Time, directly or indirectly do, or propose to do, any of the following without the prior written consent of Merger Sub (which shall not be unreasonably withheld).
(a) amend or otherwise change its Certificate of Incorporation or By-laws, except to the extent contemplated by the Preference Amendment;
(b) issue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of capital stock of any class of the Company (other than pursuant to and in accordance with the Company Stock Option Plans and the Company Employee Stock Purchase Plans and the agreements listed in Section 3.03 of the Company Disclosure Statement or in connection with the Preference Exchange or the Equity Contribution) or its subsidiaries, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interests), of the Company or its subsidiaries or (ii) any assets of the Company or its subsidiaries, except for sales in the ordinary course of business consistent with past practice, practice and the Company will use, and will cause each Company Subsidiary to use, commercially reasonable efforts to (1) preserve intact its and their business organization, (2) preserve the present relationships and goodwill with those persons other asset sales for consideration or having significant business relationships with the Company and the Company Subsidiaries and (3) comply with and maintain all material Permits required to conduct its and their businesses and to own, lease and operate its and their properties and assets. Without limiting the foregoing, subject to the exceptions described in clauses (w) through (z) of the foregoing sentence, the Company shall not, and shall a fair market value aggregating not permit any Company Subsidiary to:
(a) amend the Company Charter, Company Bylaws or certificate of incorporation or bylaws (or other similar governing documents) of any Company Subsidiary;
(b) issue, sell, grant options, restricted stock units, restricted stock or rights to purchase, pledge, or authorize or propose the issuance of, sale of, or grant of options, restricted stock units, restricted stock or rights to purchase or pledge, any Company Securities or Subsidiary Securities, other more than (i) the issuance of Shares upon the exercise of Company Options or the vesting and settlement of RSU Awards, in each case outstanding as of the date hereof in accordance with their terms, or the issuance of Shares pursuant to the terms of the Company Stock Purchase Plan and (ii) the issuance of securities by a wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary$100,000;
(c) adjust, split, combine, recapitalize, subdivide or reclassify or otherwise amend the terms of any shares of its capital stock or other equity interests;
(d) sell, pledge, dispose of, transfer, lease, mortgage, license, sublicense, abandon, allow to lapse, assign or encumber any Company Subsidiary or any material property, securities, or material assets of the Company or any Company Subsidiary, except (i) pursuant to Company Material Contracts existing as of, and true, correct and complete copies of which have been made available to Parent prior to, the date of this Agreement and set forth in Section 5.01(d)(i) of the Company Disclosure Letter, (ii) pursuant to Incidental Contracts, or (iii) for de minimis dispositions or abandonments of immaterial tangible assets not currently used in the Company’s or Company’s Subsidiaries business, in the ordinary course of business and consistent with past practice;
(e) declare, set aside, make or pay any dividend or other distribution with respect to any shares of its capital stock or other equity interestsdistribution, whether payable in cash, stock, property or a combination thereofotherwise, with respect to any of its capital stock (other than between any wholly-owned subsidiary of the Company and the Company);
(fd) other than (i) in connection with the exercise of any outstanding Company Options or offers of purchase rights under the Company Stock Purchase Plan permitted by the terms of such Company Options or the Company Stock Purchase Plan, as applicable, or the payment of related withholding Taxes, by net exercise or by tendering of shares or (ii) Tax withholdings on the vesting or payment of RSU Awards or the vesting of Restricted Stock Awards, reclassify, combine, split, subdivide or amend the terms ofredeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, directly or indirectly, any of its equity securities or any optionscapital stock, warrants, securities of other than in connection with the Company or other rights exercisable for or convertible into any such equity securitiesPreference Exchange;
(ge) acquire (including, without limitation, by merger, consolidation or acquisition of stock or assets) or agree to acquire any corporation, partnership, limited liability company, or other business organization or division thereof;
(f) (i) make incur or agree to incur any acquisition indebtedness for borrowed money or dispositionissue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any offer or agreement to acquire or dispose by means of a mergerloans, consolidation, recapitalization, purchase, sale or otherwise, in one transaction or any series of related transactions, of any business, assets or securities or any sale, lease, encumbrance or other disposition of assets or securities of the Company or any of its Subsidiaries or any person or (ii) adopt, publicly propose or enter into a plan of complete or partial liquidation, dissolution, recapitalization or restructuringadvances, or file capital contributions to or consent to the filing of a petition in bankruptcy under investments in, any provisions of applicable Lawother person, except for in the ordinary course of business consistent with past practice and in an amount not in excess of $100,000; or (ii) authorize capital expenditures which are, in the aggregate, in excess of $100,000;
(g) acquire, or agree to acquire, sell, lease or dispose of any Real Property or other material assets, other than sales or leases or other dispositions of fixed assets (other than Real Property) or sales or other dispositions of inventory and the purchase of supplies and equipment, in each case, in the ordinary course of business consistent with past practice;
(h) assumeenter into, guaranteeestablish, endorse adopt, amend or otherwise become liable renew any material employment, consulting, severance or responsible (whether directlysimilar agreement or arrangements with any director, contingently or otherwise) for the obligations (excluding existing obligations as of the date hereof) of any other person;
(i) incur, create, assume or otherwise become liable or responsible for any Indebtedness or issue any debt securitiesexecutive officer, or assume employee, or guarantee the obligations of grant any person salary or wage increase (other than a wholly owned Company Subsidiary) for borrowed money;
(j) make any loans, advances or capital contributions to, or investments in, any other person, other than (i) loans solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries, (ii) advances for travel and other out-of-pocket expenses to officers, directors or employees of the Company or any Company Subsidiary made in the ordinary course consistent with past practice);
(i) establish, and adopt, amend or increase benefits under any pension, retirement, stock option, stock purchase, savings, profit sharing, deferred compensation, consulting, welfare benefit contract, plan or arrangement (iiiother than as may be required by applicable Law);
(j) advances enter into any labor or collective bargaining agreement, memorandum of understanding, grievance settlement or any other agreement or commitment to directors and officers required to be made pursuant or relating to any indemnification or advancement obligations in the Company Charter, the Company Bylaws, the governing documents of any Company Subsidiary, or any employment agreement or indemnification agreement to which the Company or any Company Subsidiary is party as of the date of this Agreement (true and accurate copies of which have been made available to Parent prior to the date of this Agreement)labor union;
(k) except to the extent required by this Agreement, applicable Law discharge or the terms of satisfy any Company Benefit Plan, as in effect on the date hereof and set forth on Section 5.01(k) of the Company Disclosure Letter: (i) hire any employee at the level of Director material Lien or higher, except in the ordinary course of business or as otherwise required by applicable Law, or an existing Contract, (ii) increase the compensation or benefits payable or to become payable to its directors, officers or employees (other than if the Closing has not yet occurred as of February 28, 2024 merit increases in salaries for employees with titles below the level of Vice President, not to exceed four percent (4%) in the aggregate of such employees’ salaries on the date hereof in the ordinary course of business consistent with prior years’ annual compensation review cycles), or promote any non-officer employee to an officer position; (iii) grant any rights to severance or termination pay or other termination benefit or terminate any such individual, other than for cause or due to death or disability; (iv) establish, terminate, adopt, enter into or materially amend any CBA or Company Benefit Plans (or any collective bargaining or similar labor agreement, or employee benefit plan or arrangement, that would be a CBA or a Company Benefit Plan (as applicable) if in effect on the date hereof); or (v) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability, time of payment or funding of any compensation or any equity award or other benefit under any Company Benefit Plan with respect to any current or former service provider;
(l) make any change in accounting policies or procedures, other than as required by GAAP, applicable Law or any Governmental Entity with competent jurisdiction;
(m) engage in any transaction with, or enter into any agreement, arrangement or understanding with any affiliate of the Company or other person covered by Item 404 of Regulation S-K promulgated under the Exchange Act;
(i) prepare or file satisfy any material Tax Return materially inconsistent with past practice obligation or take any position liability (fixed or adopt any method on any such Tax Return that is materially inconsistent with positions taken or methods used in preparing or filing similar Tax Returns in prior periods, (ii) make, change or revoke any material Tax election, (iii) enter into any Tax allocation, indemnity or sharing agreement (other than any such agreement entered into in the ordinary course of business, the primary purpose of which is unrelated to Taxes or any agreement solely among any of the Company or the Company Subsidiaries), (iv) change any annual Tax accounting period, (v) file any amendment to a material Tax Return, (vi) enter into any “closing agreement” with any taxing authority regarding a material amount of Tax, (vii) consent to any material Tax claim or assessment or surrender a right to a material refund of Taxes, (viii) adopt or change any method of Tax accounting, or (ix) consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment;
(o) make or authorize any capital expenditure, or incur any obligations, liabilities or Indebtedness in respect thereof, except for those in an amount less than $75,000 contemplated by the capital expenditure budget for the relevant fiscal year at or after the time contemplated by such budget, which capital expenditure budget has been made available to Parent prior to the date of this Agreement;
(p) change in any material respect the policies or practices regarding accounts receivable or accounts payable or cash management or fail to manage working capital in accordance with past practices, except as required by GAAP or applicable Law;
(q) settle any suit, action, claim, proceeding or investigation other than a settlement solely for monetary damages (net of insurance proceeds received) not in excess of $25,000 individually or $50,000 in the aggregate;
(rcontingent) except in the ordinary course of business consistent with past practice practice, or commence any voluntary petition, proceeding or action under any bankruptcy, insolvency or other similar Law;
(l) make or institute any change in connection with accounting procedures or practices in its accounting procedures and practices unless mandated by GAAP;
(m) take any transaction to the extent specifically permitted by any other subclause of this Section 5.01, (i) enter into any Contract that wouldaction that, if entered into taken after October 31, 1999 but prior to the date hereof, would have been required to be a Company Material Contract or a Real Property Lease, (ii) materially modify, materially amend, let lapse or terminate (other than expirations disclosed in accordance with its terms) any Company Material Contract or Real Property Lease or waive, release or assign any material rights or material claims or make any material payment, directly or indirectly, of any liability Section 3.07 of the Company or the Company Subsidiaries before the same comes due in accordance with its terms, thereunder, (iii) sublease or license any portion of the real property leased under any Real Property Lease, or (iv) acquire a fee interest in any real propertyDisclosure Statement;
(s) create any Subsidiary of the Company or any of its Subsidiaries;
(tn) enter into any new line of businessagreement or other arrangement with any director, executive officer, employee or form or commence the operations of any joint venture;
(u) amend in a manner that adversely impacts in any material respect the ability to conduct its business, or terminate or allow to lapse any material Permits stockholder of the Company or its Subsidiaries;
(v) subsidiaries or, to the Company's Knowledge, any affiliate of the foregoing, except in the ordinary course of business consistent with past practice practice;
(o) enter into any agreement or pursuant other arrangement that is reasonably likely to a Contract in effect as of the date hereof, exclusively license or sublicense, sell, transfer, dispose of, abandon, cancel, knowingly allow to lapse, or fail to renew, maintain, diligently pursue applications for or defend any Intellectual Property Rights of the Company or any Company Subsidiary that are individually or in the aggregate be material to the Company and the Company Subsidiaries; or
(w) authorize, resolve or offer, agree or commit, in writing or otherwise, to do any of the foregoing. Nothing contained in this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control or direct the operations business of the Company or its Subsidiaries prior subsidiaries, except in the ordinary course of business consistent with past practice;
(p) make or change any election, change an annual accounting period, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or assessment relating to the Effective Time. Prior Company or its subsidiaries, surrender any right to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Effective TimeCompany or its subsidiaries, fail to timely file any Tax Return, take a position on a Tax Return not in keeping with prior practice or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission could have the effect of increasing the present or future Tax liability or decreasing any present or future Tax asset of the Company shall exerciseor its subsidiaries;
(q) license, assign or otherwise transfer to any person or entity any rights to any material Intellectual Property Rights owned or used by the Company or its subsidiaries, except in the ordinary course of business consistent with past practice;
(r) amend, extend, renew or terminate any Lease, and shall not enter into any new lease, sublease, license or other agreement for the terms use or occupancy of any real property, except in the ordinary course of business consistent with past practice, and conditions for which annual rental payments do not exceed $20,000;
(s) fail to maintain, enforce or protect any material Intellectual Property Rights owned or used by the Company or its subsidiaries, except in the ordinary course of business consistent with past practice;
(t) settle any action, claim or suit with any Governmental Authority or third party relating to this Agreement, complete control and supervision over its and its Subsidiaries’ respective business operationsthe Merger or any of the other transactions contemplated hereby; or
(u) authorize or propose, or agree to take, any of the foregoing actions prohibited under Section 6.01.
Appears in 1 contract
Samples: Recapitalization Agreement and Plan of Merger (Westaff Inc)
Conduct of Business by the Company Pending the Merger. (a) The Company covenants and agrees that between the date of this Agreement and the earlier of the Effective Time Time, unless Parent shall otherwise agree in writing (and the valid termination of this Agreement in accordance with Article VII, except (w) as specifically set forth in Section 5.01 5.1 of the Company Disclosure Letter or as an exception to the corresponding restriction of this Section 5.01otherwise expressly contemplated, (x) as expressly permitted or required or expressly provided for by this Agreement, (y) as required by applicable Law or (z) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed, or conditioned), the Company will, shall and will shall cause each Company Subsidiary of its Subsidiaries to, use commercially reasonable efforts (i) maintain its existence in good standing under applicable Law, (ii) subject to the restrictions and exceptions set forth in Section 5.1(b) or elsewhere in this Agreement, conduct its business and operations in all material respects in the ordinary and usual course of business and in a manner consistent with past prior practice, and the Company will use, and will cause each Company Subsidiary to use, commercially (iii) use reasonable best efforts to (1) preserve substantially intact its business organizations, to keep available the services of its current officers and their business organization, (2) employees and to preserve the present current relationships and goodwill with those persons having significant business relationships with of the Company and its Subsidiaries with customers, suppliers, distributors and other Persons with which the Company or any of its Subsidiaries and has business relations that are material to the Company.
(3b) comply with and maintain all material Permits required to conduct its and their businesses and to own, lease and operate its and their properties and assets. Without limiting the foregoing, subject to the exceptions described in clauses (w) through (z) of the foregoing sentence, the Company shall not, covenants and shall not permit any Company Subsidiary to:
(a) amend the Company Charter, Company Bylaws or certificate of incorporation or bylaws (or other similar governing documents) of any Company Subsidiary;
(b) issue, sell, grant options, restricted stock units, restricted stock or rights to purchase, pledge, or authorize or propose the issuance of, sale of, or grant of options, restricted stock units, restricted stock or rights to purchase or pledge, any Company Securities or Subsidiary Securities, other than (i) the issuance of Shares upon the exercise of Company Options or the vesting and settlement of RSU Awards, in each case outstanding as of the date hereof in accordance with their terms, or the issuance of Shares pursuant to the terms of the Company Stock Purchase Plan and (ii) the issuance of securities by a wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary;
(c) adjust, split, combine, recapitalize, subdivide or reclassify or otherwise amend the terms of any shares of its capital stock or other equity interests;
(d) sell, pledge, dispose of, transfer, lease, mortgage, license, sublicense, abandon, allow to lapse, assign or encumber any Company Subsidiary or any material property, securities, or material assets of the Company or any Company Subsidiary, except (i) pursuant to Company Material Contracts existing as of, and true, correct and complete copies of which have been made available to Parent prior to, agrees that between the date of this Agreement and the Effective Time, the Company shall not and shall cause each of its Subsidiaries not to (except as expressly contemplated, permitted or required by this Agreement, as set forth in the applicable subsection of Section 5.01(d)(i5.1(b) of the Company Disclosure LetterLetter or with the prior written approval of Parent, (ii) pursuant such approval not to Incidental Contracts, be unreasonably withheld or (iii) for de minimis dispositions or abandonments of immaterial tangible assets not currently used in the Company’s or Company’s Subsidiaries business, in the ordinary course of business and consistent with past practice;delayed):
(ei) declare, set aside, make or pay any dividend dividends or other distribution distributions (whether in cash, stock or property) in respect of any of its or its Subsidiaries' capital stock, other than regular quarterly dividends on Company Common Stock not in excess of $0.04 per share, and the regular annual dividend on Company Preferred Stock not in excess of $5.00 per share, in each case consistent with past practice and with declaration, record and payment dates consistent with the timing of declaration, record and payment dates in the most recent comparable prior year fiscal quarter or prior fiscal year, as applicable, prior to the date of this Agreement;
(ii) adjust, split, combine, subdivide or reclassify any of its capital stock or that of its Subsidiaries or issue or authorize or propose the issuance of any other securities in respect to any of, in lieu of or in substitution for, shares of its capital stock or other equity interests, whether payable in cash, stock, property or a combination thereofthat of its Subsidiaries;
(fiii) other than (i) in connection with the exercise of any outstanding Company Options repurchase, redeem or offers of purchase rights under the Company Stock Purchase Plan permitted by the terms of such Company Options otherwise acquire or the Company Stock Purchase Planoffer to repurchase, as applicable, or the payment of related withholding Taxes, by net exercise or by tendering of shares or (ii) Tax withholdings on the vesting or payment of RSU Awards or the vesting of Restricted Stock Awards, reclassify, combine, split, subdivide or amend the terms of, or redeem, purchase redeem or otherwise acquire, directly or indirectly, any shares of its equity securities capital stock, capital stock or interests in any of its Subsidiaries or any optionsCompany Stock Rights or Subsidiary Stock Rights (other than (A) the withholding of shares of Company Common Stock to satisfy tax obligations with respect to awards granted pursuant to the Company Equity Plans and (B) the acquisition by the Company of Company Common Stock in connection with the forfeiture of awards granted under Company Equity Plans);
(iv) issue, warrantsdeliver or sell any shares of its capital stock, securities capital stock or interests in any of its Subsidiaries or Company Stock Rights or Subsidiary Stock Rights, other than the issuance of shares of Company Common Stock (A) in accordance with the Anniversary Plan in amounts not to exceed the number of shares set forth in Section 3.3(b) of the Company Disclosure Letter, (B) upon the settlement of Options or vesting of Restricted Share Units outstanding as of the date of this Agreement in accordance with the terms thereof, or (C) upon conversion of the outstanding shares of Company Preferred Stock in accordance with its terms;
(v) amend or otherwise change the Company Articles of Incorporation or Company Bylaws or equivalent organizational documents of the Company's Subsidiaries (whether by merger, consolidation or otherwise);
(A) purchase an equity interest in any Person or any division or business thereof, or (B) purchase the assets of any Person or any division or business thereof, except for the purchase of inventory or other assets (pursuant to existing Contracts which have been made available to Parent prior to the date hereof) in the ordinary and usual course of business and in a manner consistent with prior practice, including in each such case any such action solely between or among the Company and its wholly-owned Subsidiaries;
(vii) sell, lease, license, assign, transfer, abandon, mortgage, encumber, allow to lapse or otherwise dispose of or discontinue or fail to maintain any of its properties or assets (including capital stock of any Subsidiary of the Company) other than (A) sales or other dispositions of inventory or other assets (pursuant to existing Contracts which have been made available to Parent prior to the date hereof) in the ordinary and usual course of business and in a manner consistent with past practice, (B) leases, subleases or licenses of Owned Real Property and real property or tangible personal property leased by the Company or its Subsidiaries, in each case, in the ordinary and usual course of business and in a manner consistent with past practice, with a value that does not exceed $100,000 individually or $250,000 in the aggregate, (C) sales or other dispositions of real estate not utilized in the operations of the Company or its Subsidiaries with a value that does not exceed $100,000 individually or $250,000 in the aggregate, except for sales or dispositions pursuant to Contracts in existence on, and disclosed to Parent prior to, the date hereof, (D) sales of obsolete or written off assets in the ordinary and usual course of business and in a manner consistent with past practice for fair or reasonable value, (E) sales or other rights exercisable dispositions of assets utilized in the operations of the Company or its Subsidiaries the total value of which does not exceed $250,000 in the aggregate, except for sales or convertible into any such equity securitiesother dispositions pursuant to Contracts in existence on, and disclosed to Parent prior to, the date hereof, (F) sale of tax credits pursuant to Section 45G of the Code in the ordinary and usual course of business and in a manner consistent with past practice or (G) as set forth in Section 5.1(b)(vii) of the Company Disclosure Letter;
(gviii) pledge, encumber or otherwise subject to an Encumbrance (iother than a Permitted Encumbrance) make any acquisition of its shares of capital stock, Company Stock Rights, Subsidiary Stock Rights or dispositionproperties or assets (including capital stock of any Subsidiary of the Company);
(ix) incur (or modify in any material respect) any indebtedness for borrowed money, issue or make sell any offer debt securities or agreement warrants or other rights to acquire or dispose by means of a merger, consolidation, recapitalization, purchase, sale or otherwise, in one transaction or any series of related transactions, of any business, assets or securities or any sale, lease, encumbrance or other disposition of assets or debt securities of the Company or any of its Subsidiaries Subsidiaries, guarantee any such indebtedness or any person or (ii) adoptdebt securities of another Person, publicly propose or enter into a plan any "keep well" or other agreement to maintain any financial statement condition of complete or partial liquidationanother person (collectively, dissolution"Indebtedness"), recapitalization or restructuring, or file or consent to the filing of a petition in bankruptcy under any provisions of applicable Law, except for other than (A) Indebtedness incurred in the ordinary and usual course of business and in a manner consistent with past practicepractice under the Company's existing credit facilities not in excess of $1.0 million in the aggregate and (B) construction loans, performance and completion guaranties and surety obligations incurred in connection with capital projects that are pending or contemplated on the date hereof and set forth on Section 5.1(b)(ix) of the Company Disclosure Letter and not in excess of $2.5 million in the aggregate;
(h) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations (excluding existing obligations as of the date hereof) of any other person;
(i) incur, create, assume or otherwise become liable or responsible for any Indebtedness or issue any debt securities, or assume or guarantee the obligations of any person (other than a wholly owned Company Subsidiary) for borrowed money;
(jx) make any loans, advances or capital contributions to, or investments in, any Person, or enter into any swap or hedging transaction or other personderivative agreement, other than (i) loans solely between the Company hedging transactions for fuel having a term of less than one year and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries, (ii) advances for travel and other out-of-pocket expenses to officers, directors or employees of the Company or any Company Subsidiary made in the ordinary course consistent with past practice, and (iii) advances to directors and officers required to be made pursuant to any indemnification or advancement obligations in the Company Charter, the Company Bylaws, the governing documents of any Company Subsidiary, or any employment agreement or indemnification agreement to which the Company or any Company Subsidiary is party as of the date of this Agreement (true and accurate copies of which have been made available to Parent prior to the date of this Agreement);
(k) except to the extent required by this Agreement, applicable Law or the terms of any Company Benefit Plan, as in effect on the date hereof and set forth on Section 5.01(k) of the Company Disclosure Letter: (i) hire any employee at the level of Director or higher, except in the ordinary course of business or as otherwise required by applicable Law, or an existing Contract, (ii) increase the compensation or benefits payable or to become payable to its directors, officers or employees (other than if the Closing has not yet occurred as of February 28, 2024 merit increases in salaries for employees with titles below the level of Vice President, not to exceed four percent (4%) in the aggregate of such employees’ salaries on the date hereof entered into in the ordinary course of business consistent with prior years’ annual compensation review cycles)past practices;
(xi) except for claims and litigation with respect to which an insurer (but neither the Company nor any of its Subsidiaries) has the right to control the decision to settle, settle any suit, action, arbitration, investigation, claim or litigation, in each case made or pending against the Company or any of its Subsidiaries, or promote any non-officer employee to an officer position; (iii) grant any rights to severance or termination pay or other termination benefit or terminate any such individualof their officers and directors in their capacities as such, other than for cause the settlement of suits, actions, arbitrations, investigations, claims or due to death or disability; (iv) establishlitigations which, terminate, adopt, enter into or materially amend any CBA or Company Benefit Plans (or any collective bargaining or similar labor agreement, or employee benefit plan or arrangement, that would be a CBA or a Company Benefit Plan (as applicable) if in effect on the date hereof); or (v) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability, time of payment or funding of any compensation or any equity award or other benefit under any Company Benefit Plan with respect to any current or former service provider;
(l) make any change in accounting policies or procedures, other than as required by GAAP, applicable Law or any Governmental Entity with competent jurisdiction;
(m) engage in any transaction with, or enter into any agreement, arrangement or understanding with any affiliate of the Company or other person covered by Item 404 of Regulation S-K promulgated under the Exchange Act;
event (iA) prepare or file any material Tax Return materially inconsistent is consistent with past practice or take any position or adopt any method on and solely for monetary damages for an amount not to exceed, for any such Tax Return that is materially inconsistent with positions taken settlement individually, $250,000 or methods used in preparing or filing similar Tax Returns in prior periods, (ii) make, change or revoke any material Tax election, (iii) enter into any Tax allocation, indemnity or sharing agreement (other than any such agreement entered into $500,000 in the ordinary course of business, the primary purpose of which is unrelated aggregate or (B) would not be reasonably expected to Taxes prohibit or any agreement solely among any of restrict the Company or and its Subsidiaries from operating their business in substantially the Company Subsidiaries), (iv) change any annual Tax accounting period, (v) file any amendment to a material Tax Return, (vi) enter into any “closing agreement” with any taxing authority regarding a material amount of Tax, (vii) consent to any material Tax claim or assessment or surrender a right to a material refund of Taxes, (viii) adopt or change any method of Tax accounting, or (ix) consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment;
(o) make or authorize any capital expenditure, or incur any obligations, liabilities or Indebtedness in respect thereof, except for those in an amount less than $75,000 contemplated by the capital expenditure budget for the relevant fiscal year at or after the time contemplated by such budget, which capital expenditure budget has been made available to Parent prior to same manner as operated on the date of this Agreement;
(pxii) settle, compromise, release, forgive or cancel any Indebtedness or waive any material benefits, claims or rights of substantial value;
(xiii) change in any material respect the policies its Tax accounting methods, principles or practices regarding accounts receivable or accounts payable or cash management or fail to manage working capital in accordance with past practices, except as required by GAAP or applicable LawLaws;
(qxiv) settle grant any suit, action, claim, proceeding or investigation other than a settlement solely for monetary damages (net of insurance proceeds received) not in excess of $25,000 individually or $50,000 increases in the aggregate;
compensation of any of its directors, executive officers (ras defined in Rule 3b-7 under the Exchange Act) or employees, except for (A) contractually mandated increases in the compensation of employees represented by applicable collective bargaining agreements and (B) increases in the compensation of non-executive-officer employees in the ordinary course of business consistent with past practice and which would not increase such Person's compensation in excess of 3% over such Person's prior year compensation;
(xv) except as required by existing award agreements (including Restricted Share Units, Options, and change-in-control agreements), this Agreement, or in connection with any transaction to the extent specifically permitted as otherwise required by any other subclause of this Section 5.01, applicable Law (i) enter into grant or increase any Contract that wouldseverance, if entered into prior change in control, termination or similar compensation or benefits payable to the date hereofany director, be a Company Material Contract executive officer, employee or a Real Property Leaseindividual independent contractor, (ii) materially modifyaccelerate the time of payment or vesting of, materially amendthe lapsing of restrictions or waiving of performance conditions with respect to, let lapse or terminate (other than expirations in accordance with its terms) fund or otherwise secure the payment of, any Company Material Contract compensation or Real Property Lease or waive, release or assign benefits under any material rights or material claims or make any material payment, directly or indirectly, of any liability of the Company or the Company Subsidiaries before the same comes due in accordance with its terms, thereunderBenefit Plan, (iii) sublease enter into, terminate or license materially amend any portion of Benefit Plan (or any plan, program, agreement, or arrangement that would constitute a Benefit Plan if in effect on the real property leased under date hereof), (iv) change any Real Property Leaseactuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan (other than a Multiemployer 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 Law, or (ivv) acquire a fee interest in forgive any real propertyloans to Company Employees;
(sxvi) create hire any person to be employed by the Company or any Subsidiary or terminate the employment of any employee of the Company or any of its Subsidiaries;
Subsidiary, other than (tA) enter into any new line of business, or form or commence the operations firing of any joint venture;
Non-CBA Employee for "Cause" (uas such term is defined in the Company's standard change-in-control agreement) amend in a manner that adversely impacts in or (B) the hiring or firing of any material respect the ability to conduct its business, or terminate or allow to lapse any material Permits of the Company or its Subsidiaries;
(v) except non-executive-officer employees in the ordinary course of business consistent with past practice practice;
(xvii) make or pursuant change any material Tax election, settle or compromise any material Tax Liability, fail to file any material Tax Return when due, enter any closing agreement, file any materially amended Tax Return or surrender any right to claim a Contract material Tax refund, offset or other reduction in effect Tax Liability, except as required by applicable Law;
(xviii) (A) enter into any agreement or arrangement that limits or otherwise restricts in any material respect the Company, any of its Subsidiaries or any of their respective Affiliates or any successor thereto or that would reasonably be expected to, after the Effective Time, limit or restrict in any material respect the Company, any of its Subsidiaries, the Surviving Corporation, Parent or any of their respective Affiliates, from engaging or competing in any line of business, in any location or with any Person, (B) modify or amend on terms materially adverse to the Company or any of its Subsidiaries or terminate any other Company Material Contract, Material Lease or Other Material Contract, or enter into any contract which if entered into prior to the date hereofhereof would be a Company Material Contract, exclusively license Material Lease or sublicenseOther Material Contract or (C) enter into, sellamend in any respect, transfer, dispose of, abandon, cancel, knowingly allow to lapse, modify in any respect or fail to renew, maintain, diligently pursue applications for terminate or defend engage in any Intellectual Property Rights transactions with any executive officer or director of the Company or any Company Subsidiary that are individually of its Subsidiaries, any Person owning 5% or in more of the aggregate material to the Company and the Company Subsidiaries; orShares or any relative or Affiliate of any such Person;
(wxix) authorizechange the Company's methods or principles of accounting, resolve except as required by concurrent changes in GAAP or offer, agree Regulation S-X under the Exchange Act (or commit, in writing regulatory requirements with respect thereto) or otherwise, the Company's independent accountants;
(xx) take any action that would reasonably be expected to do make any of the foregoing. Nothing contained in this Agreement shall give Parent representation or Merger Sub, directly or indirectly, the right to control or direct the operations warranty of the Company hereunder, or its Subsidiaries omit to take any action reasonably necessary to prevent any representation or warranty of the Company hereunder from being, inaccurate in any respect at, or as of any time before, the Effective Time;
(xxi) make or authorize any capital expenditures, other than (A) capital expenditures up to an aggregate amount not greater than the amount set forth on Section 5.1(b)(xxi)(A) of the Company Disclosure Letter and otherwise consistent with the budget provided to Parent prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent date hereof and (B) expenditures (whether accounted for as capital expenditures or operating expenses) required in connection with carrying out the terms and conditions of any grant set forth on Section 5.1(b)(xxi)(B) of the Company Disclosure Letter made to the Company by a Governmental Entity;
(xxii) enter into any line of business other than the railway business;
(xxiii) fail to use reasonable efforts to maintain or renew existing insurance policies or comparable replacement policies, or prejudice any rights of recovery under any insurance policy other than in the ordinary and usual course of business consistent with past practice;
(xxiv) except for this Agreement, adopt or enter into any plan of complete control and supervision or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries or file a petition in bankruptcy under the provisions of federal or state bankruptcy Law or consent to the filing of any bankruptcy against it under any similar applicable Law;
(xxv) except as required by Law, enter into any collective bargaining agreement, or renew, terminate, extend or renegotiate any existing collective bargaining agreement;
(xxvi) reorganize, restructure or combine any railroads or railroad operations if any such action would result in the Company or any of its Subsidiaries being classified as a Class II railroad by the STB;
(xxvii) enter into any agreement, arrangement, understanding or transaction that is not on an arm's length basis;
(xxviii) abandon or discontinue service over its and its Subsidiaries’ respective business operationsall or any portion of the Rail Facilities, or commence a regulatory proceeding to facilitate any such abandonment or discontinuance; and
(xxix) authorize, commit or agree to take any of the actions described in this Section 5.1(b).
Appears in 1 contract
Samples: Merger Agreement (Providence & Worcester Railroad Co/Ri/)